- Key insight: In the second quarter of 2026, auto-loan delinquencies for Ally were roughly flat from the same period last year.
- Supporting data: Loans that were 60 or more days past due amounted to 1.04% of Ally's auto loans, the same rate as a year ago.
- Expert quote: "We've got this dynamic of stubbornly high delinquencies decreasing, but not decreasing at quite the pace we'd like." — Russ Hutchinson, CFO of Ally Financial
In recent quarters, Ally Financial has been driving auto loan delinquencies downward, in spite of a highly challenging environment for car owners. Now that progress appears to have slowed.
In the second quarter of 2026, delinquency rates on Ally's auto loans remained roughly flat from a year ago. The percentage of retail car loans that were at least 30 days past due was 3.89%, down just slightly from 3.91% in the same period last year. And auto loans at least 60 days past due remained at 1.04%, exactly where they were a year earlier.
"Delinquencies have remained stubbornly high," Russ Hutchinson, the $197-billion-asset bank's chief financial officer, said during an earnings call on Tuesday. "Clearly, we're dealing with a consumer that is dealing with affordability."
Three months ago, the Detroit-based auto lender was boasting faster progress. In the first quarter of 2026, Ally saw 30-plus-day delinquencies drop to 3.69%, down from 3.79% in the same period of 2025. And 60-plus-day delinquencies declined to 0.97%, down from 1.02% the year before.
To be clear, Ally's delinquency rates have not risen. And net charge-offs for auto loans were down by $22 million in the second quarter, year over year, declining from a rate of 1.75% to 1.57%.
"There's nothing different that happened in this quarter versus prior quarters," Hutchinson said in an interview with American Banker. "It's really a continuation of the same, which is delinquencies declining on a year-over-year basis, but the size of that decline moderating over several quarters."
Why has that decline been shrinking? One possible answer is that a cause of lower delinquencies — the runoff of more troublesome earlier loan vintages — is gradually disappearing.
Auto loans issued in 2022 and 2023, when pandemic-induced supply shortages sent car prices soaring, often ended up underwater. To Ally's benefit, those loans have slowly been rolling off the bank's balance sheet. But as Truist Securities analyst Brian Foran pointed out, this roll-off can't last forever.
"For a long time, Ally saw delinquencies declining based on the burn-off of the more problematic 2022 and 2023 vintages," Foran told American Banker in an email. "There is still some tailwind there, but it is in the late innings, and the newer vintages are showing more steady performance."
Another explanation is that macroeconomic trends have finally started to catch up with Ally.
In recent years, Americans have increasingly struggled to afford their cars. In early 2026, as tariffs pushed up car prices, and the war in Iran drove up the cost of gas, national auto loan delinquencies reached rates not seen since 2010, according to
Meanwhile, inflation in general has remained stubborn, with the
"I do think we have a household that is still struggling with affordability," Hutchinson told American Banker. "The cumulative effect of the inflation that we've seen over the past couple of years, as well as recently elevated gas prices — I think that's weighing on the household budget."
At the same time, the U.S. employment rate has remained low, drifting
"You take all those things together, and we've got this dynamic of stubbornly high delinquencies decreasing, but not decreasing at quite the pace we'd like," Hutchinson said.
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In spite of this backdrop, Ally's profits continued to grow in the second quarter. Earnings per share for the company were $1.18, a penny short of analysts' consensus estimate of $1.19, according to S&P Capital IQ.
Net income for the quarter was $410 million, a $58 million jump from the same period last year. Total net revenue was $2.29 billion, up $204 million year over year.
Ally's net interest margin also expanded to 3.59%, up from 3.41% one year ago. In its updated guidance, the bank said it still expects its full-year NIM to reach the 3.6%-to-3.7% range.
On the capital side, Ally conducted $148 million in stock buybacks during the quarter.
"There is clearly growth momentum building across the business lines, and it is coming at a time when credit is improving, margin is expanding and buybacks are starting to layer in," Foran wrote in a research note.
