SmartBuy

[jhawk]

So I'm new to this but seriously considering a H3. Just wondering if this sounds right or if there's something I'm not taking into consideration. According to the HUMMER website I can get a base H3 for $233 a month for 24 months by doing the SmartBuy. Here is the breakout:

$30,500 (estimated selling price with GMID)
$6500 net trade-in
24 month term
5.75% APR
15K annual mileage

To me sounds really good, that's why I'm wondering if I missed something.

[RubHer Yellow Ducky]

LEASING:

24 months X $233.00 = $5592.00

Trade = $6500.00
_____________
$12092.00
by 24 months = $ 503.83 per month

not figuring APR

$6000 a year for a H-3 and you don't own it.

For me if you can use it as business for tax purposes fine, if not, I personally like to own something.

RYD

[HummerNewbie]

First, isn't the price a thousand or more over base MSRP? Why is it higher than MSRP with GMID? You must be adding options to the base model. Second, what is the payoff in two years? Isn't a SmartBuy basically the same as a lease? You put so much down, you end up with a cheaper payment but you have to either pay it off after the term of the contract or walk away. Are you going to pay it off after the term? If not, go lease it and get a better monthly payment.

[nmikes]

Is the selling price before or after the trade-in... or is that the guaranteed value when the lease expires? With the information given it almost sounds like a wash, I think thats a respectable entrest rate. But there's not enough information given like with options etc. Have you done the numbers for GMID for purchase? I'd rather purchase as well... did a lease once... never again... you will more often than not lose your shorts unless you drive it like a typical geriatric. Plus Its only taken me 7 months to burned through 15K **** eating and grinning miles

[jhawk]

This was a base model with:

MONSOON STEREO SYSTEM
POWER SUNROOF
AUTOMATIC TRANS

The price was before the trade and I typically trade cars in every couple years. Just not sure I want a 4 or 5 year loan if I could walk away in 2 years and get another new HUMMER then.

[nmikes]

If you want to rent a vehicle then... power to the people. I have a tendancy to get emotionally attached to my vehicles but hey thats just me. There is plenty of helpful information regarding the pros and cons of leasing vs. purchasing on google. Balance it all out and go with what your priorities are. Trust me, unless you've done your homework well... the dealership is probably making alot more money than you think they are.

[RubHer Yellow Ducky]

You didn't state where you are located but if you have a good choice of dealers the price you pay if purchased shouldn't be over DEALER INVOICE + transportation charges + ad fees if on the FACTORY INVOICE that of course YOU WANT to see. Remember they still are making 3% of the MSRP on you {dealer holdback}. (now remember dealer installed accessories are a different story - HIGH PROFIT for the dealer) Consider dealer addons as gravy...REMEMBER you are not concerned with LIST PRICES (they are call "once upon a time or this is no S**T") BASE ALL INQUIRES ON FACTORY INVOICE PRICING

RYD

[Dani]

Three of the Hummer dealerships I went to said that they won't use SmartBuy anymore.

[jhawk]

I'm in St. Louis, so Lynch would be the dealership. Did the other dealerships say why they weren't doing it? It's still being offered as an option on the HUMMER website. I guess I like this option because in 2 years I could walk away from it and get a 2008, another in 2010, etc rather than making higher payments the whole time to purchase it and then more than likely trade it in for a new one once the 5 years are up. Are most of you planning on keeping yours once it is paid off?

[HummerNewbie]

Calling yourself "jhawk" you should move one state west http://www.elcova.com/infopop/emoticons/icon_biggrin.gif

To me it sounds like a lease would be a better option for you. Are you looking to get the lowest payment you can get? I lease mine because I usually want a new vehicle within about 3 years so unless you are putting a lot down you are not really any better off in three years when you go to trade one you purchased. I looked at all my options from lease to a flat out purchase for cash and the lease worked best for me. To me, the cash is better spent on appreciating investments than it is on a depreciating vehicle. Just my two cents and everyone's situation is different.

[Dani]

Originally posted by jhawk:
I'm in St. Louis, so Lynch would be the dealership. Did the other dealerships say why they weren't doing it? It's still being offered as an option on the HUMMER website. I guess I like this option because in 2 years I could walk away from it and get a 2008, another in 2010, etc rather than making higher payments the whole time to purchase it and then more than likely trade it in for a new one once the 5 years are up. Are most of you planning on keeping yours once it is paid off?


