Ally Exits Superprime Loans, Enters Used Car Market

TTAC Staff
by TTAC Staff

Best known for underwriting public radio programming such as “All Things Considered” and “Marketplace,” Ally Financial — formerly known as GMAC until the subprime market collapse kicked off the Great Recession — has decided to go for the gold in the used car and leasing markets, citing “irrational” pricing found in the superprime mortgage loan sector for its move from the latter toward the former.

The other reason? Better returns on investment; according to Ally CFO Chris Halmy, leasing a vehicle takes more expertise than conducting a low-risk, low-return superprime loan. Thus, Ally can gain more from financing a lease or used car purchase while still remaining inside a low-risk bubble.

As for its current lease and used car financing operations, 29 percent of Ally’s total originations came from leases while 27 percent came from the used car lot in the third quarter of 2013, up 2 and 3 percent respectively from the same time last year. Total originations for the third quarter netted the organiztion $9.6 billion, unchanged from Q3 2012.

Regarding future plans, Ally is planning to buyout the United State Treasury, which currently holds 74 percent of Ally. There are also plans for an IPO, but when is still a matter to be discussed behind closed doors.

TTAC Staff
TTAC Staff

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  • Buickman Buickman on Nov 12, 2013

    these bankster/government bedfellows are no longer short sheeting. no matter, there are plenty of other fish willing to bite.

  • CarPerson CarPerson on Nov 12, 2013

    BMW is currently running a 0.9% loan promotion. They are also running a Certified Previously Owned (CPO) "Holiday Promotion" on the 2011 3-series where you will get up to $500 or $1000 towards the first 1 or 2 loan payments, depending on model. Do the math. The interest rate is actually a NEGATIVE number as the Finance Charge ends up paying you to take out a loan. In effect, BMW PAYS YOU to finance the car with them...

    • Rodface Rodface on Nov 13, 2013

      It's too good to be true. That deal would have to only apply to a stripper 320i.

  • Fred diesel Fred diesel on Nov 13, 2013

    Nice shot of the ONLY buildings still standing in downtown Detroit? Maybe yous shoulda moved to Oshawa.

  • Victoroliver486 Victoroliver486 on Jan 09, 2019

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