Ally Financial, Chase Auto, and U.S. Bank Dealer Services all grew origination volumes in the third quarter despite a mixed environment for delinquencies and charge-offs.
Third-quarter originations at Ally climbed 14% year over year to $9.3 billion of auto loans and leases compared with $8.1 billion in the prior-year period. Ally’s originations were decisioned from a record 3.2 million loan applications, an 11% increase year over year.
Outstandings also increased on a year-over-year basis, rising to $81.5 billion from $78.6 billion.
Meanwhile, 30-day delinquencies rose 26 basis points to 3.32%, while net charge-offs increased 6 basis points to 1.38% of Ally’s portfolio. The rise in delinquencies reflects the “increased mix and seasoning of the used portfolio,” Chief Financial Officer Jennifer LaClair said during an earnings call.
Used vehicles accounted for 50% of new contracts, compared with 53% in the prior-year period. Leases accounted for 14% of new originations in the third quarter, and new vehicles accounted for 36% of the mix.
During the earnings call, Ally expressed plans to continue its focus on the used-car market through yearend. “Off-lease volume is at a high level of 4 million units, and consumers continue to present strong demand for used vehicles,” LeClair said, noting that the transaction difference between new and used cars is about $13,000.
U.S. Bank Dealer Services
U.S. Bank grew its auto portfolio 4.6% year over year to $19.4 billion outstanding, according to its third-quarter earnings report.
The bank has maintained an average Fico score of 776 in its indirect channel, which represented 96% of originations.
Delinquencies 30-or-more days late rose to 1.04% of U.S. Bank’s portfolio, compared with 1% in the year-prior period. Meanwhile, net charge-offs crept up to 0.39% of the portfolio, compared with 0.34% year over year, while non-performing loans accounted for 0.18% of the lender’s portfolio, up from 0.14% previously.
At Chase Auto, originations climbed 12.3% year over year to $9.1 billion, though outstandings remained flat at $83.1 billion.
Charge-offs decreased 3 basis points to 0.32% of the bank’s auto portfolio, compared with 0.35% in the year-prior period. Meanwhile, delinquencies 30 days or more past due increased 6 basis points year over year to 0.88% of the portfolio.
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