[BigGuy]

Does anyone know if GMAC offers 72 month financing?

What kind of rates are you all paying? Most of what I see is around 7%.

 

[admin]

We got a hell of a deal with my wife's Pentagon Credit Union. 5.49% for 72mos. That drops the payments way down, but we're still going to pay as if it were a 60 mo @ 5.49, which would still be a good rate these days, and have it paid off in about 4 years and save thousands in interest

 

[NY_Joe]

I think you may only get a 6 yr loan from a credit union or the like.

The most I have ever seen in 60 mo. thru a dealer.

 

[gmc]

5.54% - That is great! I am an old member of Pentagon Credit Union and still can use them. In fact I will now finance my new Acadia from them when it is delivered in the next week or so.

Thanks!

 

[ownersite]

When I used the "Estimate Payment" link on the GMC website, it showed a few 72 month options, the lowest of which was 7.9%.

 

[NY_Joe]

It may be something they don't push at the dealer maybe?

Dunno.

Credit unions will always be the best source of good rates on long term financing.

 

[GaGirl]

I'm with Associated Credit Union and am getting 4.9% for 60 mos. However, they do have a 72 and 84 month finance option, but the interest rate is higher than the 4.9%.

 

[Bluecrab1260]

This question is for those of you who may have looked into, or, selected to use the GM Smart Buy option. Not the Smart Lease. On the GM financing estimator they show allowable mileage of up to 15,000 miles. Does anyone know if they are allowing 18,000 miles/year ? They used to show it on their site as recently as last year previous, but, I do not see it now.

 

[TDIIDman]

Financing a car for 72 months would, in my opinion, not be a good idea; it is a recipe for quickly being in an "upside down" situation, owing more on the vehicle than it is worth. Would be paying a lot of interest over the course of that loan unless, of course, it is paid off earlier. I think that most folks who consider a 72 month loan should purchase a less expensive vehicle.

 

[admin]

Depends on how you use that loan. The credit union we used offered 5.49% for anywhere from 36 to 72 months. Of course we could have taken the same rate at the std 60 months, but by taking it at 72 months, we lowered the base monthly payment by about $60/month. Now we'll take that $60 savings and pay that much extra towards the principle each mont along with our normal payment. This means we'll have the exact same monthly payment as if we'd taken the 60 month loan, but since we're paying more principle each month, we'll have the car paid off in 4 years and 3 months, nearly a year quicker than the 60 month loan, while saving almost $1000 in interest payments.

 

[zman]

Depends on how you use that loan. The credit union we used offered 5.49% for anywhere from 36 to 72 months. Of course we could have taken the same rate at the std 60 months, but by taking it at 72 months, we lowered the base monthly payment by about $60/month. Now we'll take that $60 savings and pay that much extra towards the principle each mont along with our normal payment. This means we'll have the exact same monthly payment as if we'd taken the 60 month loan, but since we're paying more principle each month, we'll have the car paid off in 4 years and 3 months, nearly a year quicker than the 60 month loan, while saving almost $1000 in interest payments.

I don't follow this. If you are taking out a 72 month loan rather than a 60 month loan, but paying the extra amount equivalent to the 60 month loan difference each month, you will have it paid of in 60 months, no?? If the interest rate is the same this is all you are doing.

I must not understand what you are saying.

 

[fenwah]

I don't really recommend this...but if you were to use your home equity line of credit towards your car purchase, you would be able to write off the interest on your car purchase come tax time. The caveet however is that if for some reason you can't make those HELOC payments on your car, then you jeapordize losing your home. But, my thought is is that if you aren't financially secure in the first place, then you definitely shouldn't be in the market for a new car.

 

[loach]

Depends on how you use that loan. The credit union we used offered 5.49% for anywhere from 36 to 72 months. Of course we could have taken the same rate at the std 60 months, but by taking it at 72 months, we lowered the base monthly payment by about $60/month. Now we'll take that $60 savings and pay that much extra towards the principle each mont along with our normal payment. This means we'll have the exact same monthly payment as if we'd taken the 60 month loan, but since we're paying more principle each month, we'll have the car paid off in 4 years and 3 months, nearly a year quicker than the 60 month loan, while saving almost $1000 in interest payments.

You are ending up in the exact same place as would if you took out a 51 month loan. You're not saving any interest by taking the longer term and making extra interest payments if the interest rates were the same regardless of term. I suppose you've given yourself the flexibility to make a lower payment if you get in a financial bind.

 

[bkmartin]

I thought the 0% financing was extended until the end of the month. As long as that is going, it seems you should use that.

Brian

 

[mitchl]

I don't really recommend this...but if you were to use your home equity line of credit towards your car purchase, you would be able to write off the interest on your car purchase come tax time. The caveet however is that if for some reason you can't make those HELOC payments on your car, then you jeapordize losing your home. But, my thought is is that if you aren't financially secure in the first place, then you definitely shouldn't be in the market for a new car.

Well, you actually should still compare. Right now my Home Equity line is at 8.9%, then use your top tax rate (lets say 30%, 25%federal, 5% state)- then your taxed rate would be 8.9% * ( 1.0 -.30 )= 6.23%. If your loan rate would be less than 6.23%, then you should go loan, if greater then Home Equity. That would be if your home equity would be fixed. If it is variable and goes up, then you have to figure your risk of home equity going up or down. Mine has gone from 5.5% 3 years ago to 8.9% now, but I can lock a 7.9% for a fixed term if I like.

I will go 48 months or less at 4.9% or less-- otherwise I will either cut a check or go home equity. Unfortunately I don't think there is any way my Acadia will be here by Feb 28; maybe St. Patrick will bring some more low rates.

