Thanks a lot for the information guys. I’ll close the regular checking account.
Sorry, I think it was ALG, not AFG, that sold the residual values. And the residual insurance guarantors used ALG’s data.
What is Payment Saver ? It’s for leasing and buying both or just to lease a new car through a CU.
Buying with a Balloon Payment
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If I get on a 72 month payment so after last payment I own the car and no RV.
AFG calculator link shown in the post above talks about mileage each year used and msrp . That’s looks like a lease calculation.
Think of it kind of like a lease/loan hybrid. The title goes in your name and not the leasing company, so you own it and can sell or trade it any time. But at the end of the payment period, you still owe a certain lump value of the car. Some credit unions even treat it like a lease where you can give the car to them instead of paying the balloon payment.
The monthly does still figure in miles like a lease because that affects the final value.
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Don’t treat it like a traditional lease and walk away at the end. Have a plan to buy, trade or refi at the end instead.
The RV is going to be conservative, so one would probably have equity at the end.
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I’m not planning to, just stating that it could be an option. If I go this route, I’m buying a car that I’ll love and drive until it dies.
This is a good option in today’s crazy mkt to keep monthly payments relatively low and still own the car if one wants to sell it or decide to buy it at the end. RV definitely important and the interest rate to get low monthly payment.
If Car is totaled then the insurance pays to the owner or the CU ? I would think to the owner since Title is under his name. And think it need Gap insurance also.
This looks like a sort of interest only loans people get on houses to keep payments to a minimum.
Good find folks.
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For my personal situation, I’m a federal government employee. With the GS pay schedule I know exactly how my pay grade is going to change for my position over the next few years (within a few percent depending on yearly costs of living increases). So things might be tight now, but I know that unless I do something really stupid and get in trouble, I’m going to be seeing a significant pay increase by the end of whatever loan period I take and could easily pay whatever the final payment is. That’s one advantage I’m looking at myself.
i see both sides of the arguement.
What i always say is you should compare all 3 scenarios (Lease v Traditional Finance v Payment Saver)
It all depends on how the incentives, APR, Fees, Terms & RV line up.
the issue i find is that people usually get a blind spot for one of the 3 options & then ignore the other 2 as they cant evaluate or compare all the options without prejudice.
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I’ve already evaluated traditional finance ($0 down) vs lease on a Sienna and Odyssey. My wife really wants a van and we have a Carvana offer to buy our Armada for more than we paid for it in December 2018 (it’s a 2017 model). So we have essentially used it 3 years for free.
I really want to bank all the equity and put her into a new van. Neither van leases well but both hold solid residuals. So I thought the payment saver may make a ton on sense and still have a lot of positive equity at the end of the term.
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If you give me the year, make, model and trim I will post the RV and MSRPs for you.
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Penfed does not list a 2022 Sienna (yet?) so I pulled a 2021. Below are the 36 and 48 month terms, payment is based on loan amount
at MSRP.
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Thanks for the information. I need to compare to my standard lease calculations from the calculator. At first glance it appears to be $20-40/month worse than standard lease. The RV for the ballon is less than the lease, but nothing sure it’s worth the risk with the market how it is. Also, I think I had some added options to my original MSRP.
Interested to see what @RVguy has to say.
I’m trying to find a way to make these a better lease than buy (and pocket the equity from the Armada) but I am not convinced yet.
It seems like these would be much better for a longer term, and not as much of a difference on the same terms as a lease.
The best lease on a sienna or odyssey is with one of our credit unions but we don’t have any (yet) that can operate in KY.
I don’t see much of a benefit on the balloon through Pen Fed than a retail purchase with the best rate you can find through a credit union in your area. AFG makes their money by getting 1% of the rate on top of what Pen Fed’s buy rate is. The only thing that higher rate gets you is the option to walk away at the end of the term and a slightly lower payment because you are only paying down to the afg RV.
If you do the retail loan on a 60 or 72mo term and sell it after 48mo, I believe you would have more equity than on a 48mo balloon.
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