Financing Balloon after Ford Options

[ChuckA]

Anyone refinance the Ford Options balloon payment through Ford Credit? What is your interest rate?

In my contract (in CT), it reads like the interest rate will change but the payment amount stays the same. This makes the refinanced term less then 36 months.

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[RickMachE]

Anyone refinance the Ford Options balloon payment through Ford Credit? What is your interest rate?

In my contract (in CT), it reads like the interest rate will change but the payment amount stays the same. This makes the refinanced term less then 36 months.

Not possible yet. The shortest term was 36 months. I would expect a market rate.

 

[generaltso]

Anyone refinance the Ford Options balloon payment through Ford Credit? What is your interest rate?

In my contract (in CT), it reads like the interest rate will change but the payment amount stays the same. This makes the refinanced term less then 36 months.

The payment should be the same for an additional 36 months. That should also mean the interest rate is the same since it was originally amortized over 6 years (or 7 for the 4yr Options plan).

 

[Ghost Ryder]

The payment should be the same for an additional 36 months. That should also mean the interest rate is the same since it was originally amortized over 6 years (or 7 for the 4yr Options plan).

That would be crazy if I could get 1.75% again.

 

[macchiaz-o]

There are a few different Ford Options contract term sheets. Some state that you can refinance at the same rate, others don't.

No one has met their term yet. Earliest will be in January 2024 so we should be seeing some real world experiences playing out in the coming months.

 

[generaltso]

There are a few different Ford Options contract term sheets. Some state that you can refinance at the same rate, others don't.

Yeah, some say that you can refinance for 3 years with the same rate, and some say you can refinance for 3 years with the same monthly payment. But I’m pretty sure those are the same thing mathematically.

 

[macchiaz-o]

Yeah, some say that you can refinance for 3 years with the same rate, and some say you can refinance for 3 years with the same monthly payment. But I’m pretty sure those are the same thing mathematically.

You're forgetting that we're only paying interest on the fixed balloon amount every month. That's quite significant.

The way my contract is written, Ford Credit might ask me to agree to pay a 21.8% interest rate so that I'm keeping the same monthly amount I'm currently paying spread over 36 monthly payments, to pay off my $20,855 balloon.

If they go that route, I will definitely decline the offer. I'll instead pay in full at the original month 36 or I'll use the trade option.

I currently pay $795 per month for 35 months. Under the terms of the other contract language where interest rate remains fixed, it would be $600 per month. That's a difference of more than $7,000 in interest payments.

Here are the terms on my contract:

 

[generaltso]

You're forgetting that we're only paying interest on the fixed balloon amount every month. That's quite significant.

Hmm. Yeah, I guess I’d have to do some more math since the original balloon amount would start to go down in the refinanced term.

 

[BMT1071]

You're forgetting that we're only paying interest on the fixed balloon amount every month. That's quite significant.

The way my contract is written, Ford Credit might ask me to agree to pay a 21.8% interest rate so that I'm keeping the same monthly amount I'm currently paying spread over 36 monthly payments, to pay off my $20,855 balloon.

If they go that route, I will definitely decline the offer. I'll instead pay in full at the original month 36 or I'll use the trade option.

I currently pay $795 per month for 35 months. Under the terms of the other contract language where interest rate remains fixed, it would be $600 per month. That's a difference of more than $7,000 in interest payments.

Here are the terms on my contract:

My contract is the same as yours, as expected since we bought from the same dealer just a few months apart. I went with the 48 month Options plan and the numbers work out that my balloon payment divided by my monthly payment is 36.4. So I would be happy to keep the same payment if I decide to keep the car. It would actually increase by about $6/month but that's close enough for me.

 

[BMT1071]

My contract is the same as yours, as expected since we bought from the same dealer just a few months apart. I went with the 48 month Options plan and the numbers work out that my balloon payment divided by my monthly payment is 36.4. So I would be happy to keep the same payment if I decide to keep the car. It would actually increase by about $6/month but that's close enough for me.

Keeping the same rate would bump my payment up about $25/month.
I would swear that I saw the "same rate" verbiage on ford.com, but maybe it was from another forum member's contract. It appears I have nothing in writing saying Ford has to do me any favors on the rate. ??

 

[macchiaz-o]

Keeping the same rate would bump my payment up about $25/month.
I would swear that I saw the "same rate" verbiage on ford.com, but maybe it was from another forum member's contract. It appears I have nothing in writing saying Ford has to do me any favors on the rate. ??

Even so, it sounds like you may get a fair offer. As you pointed out, the numbers work a lot better on your 48 month term than on my 36 month term.

It's these weird fine print details that make it easy to take advantage of most consumers and it's why so many are anxious or distrusting of car sales... But at least we're not rushing into anything and we have lots of options when the time comes.

 

[RickMachE]

I think if you're expecting anything other than market rate, you're in for a surprise. It would make zero sense for Ford to offer you a 3 year payment schedule, then a balloon payment for another t3 years that was the same with the same rate.

You took a risk, i.e. in 3 years you can hand the keys over, or pay off the balloon, or refinance it. That risk isn't going to be at the same rate.

 

[Thor2j]

Your car will probably be worth way less then the balloon. No reason to keep it.

 

[macchiaz-o]

Your car will probably be worth way less then the balloon. No reason to keep it.

Maybe not. Time will tell...

My balloon's $20,855 with a current market value around $33k or so. I have less than 6 months to decide what to do with my Ford Options.

 

[ChuckA]

Thanks for your responses. Learned 2 things, 1) in a year we should know as my MME just hit 2 yrs owned, 2) that different states have different refinancing terms in their Ford Options contracts.

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