Ally Financial surpassed Wells Fargo during the second quarter to regain its perch as the nation's largest auto lender, according to Experian Automotive.

Detroit-based Ally had 5.92% market share in the retail auto loan market, Experian said Thursday. That was up from 5.26% in the first quarter.

Wells also picked up market share, but not enough to hold onto the top spot. The San Francisco bank's share rose from 5.35% in the first quarter to 5.45% during the following three months, according to Experian.

At the start of the decade, Ally held a clear lead over Wells Fargo in auto lending. But during and after the recession, Wells and other banks took advantage of their lower funding costs to gain an edge on competitors. Over the last few years, Wells has often held the largest market share.

But the trend has reversed in recent months. Wells Fargo is showing a willingness to cede business to other lenders, while Ally is looking to compete more aggressively.

In January, Wells Fargo Chief Financial Officer John Shrewsberry acknowledged that his company would lose business to competitors willing to offer lower prices or accept lower risk-adjusted returns.

Regarding auto loans to borrowers with top-notch credit scores, he said: "We'll feel the pinch there, where people are just willing to go below us in price terms. And so be it."

Meanwhile, Ally is seeking to build its auto-lending volume, partly to compensate for the firm's loss of leasing business on General Motors vehicles. In particular, Ally wants to make more auto loans to consumers with damaged credit.

"Some of the competitors have sort of said they backed away a little bit from nonprime space. And part of that, I think, is us getting a bigger appetite and forcing others out of the channel," Ally Chief Executive Officer Jeffrey Brown said during a July conference call.

Also during the second quarter, Capital One Financial surpassed JPMorgan Chase to move into third place in the highly fragmented auto lending market, according to Experian. JPMorgan's market share fell from 4.57% in the first quarter to 4.06%.

After the four largest auto lenders, next in market share were Toyota Financial Services, Ford Motor Credit, and Santander Consumer USA, according to Experian.

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