Ally Financial is ramping up a U.S. version of an industry-first financial product that fits between vehicle buying and leasing.

The lender says its Ally Buyer’s Choice delivers the best of both worlds for consumers buying new ’11 or ’12 General Motors and Chrysler vehicles.

The program allows them to own such a vehicle with a fixed rate and payment, but hold an option to sell it to Ally after 48 months at a predetermined rate using residual forecasts.

“We are filling needs of both consumers and dealers,” Tim Russi, Ally’s executive vice president-North American Operations, tells WardsAuto.

The option plan is ideal for customers interested in purchasing rather than leasing, while providing flexibility should circumstances or preferences change, he says.

“This takes some of the uncertainty out of buying a car.”

People who lease vehicles typically do so for three years and then get a new vehicle, Russi says.

But when a bought vehicle hits the 4-year mark, “the owner starts to think about what to do with it. This gives them an option.”

Ally has offered the product for a year in Canada, where regulations restrict vehicle leasing. Ally Buyer’s Choice now debuts in California, Florida, Illinois, New York and Texas. Ally expects to add other U.S. locations in coming months.

“I think we will find a sweet spot with those first five markets,” Russi says. “They are all big but different.”

Customers can select vehicle-financing terms between 60 and 84 months. They can choose to sell their vehicle to Ally or continue their monthly payments for the duration of the finance contract, if they want to retain ownership.

The product can reduce the customer’s buying cycle, increasing showroom traffic, Russi says. “Dealers and auto makers don’t like people out of the market for a long time, so this addresses that while also helping consumers.”

Ally, formerly GMAC, set the 48-month mark for a couple of reasons. If terms were too long, a vehicle would lose some of its remarketing appeal and value, he says. But a 4-year-old car is “a quality pre-owned vehicle for dealers.”

On the other hand, if terms were as short as 36 months, “you would be gravitating to an area where people probably would lease. Forty-eight months seems optimal.”

sfinlay@wardsauto.com