Yes that is a straw purchase, I’m pretty surprised an F&I manager suggested that.
A co-signer who is Tier 1 should put you at Tier 1. That’s the entire point of a co-signer on a lease or loan. It’s not a mortgage. My guess is that he’s marking up the MF and this is an excuse to do so. Ask him to show you the approval from Ally with your considered credit score (and tier) on it.
Regarding the monthly, there’s no way of telling without the numbers. He could be dumping adds into it for all we know since 99.9% of people don’t read their contract let alone back calculate the MF.