Education

Want to be a smart customer? Before you begin the car-buying process, we highly recommend spending some time with "Understanding Vehicle Financing." This pamphlet from NADA, the National Automobile Dealers Association, helps you evaluate your financial situation before financing or leasing a new or pre-owned vehicle.

As you consider your purchase, here are some terms you might encounter when discussing finance packages with your Sewell business manager:

Balloon Financing

This financing option combines the benefits of leasing and owning. You pay only the anticipated depreciation of the vehicle, plus any finance charges and taxes. A couple of different options are available, depending on the mileage you expect to drive. Your Sewell business manager will help you arrange financing for a 24-, 36- or 48-month term. At the end of the term, you can either make a final balloon payment to buy the car outright or turn in the vehicle to the dealership.

Leasing

A lease can be a good way to have a more affordable payment than when buying a car. Your lease payment covers only the vehicle depreciated value (plus the lessor's monthly finance charges), not the entire purchase value. Most vehicles are leased for 24 to 48 months, then returned to the lease company. We don't recommend leasing a vehicle for longer than its general warranty. For people who drive an average number of miles and take good care of their vehicles, leasing is a good financing alternative. Note: If the vehicle incurs excessive wear and tear or mileage during the lease period, a fee will be assessed when the vehicle is turned in.

Traditional Financing

Traditional financing is an installment transaction over a period of time. You agree to pay the amount financed, plus an agreed-upon finance charge. Traditional financing is probably right for you if you like the idea of owning a vehicle or you plan to keep the car for more than a few years. Sewell works with many different lenders to offer you competitive rates.

SmartBuy^®

GMAC's SmartBuy program gives you the opportunity to drive a new GM vehicle more often. SmartBuy terms are often shorter than traditional financing terms, enabling you to drive a vehicle during its low-maintenance years, then turn in the vehicle. SmartBuy monthly payments are based on the portion of the vehicle's life you expect to use, plus finance charges. Your monthly payments, excluding the balloon payment, are usually lower than with traditional financing. At the end of your SmartBuy contract, you have several options. You may pay the final balloon payment, or refinance the balloon payment, subject to credit approval in some states. You may sell your vehicle, pay off the balloon balance and keep any profit. Or you may return the vehicle to the dealer and pay any applicable fees.

SmartLease^®

With GMAC's SmartLease program, leasing terms can be shorter than purchase terms with similar monthly payments. SmartLease payments cover depreciation - the portion of the vehicle's value you expect to use during the lease term - plus a rent charge, taxes and fees. As a result, your monthly payments may be lower than with traditional financing. At the end of your SmartLease, when you've met all your lease obligations, you have three options: get a new SmartLease on another GM vehicle, purchase the current lease vehicle or simply turn in the vehicle to the dealer.

Return to the main Finance page.