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What to Look for When Buying a Used Car

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Used car checklist
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You probably already know the biggest advantage of a used car over new: lower cost. The average used car price was $16,000 below the average new car price in the third quarter of 2018, according to Edmunds. But is the potential savings worth the risk of buying a vehicle with a mysterious past?

Perhaps — if you’re armed with the right know-how. We’ll tell you where to find reliable information about the car you’re considering and what to look for in your own vehicle inspection.

What to look for when buying a used car: 6 steps

Step 1: Research the specific used car

Before you leave home to go test drive the car, do some internet sleuthing. It may save you a trip to see it if you find that type of vehicle usually has issues.

Expert reviews and user reviews

Look for expert and user reviews for the specific model you’re interested in, which could tell you whether that type of car is reliable or has major issues. Almost every used car has some type of common issue, from simple things that may not affect you, like the AM radio not working, to large things that can result in the engine melting.

Steer clear. If that car tends to have major or expensive problems, you may want to find another used car.

Where to find it. In Google or another search engine, type in the car’s year, make, model and the words “review” or “problems” to see what pops up. You could also use a free industry standard site like Kelley Blue Book or Edmunds to see their reliability scores and auto expert reviews. And you can look up safety reviews at the National Highway Traffic Safety Administration and the Insurance Institute for Highway Safety.

Vehicle history report

If the car passes your preliminary internet research, you could look up a vehicle history report on the car, which can tell you whether the car is marked as stolen, was in an accident, got flooded, is considered salvage and how many owners it’s had and more.

Steer clear. If it is stolen — report it to the police. Otherwise, ask the owner about any red flags you see on the vehicle history report. If it’s a small thing, like fender bender, you could use that to negotiate a lower price. If it’s a large thing, such as a major accident, you may want to pass.

Where to find it. Many car dealerships provide free vehicle history reports. If they are not willing to give you one, that could be a red flag in and of itself. If you are buying a car directly from another person, you could ask them to provide one or buy one yourself from National Motor Vehicle Title Information System, AutoCheck or CARFAX.

Vehicle value

Before you go look at the car, an easy and useful thing is to look up its value. You should not pay more than that to buy the car and if you can negotiate a price less than that, you got a good deal.

Steer clear. Before you go look at it, if the car’s advertised price is exceedingly low compared with its value, it might be a scam. After you look at it, if the car’s seller refuses to sell it for around that value, you can probably get a better deal elsewhere.

Where to find it. You could use NADAguides or Kelley Blue Book. Both are free internet resources. You can put in the car’s information and it will tell you the fair price for it depending on the car type, condition, location and seller (a dealership or a person).

Step 2: Perform a visual inspection of the car

The best time to inspect a used car is in daylight on a dry day. If you’re meeting a private seller rather than buying from a business, a public parking lot near an interstate is usually ideal. Have the car parked on even, flat pavement that doesn’t have any oil marks or puddles on it already.

Leaks

Turn the car on and have it idling for at least 30 seconds, or leave it on while you check the cosmetics. Then pull the car forward enough so that you can check the ground where it used to be parked for any puddles or fluids that the vehicle may have leaked.

Steer clear. Any leaks is not good news, especially oil. If the AC was running, some water is normal.

Where to look. Any fluids that leaked from the engine will of course be on the ground from where the front part of the car was. A gas leak may have come from the gas tank, which is usually at the back of the car.

Cosmetics

Look for any sagging, dents, scratches, uneven gaps between the car doors and the body of the car, rust and duct tape. While some of these things may be just cosmetics, lots of rust isn’t good and dents in certain places can seriously affect the car.

Steer clear. A ton of rust could mean there are or there may soon be holes in the car, and people generally like their vehicles to be watertight so you don’t get rained on while driving or have to deal with mold inside. Dents in the car’s frame could affect its driving and safety.

Where to look. Don’t forget to look at the roof of the car for rust. To check the frame, either look or feel under the front and back bumpers for the metal bar. The bar shouldn’t have dents, kinks or lots of rust. You could also look in the trunk in the spare tire compartment, if the car has one. This compartment is usually made of curved metal, to fit the tire. If the shape of the metal isn’t smooth, the car may have been in an accident.

Tire tread

Looking at the tread on the tires can tell you more than just whether they are old or new. They can tell you whether the suspension of the car is good.

Steer clear. The tire tread should be “penny deep.” An old tip is to use a penny to check the depth of the tire tread. If the penny shows, then the tread is low and the car will likely soon need new tires. And if the tread is worn unevenly, the car probably has a suspension problem.

