That’s what Carpenter told analysts yesterday during the company’s fourth-quarter earnings call. He said that Ally was quickly weaning itself of the need to use subvented finance programs to compete and that Ally’s standard contracts are attractive enough to gain market share.
In the fourth quarter, Ally increased its U.S. retail volume 72 percent to $9.3 billion from $5.9 billion.
The competitive edge comes from a bank holding company’s lower cost of funds, Carpenter said. Ally doesn’t need manufacturers’ finance incentives to be competitive when it can tap bank deposits.
Ally’s debt ratings also have improved as it strengthened its balance sheet over 2010, lowering its cost of funds further, he said.
Now Ally’s cost of money is a half-percentage point better than Ford Motor Credit Co., he said. And Carpenter believes it can only get better after Ally launches an IPO in the near future to buy back the U.S. Treasury’s 73.8 percent stake in the company.