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guys and gals i think this is a tough question.does anyone know how smart buy works? it ends up having alower monthly payment than leasing. looks like fter 487 mos. you refinance for the remainder??. its about $80 mo less than straight financing. very confusing. :willy:
fred from nashville
ps thank you for your help
 

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Discussion Starter · #2 ·
ooops i meant 48 months not 487
fred :lol:
 

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Smart buy is essentially a lease without the advantages of a lease. You are still responsible for the residual at the end of your term. This is the single biggest reason to lease a car..OPTIONS!!! 1- Walkaway if the residual is a lot higher than the car is worth. 2- Buy the car if it is worth the same or more than the residual (in which case you have spent less per month than a conventional purchase. 3- Sell the car if it is worth the same or more than the residual.
 

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deepdawg said:
Smart buy is essentially a lease without the advantages of a lease. You are still responsible for the residual at the end of your term. This is the single biggest reason to lease a car..OPTIONS!!! 1- Walkaway if the residual is a lot higher than the car is worth. 2- Buy the car if it is worth the same or more than the residual (in which case you have spent less per month than a conventional purchase. 3- Sell the car if it is worth the same or more than the residual.
Explain residule.
 

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The residual is the percent of the MSRP that is still due at the termination of the lease. It is set by the lender. Your payments are based upon the difference between the residual and how much you pay for the car. The higher the residual..the lower the payment. Also the bigger the difference from the selling price and the MSRP the lower your payments will be. Essentially, the residual is the lenders guess of what the vehicle will be worth in the number of months the lease is scheduled for.
 

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www.gmacfs.com is a source of infomation for SmartBuy and SmartLease. Leases are fairly well understood, so let me just give a quick overview to the SmartBuy.

SmartBuy is an alternate finance method. The Buyer is the Owner. A future value is determined using the residual percentage. This amount becomes your final or balloon payment, the last coupon in the book. Your payments are based on the differnence between the finance amount and the residual/final payment amount, with interest on both.

Now in Massachusetts the payment is lower then a SmartLease, because the lease payment also includes monthly sales tax and excise tax. With a SmartBuy, the sales tax is paid at purchase, and the excie tax is paid when billed by your garaging town.

When the balloon comes due, you have three ways to pay. 1) Sent them the money 2) "Sell" the car back to GMAC for the amount of the balloon. Sort of a wash. Now mileage and condition can come into play here. There is also a disposal fee if the car is not replaced with another GMAC SmartLease or SmartBuy. 3) Refinance the balloon at the same rate and monthly payment that you had in the first part of the loan.


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:agree: :agree: :agree: :agree:


Isn't Small Dealer great? Such a wealth of information. He not only provides the link to the info needed, but he provides a basic but very concise overview of the information provided. And the little deal at the bottom about Bonzo is just hilarious! I say defend whoever you want, you are a Dealer, and you have to defend your Livelyhood. I hope you are a small Cadillac/Pontiac Dealer near the beach, cause I want to work for you!!!
 

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Small Dealer said:
...

When the balloon comes due, you have three ways to pay. 1) Sent them the money 2) "Sell" the car back to GMAC for the amount of the balloon. Sort of a wash. Now mileage and condition can come into play here. There is also a disposal fee if the car is not replaced with another GMAC SmartLease or SmartBuy. 3) Refinance the balloon at the same rate and monthly payment that you had in the first part of the loan.
ok, so whats the catch? if i can just do that and it will help to bring my payments down why not do that to own the vehicle. does it bring the term out longer? does it have any restrictions? whats the deal?

oh, and whats with the bonzo thing? you getting quized by GM?
 

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Small Dealer said:
www.gmacfs.com is a source of infomation for SmartBuy and SmartLease. Leases are fairly well understood, so let me just give a quick overview to the SmartBuy.

[BSmartBuy[/B] is an alternate finance method. The Buyer is the Owner. A future value is determined using the residual percentage. This amount becomes your final or balloon payment, the last coupon in the book. Your payments are based on the differnence between the finance amount and the residual/final payment amount, with interest on both.

Now in Massachusetts the payment is lower then a SmartLease, because the lease payment also includes monthly sales tax and excise tax. With a SmartBuy, the sales tax is paid at purchase, and the excie tax is paid when billed by your garaging town.

When the balloon comes due, you have three ways to pay. 1) Sent them the money 2) "Sell" the car back to GMAC for the amount of the balloon. Sort of a wash. Now mileage and condition can come into play here. There is also a disposal fee if the car is not replaced with another GMAC SmartLease or SmartBuy. 3) Refinance the balloon at the same rate and monthly payment that you had in the first part of the loan.


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Small Dealer Are you in Mass If so can you tell me your town.
 