Where to find it. To fully check the tires, turn the car’s steering wheel sharply in one direction so you’ll be able to see the whole flat of the tire. Do look at all of the tires and check for uneven tread on both the right and left sides of the car.

Step 3: A closer look inside the car

This is where you will hopefully spend most of your time with the vehicle, so make sure it doesn’t smell like mold, have a lot of wear and tear, and that it’s generally up to snuff.

Diagnostic check

This is the first thing many mechanics will do when testing a vehicle. There’s little point in popping the hood and getting dirty when you can get a full overview by only plugging in a scanner. The scan reports problems so you can quickly know what, if anything, is wrong with the car.

Steer clear. If the scanner reports a lot of “fails,” states only one result that means “all codes were cleared,” or says “not ready” or “pending” on many items, be wary. The seller could have cleared warning codes to hide major problems. In any of these cases, the car may have many costly problems. Each item should ideally say “OK.”

Where to find it. At an auto parts shop, such as AutoZone or O’Reilly Auto Parts, an employee could run the test for you for free. Or you could buy a scanner from them or online for less than $20, which could be especially useful if you’re going to look at a few cars.

Internal equipment

As you may take the car on a test drive soon, make sure you can comfortably see via the mirrors and sit well. Adjust the mirrors and the driver’s seat. Blast the AC, heat and radio to test that they work. Push buttons to see that the power windows, navigation, touchscreen backup camera and any technology the car may have works.

Steer clear. You shouldn’t smell anything burnt when you turn up the heat. You shouldn’t hear any crackling from the audio speakers. Everything should work as it’s supposed to. If it doesn’t, you could look up the cost to fix it and ask the owner to deduct that cost from the price of the car. Or you may decide buying a car without a working heater in the dead of winter isn’t worth the trouble.

Where to find it. If the car is supposed to have something that you can’t find or figure out how to work, ask the owner or the salesperson. If they don’t know, you could consult the owner’s manual or look it up on the internet.

Step 4: Pop the hood

Checking the part of the car that makes it go – the engine – is a good idea. You don’t have to be a mechanic to look at a few basic things.

Engine oil

The oil lubricates the moving parts of the engine. It should be dark brown or black and very smooth when you rub a dab of it between your fingers. With the engine off, take the dipstick out, wipe it off, put it back in and take out it again to check the level of oil. It should come up to the appropriate mark on the dipstick showing it has enough oil; not too much, not too little.

Steer clear. If it is very gritty, has metallic flakes or is light colored. These signs mean the engine is damaged and could fail soon. An odd level of oil is not the best either, especially a low level.

Where to find it. The dipstick to check the oil may be yellow and should be marked as “oil.” If you have trouble finding it, ask the seller, check the owner’s manual or look online where the oil dipstick is located for that type of car.

Transmission fluid

The transmission is the part of the engine that allows you to go different speeds, instead of forever putting along at five miles an hour. It needs a different type of lubricant that is much thinner than oil and should be a light red color.

Steer clear. If it is brown or black or smells burnt. This means the transmission is in bad shape, might stop working soon, and a new one is usually at least a couple thousand dollars.

Where to find it. There should be a cap maybe four inches wide that is labeled, but usually not clearly, so a flashlight may help. Again, check online, check the manual or ask the seller if you have trouble.

Belts and hoses

Touch the belts and hoses you see to feel whether they’re firm, not frayed, not cracked and don’t have leaks.

Steer clear. The belts and hoses should be taut and flexible but should not be loose. If you can wiggle them or pull them free, that’s not good. If they are leaking, coming apart by fraying or cracking, that’s also not good. Most of these things are easy enough and relatively cheap to replace, but leaking hoses could mean the engine hasn’t been getting enough fluids and could be damaged.

Where to find it. These should be easily visible. Lean down and peer around the engine in the front and on the sides to see more.

Exhaust

The color of the engine exhaust can tell you a lot about the engine’s health. Ask the owner or a friend to turn the car on and rev the engine while you stand behind the vehicle and watch for the exhaust.

You should check this twice; once when the engine is cold and once when it is hot. An engine is “cold” when it hasn’t been running for a while and “hot” when it’s been running and warmed up.

Steer clear. A small amount of water vapor is normal, but blue, white, black and gray smoke are all signs of a problem that could mean anything from a small, easily repaired crack in the coolant container to a split engine block. If there is smoke but the car has passed your other tests thus far, consider taking it to an independent mechanic to determine the problem.