I was told they no longer used SmartBuy because it really wasn't any different from leasing and at the end of the SmartBuy term the final payment couldn't be refinanced (like you can with a lease). It was due in one lump sum. Now- I've heard differently from a few others however this is just what I've been told from the dealerships. They basically compared it to a land contract. I'll be the first to say that I don't know **** when it comes to stuff like this....so I really wouldn't be surprised if it's incorrect. Again- it's just what I was told.

[1COOLH3]

I leased my H3 Adventure for two years with 15k miles per year. Here is the way I figure it:

MSRP was $37k and I put $4000 down and my payment is $300 a month. That equals $11200.

Will this H3 depreciate that much in two years? Most definately- especially when the V8 comes out no one will want the 5 banger.

If I were buying I would lose at least as much as what I'm paying in "rent" and then I would still be stuck with either selling or trading in. All I have to do now is return it and jump in another brand new Hummer - hopefully a V8.

[HummerNewbie]

Originally posted by 1COOLH3:
Will this H3 depreciate that much in two years? Most definately- especially when the V8 comes out no one will want the 5 banger.

If I were buying I would lose at least as much as what I'm paying in "rent" and then I would still be stuck with either selling or trading in. All I have to do now is return it and jump in another brand new Hummer - hopefully a V8.

Exactly my thinking on it.

[BuzzH3]

My understanding of the SmartBuy is that it is just a balloon loan. You make payments for a certain time period then you have a balloon payment due at the end. Not sure how it really differs from the lease, but I thought that there was no mileage limitations on the SmartBuy.

Have you talked to anyone at Lynch yet? If not, talk to Tom Klosle. He was very helpful to me. Also, not sure if you know, but they are having an Off-Road event on April 29th on their track behind the dealership. Hope you can get yours by then. I'll be there. It should be fun.

[HummerNewbie]

Originally posted by BuzzH3:
My understanding of the SmartBuy is that it is just a balloon loan. You make payments for a certain time period then you have a balloon payment due at the end. Not sure how it really differs from the lease, but I thought that there was no mileage limitations on the SmartBuy.

I never really understood the difference from a lease either. I also think you end up with higher payments with a SmartBuy versus a lease but could be wrong about that.

[Dani]

Originally posted by 1COOLH3:
I leased my H3 Adventure for two years with 15k miles per year. Here is the way I figure it:

MSRP was $37k and I put $4000 down and my payment is $300 a month. That equals $11200.

Will this H3 depreciate that much in two years? Most definately- especially when the V8 comes out no one will want the 5 banger.

WOW! The H3 I'm looking to buy has a GMS price of roughly $33k (it's just shy of $33k but close enough) and I'm putting $4k down and my payment is still well over $550 a month. And that's to lease it with 10k miles for 39 mos.

[HummerNewbie]

Originally posted by Dani:
WOW! The H3 I'm looking to buy has a GMS price of roughly $33k (it's just shy of $33k but close enough) and I'm putting $4k down and my payment is still well over $550 a month. And that's to lease it with 10k miles for 39 mos.

Something doesn't sound right there. I have a 39 month lease with 15K per year, put down less, don't recall GMS but it was more than $33K and my payment is right at $400.

[usetosellhummer]

smart buy is like a lease with the benifits of buying. GM will take the car back as long as it is within in milage limit and condition and you walk away after 24 months. If you decide you wan tto keep the vehicle you can finance the amount remaining. GM was burned bad by them on low dough pontiacs a few years back and some dealers or states don't like them. It is an incentive purchase. God forbit you off-road it on a smart buy and try to turn it in and walk away. Smart buys are for stupid people.

[HummerNewbie]

Originally posted by usetosellhummer:
God forbit you off-road it on a smart buy and try to turn it in and walk away. Smart buys are for stupid people.

Just curious, since a smart buy sounds identical to a lease, is it worse than a lease?

[1COOLH3]

OOPS- I goofed up! MSRP was $37 but I paid GM Employee price and right now I dont know exactly what that was- I have to find my paperwork.

This might really screw up my reasoning for my lease.

