Ally Debuts Hybrid Loan-Lease Product in U.S.

For consumers who can’t make up their minds between leasing and buying, Ally Financial seems to have just the product to fit their needs. The company announced today that it will offer its Buyer’s Choice product in select U.S. states for new 2011 and 2012 General Motors and Chrysler vehicles.

How does it work? Buyer’s Choice allows customers to own their vehicles with a fixed rate and payment (the loan portion), with the option to sell it to Ally at a predetermined price at the 48th month of the contract (the leasing part). Contract terms can extend as long as 84 months, the company said.

With the fixed offer, Ally hopes to benefit consumers, OEMs, and dealers. Consumers benefit because they know they have a fixed price for their vehicle at 48 months, a price that effectively acts as a minimum bid on the car. OEMs want short sales cycles, and this product should facilitate that. And finally, dealers get a marketing calendar event with the potential to get healthy, four-year-old vehicles on their lots.

“For all three of the parties, we are really trying to align the trade cycle in the market,” Tim Russi, Ally’s executive vice president of North American operations told AutoFinanceNews.net.

For the past year, the product has been offered in Canada, but the recent launch brings it over to the states in California, Florida, Illinois, New York and Texas. Russi told AFN.net he hopes Buyer’s Choice will be available nationwide by the time the NADA annual convention rolls around next February.

As the market becomes more competitive again and optionality seems necessary, does this put Ally is a good spot as 2012 draws near?