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Ally Financial (formerly GMAC Financial Services) is preparing to originate car loans that should please any car buyer who has dealt with an upside down loan. The Detroit Free Press reports that Ally will offer car loans in America's 5 most highly populated states that will permit borrowers to sell their vehicles back to Ally after four years at a cost that will at least cover the remaining loan balance. Article source: Ally Financial to offer upside-down-proof auto loans



Try it out on Tuesday



Ally Financial’s Buyer’s Choice car loans programs will start being offered on Tues, Nov 1 at GM and Chrysler dealers in California, Florida, Illinois, New York and Texas. Borrowers will be able to sell back the car after 48 months as loan terms vary from 60 to 84 months. Customers can still watch for other opportunities if they think they can get a better sale price on their own for the vehicle, according to Ally Financial’s North American executive Vice President Tim Russi.



“This tries to appeal to the consumer who really likes having an arrangement where he owns the vehicle, but still wants to know its market value when he considers replacing it,” Russi said.



New loans, more leases



Experts think that Ally might lose loans with the new program. It could make it harder to sell loans. Russi countered that by setting repurchase cost in advance, Buyer’s Choice will defend Ally from the issues inherent in most conventional leases.



Ally Financial’s credit rating has improved twice this year, which Standard & Poor’s notes as a good sign. The score is improving even though the company is losing cash. It is losing money in the residential home mortgage arm. Overall, the company reported $113 million in second-quarter profit, the sixth straight profitable quarter since the financial crisis. An initial public offering is coming soon, a sign that the business is optimistic about the future.



“Ally Buyer’s Choice is a true differentiator in the market and provides great flexibility and choice for consumers,” said Russi. “Ally is committed to bringing industry-first products to market that offer consumers more choices and help dealers sell and service more vehicles.”



Change to an IPO



<p><strong>Information from</strong></p>

Ally Financial Auto Financing

Detroit Free Press

PR Newswire

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