Ally Financial trafficked significantly more auto loan and lease applications in the third quarter, compared to the previous year — a growth it credits to strong dealer relationships, among other factors.
Specifically, Ally consumer auto originations were $12.9 billion a 10% increase year-over-year — in an auto market that’s flat to slightly down. Ally auto credit application volume was at a quarterly record of 4.8 million in Q3, up 20% versus a year ago, according to the press release, and surpassing Q2’s record 4.6 million credit applications.
Application volume has been on the rise since Ally started asking its dealers for the last couple of years to send Ally all their credit applications, whether or not they meet Ally’s approval standards. Ally refers those applications that don’t meet its standards to partner lenders, in return for a fee.
Besides the fee income, Ally CEO Michael Rhodes said in an earnings call that analyzing a much larger volume of credit applications is a competitive advantage for Ally. That’s because Ally can use the larger amount of data to identify product segments it wants to pursue — or avoid — and to reprice its loans continuously.
In addition, Ally is closer to dealers than other banks because it is the former captive finance company for General Motors Co. — and for a time the former Chrysler Corp., now part of Stellantis. Dealers for those OEMs are still over-represented among Ally’s dealer network.
“You know, we have got longstanding relationships with our dealers. They have rewarded us through application flow,” Ally CFO Russ Hutchinson said in the conference call.
As of Dec. 31, 2025, Ally said in its annual report it had active relationships with 21,400 dealers. Ally defines “active” at the time as having done business with the company in the fourth quarter of 2025.
The increase in customer auto originations contributed to an overall improvement in Ally's core business lines in the third quarter. Ally net income attributable to common shareholders was $401 million in the quarter, an increase of 8% versus a year ago.
“Ally is a stronger company today than it was just a few years ago. We have made deliberate choices about where to invest and grow, and our results reinforce that we are on the right path,” Ally CEO Michael Rhodes said in the call.
Last year, Ally stopped originating consumer mortgages, and sold its credit card business. Its remaining core business lines are consumer auto loans and leases via dealers; insurance, such as extended-service contracts and guaranteed asset protection; corporate finance, including dealer floorplan; SmartAuction, a wholesale, used-car auction platform, and Ally Bank, its online, consumer-facing bank.
However, despite the profit improvements, Ally acknowledged it also faced a few short-term bumps in the road in the quarter — a temporary increase in losses on lease returns, and an uptick in delinquencies that Ally says is worth keeping an eye on.
For example, Ally said it faced losses on lease returns from Stellantis dealers, as some vehicles were subject to recall. Without breaking them down by brand, Ally reported in a financial supplement to its Q3 report that it had 17,494 lease returns in Q3, at an average loss per vehicle of $914. That compares with 21,608 returns a year ago, at an average gain of $53.
Hutchinson said in the call that Ally expects the run of problematic Stellantis lease returns to end next year.
“Given the current mix of our lease portfolio coming to termination, we expect the resulting pressure to persist into 4Q. Looking beyond that, we would expect the headwind to abate as we move through 2027,” he said.
In addition, Hutchinson said Ally detected a small increase in delinquencies in some of the loans that were originated in late 2025 and early 2026. Ally reported the 30-plus days delinquent rate for the third quarter was 4.96%, up from 4.9% a year ago.
“Nothing we are seeing gives us a ton of concern right now. But as you would expect, we are watching a number of factors. And, as you know, we are adjusting our underwriting on a very real-time basis,” Hutchinson said in answer to an analyst’s question about delinquencies.
