Ally provides $600 million to online auto retailer

Ally Financial has announced it is to make to $600 million available to e-commerce auto supplier Carvana over the next 12 months through financing and bulk purchases of contracts, in order to support growth at the online retailer.

“We are very pleased to be expanding our relationship with Carvana, and continuing to develop innovative financing solutions that help businesses succeed in the online channel,” said Tim Russi, president of auto finance at Ally. “As the industry evolves, Ally is committed to providing products and services for new business models in the online channel, and also to applying key technology and learnings to help our dealers improve the ease and efficiency of their financing transactions with customers.”

Under the terms of the agreement, Ally will provide financial arrangements to support Carvana’s retail operations, with an initial commitment of up to $600 million. The agreement expands Ally’s existing relationship with Carvana, which also includes a floorplan credit line and vehicle sourcing through Ally’s SmartAuction platform.

“The agreement with Ally will provide Carvana reliable and consistent financing to support both our origination growth and future expansion plans,” said Ernie Garcia, Carvana founder and CEO. “As we look to enter new cities, this relationship will help us to easily accommodate more volume, while maintaining the seamless customer experience that we are known for.”

Founded in 2013 and based in Phoenix, Arizona, Carvana’s has created a start-to-finish online shopping platform that has allowed customers to complete their purchase in less than 15 minutes The company offers as-soon-as next-day delivery to residents in 21 markets: Atlanta, Austin, Birmingham, Charlotte, Cincinnati, Columbus, Dallas, Houston, IndianapolisJacksonville, Memphis, Miami, Nashville, Orlando, Pittsburgh, Raleigh, Richmond, San Antonio, Tampa, Washington D.C., and Cleveland, and is planning to expand to additional states over the next few years..

Ally and Carvana said they are also exploring other opportunities to expand the relationship.