Ally continues to expand used-vehicle portfolio

DETROIT -- Ally Financial's first-quarter used-vehicle originations made up more than half of its auto portfolio for the fifth-straight quarter, the lender said Thursday. Total auto originations dipped, driven by a decline in new-vehicle originations.

Used-vehicle originations climbed 8.3 percent to $5.2 billion, comprising 56 percent of Ally's auto portfolio in the first quarter. Last year, used-vehicle originations made up half of the portfolio.

Total originations fell 3.2 percent to $9.2 billion, driven mostly by declines in new-vehicle and lease originations, Ally, one of the top auto lenders in the U.S., said in a statement.

Ally CFO Jenn LaClair told investors that used-vehicle originations helped offset the impact of lower new-vehicle sales.

"We've been mindful of auto ecosystem shifts and built an adaptable platform that positions our franchise for the long term," LaClair said. "At the dealer level, we aligned with trends in the used category, where momentum has continued to build."

Ally's active dealer customers grew 3 percent to 18,000, which drove 3.2 million loan and lease applications, up 9 percent from the year earlier and Ally's highest level ever.

New-vehicle originations fell 14 percent to $3.1 billion, as Ally continued to dial back on loans and leases through its Chrysler and General Motors channels.

Combined, originations through Ally's GM and Chrysler channels declined 25 percent to $1.8 billion.

New-vehicle originations through the growth channel, which consists of franchised dealerships that sell brands other than Chrysler or GM, stayed flat from the year earlier, at $1.2 billion, while lease originations declined 10 percent to $900 million.

New-vehicle loans accounted for 34 percent of originations, down from 39 percent the year earlier, and leases made up 10 percent, compared with 11 percent the year earlier.

Ally's auto finance pretax net income increased 23 percent to $329 million. Net financing revenue rose 7.8 percent to $980 million.

Pretax income for Ally's insurance business, which includes F&I products, rose 23 percent to $145 million.