Ally Financial has once again added $1 billion to Carvana’s line of credit, putting the two companies’ purchase agreement at a total of $3 billion to fund loans since March 2020, Carvana announced yesterday.
Ally has also increased the used-car retailer’s floorplan line of credit to $1.25 billion, up from $950 million, and extended the facility another three years to March 2023. The facility was originally set to expire in October.
“The strong relationship we’ve built is a testament to Carvana’s unique digital platform and our focused dedication and expertise in the auto retail business,” said Doug Timmerman, president of Auto Finance for Ally, in a statement.
Ally doubled Carvana’s line of credit back in March to $2 billion. Carvana has since tightened its underwriting standards, but remains on a growth trajectory for originations, which clocked in at $782.8 million in the second quarter, according to an Auto Finance News analysis in August, bringing total originations to $1.6 billion in the first half of the year, a 32.4% year-over-year increase.
Tempe, Ariz.-based Carvana had a managed auto portfolio of $3.3 billion at yearend 2019, according to Big Wheels Auto Finance Data. Shares of Carvana were trading at $220.87 at 12:45 pm ET, down 2.3% since market open. The stock soared nearly $50 per share on Sept. 22 in response to Carvana expected “record performance” in retail units sold, gross profit per unit, revenue and EBITDA margin.
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