A friend of my was approved for a 60 month car loan for 10.9% she has a 500 score. She was classified a D tier with GMAC. She just missed the C Tier classification to get the 3.9 for 60 months. There is a difference of $80.00 a month from C to D tier with GMAC. Thats $4800.00 over 60 months more! My question is should she have the F&I guy at the dealership try to fight it with GMAC and if so what could she do to move herself to the C Tier Catagory? Anyone have a similar problem with GMAC and get it to go their way???
Do you mind if I ask how much your friend had to put down to get that rate? 10.9% sounds really good for a FICO score of 500.
Well she converted the approval into a GMAC lease. GMAC has no tier approval for leasing one straight rate. She only had to put 1000.00 down and her payment was 50.00 lower a month.
...that's nice, but you do realize that she put $1000 down and is saving $50 a month for the right to drive a car, nothing else. At the end of the lease, she's going to have to buy the car at a (probably) higher price that it's worth, or simply walk away with nothing to show for paying many thousands of dollars. The only time leasing EVER makes any financial sense is when it's heavily subsidized by the manufacturer or if the vehicle has a high residual value (it depreciates less so you pay less for the time you use it). If you're self-employed, there may be tax advantages to lease vs. deducing the depreciation (consult your tax advisor). Lots of folks get suckered into the lower payments idea ... and don't realize that mileage over the agreement (something usually around $.20/mi) can be REALLY expensive. I hope that she got a good lease deal, but from what it sounds like, it's not too heavily subsidized. If I added it up right - she saved $5000 -- $2k up front and $3000 over the life of the lease. Will the car be worth that much or more at the end? -mj
The car is a Pontiac Trans Am. This is the last year they are making them. The car will be worthless after 3 years. That payment also includes 20,000 a year in miles. Thats 60,000 miles for 3 years. She is a GM employee so she gets a huge discount on the car. If she bought the car she would have still owed 14,000.00 after 3 years. She trades her cars in like buying new shoes. Leasing is the way to go for her. After 3 years she drops it off and gets another. They also give you a additional 1000.00 off a new car when you turn in your lease. Lease Loyalty Program GMAC has.
Sounds like a pretty good deal - and also sounds like she's a good match for leasing. Hope she enjoys it - I loved my GrandPrix when I had it (also leased). GMAC was very easy to deal with, and my lease-end was completely painless. -mj
