Inner Lakes is excited to introduce our new Driving Sense program, a lease-like auto loan program. Like a regular auto lease, Driving Sense provides lower monthly payments than conventional financing, but still allows borrowers to retain ownership of the vehicle.
Below is a FAQ that will help you decide if Driving Sense is right for you. If you have any questions, call us today at (716) 326-3858 and speak to a Loan Officer.
Q: How can the monthly payments be so much lower than with a regular loan?
A: At the time of purchase, depending on the loan term and annual mileage option chosen by the borrower, the residual value of the vehicle at the end of the term is calculated and then subtracted from the total amount financed, thereby lowering payments during the term of the loan and creating a “balloon” payment due at the end of the term.
Q: What options does the borrower have at the end of the term to cover the balloon payment due?
A: The borrower can pay the balloon payment due and keep the vehicle, they can come back to Inner Lakes and refinance the balloon payment into a conventional loan and keep the vehicle, they can trade-in the vehicle on another car at the dealership and pay the balloon payment off with the new loan agreement, or they can simply turn the vehicle in and walk away.
Q: If the borrower does not want to keep the car at the end of the term, how do they turn it back in?
A: Auto Financial Group (AFG), our third-party partner for this product, will send out a notice 12 months prior to the end of the loan term outlining the borrower’s options for the vehicle at the end of the term and then will follow-up with phone calls at specified intervals – the borrower simply makes arrangements with AFG to return the vehicle if that is the option they choose. The borrower then incurs a $195 disposition fee from AFG.
Q: Are there any other charges incurred when the vehicle is surrendered?
A: AFG will perform an inspection of the vehicle at the time of surrender and the borrower will have to pay for any damage to the vehicle in excess of “normal wear and tear” at that time.
Q: What kind of vehicles can be purchased through the Driving Sense program?
A: Future year and current year and five previous model year autos, SUV’s, and light trucks are eligible.
Q: What annual mileage options can the borrower choose?
A: Three mileage options are available – 12,000, 15,000, and 18,000 miles per year. The higher the mileage option selected, the lower the residual value at the end of the loan term will be.
Q: What if the borrower exceeds the mileage option chosen?
A: Total miles are verified at the end of the loan term and the borrower must pay 10 cents per mile that they drove the vehicle above the aggregate annual mileage maximum initially chosen.
Q: Are all borrowers eligible for the “Driving Sense” program?
A: Not necessarily – all regular underwriting guidelines apply.
Q: How long can the term of the “Driving Sense” loan be?
A: 72 months maximum for model vehicles.
Q: Can I run some potential numbers myself to see the savings?