Ally Financial: The Next Vintage

From “Ally Financial: Momentum” (October 2025):

“The biggest concern on the Ally thesis has been credit quality, primarily due to the troublesome performance of the 2022 vintage. The good news is that the loan book turns fairly quickly… The large majority of what remains is from newer vintages (2023 – 2025), loans added to the auto book with 9%+ origination yields and which are more heavily weighted to Ally’s highest quality credit tier. In effect, the pain that preceded this period set the stage for improved underwriting conditions; Ally and its peers are reacting accordingly.”

That reaction - leaning into improved underwriting conditions - remains evident: Ally originated ~$13.3 billion of consumer auto loans during Q2 FY26, a ~21% increase from the year ago period. We see a similar trajectory at its peers, with Capital One’s Auto originations growing by a comparable rate in the quarter to ~$12.9 billion. In total, Q2 FY26 auto origination volumes ($) for Ally and Capital One were up >40% versus Q2 FY24.