Ally Financial has doubled used-car retailer Carvana’s line of credit to $2 billion over the next year, the companies announced today. Carvana and Ally have been partnered for six years.
“As we work through the current business challenges facing the auto industry, the Ally team remains unwavering in its focus on finding the best solutions to help our dealer customers,” said Ally Financial President Doug Timmerman.
To that end, Ally and Carvana are also looking to “broaden the set of customers covered by the agreement,” the companies noted.
Carvana prices (NYSE: CVNA) soared after the announcement hit the wire at 3:30 ET. Within 15 minutes, price per share increased 13% to $56.29. Shares for the online lender closed up 42.96% at market close.
As consumers exercise social isolation and self-quarantine, foot traffic at dealerships is declining. The ability to shop online and secure financing for vehicles will provide opportunities for lenders to mitigate the sales slowdown. Carvana, for one, has a noticeable presence on Hulu, with a new ad focused on how its platform allows consumers to take control of their financing at home. That ad has been aired 8,689 times since Jan. 31, according to data from iSpot.tv. Carvana’s online inventory includes more than 25,000 vehicles.
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