Ally Financial auto originations jump 12.2%

Ally Financial ’s auto originations rose in the second quarter as application volume set a record and lease activity picked up. Auto originations totaled $11 billion, up 12.2% year over year and 7.8% quarter over quarter , according to the bank’s earnings presentation today. Auto originations outpaced analysts’ estimates of around $10.3 billion, according to published reports. The bank is focused on “prudent growth” of its auto business as retail loan volume ticked up in the quarter, but floorplan financing slowed as a pull-ahead of auto purchases affected dealer inventory, Russ Hutchinson , chief financial officer, said during today’s earnings call. Ally’s originations growth followed a trend in Q2 that saw Chase Auto and Wells Fargo Auto reporting an uptick in volume YoY. Meanwhile, performance was mixed for regional banks in the second quarter. Ally received a record 3.9 million auto finance applications during the quarter, according to its earnings presentation. “This sustained momentum of application flows speaks to the strength of our dealer relationships and the scale of our franchise,” Chief Executive Michael Rhodes said during the call. “Our scale enables us to be highly selective of the loans we book, optimizing both pricing and credit decisioning.” “Our scale enables us to be highly selective of the loans we book, optimizing both pricing and credit decisioning.” -- Michael Rhodes, CEO, Ally The bank’s retail auto-originated yield was 9.8%, with 42% in the highest credit quality tier, according to the presentation. Auto loan and lease outstandings came in at $91.8 billion, down 0.1% YoY but up 0.1% QoQ, according to the presentation. Ally was the third-largest auto lender by outstandings at yearend 2024 with a portfolio of $91.8 billion, according to the latest Big Wheels Rankings data . Lease originations rise 22% Lease originations surged 22.2% YoY and QoQ to $1.1 billion while lease outstandings decreased 5.9% YoY and 0.5% QoQ to $7.9 billion, according to the supplement. Lease-originated yield was 6.9%, down 161 basis points (bps) YoY but up 119 bps QoQ, according to the presentation. “Lease remarketing gains normalized in line with our expectations,” Hutchinson said. The percentage of lease buyouts by consumers and dealers was 44% in Q2 compared with 54% in Q2 2024 and 40% in Q1, according to the presentation. Off-lease vehicles terminated totaled 26,302 units, down 36.8% YoY but up 19.9% QoQ, according to the supplement. Auto DQs decline YoY Credit performance in auto improved during the quarter on the heels of “targeted underwriting enhancements to strengthen credit performance while preserving strong yields and risk-adjusted returns,” Rhodes said, noting that the resumption of student loan repayments and affordability pressures could impact credit health this year. The rate of 30-plus day auto delinquencies stood at 3.91% in Q2, down 42 bps YoY but up 12 bps QoQ, according to the presentation. Auto loans 60-plus days past due stood at 1.04%, up 22 bps YoY but down 2 bps QoQ. Loans 90-plus days past due stood at 0.48%, down 3 bps YoY and 1 bps QoQ. Retail auto net charge-offs ticked up 6 bps YoY but decreased 37 bps QoQ to 1.75%. The bank updated its retail auto net charge-off outlook for 2025 to between 2% and 2.15% from between 2% and 2.25%, according to the presentation. “We are encouraged by the trends within the portfolio, as vintage dynamics and servicing strategy enhancements continue to drive an improvement in losses,” Hutchinson said. “However, we remain mindful of macroeconomic uncertainty.” “We are encouraged by the trends within the portfolio, as vintage dynamics and servicing strategy enhancements continue to drive an improvement in losses." --Russ Hutchinson, CFO, Ally The bank’s allowance for auto loan losses totaled $3.2 billion, or 3.75% of the portfolio, up 10 bps YoY and flat QoQ, according to the presentation. “Our retail auto coverage levels continue to balance the favorable credit trends we're seeing, namely improved delinquency rates and recent turnover in the portfolio to higher quality vintages, against an uncertain macroeconomic outlook and the expectation of worsening unemployment,” Hutchinson said. Floorplan volume drop 21% On the commercial front, floorplan outstandings decreased 21.4% YoY and 2.7% QoQ to $14.7 billion, according to Ally’s supplement. “Floorplan balances reflect industry trends and inventory levels partly influenced by tariffs that likely pulled forward consumer demand ,” Hutchinson said. “While dealer inventory levels remain lower, increased sales activity and the financing of leaner inventories have continued to support overall dealer health and profitability.” Meanwhile, Ally Financial stopped originating new mortgages this year and in April sold its credit card business . “Looking ahead, our focus remains on leveraging relationships in auto finance and growing earned premiums over time,” Hutchinson said. The bank is also focused on technology initiatives, Rhodes said. “We're prioritizing investments across other critical areas, enhancing cyber defenses, advancing AI capabilities and developing innovative products, tools and solutions that elevate the customer experience,” he said, without providing details. Shares of Ally Financial [NYSE: ALLY] were trading at $39.74 at 2:43 p.m. ET today, down 1.3% from market open. Ally has a market capitalization of $12.2 billion. Auto Finance Summit, the premier industry event for auto lending and leasing, returns Oct. 15-17 at the Bellagio Las Vegas. To learn more about the 2025 event and register, visit www.AutoFinance.live/AFS .

Ally Financial auto originations jump 12.2%

Lease originations surged 22.2% YoY

Huntington Auto Finance originations up 9.5% YoY

Stellantis takes $2.7 billion hit as new CEO seeks a reset

Related Posts

CPS’ originations fall 12.3% in Q3

Vroom subsidiary UACC’s originations up 7%

Open Lending certified loans fall 13%

Lucid, Rivian deliveries surge in third quarter

Stellantis takes $2.7 billion hit as new CEO seeks a reset

Stay Informed with Our Newsletters

The Roadmap Podcast

Retrieve your password