GMAC Loans: Vehicle Financing vs. Vehicle Leasing

The finance company known as GMAC uses easy online tools, a variety of customer program options and a special connection to General Motors to help customers get behind the wheel of new or slightly used GM cars and trucks with GMAC loans. GMAC is often called a “captive finance company” because, up until recently, it was owned by General Motors. A captive finance company generally provides financing and other options for the vehicles that come from a specific auto maker.

GMAC Financing

The GMAC company offers various financing options or "GMAC loans" to customers who want to drive away in a GM car or truck that they will own for the rest of its driving lifetime. GMAC can help potential buyers figure out how much they can afford, and how they can get the best interest rates for their credit situations. Lots of America's drivers still think of car ownership in the conventional sense; they buy a new or used GM car or truck outright, change over the title and agree to convenient terms for paying off that vehicle over time, so that eventually, if they resell it at a private party sale, they own that vehicle free and clear.

GMAC Leasing

Another option for General Motors enthusiasts is a lease: GMAC offers specific leasing options for new GM cars and trucks. The main GMAC leasing program is called SmartLease: GMAC provides details and application information on its website. Customers sign up for a vehicle for a certain period of time, and make monthly payments, not on the total value of the vehicle, but on its “depreciation” over the lease term. Leasing customers often enjoy lower monthly payments than those who are purchasing GM vehicles. GMAC also offers SmartLease Plus, a program where those who want to lease GM vehicles can make their lease payment upfront, saving dollars and eliminating monthly bills.

A Third Way: GMAC SmartBuy

In yet another option for General Motors customers, GMAC has unrolled its SmartBuy program, which is a kind of “hybrid” financing program that ends with the driver's ability to resolve the account as if it were a lease. In a SmartBuy agreement, a driver has several options at the end of a loan term. He or she can pay off a “balloon payment” (a lump sum at the end of a loan term in exchange for lower monthly payments) and keep the vehicle, or turn it into a GM dealership, and pay the depreciation or difference from the new value to the resale value. Some customers have reported a great experience with SmartBuy, but for others the terms of the agreement are little too vague. Talk to GMAC representative's upfront about how much a dealership would pay to take the vehicle off of your hands after a loan period has ended.

Drivers who have their eyes on a GM car or truck should think about the various options available from GMAC to decide if they would like to make the commitment to own, lease a vehicle for a period of time or consider a more complex Smart Buy option.