Where to find it. The exhaust pipe should be at the back of the car near the rear bumper. There may be two pipes and the pipe itself may be under the bumper, not easily visible.

Step 5: Take a test drive

If the car has passed all of your tests so far and you think you’d like to buy it, take it for a test drive. Drive it over potholes and speed bumps. Listen for any squeaks and rattling.

Accelerate

When appropriate, such as on an on ramp to a highway or interstate, punch the gas and accelerate quickly. Go from a low speed up to the speed limit.

Steer clear. If the car jerks or makes funny noises there may be a transmission or engine issue.

Brakes

Give the owner or salesperson in the car with you a warning that you’re going to stop quickly to test the brakes. Make sure there is no one else around that could hit you or whom you could hit if the brakes don’t work.

Steer clear. The car should come to a smooth stop without a lot of noise. A jerky or particularly loud stop means the brakes need work.

Turns

When appropriate, turn the steering wheel sharply to one side and then the other to test that the car will indeed go where you want it to go.

Steer clear. If the steering squeaks a lot, it may be a case of needing more steering wheel fluid (a simple fix). If it is awfully loose or tight, there may be a bigger problem.

Looking for auto financing? Check out our top picks for auto loans.

Step 6: Check the paperwork

Check the VIN

Finally, if everything seems good and you want to buy the car, make sure the VIN on the paperwork matches the VIN on the car. And if you’re buying from a private seller, make sure the name on the title matches the name on their driver’s license so you’re sure the person has the right to sell the car. If the title lists two names as the current owners with the word “or” between them, you don’t need the other owner to sign as well. However, if the word between the name is “and,” you will need both owners to sign the title over.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Jenn Jones
Jenn Jones |

Jenn Jones is a writer at MagnifyMoney. You can email Jenn at [email protected]

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Auto Loan

How Much Does a Tesla Cost?

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Tesla Roadster
Tesla

Teslas are the newest, spiffiest electric vehicles on the block. The first models were priced as luxury vehicles, but Elon Musk promised to make an EV affordable for most Americans by rolling out the Model 3 at an advertised price below $35,000. There is more to the price, however, as we’ll explain.

Musk’s fancier models will cost you a pretty penny — up to $250,000 — along with Tesla’s upgrades. Availability and price depend on the model and the trim you choose. For the whole picture, keep reading.

How much does each new Tesla model cost?

In order of price, Tesla offers five consumer car models: 3, S, X, Y and the upcoming second-generation Roadster, which you can reserve now. It speaks to company founder Elon Musk’s sense of humor that if you put the first models in the order they were produced you get “S3XY.”

*It’s important to note that the advertised prices don’t include a $1,200 destination and document fee, and they do include a $1,875 federal tax incentive and an estimated savings in gas over six years. Neither price includes taxes or registration fees.

What about the tax credit?

Time ran out on the full $7,500 federal tax credit that was available to the first 200,000 new Tesla owners. Customers who have their Teslas delivered from July 1 to Dec, 31, 2019 get a fourth of the tax credit amount, $1,875.  In 2020, there is no scheduled tax credit.

The good news? There are state tax credits you may be able to use for your new Tesla. The following states and Washington D.C. offer incentives like tax credits, tax exemptions and reduced rates for EV charging: Arizona, California, Connecticut, Colorado, Delaware, Hawaii, Louisiana, Maryland, Massachusetts, Nevada, New Jersey, New York and Pennsylvania.

How much does a Model 3 cost?

The Model 3 is Tesla’s least expensive car. You may be able to drive away in one for a minimum of $41,100. If that amount surprises you, then you know the Model 3 is often highlighted as costing less than $35,000. So why the discrepancy?

The quoted $33,725 price tag is after estimated savings, including the $1,875 tax credit and the fuel savings you would have over six years if you owned a gasoline-powered car. Add those back in and you get to the sticker price of $39,900. Then, tack on Tesla’s standard $1,200 delivery and document fee to get a price of $41,100, not including tax and registration fees.

How much does a Model S cost?

The sticker price for the Standard Range AWD of a Model S is $75,000. For a greater driving range by about 76 miles, the Long Range AWD trim comes in at a $85,000 sticker price. And for a greater performance, the Performance AWD goes from zero to 60 in 2.5 seconds, a 64% faster acceleration for $11,000 more than the Long Range AWD.