[ETD]

Hmmmm. To a car saleman, we're probably stupid, stupider, or stupidest. I guess that I'm either stupider or stupidest when it comes to buying cars according to UTSHummer. I'm on the SmartBuy track, paying $114 a month for 20K miles/year after having taded in my passat wagon. I think it's whatever you can live it because they'll get you anyways, in the beginning, in the middle, or in the end. I was never told that they were giving away the H3's fur nothin' http://www.elcova.com/infopop/emoticons/icon_smile.gif

[Rick]

Hi All... I run a company that consults auto dealers in the area of finance... As well as other matters.

Smartbuy (as someone pointed out earlier) is very similar to a balloon note. You may or may not be able to walk away at the end of the term. The difference between Smartbuy and Smartlease (or any lease) is that with Smartbuy... You own the car.. It is titled in your name. With a lease you don't. The lease company owns it and you "lease" the car from them. It is titled in the lease company's name C/O you. Some may think that there is no difference but there is. Mostly business and legal stuff. The Smartbuy allows you to make lower payments while you own it and then either trade it or pay the balloon. There are options that allow you to walk away. With most leases now you can just walk away at term end and only owe for excess miles and wear and tear over what was originally agreed upon. The differences come up in insurance. Leasing usually costs you more becuase the leasing company wants higher coverage than most people have. They want to be protected just in case. The leasing company or finance company sets the residual value of what they think the vehicle will be worth at the end of the term. I've known some people to buy the car and sell it for a profit because the lease company set the residual too low. Most just walk away. This is why you are crazy to put money down on a lease. (More than what you normally would for taxes and tags.) Why put money down to just walk away at term end???

Leasing is great for those who tend to trade every few years and drive less than 15k miles per year. Leasing also makes sense for business reasons and are great write-offs. Others, like myself, sometimes keep cars past their payoff and want true ownership. (I like to modify my vehicles... I'm not paying for mods to hand it over to the lease company!) If you tend to keep cars a long time and/or you drive high miles.. Go for a longer term to lower the payments. You can finance now out to 96 months. (Though I feel you'd be crazy to go over 60 or 72 months.)

Just my .02

Rick

[HumbleAg]

Originally posted by usetosellhummer:
Smart buys are for stupid people.


I guess I need to give back my engineering degree and MBA.

Blanket statements are for stupid people.

Smart buy can make sense for several reasons:

1) If car has a high residual value (as H3 does), but anticipated depreciation is high (these don't always correspond), then smart buy can be less money if you only keep the vehicle a couple of years. Trading out of a 5 or 6 year note on a depreciated car can cost a bunch.

2) Some states (like the great state of Texas) have personal property tax on leased vehicles, this is passed on to the lessee. No such thing with smart buy (or a standard purchase).

3) Some people want to keep their debt ratio down (a $300 note vs a $500 note can make a difference if you are buying a house).

That said there are some serious criteria you need to consider for a smart buy (or a lease).

1) Mileage is critical. Going over a bit can be ok, but going way over can leave you with a large bill at the end.

2) Condition is critical. If you normally trash your cars, you'll pay for that as well (plus you'll probably rot in hell).

3) Getting out early is always going to cost you a bundle, don't do it if you can stick with the term. (not as bad as " 'til death do us part", but can be as expensive).

4) Planning to purchase at the end (of eiather lease or smart buy) is usually poor planning. You'll end up paying way more than if you finance for a longer term. Just plan on driving and dumping.


I believe this will qualify as my longest post ever on here, but since I felt personally attacked, I feel much better about it.

My best advice: do whatever you have to do to get the H3. I'm loving mine and still grin every time I get in it.

Good luck!

[Jackwins]

For me, Smartbuy or Lease is the only way to go. I like new cars too much, Ive had my H3 for 3 months and am already looking forward to the new 2009-2010 vehicles(damn car show).

[Dani]

I'm taking a HUGE loss on my trade in. I have an '06 Honda Pilot that I still owe about $35k on (I've had it less than 3 months) just so I can get the H3. The hit is about $10k...we were debating weather to just buy the H3 outright, lease it or do the SmartBuy.

After reading this thread I'm really not sure what the best way to go is lol.....I'm a little confused

[Rick]

If you are $10k upsidedown... You'll lose no matter what you do if you trade after 3 months. You'll need to stay in it for minimum 18 - 24 months or take the hit.

You could try selling the Pilot on your own... That would lessen the loss.

