GM's Strong Quarter and Ally's Credit Data Tell Different Car Stories

General Motors and Ally Financial entered third-quarter earnings as a paired test of the American car buyer. The results were not uniformly reassuring, but they were clearer than the preview: GM protected pricing and expanded margins, while Ally grew lending volume as auto credit losses moved higher.

GM reported third-quarter revenue of $50.0 billion, up 2.9% from a year earlier. Net income attributable to stockholders was $3.3 billion, adjusted earnings before interest and taxes were $4.1 billion, and adjusted diluted earnings per share reached $3.70. GM North America's adjusted operating margin rose to 8.7% from 6.2%, a 2.5 percentage-point improvement.

That margin result matters because the original question was whether vehicle buyers were resisting high prices. GM's earnings deck said average U.S. transaction prices were about $52,000, while incentives averaged 4.8% of the manufacturer's suggested retail price, 1.8 percentage points below the industry average. Wholesale volume also increased: GM shipped 1.028 million vehicles globally in the quarter, up from 977,000 a year earlier. Wholesale sales are vehicles sold to dealers, distributors and governments, so they are not the same as retail purchases, but they are the volume most closely tied to GM's reported automotive revenue.

GM narrowed its full-year adjusted EBIT forecast to $14.5 billion to $15.5 billion from $14.0 billion to $16.0 billion. It also raised the low end of adjusted automotive free cash flow guidance, now expecting $11.5 billion to $12.5 billion. The board approved a new $20 billion multiyear share-repurchase authorization after GM completed the $6 billion program announced in January. The authorization permits repurchases but does not require GM to spend the full amount.

Ally's quarter showed strong demand for financing and a less comfortable credit picture. The lender reported $401 million of net income attributable to common shareholders, GAAP diluted earnings of $1.30 per share and adjusted earnings of $1.34 per share. Net interest margin excluding original-issue discount increased to 3.66% from 3.63% in the second quarter and 3.55% a year earlier.

Consumer auto originations were $12.9 billion, up $1.2 billion from the third quarter of 2025, on a record 4.8 million applications. The mix shifted slightly away from Ally's top credit tier: S-tier borrowers represented 44% of originations, compared with 47% in the second quarter. That does not establish deteriorating underwriting by itself, but it makes the loss data more important.

Retail auto net charge-offs rose to an annualized 1.89% of average receivables from 1.57% in the second quarter and 1.88% a year earlier. Consolidated net charge-offs were $423 million, versus $394 million in the second quarter, and the provision for credit losses increased to $529 million. Ally said the provision reflected strong asset growth and stabilizing credit trends, while also warning that the economic environment remained fluid. Management kept its full-year retail auto net charge-off outlook at 1.8% to 2.0%.

The two reports therefore separate vehicle demand from borrower health. GM's pricing discipline, higher wholesale volume and wider North American margin indicate that demand for its product mix remained firm. Ally's application and origination growth confirms that consumers still sought financing, but its higher sequential charge-off rate shows that loan performance did not improve at the same pace. For investors, the next signal is whether Ally can keep losses within guidance without sacrificing loan growth, while GM converts pricing strength into cash after a quarter that already raised the floor of its outlook.