GM, Chrysler Offer 48-Month Buy-Back Program

Ally Financial, the preferred lender for GM and Chrysler, is launching a new program to buy your car back after four years if you have a five-, six- or seven-year loan. The program, called Buyer’s Choice, rolled out yesterday in California, Florida, Illinois, New York and Texas, with more markets "added over the coming months," Ally said in a statement.

To be sure, anyone can trade or sell their car before their payments are up through rollover financing or a sale payment to the lender, but it's a sticky process.

The Ally product gives the buyer a guaranteed value at the time of purchase, along with an amortization table of the loan. You'll know from the start what sort of equity you'll have at the end of 48 months, which should help anyone thinking about using Buyer's Choice to avoid being upside down at the four-year mark. There's no fee to enroll, and you don't have to buy or lease a Chrysler or GM vehicle with your Buyer's Choice cash. Wear and tear limits will be similar to that of a lease, but exact terms on mileage weren't given.

The program should offer a degree of assurance to shoppers wary of buying from GM or Chrysler, given each automaker's bankrupt past. Then again, Chrysler vehicles are moving up on the reliability chain, an earlier weakness for the company.



i would think this is a counter move to Hyundai's resale value guarantee- I dont think it really has anything to do with assuring people that its safe to by from these companies over 2 years past the bankruptcies. Thats old news at this point and Chrysler has done very well in 2011.


I thought, I can sell my car myself and anytime



The response to your statement is "mostly".

When you buy a car using a car loan, you use the car itself as collateral on the loan. That means it isn't really "your" car at that point. While you are responsible for it, the bank is technically the owner until that loan is repaid. Sometimes you won't be given the title until the loan is repaid, other times you will, but you'll notice that there is language on the title listing the bank as a having right on the vehicle or other equivalent language.

During the time of the loan you may sell the vehicle, but you need the bank's permission to do so. They will only grant that permission on the agreement that you immediately repay the loan upon selling the vehicle. This is because if the vehicle is sold there is no more collateral, so they have no guarantee on the money they lent. (the only reason they gave you as low a rate as they did was because they knew that if you didn't repay they could always come take the vehicle) Usually banks will also then require that you don't sell the vehicle for less than you owe on the loan (though sometimes they will if you have enough cash to make up the difference). This has gotten people stuck in car loans before when they've been upside down, and hence why this program is being put in place. It guarantees that you can get out from under a car loan that you can't afford even if the car falls in value quite a bit.

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