Leasing

Ally as the Lessee

We have operating leases for certain of our corporate facilities, which have remaining lease terms of 3 months to 6 years. Most of the property leases have fixed payment terms with annual fixed-escalation clauses and include options to extend or terminate the lease. We do not include these term extensions or termination provisions in our estimates of the lease term if we do not consider it reasonably certain that the options will be exercised.

We also have operating leases for a fleet of vehicles that is used by our sales force for business purposes, with noncancelable lease terms of 367 days. Thereafter, the leases are month-to-month, up to a maximum of 48 months from inception.

During the three months ended March 31, 2025, and March 31, 2024, we paid $9 million and $8 million in cash for amounts included in the measurement of lease liabilities at March 31, 2025, and March 31, 2024, respectively. These amounts are included in net cash provided by operating activities in the Condensed Consolidated Statement of Cash Flows. During the three months ended March 31, 2025, and March 31, 2024, we obtained $5 million and $16 million, respectively, of ROU assets in exchange for new lease liabilities. As of March 31, 2025, the weighted-average remaining lease term of our operating lease portfolio was 3 years, and the weighted-average discount rate was 3.39%, compared to 3 years and 3.32% as of December 31, 2024.

The following table presents future minimum rental payments we are required to make under operating leases that have commenced as of March 31, 2025, and that have noncancelable lease terms expiring after March 31, 2025.


($ in millions)
2025	$	28
2026	35
2027	27
2028	19
2029	2
2030 and thereafter	1
Total undiscounted cash flows	112
Difference between undiscounted cash flows and discounted cash flows	(6)
Total lease liability	$	106

The following table details the components of total net operating lease expense.


	Three months ended March 31,
($ in millions)		2025		2024
Operating lease expense		$	8	$	7

Variable lease expense		1		1

Total lease expense, net (a)		$	9	$	8

(a)Included in other operating expenses in our Condensed Consolidated Statement of Comprehensive Income (Loss).

Ally as the Lessor

Investment in Operating Leases

We purchase consumer operating lease contracts and the associated vehicles from automotive dealerships or manufacturers after those contracts are executed. The amount we pay for an operating lease contract is based on the negotiated price for the vehicle less vehicle trade-in, down payment from the consumer, tax credits, and available automotive manufacturer incentives. Under the operating lease, the consumer is obligated to make payments in amounts equal to the amount by which the negotiated purchase price of the vehicle (less any trade-in value, down payment, tax credits, or available manufacturer incentives) exceeds the contract residual value (including residual support) of the vehicle at lease termination, plus operating lease rental charges. The customer can terminate the lease at any point after commencement, subject to additional charges and fees. The consumer, dealership, or automotive manufacturer may have the option to purchase the vehicle at the end of the lease term, which generally range from 24 to 60 months, at the residual value of the vehicle, however it is not reasonably certain this option will be exercised and accordingly our consumer leases are classified as operating leases. In addition to the charges described above, the consumer is generally responsible for certain charges related to excess mileage or excessive wear and tear on the vehicle. These charges are deemed variable lease payments and, as these payments are not based on a rate or index, they are recognized as net depreciation expense on operating lease assets in our Condensed Consolidated Statement of Comprehensive Income (Loss) as incurred.

When we acquire a consumer operating lease, we assume ownership of the vehicle. We require that property damage, bodily injury, collision, and comprehensive insurance be obtained by the lessee on all consumer operating leases. Neither the consumer, dealer, nor automotive manufacturer is responsible for the value of the vehicle at the time of lease termination. When vehicles are not purchased by customers, the receiving dealer, or automotive manufacturer at scheduled lease termination, the vehicle is returned to us for remarketing. We generally bear the risk of loss to the extent the value of a leased vehicle upon remarketing is below the expected residual value after adjusting for any residual value guarantees. At termination, our actual sales proceeds from remarketing the vehicle may be higher or lower than the estimated residual value after adjusting for any residual value guarantees resulting in a gain or loss on remarketing, which is included in net depreciation expense on operating lease assets in our Condensed Consolidated Statement of Comprehensive Income (Loss). Excessive mileage or excessive wear and tear on the vehicle during the lease may impact the sales proceeds received upon remarketing. As of March 31, 2025, and December 31, 2024, consumer operating leases with a carrying value, net of accumulated depreciation, of $2.3 billion and $1.9 billion, respectively, were covered by OEM residual value guarantees. Substantially all were covered under a residual value guarantee of approximately 50% of the vehicles’ contract residual value at both March 31, 2025 and December 31, 2024.