[ETD]

Sheeet! So much for taking it back the way I bought it http://www.elcova.com/infopop/emoticons/icon_mad.gif http://elcova.com/groupee/forums/a/tpc/f/2706067735/m/5181065771

[Ken06H3]

If go with a SmartBuy or lease, you really should consider GAP Insurance. It will take care of the difference between your insurance and the balance due on the vehicle if it's totaled.

[Rick]

You should always buy GAP insurance regardless if you lease or buy... Unless you put A LOT of money down. They you will always be in an equity position anyway.

You don't have to buy GAP from the dealer. They pay anywhere from $130 to $220 for each policy and sell it for up to $600. (Lenders won't finance more than that!) So... It may be cheaper to get it through your own ins. co.

Just my .02

[HoKC]

Extra .02 worth for those that are upside down in their trade.

A Smartlease or Smartbuy is a good way to get out from under that inequity. It has allowed us to place customers in vehicles that they would not normally be able to buy because the payments are lower. They also have the advantage of allowing you to be totally out from under that inequity in a shorter period of time (24-48 mo.) as compared to a purchase where you are dragging all that inequity for up to 72 mo. and paying interest on it the whole time.

[Dani]

I decided to purchase it outright instead of leasing/smartbuy. i can't wait to get it!

[Rick]

Dani... Regardless of how you intend to pay for it... You are going to LOVE IT!

Good luck!

[Dani]

I'm picking my new H3 up tomorrow! I'm so excited!!! Today will surely be the longest day of my life

[HummerNewbie]

Congrats. What did you get?

Today will be long but tomorrow will be even longer. Post some pics when you get it.

[Dani]

Originally posted by HummerNewbie:
Congrats. What did you get?

Today will be long but tomorrow will be even longer. Post some pics when you get it.

I got a black base with sunroof, chrome appearance package, chrome fuel door, XM radio and the upgraded to the monsoon sound system. I didn't want the chrome appearance package but the hubby did so we had to get it. I told him it wasn't fair because I wanted leather and he didn't....it's my car so he shouldn't count. Yeah that didn't go over real well lol

[HummerNewbie]

Originally posted by Dani:
I got a black base with sunroof, chrome appearance package, chrome fuel door, XM radio and the upgraded to the monsoon sound system. I didn't want the chrome appearance package but the hubby did so we had to get it. I told him it wasn't fair because I wanted leather and he didn't....it's my car so he shouldn't count. Yeah that didn't go over real well lol

Congrats, hope the day goes by fast. When are your picking it up?

[Agriv8r]

Originally posted by HummerNewbie:
<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by usetosellhummer:
God forbit you off-road it on a smart buy and try to turn it in and walk away. Smart buys are for stupid people.

Just curious, since a smart buy sounds identical to a lease, is it worse than a lease? </div></BLOCKQUOTE>
The big difference between a "Smartbuy" and a "Lease" is that the smartbuy is titled in the customer name and the lease is titled in the "Bank/lender" name in care of the customer. In Va the advantage of this is that military people do not have to pay personal property tax on a smartbuy, but they do in a lease. There are other minor differences.

[Steve - SanJose]

Dani - congrats on the new H3. Glad you could make a crisp decision despite all the pontification on how to purchase it on this thread.

Enjoy your new rig.

S.

[Dani]

I picked up my H3 yesterday! I will post pics tomorrow on my day off

[Rick]

Originally posted by Dani:
I picked up my H3 yesterday! I will post pics tomorrow on my day off

And? And? Do you love it? Is it everything you wanted?

[Jackwins]

I dont understand how someone can pay a large down payment on something that is guaranteed to depreciate several thousand dollars per year. Unless you got 0(zero) percent financing its not worth it to buy. Hence, the reason to lease or smartbuy. As long as you take care of it you will not be upside down. To me thats a win, win http://www.elcova.com/infopop/emoticons/icon_biggrin.gif

[Dani]

Originally posted by Rick:
<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by Dani:
I picked up my H3 yesterday! I will post pics tomorrow on my day off

And? And? Do you love it? Is it everything you wanted? </div></BLOCKQUOTE>

I loved it WAY before I ever got it. I wanted to get one last june but I had found out that I had a broken heel bone that wouldn't heal. So through testing I was diagnosed with brittle bone disease and was forced to take almost a 10 months off of work. Just couldn't afford to make the purchase then.