Ally Bank auto loan review: A wide range of options

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In a Nutshell

An Ally Bank auto loan may be good if you want multiple loan options for a variety of vehicle types with easy payment choices — including automatic payments and online account management. But these loans are only available through car dealerships that partner with Ally, so you’re limited to those locations.

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Pros Cons
Multiple loan options Can’t get financing directly — must apply through a participating dealership
Specialty-vehicle financing on some loans No funding for vehicles older than 10 years
Online and mobile account management No principal-only payments

What you need to know about Ally Bank auto loans

If you’re thinking of getting a car loan at Ally Bank, here are some features that stand out.

Flexible loan options

Ally Bank, a subsidiary of Ally Financial, offers loans with multiple terms for a wide range of budgets. So whether you plan to buy a vehicle or lease one, there are different options. 

Specialty-vehicle financing

Loan options may include financing your vehicle’s design for accessibility needs, like wheelchair lifts and right-hand drive capabilities. 

Must finance through dealership

You’re not able to apply directly for an auto loan through Ally Bank. Instead, to learn about interest rates, loan terms and qualification, you must do so through a partnering dealership.

A closer look at Ally Bank auto loans

It’s important to consider the details of a car loan, and shop around, before making a decision. Here are some key things to know about Ally Bank.

  • You can select monthly or one-time payment options from a checking or savings account.
  • You can check your payment status, balance and statements anytime by going online or using your mobile device.
  • There’s a free Ally Auto Mobile Pay app, available on both iOS and Android devices.
  • There’s no principal-only payment. That means extra payments go toward any outstanding fees or finance charges first and then are applied to future payments.
  • Financing options are available for new vehicles, and for used cars or certified pre-owned vehicles up to 10 years old and that have 120,000 miles at the start of the loan.

Is an Ally Bank auto loan right for you?

An Ally Bank auto loan may be a good option for people who prefer to finance directly at the dealership while getting access to a variety of loan types. Choices include lease loan and buy loan options.

If you have the time and ability to shop around, it’s best to compare interest rates at a variety of financial institutions. Depending on your credit history and the terms you qualify for, you may be able to get a better loan elsewhere. Keep in mind that if you’re interested in buying a vehicle that’s older than 10 years, or has more than 120,000 miles, you won’t be able to finance through Ally.

Ally also offers a balloon-payment financing product called Ally Balloon Advantage, which offers a fixed annual percentage rate. This allows you to have lower monthly payments in exchange for owing a larger payment at the end of the contract (the balloon payment). This could be a good option if you manage your monthly cash flow well — but if cash management is something you struggle with, balloon payments can be tricky. Also keep in mind that Ally Balloon advantage is not available in all states or for all makes and models.

Finally, if you’d like the option to pay down your auto purchase faster by making additional payments toward your loan principal, Ally isn’t a good option, because it doesn’t allow principal-only payments.

How to apply for an auto loan from Ally

Information about how to apply for a car loan from Ally Bank is limited because you have to go to a partnering dealership to apply directly — and requirements may vary from dealership to dealership.

But you can start the process by going to Ally’s website to identify its partnering dealerships. Then you can go to one of them to look for a car you might want to buy or lease.

After that, the next step at the dealership will likely be a review of your credit, which typically will trigger a hard credit inquiry.  This can negatively affect your credit, so you’ll want to keep this in mind — especially if you’re comparing offers from other lenders. Rate-shopping under certain circumstances may have a minimal impact, but multiple credit inquiries in a short period of time have potential to harm your credit.

If you’re approved, carefully review Ally’s offer — and any other offers you’re comparing — before deciding about signing on the dotted line.

Hard and soft credit inquiries: What they are and why they matter

Not sure if Ally is right for you? Consider these alternatives.

An auto loan from Ally Bank could be a good option if you’re buying or leasing a car that’s newer and has less than 120,000 miles.

If you’re looking for a prequalification experience — which could give an estimate of what your rates and terms might be without a hard credit inquiry — an Ally Bank auto loan may not be for you. That’s because Ally Bank won’t give you an idea of what your interest rates or loan terms might be until you’ve actually applied at a partnering dealership.

If you’re unsure whether an Ally Bank auto loan is right for you, consider these alternatives.

  • Capital One auto loan: If you’d like to check your estimated interest rate and potential loan options ahead of time, Capital One may be a good choice, since it offers a simple prequalification process that doesn’t involve a hard credit inquiry.
  • Wells Fargo auto loan: If your credit history has issues, this may be a good option for you, as Wells Fargo considers all credit ranges in its auto loan decisions. And if you already bank with Wells Fargo, you may receive an interest-rate discount after meeting certain terms.