The following table details our investment in operating leases.



($ in millions)	March 31, 2025		December 31, 2024
Vehicles	$	9,361	$	9,519
Accumulated depreciation	(1,482)		(1,528)
Investment in operating leases, net	$	7,879	$	7,991

The following table presents future minimum rental payments we have the right to receive under operating leases with noncancelable lease terms expiring after March 31, 2025.


($ in millions)
2025	$	985
2026	985
2027	476
2028	56
2029	5

Total lease payments from operating leases	$	2,507

We recognized operating lease revenue of $351 million and $356 million for the three months ended March 31, 2025, and March 31, 2024, respectively. Depreciation expense on operating lease assets includes net remarketing (losses) gains recognized on the sale of operating lease assets. The following table summarizes the components of depreciation expense on operating lease assets.


	Three months ended March 31,
($ in millions)	2025		2024
Depreciation expense on operating lease assets (excluding remarketing losses (gains)) (a)	$	221	$	238
Remarketing losses (gains), net	19		(46)
Net depreciation expense on operating lease assets	$	240	$	192

(a)Includes variable lease payments related to excess mileage and excessive wear and tear on vehicles of $6 million and $4 million during the three months ended March 31, 2025, and 2024, respectively.

Finance Leases

In our Automotive Finance operations, we also hold automotive leases that require finance lease treatment as prescribed by ASC Topic 842, Leases. Our total gross investment in finance leases, which consists of lease payment receivables, and is included in finance receivables and loans, net, on our Condensed Consolidated Balance Sheet, was $482 million and $496 million as of March 31, 2025, and December 31, 2024, respectively. Interest income on finance lease receivables was $11 million for both the three months ended March 31, 2025, and 2024, and is included in interest and fees on finance receivables and loans in our Condensed Consolidated Statement of Comprehensive Income (Loss).

The following table presents future minimum rental payments we have the right to receive under finance leases with noncancelable lease terms expiring after March 31, 2025.


($ in millions)
2025	$	141
2026	162
2027	127
2028	73
2029	38
2030 and thereafter	15
Total undiscounted cash flows	556
Difference between undiscounted cash flows and discounted cash flows	(74)
Present value of lease payments recorded as lease receivable	$	482

Leasing

Ally as the Lessee

We have operating leases for certain of our corporate facilities, which have remaining lease terms of 3 months to 6 years. Most of the property leases have fixed payment terms with annual fixed-escalation clauses and include options to extend or terminate the lease. We do not include these term extensions or termination provisions in our estimates of the lease term if we do not consider it reasonably certain that the options will be exercised.

We also have operating leases for a fleet of vehicles that is used by our sales force for business purposes, with noncancelable lease terms of 367 days. Thereafter, the leases are month-to-month, up to a maximum of 48 months from inception.

During the three months ended March 31, 2025, and March 31, 2024, we paid $9 million and $8 million in cash for amounts included in the measurement of lease liabilities at March 31, 2025, and March 31, 2024, respectively. These amounts are included in net cash provided by operating activities in the Condensed Consolidated Statement of Cash Flows. During the three months ended March 31, 2025, and March 31, 2024, we obtained $5 million and $16 million, respectively, of ROU assets in exchange for new lease liabilities. As of March 31, 2025, the weighted-average remaining lease term of our operating lease portfolio was 3 years, and the weighted-average discount rate was 3.39%, compared to 3 years and 3.32% as of December 31, 2024.

The following table presents future minimum rental payments we are required to make under operating leases that have commenced as of March 31, 2025, and that have noncancelable lease terms expiring after March 31, 2025.


($ in millions)
2025	$	28
2026	35
2027	27
2028	19
2029	2
2030 and thereafter	1
Total undiscounted cash flows	112
Difference between undiscounted cash flows and discounted cash flows	(6)
Total lease liability	$	106

The following table details the components of total net operating lease expense.


	Three months ended March 31,
($ in millions)		2025		2024
Operating lease expense		$	8	$	7

Variable lease expense		1		1

Total lease expense, net (a)		$	9	$	8

(a)Included in other operating expenses in our Condensed Consolidated Statement of Comprehensive Income (Loss).