How much does a Model X cost?

While models 3 and S are sedans, the Model X is an SUV crossover with optional third-row seating. The lowest trim, the Standard Range AWD, has an $81,000 sticker price. The next trim up, the Long Range AWD has a sticker price of $91,000 and will get you 58 miles more in driving range. The top trim Performance AWD for $102,000 will get you from zero to 60 mph in 2.9 seconds, instead of 4.7 seconds that the Long Range AWD achieves.

How much does a Model Y cost?

A smaller crossover than Model X, Model Y doesn’t have a Standard Range option. Its least expensive trim is the Long Range at a price of $48,000. The Long Range AWD is $52,000 and the Performance AWD is $61,000.

How much does a Tesla Roadster cost?

The most expensive Tesla model is the second-generation Roadster. A Founders Series Roadster is $250,000; although you could get a base Roadster for $200,000. Given the $50,000 price difference between the Founders Series Roadster and the base Roadster, which is enough to buy a whole other Tesla, the Founders Series Roadster has got to offer something special — and it does. You can go from zero to 60 in 1.9 seconds and from zero to 100 in 4.2 seconds, which is pretty dang quick acceleration.

Can you negotiate?

Most car brands let you negotiate on prices. We even wrote about how to negotiate a car price. With Tesla, however, there is no price negotiation. James Wolf, a senior engineer at LendingTree, the parent company of MagnifyMoney, bought his Model 3 in October 2018. He explained, “There is no negotiation when it comes to the price, only your options [can] adjust the price.”

There are no back-and-forth, tit for tat price negotiations on a new Tesla. The price is the price, take it or leave it. The only negotiation on a new Tesla is the one you may have with yourself and your budget: there are plenty of drool-worthy option upgrades, the cheapest of which adds a cool $1,000 to the price tag. More on that later.

Tesla fees and options

As with any car purchase, there will be unavoidable fees and some enticing options you could add to the vehicle. Both will increase the final price.

Can you avoid the destination and document fees?
No. Of the $1,200 fee, $1,000 is the delivery fee, which is charged in the U.S. and Canada regardless of delivery method or location, even if you pick it up hot from the factory floor. Why? It’s government-mandated. The delivery fee, also known as the destination charge, has to be separate from the MSRP and clearly disclosed. The remaining $200 is the document fee.

How much do options cost?
The least expensive upgrade is getting a black and white interior in a Model 3, rather than the all black. The most expensive is adding autopilot after you buy the car for $7,000, instead of ordering it for $5,000 when you get the car new.

**For Models S and X the interior options of Black and White, and Cream are available for purchase on the two lower trims only. The Black and White option is available for no up-charge on the top trim, but the Cream is not available on the top trim.

How much is tax?

Property tax. Vehicle property tax depends on your state and your county or city of residence. It varies pretty wildly, so check your state’s Department of Motor Vehicles website for more information.

Sales tax. If you’re lucky enough to live in state without sales tax (Alaska, Delaware, Montana, Oregon, New Hampshire), you may not have to pay taxes on the car’s purchase.

For the rest of the country, state sales tax applies. You may also have local sales taxes to contend with. The highest average combined state and local sales tax rate is in Tennessee at 9.46% as of July 2018. The lowest is Alaska at 1.43%. And the average in California is 8.55%.

Is tax included in the final amount I pay for the Tesla? If you live in a state where Tesla has a sales license, the applicable taxes you’ll have to pay will be included in your total. If you live in a state where Tesla does not have a sales license, taxes will not be included in the total, but you will have to pay them when you register the car in your state.

Do I have to pay California sales tax? If you pick the car up in California and you live in a different state where Tesla does not have a sales license, Tesla, by law, has to charge California sales tax. For further information on this, see a tax professional or talk to a Tesla representative.

Where does Tesla have a sales license? Tesla has a sales license to directly sell vehicles in about half of U.S. states. Different states have different automotive sales laws. You could see a thread on the Tesla Motors Club website with a map on Tesla sales licensure.

Financing a Tesla

If you’re not paying cash, you may be able to get a loan through Tesla or another lender. It does not hurt your credit to apply to multiple lenders any more than it does to apply to one lender, as long as you do so within a 14-day window. It’s always good idea to shop around for a car loan just as you would for the car itself — only talking to one lender is one of the common mistakes people make when they need an auto loan.

