Take the extreme case of a program where every allocation is permanent. The GC allocation will be much much faster than malloc() (GC allocation is normally just bumping a pointer to the end of the heap, while malloc() typically does a lot more work to segregate objects by size etc), and collection will never run. So, overall, the program will be significantly faster.
Edit: More realistically, a program that typically produces 1:1 live mmeory:junk, but occasionally spikes, will consume 0 GC time in normal operation (the GC will just let the junk sit there), while free() needs to run on all that junk as soon as it was created, otherwise it leaks forever.
Also, the fact that GCs can defer collection to later than the object going out of scope can often make them more efficient than a traditional free(). For example, if you have a large graph data structure that is now junk, free() needs to do work that's O(size of graph) to free all the nodes. A copying collector, the most popular design, never even looks at the graph, so it frees it in O(1). Edit: of course, the converse is also true: if the graph survives N collections, the copying GC has to do O(N * size) work, where malloc()/free() do nothing at all.