Ally looks to boost online used volume via TRED partnership

Ally Financial Inc. has begun offering auto loans and F&I products to online used-vehicle buyers through a partnership with TRED. The move is the latest in Ally's continual effort to boost its digital presence, according to Doug Timmerman, president of Ally Insurance, who told Automotive News to expect more initiatives soon, without elaborating.

TRED is an online portal that connects car buyers and sellers. For now, Ally is the sole indirect lender and F&I product provider on the platform. TRED has dealership licenses in the states where it operates: Washington, Oregon and soon California. Like a traditional dealership, TRED sells the retail installment contracts to Ally. Other dealerships can participate as buyers, but not sellers. TRED also has a direct lending relationship with Autopay.

Ally began accepting financing applications through TRED in April. It will start offering Ally Premier Protection vehicle service contracts and GAP policies within the next two months.

"Ally's new relationship with TRED expands our digital presence and brings trusted financing and insurance products to its customers at the point of purchase," Timmerman said in a statement. "As a leader in the industry, our goal is to add value for auto consumers by offering products and services that fit their needs and shopping preferences -- whether they choose to purchase at a dealership, or through an online marketplace like TRED."

The partnership will generate an incremental increase in Ally's insurance business, Timmerman told Automotive News. "TRED is an area of our business that we would call a whole new segment, whether you describe it as a digital dealer, as TRED is, or the third parties that are getting into this space to help consumers buy and sell their vehicles via the Internet," he said. "It starts as a small piece, but if you think about consumers' buying habits and how they've evolved in other aspects of shopping, we think it will become a bigger and bigger piece over time."

With Ally, TRED gives buyers more access to vehicles and financing and helps sellers get paid faster. The most significant advancement through Ally, though, is giving customers access to vehicle service contracts and GAP, said Grant Feek, CEO of TRED.

"For years and years and years, the private market was kind of like playing Russian roulette. You don't know what you're getting. Even if you have an inspection and a Carfax report, you never really know what condition it's in. Having access to a vehicle service contract and/or GAP is just a game-changer," he said. "It provides buyers with a lot more assurance, with a much more convenient way to purchase because they can do all this" online.

Last month, Ally launched Clearlane, an online auto finance marketplace that connects lenders and consumers to finance and refinance auto loans. The agreement with TRED still allows Ally to offer financing and F&I products to consumers, but the model differs from that of Clearlane. More than a dozen lenders participate in Clearlane, and the Clearlane network is geared toward F&I only, rather than vehicle sales. "Everyone is trying different approaches. The good news is [TRED is] moving forward with a model that takes the customer through the entire experience," Timmerman said. "This is a segment that is growing, and from TRED's perspective, they wanted a provider that could cover all of their customer needs from a financing and an insurance perspective."