Tesla financing and leasing. Once you create a Tesla account, which you may do here, you can submit a credit application online and hear back from Tesla within 48 hours. Tesla financing is only available in these states: California, Colorado, Florida, Georgia, Hawaii, Illinois, Indiana, Maryland, Massachusetts, Minnesota, Missouri, Nevada, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, Tennessee, Virginia and Washington.

Financing with your own lender. If you have your own lender, you’ll need to provide the name of the lender, the exact dollar amount of the loan and the lender’s address and phone number to Tesla. In turn, the lender will want the VIN, which you can find in your Tesla account.

How much does a used Tesla cost?

Despite it being a relatively new car company, there are used Teslas available for sale. Some models are almost 10 years old, as the first generation Roadster came out in 2008. It’s these older models that are the least expensive Teslas you’ll find, priced in the upper $30,000 range. Tesla itself offers used models that passed a rigorous inspection and come with a warranty. You can also find used Teslas for sale off third-party car buying sites, such as AutoTempest and CarGurus.

Because they are used, you won’t have to pay the $1,000 destination fee, which only applies to new cars; unless, of course, you’re getting the car shipped to you specially. If you buy the car from a dealership rather than a private person, you will still face all of the typical dealer fees. And no matter how you buy the car, you’ll need to pay the appropriate taxes.

The bottom line

The least expensive new Tesla will cost you $41,100 before taxes and before any available tax credits. You can’t negotiate on the price of a Tesla, but you can pick and choose options that suit you. If you’d like to see what else is out there without leaving your couch, you could look at the best online car buying sites for 2018.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Jenn Jones
Jenn Jones |

Jenn Jones is a writer at MagnifyMoney. You can email Jenn at [email protected]

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Auto Loan

Ally Bank Auto Loan Review

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

First Investors Financial Services auto loans
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Ally Bank is one of the most popular online banks, thanks to its sky-high deposit rates. But it is more than a place to keep your money. The bank also offers loans, including auto financing, though most car buyers will only be able to apply through a dealership. Are Ally’s lending terms as impressive as its deposit accounts? This review will cover all the key details along with how to apply with Ally Bank.

About Ally Bank

Ally Financial Inc. is one of the largest automotive lenders in the country. Even though its bank is only 10 years old, its history in auto financing goes back a century thanks to its General Motors Acceptance Corp. roots. GMAC was the financing arm of General Motors from the early 1900s leading up to the financial crisis. In 2009, it switched from an industrial loan company into a bank holding company and changed its name to Ally. To this day, General Motors and Fiat Chrysler dealers make up a little more than half of Ally’s auto finance business.

Ally offers loans and leases for both new and used vehicles. However, you don’t apply with Ally directly for auto financing. Instead, you need to visit a local dealership that works with Ally and apply through them.

You can apply for a loan through Clearlane, a subsidiary of Ally. Clearlane does not actually set up auto financing itself but generates offers from lenders from which you can choose. Through Clearlane, you can refinance an existing auto loan or set up a lease buyout if you’re interested in buying a vehicle you’re currently leasing. However, Clearlane doesn’t offer new loans or leases.

Ally Bank auto financing: At a glance

  • APRs: Not listed on either website since rates depend on the dealer or the marketplace lender.
  • Terms available: Up to 75 months for Ally retail loans. For Clearlane, terms depend on which lender you qualify with.
  • Amounts financed: Not listed
  • Minimum credit score required: Not listed, though Ally notes it has products for both prime and non-prime applicants. The average FICO Score is 689, squarely in “good” credit territory.

Neither Ally Bank nor Clearlane offer many specifics online about their auto loans. Your actual loan terms will depend on the dealership you apply for Ally or the lenders who make you an offer through the Clearlane marketplace.

How Ally Bank auto financing works

To apply for Ally auto financing, you first need to find a participating dealership. On the Ally website, you can enter your location and the type of car you’d like to buy/lease, then Ally will give you the names and addresses of nearby dealers that offer its products. You can then decide on the vehicle you’d like to buy and apply for your loan/lease.

The exact application process and requirements will depend on the dealer but expect to submit the typical documents for an auto loan, including:

  • Proof of identity: Driver’s license, a state ID or passport
  • Proof of income: Pay stub or W-2 form
  • Proof of residence: A recent bill, bank statement, mortgage/lease statement or other addressed mail
  • Banking and credit history: The dealer could ask about your current financial situation, including what kind of debt you owe and how much you have in savings and investments.

