Ally Financial has announced increasing its investment in Carvana to $2 billion, a leading e-commerce platform for buying used cars, over the next 12 months as part of the lender’s efforts to grow online initiatives to better reach customers and serve auto retailers.
Under the agreement, Ally will make the funding available to Carvana for financing and bulk purchases of contracts. The agreement increases Ally's original $600 million commitment by an additional $1.4 billion.
Tim Russi, president of auto finance at Ally (pictured above), said: “The increase is a testament to the strength of the relationship and shows how well we are working together to provide Carvana customers with an innovative digital financing experience.
“We've worked closely with Carvana to provide a number of customized services including floorplan credit, vehicle sourcing and consumer financing solutions, and are extremely proud to be able to collaborate with a company that is successfully delivering on its mission to change the way people buy cars."
The increased funding will help support Carvana's sales growth. The new agreement is in addition to the floorplan credit line and vehicle sourcing through Ally's SmartAuction online remarketing platform that Ally currently provides Carvana.
Ernie Garcia, Carvana founder and CEO, said: “We are proud to upsize our financing arrangement with Ally and to continue to strengthen our relationship, as working with Ally enables us to expand financing offerings to our customers as our business grows.
“Partnering with Ally allows us to provide customers with a convenient way to finance their purchase on terms that work best for them.”
Carvana allows consumers to shop for, finance and purchase used vehicles completely online, in as little as 10 minutes, putting the customer in control of the purchase process, including the selection of financing terms and monthly payments.
The retailer provides free, as-soon-as-next-day vehicle delivery in 39 US markets, as well as vehicle purchase pick-up at its seven fully automated, coin-operated car vending machines.
Ally Financial has also announced that Dinesh Chopra has joined the company in the newly created role of chief strategy officer.
Chopra will lead Ally's corporate strategy team, helping to foster its growth and evolution as a leading digital financial services provider and define the elements of Ally's future strategic plan.
He joins from Citigroup where he served as global head of strategy, retail bank, mortgage, fintech and digital payments responsible for leading strategic planning and improving performance for the related lines of business. Prior to Citi, he held leadership positions in strategy and banking at Capital One and McKinsey.
Jeffrey Brown, CEO of Ally, said: “I am confident Dinesh's experience and skills are a great match for Ally as we continue to grow our business and differentiate our industry-leading products and services.
“Adding a CSO to our leadership team will enable us to better evolve our business so that we keep a leading edge in the marketplace as we grow, while also maintaining our keen focus on innovation and a great customer experience."
