Bank of America does offer auto loans, but only through a third-party lender they partner with, not directly
Bank of America stopped originating its own auto loans years ago. If you want to finance a car through BofA today, you go through their partnership with Ally Bank (formerly GMAC). Ally handles the underwriting, sets the rates, and services the loan. Bank of America acts as a referral channel—they can point you toward Ally, but they do not make the lending decision or hold the loan.
This matters because it changes what you get. You are not borrowing from Bank of America; you are borrowing from Ally. That means Ally's rates, terms, and customer service apply, not Bank of America's. If you already bank with BofA, there is no special rate or streamlined process just for being a customer.
You can also shop for auto loans elsewhere—credit unions, other banks, captive lenders (like Ford Credit or GM Financial), or online lenders. Comparing offers before you walk into a dealership usually saves money, because dealerships often mark up the rate they get from their lender.
Key Takeaways
- Bank of America refers auto loan customers to Ally Bank, which is a separate company that makes the actual lending decision and services the loan.
- Rates and terms come from Ally, not from Bank of America, so being a BofA customer does not lower your rate or speed up approval.
- You can shop for auto loans from credit unions, other banks, captive lenders, or online lenders and compare offers before visiting a dealership.
- Getting pre-approved for a loan before you shop gives you a fixed rate and lets you negotiate the car price without the dealership's financing markup.
How the Bank of America and Ally partnership works
When you visit a Bank of America branch or go online and ask about an auto loan, they direct you to Ally. You then apply directly with Ally—either online, by phone, or through a dealer. Ally pulls your credit, verifies your income, and decides whether to lend and at what rate. Bank of America does not participate in that decision.
Once Ally approves you, you get a loan offer with a specific rate, term (usually 36 to 84 months), and monthly payment. You can accept or decline. If you accept and buy a car, Ally funds the loan and becomes your lender for the life of the loan. You make payments to Ally, not to Bank of America.
The partnership is a referral arrangement. Bank of America gets a small fee from Ally for sending customers their way. It is not a co-branded product or a special program for Bank of America customers.
What rates and terms Ally typically offers
Ally's auto loan rates vary based on your credit score, the age and mileage of the car, the loan term you choose, and current market conditions. Rates change daily. You cannot know your rate until you apply and Ally reviews your credit.
Ally usually finances new cars, used cars (typically 2010 or newer), and certified pre-owned vehicles. Loan terms range from 36 to 84 months. Longer terms mean lower monthly payments but more interest paid overall. Shorter terms cost more per month but less in total interest.
Ally does not charge a prepayment penalty, so you can pay off the loan early without a fee. Some lenders charge a penalty; Ally does not.
Pre-approval vs. applying at the dealership
You have two paths: get pre-approved before you shop, or let the dealership arrange financing. Pre-approval means Ally has already reviewed your credit and offered you a rate and loan amount. You then use that offer to shop for a car, knowing exactly what you can afford and what your payment will be.
If you wait and let the dealership arrange financing, the dealer contacts lenders (which may include Ally) on your behalf. The dealer then presents you with offers, often marking up the rate by 1 to 3 percentage points. That markup is how dealers make money on financing. Pre-approval avoids that markup because you already have a rate locked in.
Pre-approval also gives you negotiating power. You can tell the dealer you have financing lined up and are ready to buy today, which often leads to a better price on the car itself.
When to use Ally through Bank of America vs. other lenders
Ally is one option among many. Credit unions often offer lower rates than banks, especially if you are a member. If you belong to a credit union, start there. Some employers also offer auto loan discounts through credit unions or banks they partner with—check your HR benefits.
Captive lenders—Ford Credit, GM Financial, Toyota Financial, Honda Financial—sometimes offer promotional rates (like 0% APR for may have access to buyers) on new cars. These rates are usually only available if you buy from that manufacturer's dealership.
Online lenders like LendingClub or Upstart may offer faster approval and funding, though rates vary widely. The key is to get multiple offers and compare the total cost, not just the monthly payment. A lower rate over 60 months costs less than a higher rate over 84 months, even if the monthly payment is higher.
How to apply for an auto loan through Ally
You can start online at Ally.com or call them directly. You will need your Social Security number, driver's license, proof of income (recent pay stubs or tax returns), and information about the car you want to buy (or a general idea of price range if you have not picked one yet).
Ally pulls your credit report, which temporarily lowers your score by a few points. That dip recovers within a few months. If you apply with multiple lenders within a short window (usually 14 to 45 days, depending on the credit bureau), the inquiries count as one, so shopping around does not hurt your score as much as you might think.
Approval typically takes one to three business days. Ally will email or call you with an offer. If you accept, you get a loan agreement and instructions for the next steps. When you find a car and are ready to buy, Ally funds the loan directly to the dealer or seller.
What happens if you are denied or offered a high rate
If Ally denies you, it is usually because your credit score is too low, your debt-to-income ratio is too high, or you do not have enough income to support the loan. A denial from Ally does not mean you cannot get a loan elsewhere—credit unions and some online lenders have looser standards.
If Ally offers you a rate that seems high, compare it to other lenders before you accept. A rate that is high for someone with excellent credit might be normal for someone rebuilding credit. Shop around to know what the market is offering you.
If your credit score is low, you may be able to improve it before applying. Paying down credit card balances, correcting errors on your credit report, or waiting a few months for negative marks to age can raise your score and lower the rate you are offered.
Frequently Asked Questions
Can I get a better rate if I am a Bank of America customer?
No. Bank of America does not offer rate discounts to its own customers for auto loans through Ally. The rate Ally offers depends on your credit score, income, the car, and the loan term—not on your banking relationship with BofA.
Does Bank of America service the loan after it closes?
No. Ally services the loan, meaning you send your monthly payment to Ally, contact Ally with questions, and work with Ally if you have a problem. Bank of America has no role after you are approved.
Can I refinance my auto loan with Bank of America later?
Bank of America does not refinance auto loans. If you want to refinance after you have bought the car, you would need to go to another lender—a credit union, bank, or online lender. Refinancing makes sense if interest rates have dropped or your credit score has improved since you first borrowed.
What if I want to finance a car through a dealership instead?
You can. Dealerships work with multiple lenders and can present you with several offers. Compare the dealer's offers to pre-approval offers from Ally, credit unions, and other lenders. The lowest rate wins, regardless of where it comes from.
Does applying for an auto loan hurt my credit score?
A credit inquiry from Ally lowers your score by a few points temporarily. The dip recovers within a few months. If you apply with multiple lenders within 14 to 45 days, the inquiries typically count as one inquiry, so the damage is less than if you applied over several months.