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small dealer was pretty much right. a couple of things though.
1 at the end of the smart buy you also have the option to turn the vehicle in just as you would a leases. the diferance is that you would have to pay a dispotion fee.
The reason for a smart buy vs a lease has little to non to do with ownership (miss a few payments on either and you will see that you do not "own" in either case. The Smart buy is used in states that want all the taxes up front. I.E. a 20,000 car up front tax @ 6 % is 1200. (one check to the state) a lease same car lease's for 300 pr.m. state gets 6% of that paynent (18.00 each month). Smart Buy Minimum mikes allowed is 15k pr.yr. a lease you can go 12k. It may not be an option in your state to lease if it is that will be the lower payment. The % rate is usaly 1 point less
you have a 12k pr yr option (lower payment) plus this is not a year round car so driving will likley be on the lower side (annualy) This info may be followed by various opinions. This is not an appinion this is the deal. type any other specific q's if you would likee more info. to calculate if it is a good idea to buy out the residual do thid take the smartbuy or smart lease payment x term then add to that the residual $ this is a star. That figure will not include the % to refinace the balance. On the Lease the buy out is taxed. As of current the Solstice does not have a lease/ smartbuy program. sounds like small dealer is pretty sharp. I'm just throwing out my 2cents
 

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tednelson83 said:
ok, so whats the catch? if i can just do that and it will help to bring my payments down why not do that to own the vehicle. does it bring the term out longer? does it have any restrictions? whats the deal?
WATCH THIS SPACE


Not sure there is anything that you can call a "catch". By going the refinance route at balloon due date, you will end up paying for a longer term possibly then if you had done straight financing. So as the others have pointed out, the long term cost of interest could be greater in a two part SmartBuy. Just need to calculate it out both ways and make a judgement call for your own needs and situation. Sometimes the monthly payment is the over-riding factor.

A catch could be, if you are wrong about your estimated mileage, then the "sell" back option may not be good looking.

Actually I am writting this paragraph last, because I thought of a another catch. If you "sell" the car back, you would be loosing the trade in credit for sales tax if your state offers it. But GMAC is working on changing that and has been using a program, at least here in the NorthEast, to allow for trade in credits.

Not really many restrictions. Although in Maine they do not have to offer the refinance to the SmartBuyer. Not any other states in the NorthEast that do that. Oh, you must be current with your payments at the time of the refinance.

It is hard to put the Solstice into many of my explainations because it could be a car you keep forever. But one way I explain the SmartBuy is that it gives you a written easy way to change courses at a point in time in the future. Instead of 60 or 72 coupons in the book, this window opens at 24 or 30 or 36 or 48 months (actually you can even odd month it or SmartLease also) were you can simply move on.

tednelson83 said:
oh, and whats with the bonzo thing? you getting quized by GM?
The Bonzo Audit Scorecard is the by-product of the Accountability-Accuracy-Authenticity-Transparency and Truth In Posting Act recently enactted on this site. It is a voluntary standard used to better align the perception of a post or a poster's alliances with the actual meanings. Currently I am the only one using the scorecard, which was named after it's champion. I will continue to do so until the perception realignment takes place. :)


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Build your own, on Pontiac's web site DOES give you a comparison between purchase, lease, and smart buy, all with various up front money and the purchase at OVER 10% APR for 72 months. What a deal!
 

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achieftain said:
Build your own, on Pontiac's web site DOES give you a comparison between purchase, lease, and smart buy, all with various up front money and the purchase at OVER 10% APR for 72 months. What a deal!

10% interst for 72 months isn't a great deal? :lol:
 

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I would never lease or smart buy a car. With smart buy they say you own it but really don't untill you refinance at the end or buy it out right at the end. The interest rate stinks, at 10.25 % all you money is going towards interest.You should try Capital one auto,you apply on line and they give you an answere in about 2 min.Then they send you a blank check to pay the car dealer. Interest rate isn't bad for a bank, 5 1/4. I was going to pay cash for my car, but I'm going to be tied up because of sugery for at least 6 months so I don't want to use my cash, so this worked out great because you can pay it off at any time with no penalty.
 

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A minor adjustment. ;)

princess said:
SmartBuy minimum miles allowed is 15k pr.yr. a lease you can go 12k.
Both the SmartLease and SmartBuy standard mileage allowance is 15,000 miles per year. Both are also available in a 12,000 miles per year low mileage program with increased residual percentage.



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cadillacricket said:
:agree: :agree: :agree: :agree:


Isn't Small Dealer great? Such a wealth of information. He not only provides the link to the info needed, but he provides a basic but very concise overview of the information provided. And the little deal at the bottom about Bonzo is just hilarious! I say defend whoever you want, you are a Dealer, and you have to defend your Livelyhood. I hope you are a small Cadillac/Pontiac Dealer near the beach, cause I want to work for you!!!
CC,
So what's next spin doctor, SD for President? You need to go work for Mrs. Clinton when she runs for office. That way I can vote against your campaign.

Small Dealer,
Thanks for the post. When it comes to information like this you are the leader here. And as I said in your first post with it, I love the ratings card! :glol: Just don't stop making your posts backing dealers and GM or you'll make me look bad (please read with humor) :lol: .
 

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Small Dealer said:
The Bonzo Audit Scorecard is the by-product of the Accountability-Accuracy-Authenticity-Transparency and Truth In Posting Act recently enactted on this site. It is a voluntary standard used to better align the perception of a post or a poster's alliances with the actual meanings. Currently I am the only one using the scorecard, which was named after it's champion. I will continue to do so until the perception realignment takes place. :)
Classic answer!!! :glol: I'm glad to see you can take a little ribbing in stride and put a positive spin on it. That puts you above some other people around here. :yesnod:
 

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Might be a little on the Finance 101 side, but her is another GMAC site with infomation:

http://www.smartedgebygmac.com

along with the original:

http://www.gmacfs.com



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