 

[NY_Joe]

Depends on how you use that loan. The credit union we used offered 5.49% for anywhere from 36 to 72 months. Of course we could have taken the same rate at the std 60 months, but by taking it at 72 months, we lowered the base monthly payment by about $60/month. Now we'll take that $60 savings and pay that much extra towards the principle each mont along with our normal payment. This means we'll have the exact same monthly payment as if we'd taken the 60 month loan, but since we're paying more principle each month, we'll have the car paid off in 4 years and 3 months, nearly a year quicker than the 60 month loan, while saving almost $1000 in interest payments.

You are ending up in the exact same place as would if you took out a 51 month loan.  You're not saving any interest by taking the longer term and making extra interest payments if the interest rates were the same regardless of term.  I suppose you've given yourself the flexibility to make a lower payment if you get in a financial bind.  

You are wrong.

He is saving money in interest. If he took a 51 mo loan, if there is such a thing, he is paying interest on every penny he borrowed. By paying extra monthly, he pays down the principle and does not pay interest on it.

His monthly payments are based of the loan amount + interest, all predetermined based on the loan amount and interest rate. Howmuch each month is determined by the length of the loan.

Since the rate is equal from 36 to 72 mo, he creates a lower monthly payment to have to pay each month even though he can afford the $60 more.  Let us say this payment is $500.

Every month he now has to pay $500.  However, he sends in a check for $560.  The $500 gets applied to the principle(loan amount) and to the monthly interest.  The extra $60 is directly applied to the principle(loan amount).  As he continues this month after month he is actually lowering the loan amount he owes them.  So the loan will now be paid off sooner b.c the principle is being paid down quicker than the expected 72 months.

So, at the end of 4 yrs and 3 mo he will have his loan paid off and save paying the interest on 1 yr and 9 mo of loan payments.  Any payment you make above and beyond the prescribed payment can be applied all to principal b/c you satisfied your monthly commitment to the loan.

 

[NY_Joe]

I thought the 0% financing was extended until the end of the month. As long as that is going, it seems you should use that.

Brian

Tha tis only up to 36 months. His term look to be 51 mo if he contiues his normal payments.

 

[NY_Joe]

Depends on how you use that loan. The credit union we used offered 5.49% for anywhere from 36 to 72 months. Of course we could have taken the same rate at the std 60 months, but by taking it at 72 months, we lowered the base monthly payment by about $60/month. Now we'll take that $60 savings and pay that much extra towards the principle each mont along with our normal payment. This means we'll have the exact same monthly payment as if we'd taken the 60 month loan, but since we're paying more principle each month, we'll have the car paid off in 4 years and 3 months, nearly a year quicker than the 60 month loan, while saving almost $1000 in interest payments.

I don't follow this. If you are taking out a 72 month loan rather than a 60 month loan, but paying the extra amount equivalent to the 60 month loan difference each month, you will have it paid of in 60 months, no?? If the interest rate is the same this is all you are doing.

I must not understand what you are saying.

No, he is paying down his loan quicker with extra monthly payments.

 

[loach]

You are wrong.

He is saving money in interest. If he took a 51 mo loan, if there is such a thing, he is paying interest on every penny he borrowed. By paying extra monthly, he pays down the principle and does not pay interest on it.

I am not wrong. You are just missing my point. He is saving money by paying the loan off over 51 months instead of 72 mos. That's obvious, but that wasn't my point. My point was that he will have paid exactly the same amount of cash out by taking a 72 month loan and paying it off in 51 months as he would have if he just took out a 51 month loan (assuming same interest rate on either loan).

 

[mitchl]

Every month he now has to pay $500. However, he sends in a check for $560. The $500 gets applied to the principle(loan amount) and to the monthly interest. The extra $60 is directly applied to the principle(loan amount). As he continues this month after month he is actually lowering the loan amount he owes them. So the loan will now be paid off sooner b.c the principle is being paid down quicker than the expected 72 months.

So, at the end of 4 yrs and 3 mo he will have his loan paid off and save paying the interest on 1 yr and 9 mo of loan payments. Any payment you make above and beyond the prescribed payment can be applied all to principal b/c you satisfied your monthly commitment to the loan.

Somewhere, someone's math is way off on this. At 5.49%, on a 72 month loan, you flat out will not have 21 months of interest. Here are the 3 terms in question, I am using 25000 as the Purchase amount, because it was my first guess, and the difference between 72 and 60 months was $69, so I figured close enough.

5.49% @ 72 months = $408 payment, 29400 total paid, 4400 interest
5.49% @ 60 months = $477 payment, 28644 total, 3644 interest
5.49% @ 51 months = $551 payment, 28086 total, 3086 interest

The original question was by saving $1000 by paying earlier, it would be paid 1 year and 9 months earlier. Well the problem is that in no cases above, do a year of payments equal a year of interest. Given the longest term, 72 months, a total of $4400 in interest is paid, which is a little less than 11 payment totals.

Lets say that you do pay the 60 month payment on the 72 month loan. In 51 months, you pay 477 x 51 = 24,327. Well some bank won't be satisfied with that, because it is not even the purchase amount of $25,000- and that is not even including any interest- that would be if 100% of every payment went straight to principle.

Assuming equal monthly payments, the forumula is simple, on a simple interest loan with no early payoff penalty (read your contracts for that too!!), you just amortize the loan for the term you want to payoff, in this case for 51 months.

In excel, here is your formula -- > =PMT(interest(/# of payments to make per year),total payments, - Purchase price)

Also, an important note is that your principle and interest amount is not the same for every payment. Simple interest loans are when you make a payment- 1) it pays all interest accumulated to date, 2) it pays down principle -- excess should always be applied to principle by default, however some banks do apply to future payments (if I pay $60 extra now, it lowers next month by $60)--- that is always a bad deal- you always want it taken off principle.