Ally Offers Consumers A New Car Loan With Guaranteed Buy-Back Price

November 1, 2011

At a time when family car buyers are searching for every great deal they can get their hands on, Ally Financial has come up with what may be a very compelling proposition.

The company is offering “Buyer’s Choice,” a new type of car loan that guarantees a buy-back price at the end of four years that will at least cover the remaining loan balance.

Our sister publication TheCarConnection puts it in perspective. When you take out a car loan, you are more or less rolling the dice, betting that your vehicle will be worth more at the end of the loan instead of less.

But some cars depreciate faster than others, or fall out of favor due to any number of reasons, and you’re left holding onto a vehicle that you owe more on than it’s worth.

Buyer’s Choice, as reported in the Detroit Free Press, will be available to consumers in the five most populous states, California, Florida, Illinois, New York and Texas, starting today.

Consumers selecting Buyer’s Choice, with loans ranging in length from 60 to 84 months, will have the option after four years or 48 months to sell their vehicle back to Ally at a predetermined price. The good news is that this predetermined price will be at least the amount of the remaining loan balance.

Of course, they can also still sell their vehicle privately, if the value is greater than the balance they owe.

If the concept sounds familiar, it is. Hyundai offers its “Hyundai Assurance” program, which is similar. But consumers have to trade in a Hyundai on a newer Hyundai model. With Buyer’s Choice from Ally, on the other hand, consumers can buy any vehicle from General Motors or Chrysler.

Will Buyer’s Choice take off? If the prospect of being upside-down on a car loan bothers you, perhaps this is one guarantee that makes dollars and sense for the next family car purchase, as long as it’s a GM or Chrysler vehicle.

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