Millions Have Applied for Auto Loans Through Ally in 2021. Should You?
by Dana George | Published on Aug. 13, 2021
Ally auto loans are experiencing a record-breaking year. Should you consider them for your next vehicle loan?
This year is full of financial surprises. For example, the unusually red-hot housing market shows few signs of cooling. And as the global pandemic continues to rage, there's a shortage of new and used cars caused by an electronic chip shortage.
Despite mini-financial shockwaves, Ally auto loans is having a banner year, making decisions on nearly 7 million loan applications according to their earning reports. Halfway through the year, Ally has reported more than $4 billion in adjusted net revenue. Ally has long been known for their personal loans, but the high demand for new vehicles has pushed their auto loans into the spotlight.
What's driving this uptick in Ally's business, and should you consider applying for an auto loan from the growing company? Here, we look at the good, bad, and ugly characteristics of Ally's auto loans.
One way Ally has grown so rapidly is by using artificial intelligence software to verify borrower documents and data in real time. This software makes it possible for Ally to confirm identity, employment, income, and other applicant details in little time -- and it lets the lender quickly inform applicants of the decision.
Ally offers fixed-rate auto loans of $1,000 to $300,000, with terms from 12 to 84 months. While Ally doesn't commit to a specific minimum credit score, anecdotes indicate a minimum score of 620 is typically required.
Here are the most attractive loan features Ally offers:
- Borrowers can build the cost of wheelchair lifts and other mobility aids into their new vehicle.
- The company finances the cost of installing right-hand drive capability.
- It's possible to snag an interest-free loan on manufacturers' 0% APR promotions due to the number of vehicle manufacturers Ally works with.
- Ally will refinance the loan on vehicles up to 10 years old.
Few companies are all good or bad, and Ally is no exception. Here are some of the less attractive features of Ally auto loans:
- Ally auto loans are only available through specific dealerships.
- Ally is an online bank, so it doesn't offer in-person banking services. This may not bother everyone, but it's an essential consideration for those who prefer personalized service.
- Ally auto loans can't be used to pay for vehicles over 10 years old or with more than 120,000 miles on the odometer.
- It's tough to pay an Ally auto loan off early as the lender doesn't accept principal-only payments.
- For those looking for an auto loan for low credit, other lenders may offer more competitive rates.
While reviews must be taken with a grain of salt (usually, the unhappiest customers take the time to write reviews), online comments regarding Ally auto loans are quite harsh. The most significant number of complaints concern customer service. In addition to unwarranted late fees and payment confusion, poor communication on the part of Ally customer service is a frequent topic of discussion.
Still, as you rate shop for an auto loan, keep Ally in mind. Their loan flexibility and ease of application may be right for you.
Applying for Ally auto financing
If you're accustomed to calling your local bank for an auto loan or checking online for the lender with the lowest rates, applying for a loan through Ally will be a little different. Here's how it's done:
- Apply with several lenders to compare offers and choose the best option.
- Use Ally's dealer locator tool to find a dealership.
- Gather the documents you'll need to apply, including picture identification, proof of income, and banking information.
- Visit a dealer and, if you find a car you like, take it out for a test drive.
- Fill out a credit application at the dealership and let them also search lenders. Let them know that you'd like to view the offer from Ally.
- Compare Ally's offer to the offer you received before car shopping. If it's better, it may be the best choice for you.
No lender offers a one-size-fits-all loan product. An Ally auto loan is worth considering if the interest rate and loan term fit your needs.
The Ascent's best personal loans for 2022
Our team of independent experts pored over the fine print to find the select personal loans that offer competitive rates and low fees. Get started by reviewing The Ascent's best personal loans for 2022.
About the Author
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.