Ally Financial Inc. reported this morning that its full year auto originations volume for 2015 is unchanged from the same time a year prior, but also reported a 24% growth in used car financing.
The lender announced $41 billion in total auto originations in 2015 – flat, compared to 2014 – with $9.3 billion originations for the fourth quarter, up slightly from $9 billion in 4Q 2014.
Used financing made up 36% of Ally’s total portfolio by year end 2015, up from 29% at the same time a year prior.
“From the loss perspective, we are really comfortable with used cars,” said Chief Financial Officer Chris Halmy, during an earnings call this morning. “When we originate on used cars, the predictability of value is pretty consistent, whereas the drop is much bigger on the new cars, and it’s harder to predict.” Halmy added that the expected drop in used car prices will not drive significant losses within Ally’s portfolio.
Chief Executive Jeffrey Brown added that there is still opportunity in the market in 2016. “There are 257 million vehicles on the road, 50% of those are aged models, there is great opportunity for us, even if SAAR drops 2 or 3 million units,” he said during the call.
