Capital One Exits a Lending Business for Car Dealerships (1)

Capital One Financial Corp. is winding down a lending business that car dealerships use to buy inventory.

The bank decided on March 29 to exit the business this year, a spokesperson said in an interview, citing the “more challenging economic environment.” The bank said the decision has “no impact” on its consumer auto-finance business, and that the so-called floor-plan lending operation was “a non-material component of our commercial banking business.”

A customer uses an ATM inside a Capital One cafe branch in San Francisco

Photographer: David Paul Morris/Bloomberg

The lending pullback is another obstacle car dealerships must grapple with as the cost of auto financing soars, holding back some business from returning to post-pandemic normalcy. At the ...