Top Retail Auto Lender: Ally Bank

Since the beginning of 2013, the largest retail auto lender in the U.S has been Wells Fargo, but during the third quarter of 2014 Ally bank has take the top spot. A report by Reuters indicates Ally over took Wells Fargo by extending a record number of used car loans.

The same report noted banks are gaining ground on manufacturer lending arms on used car sales. In-house financing lending arms have dominated new car sales during recent years. During the third quarter of 2014, a record 54.1% of used vehicles were purchased with a loan. The rise for Ally bank comes during a time when auto transaction prices are at all-time highs. For November of 2014, the average buyer paid $33,750 for a vehicle, the highest per transaction average in history according to Kelley Blue Book. Used vehicle transactions were also at an all-time high during the third quarter of 2014. The average transaction price of a used car during that period was $18,576. The report of higher transaction prices during the third quarter comes even as used vehicle values fell during that same period according to the Manheim Used Vehicle Value Index.

2014 has been a year during which talk of subprime auto lending has taken center stage. Numerous reports have pointed towards increases in subprime loans leading to a “subprime auto lending bubble.” It’s a topic upon which pundits disagree and for which everyone will have to wait and see. According to Experian Automotive, during the third quarter of 2014 the average credits score for a used car buyer was 650 compared with 713 for a new car. If that average credit score for used car buyers continues to decline, the talk of another subprime bubble will only increase.

Have you seen trends like those outlined in this article? Has their been an upswing to the transactional price at your store? Are customers leaning towards in-house lending or usage of an outside credit source?