Ally Financial Boosts Carvana Financing Commitment to $2.3 Billion
Ally Financial has increased its financing commitment to Carvana by 15%, to $2.3 billion. In the third year of the partnership, Ally has agreed to provide Carvana with a $650 million floorplan line of credit, up from $350 million previously. Ally will also provide as much as $1.25 billion available for bulk purchases, and a $350 million warehouse credit facility.
Unlike Ally’s relationships with Chrysler and GM, the Carvana partnership offers Ally a non-OEM affiliation, Moshe Orenbuch, a a Credit Suisse managing director, told Auto Finance News.
“Ally is establishing their growth channel to find other partnerships,” Orenbuch said. “They’ve got very extensive leasing programs with Chrysler and extensive floorplan programs with GM. They’ve been able to maintain that despite the fact that these two OEMs are in the process of creating their own financing arms, so they’re, to some degree, more agnostic than the OEM. That’s why they make a good partner.”
Carvana plans to use the latest round of financing to bolster customer service. “This newest commitment from Ally gives us increased flexibility in investing in the growth of our company and ability to continue to deliver exceptional customer experiences every day,” Carvana CEO Ernie Garcia said in a company statement.
Carvana’s digital-first platform enables consumers to view inventory, finance, purchase and sell vehicles to Carvana in as little as 10 minutes, from their home or mobile device, according to the company. Currently, consumers in 81 cities can take advantage of next-day delivery; 14 cities in Arizona, Florida, North Carolina, Ohio, Pennsylvania, Texas, Tennessee, and Washington, D.C., offer car vending machines.
“Our extensive experience in the auto business enables us to tailor financing agreements that make it possible for our customers to reach their goals, and in Carvana’s case, change the way people buy cars,” Doug Timmerman, Ally’s president of auto finance, said in the statement.
