Car loan deterioration, Ally Financial (ALLY.US) stock price plummets by 18%.

Ally Financial (ALLY.US) fell 17.62% on Tuesday, closing at $32.67, marking its largest single-day decline since March 2020, as the Chief Financial Officer, Russ Hutchinson, stated that the credit conditions of the auto loan institution are deteriorating. Hutchinson mentioned in a conference that borrowers exhibited financial vulnerabilities in 2024, and the August U.S. employment report further highlighted these pressures. Hutchinson said, "Throughout the quarter, our credit challenges have intensified. Our borrowers are struggling with high inflation and cost of living, with recent weak employment conditions." In mid-July, the company raised its expectations for bad debt losses in 2024. Hutchinson stated that Ally will review its loan loss provisions and increase provisions if necessary to address potential defaults. He added that auto loan delinquencies and net charge-offs in July and August were higher than expected. He noted that the company's future focus will be on capital and expenses, but the current guidance will remain unchanged.