As part of the application, the dealer could pull up your credit report through a hard inquiry. Since the dealership is setting up your financing, there is no guarantee that it will recommend an Ally loan, especially if the dealer finds a better option.

Ally even suggests that you shop around before visiting a dealership as it acknowledges the benefit of comparing multiple lenders ahead of time.

How Clearlane auto financing works

With Clearlane, you start the application either online or by calling one of its representatives. They’ll first ask whether you want to refinance your existing loan or to buy your leased vehicle.

From there, the preapproval application will ask for the details about your existing vehicle (type and mileage), the amount you’d like to borrow, your contact information, income and whether you own or rent your home.

With this basic information, Clearlane will research lenders willing to make you an offer. You do not need to submit your Social Security number, which means Clearlane will not do a hard pull on your credit during this preapproval process.

If you receive an offer that you like, you can formally apply with the actual lender and it will pull your credit. The lender will also ask for the loan documents like proof of income, address and identity. The actual requirements will depend on the lender.

Ally Bank auto financing products

Traditional retail financing – For regular auto loans, Ally offers financing for both new and used vehicles as well as certified pre-owned vehicles that are up to 10 model years old and have no more than 120,000 miles. Ally’s loans also offer specialty vehicle financing to help cover special needs like wheelchair lifts and right-hand drive capability.

SmartLease® – Ally also offers leasing for both new and used vehicles but only certain types of used vehicles from a list of approved models found here.

Clearlane auto financing products

Clearlane refinance – Under the refinance program, you could replace your existing car loan with a new one that potentially has a lower APR and monthly payment. According to Clearlane, its average monthly payment savings for refinance customers is $107/month.

Clearlane lease buyout – With the lease buyout program, you replace your vehicle lease with an auto loan so you can eventually own the vehicle outright.

Clearlane publishes little information about its auto financing products, as it is a marketplace. Vehicle restrictions, terms, payment option and interest rate will all depend on the lender with which you’re matched.

What we like about Ally Bank auto loans

  • Marketplace system lets you pick the best offer: With Clearlane, it uses your application to track down offers from a list of lenders nationwide — you can pick the one you like best.
  • Convenient mobile access: Ally has developed a mobile app that you can use to schedule loan payments, track how much you still owe and check your FICO credit score, free.
  • No hard pull for Clearlane: You can receive initial loans offers through Clearlane without a hard pull of your credit report, which knocks points off your score. You only need to go through a hard pull if you accept an offer from a lender.

What we don’t like about Ally Bank auto loans

  • Few specifics available online – Both Ally and Clearlane have bare-bones websites that do not cover many details about their loans. You essentially need to apply to learn what you can receive.
  • Terms determined by the lender/dealership: The actual terms of your auto financing will depend on what you qualify for with the dealer or lender.
  • No face-to-face support: While Ally offers phone and online customer service, you can’t get help face-to-face.
  • No specialty vehicle financing: Ally Bank only offers regular auto loans. They don’t provide financing for motorcycles or RVs.

Who Ally Bank auto financing is best for

You may encounter an offer from Ally, especially if you buy your next car through General Motors or Fiat Chrysler Automobiles. You may seek out a loan directly through Clearlane if you’re interested in refinancing your current auto loan or buying a car you’re leasing.

With Ally, you need to apply for financing through one of its approved dealerships where the dealer may end up recommending another lender if the terms seem better. This can put you at a negotiating disadvantage — it’s always a good idea to walk into the dealership with your own preapproved auto loan. If the dealer can beat with an Ally loan or other offer, great, you’ll know you’re getting the best deal.

While Clearlane lets you compare offers, it only works for refinancing existing loans and lease buybacks.

Alternatives to Ally Bank

To research your options even further, you could compare Ally’s rates with those from other lenders offering new and used auto loans. Some of the lowest rates can be found at credit unions, and membership might be easier than you think

There are also several other high-quality auto refinance marketplaces besides Clearlane. If you’ve got an existing auto loan and want better terms, rateGenius is another marketplace that focuses only on loan refinances.

LendingTree, AUTOPAY and iLendingDIRECT are three companies where you can apply online and receive preapproval on quotes for auto loans and loan refinancing. (Note: LendingTree is the parent company of MagnifyMoney.) Whichever marketplace you use, collecting more quotes ahead of time now will help you qualify for better terms on your future auto financing.

The information in this article is accurate as of the date of publishing. 

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

David Rodeck
David Rodeck |

David Rodeck is a writer at MagnifyMoney. You can email David here

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