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Ho, ho, ho... Green Giant
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Discussion Starter #1
OK, i'm such a noob when it comes to car buying it's nto even funny. In the next year or so, I'm looking to buy a GTO. (i can hear it now from the SD crew. "Yeah, Mike. We know. Stop talking about it already!") By my best estimates, I should be in good enough of a financial situation to purchase this car sometime next summer, although it will likely be pre-owned. But, I've found a lot of the other GTO guys out there are purchasing their cars new with a program called GM SmartBuy through GMAC. Here's a link:

http://www.gmacfs.com/automotive/smartbuy.htm

Guys are getting payments on these $30K cars for $150-$250, which is WAY below what conventional financing would be, even through my CU which has awesome rates and super long loan periods if desired.

The way the program works seems sound enough. Yeah, I pay more on finances in the long run, but it gets me into the GTO that much sooner at a much better payment, plus I could get a new one. The SmartBuy program also allows you to combine this with deals like the credit you get if you use a GM Rewards credit card. I could easily open the card, use it for EVERYTHING, and then just pay it off every month. At the end of the SmartBuy period, I could always finance what's left through my CU and probably get the payment for what I would get now on the used GTO if i were to stick to my original plan.

So what do you guys think? Is this kinda program screwball, or is it a not-so-bad idea? Most of the guys on the GTO forums who have done this seem to be happy with it, which is why I'm asking this here. I figured an outside opinion is better.

Mike
 

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Not Special Enough
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10,540 Posts
as far as I know, the smart buy and smart lease programs have lower monthly payments because at the end of the term you have a large balloon payment. That balloon payment can be financed if you dont have the money to pay it alla t once. So basically, you make payments for X years and then at the end you refinance money thats already been financed and pay for X more years.


Not a "smart" buy.
 

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If you are going to lease the car, get rid of it after the lease is over. Don't 'lease to buy'. If you try to finance the remainder of the car after the lease, you are not going to get a good interest rate no matter what. If you get rid of the car after the lease, you are going to be in great shape. Say the car is worth 10K and you still owe 12K when the lease is up. If you tried to trade it in, you would be 2K in the whole. You can just turn the car into the lease company and not worry about it. Also it works both ways if the car is worth 12K and you only owe 10K after the lease, you can trade it in and have 2K worth of equity in the car.
 

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Ho, ho, ho... Green Giant
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Discussion Starter #4
If you are going to lease the car, get rid of it after the lease is over. Don't 'lease to buy'. If you try to finance the remainder of the car after the lease, you are not going to get a good interest rate no matter what. If you get rid of the car after the lease, you are going to be in great shape. Say the car is worth 10K and you still owe 12K when the lease is up. If you tried to trade it in, you would be 2K in the whole. You can just turn the car into the lease company and not worry about it. Also it works both ways if the car is worth 12K and you only owe 10K after the lease, you can trade it in and have 2K worth of equity in the car.
ideally, this would be a car that i would own for a good while. i guess i should have mentioned that in the original thread.

also, why wouldn't i be able to get a good APR after the Smartbuy is over? couldn't i just finance it through my credit union like a regular used car?

Mike
 

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I can't stop typing...I can't stop typing...I can'
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6,037 Posts
Dude smartbuy financing is a leasing program without the liability for GM. It is only smart for GM. With a traditional lease, the leasing company technically owns the car, so if you get a parking ticket, and don’t pay for it, the government is going to go after the leasing company. I know In the NYC area that car really add up. I believe fords leasing divisions got hit with a multi MILLION dollar parking ticket for ALL the cars they own with outstanding parking tickets. With “smartbuy” financing you are technically buying it, so tickets and fines are legally your responsibility. Because of the liability that I just mentioned, GM does NOT offer lease programs at all any more (at least in the NYC area) your only choice not “leasing” is to do the smartbuy program.

Smartbuy financing, or leasing is a short term program, it’s meant for people that just want to keep a car for a short period, and don’t beat on them to much. The idea is you are only paying for the portion of the vehicles value that you are using. At the end of the program, rather than having to worry about selling the car and such, you just stop paying for it, turn it in, and go get another car.

If you are planning right from the get go to keep the car, then this makes NO sence. You will only be paying for the depreciation on the car for the first few years, so in 3 years when that final payment is due, you will be essentially looking at buying your own car as a used car, and you will be paying full price on it too. When you finance it, a bank see it as you buying a used car, and interest rates are higher on used cars than new ones.

You will also be financing this car for a VERY long time this way, 6-7 years and depending on how much you drive, you may have driven this car into the ground, and needing major repairs, but still owe money on it. TRUST me, you do not want to owe money on a car that is worthless, and needs major work.
 

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Ho, ho, ho... Green Giant
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Discussion Starter #6
yeah, i guess it's not the best idea out there. guess i'm just really anxious on getting the new car, esp. bc mine seems to be a never-ending list of problems (small ones, but annoying nonetheless).

Mike
 

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Start banking a down-payment on your next car right now. That'll give you the ability to buy it new in a few months without any shady financing.

I'd never touch a used performance car without the money set aside to replace the engine, transmission, and drivetrain.
 

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Ho, ho, ho... Green Giant
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4,287 Posts
Discussion Starter #8
Start banking a down-payment on your next car right now. That'll give you the ability to buy it new in a few months without any shady financing.

I'd never touch a used performance car without the money set aside to replace the engine, transmission, and drivetrain.
well, here's the thing on that. i could either start saving for a good down payment, or i could work on paying down the focus. onviously, i want to not be upside down when i go to either trade it on or sell it. i owe a little over $8K on it still, and KBB puts its worth at about $9K if i were to sell it privately, and only about $7K on trade in. i want to get it paid down to where i owe only about $5K. that way, even if the trade-in value is lower than i expected, i still don't take it in the pants.

as far as the $$$ for repairs, i'm looking more pre-owned than used. the car should still have a remaining factory warranty, and i'd probably go back to GM and buy an extended one just in case.

Mike
 

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Ho, ho, ho... Green Giant
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4,287 Posts
Discussion Starter #9
O/T, but since it's my thread i'll let it go....


am i high, or did the remove the section of KBB's website (http://www.kbb.com/) where i can find out the value of my car?

Mike
 

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INCREDIBLY SHRINKING POST COUNT!!! (PSST...Add 10K
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O/T, but since it's my thread i'll let it go....


am i high, or did the remove the section of KBB's website (http://www.kbb.com/) where i can find out the value of my car?

Mike
To answer your first question.Yes you are.

And no it is still there I just checked.
 
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