Ally as the Lessor

Investment in Operating Leases

We purchase consumer operating lease contracts and the associated vehicles from automotive dealerships or manufacturers after those contracts are executed. The amount we pay for an operating lease contract is based on the negotiated price for the vehicle less vehicle trade-in, down payment from the consumer, tax credits, and available automotive manufacturer incentives. Under the operating lease, the consumer is obligated to make payments in amounts equal to the amount by which the negotiated purchase price of the vehicle (less any trade-in value, down payment, tax credits, or available manufacturer incentives) exceeds the contract residual value (including residual support) of the vehicle at lease termination, plus operating lease rental charges. The customer can terminate the lease at any point after commencement, subject to additional charges and fees. The consumer, dealership, or automotive manufacturer may have the option to purchase the vehicle at the end of the lease term, which generally range from 24 to 60 months, at the residual value of the vehicle, however it is not reasonably certain this option will be exercised and accordingly our consumer leases are classified as operating leases. In addition to the charges described above, the consumer is generally responsible for certain charges related to excess mileage or excessive wear and tear on the vehicle. These charges are deemed variable lease payments and, as these payments are not based on a rate or index, they are recognized as net depreciation expense on operating lease assets in our Condensed Consolidated Statement of Comprehensive Income (Loss) as incurred.

When we acquire a consumer operating lease, we assume ownership of the vehicle. We require that property damage, bodily injury, collision, and comprehensive insurance be obtained by the lessee on all consumer operating leases. Neither the consumer, dealer, nor automotive manufacturer is responsible for the value of the vehicle at the time of lease termination. When vehicles are not purchased by customers, the receiving dealer, or automotive manufacturer at scheduled lease termination, the vehicle is returned to us for remarketing. We generally bear the risk of loss to the extent the value of a leased vehicle upon remarketing is below the expected residual value after adjusting for any residual value guarantees. At termination, our actual sales proceeds from remarketing the vehicle may be higher or lower than the estimated residual value after adjusting for any residual value guarantees resulting in a gain or loss on remarketing, which is included in net depreciation expense on operating lease assets in our Condensed Consolidated Statement of Comprehensive Income (Loss). Excessive mileage or excessive wear and tear on the vehicle during the lease may impact the sales proceeds received upon remarketing. As of March 31, 2025, and December 31, 2024, consumer operating leases with a carrying value, net of accumulated depreciation, of $2.3 billion and $1.9 billion, respectively, were covered by OEM residual value guarantees. Substantially all were covered under a residual value guarantee of approximately 50% of the vehicles’ contract residual value at both March 31, 2025 and December 31, 2024.

The following table details our investment in operating leases.



($ in millions)	March 31, 2025		December 31, 2024
Vehicles	$	9,361	$	9,519
Accumulated depreciation	(1,482)		(1,528)
Investment in operating leases, net	$	7,879	$	7,991

The following table presents future minimum rental payments we have the right to receive under operating leases with noncancelable lease terms expiring after March 31, 2025.


($ in millions)
2025	$	985
2026	985
2027	476
2028	56
2029	5

Total lease payments from operating leases	$	2,507

We recognized operating lease revenue of $351 million and $356 million for the three months ended March 31, 2025, and March 31, 2024, respectively. Depreciation expense on operating lease assets includes net remarketing (losses) gains recognized on the sale of operating lease assets. The following table summarizes the components of depreciation expense on operating lease assets.


	Three months ended March 31,
($ in millions)	2025		2024
Depreciation expense on operating lease assets (excluding remarketing losses (gains)) (a)	$	221	$	238
Remarketing losses (gains), net	19		(46)
Net depreciation expense on operating lease assets	$	240	$	192

(a)Includes variable lease payments related to excess mileage and excessive wear and tear on vehicles of $6 million and $4 million during the three months ended March 31, 2025, and 2024, respectively.

Finance Leases

In our Automotive Finance operations, we also hold automotive leases that require finance lease treatment as prescribed by ASC Topic 842, Leases. Our total gross investment in finance leases, which consists of lease payment receivables, and is included in finance receivables and loans, net, on our Condensed Consolidated Balance Sheet, was $482 million and $496 million as of March 31, 2025, and December 31, 2024, respectively. Interest income on finance lease receivables was $11 million for both the three months ended March 31, 2025, and 2024, and is included in interest and fees on finance receivables and loans in our Condensed Consolidated Statement of Comprehensive Income (Loss).

The following table presents future minimum rental payments we have the right to receive under finance leases with noncancelable lease terms expiring after March 31, 2025.


($ in millions)
2025	$	141
2026	162
2027	127
2028	73
2029	38
2030 and thereafter	15
Total undiscounted cash flows	556
Difference between undiscounted cash flows and discounted cash flows	(74)
Present value of lease payments recorded as lease receivable	$	482