2021 Mach-E Lease Residuals and Terms Revealed

[FredT]

The answer seems simple but some people here seem to struggle mightily so let's go over it one last time:

A manufacturer has a vehicle which they believe has a FMV of $50K. A reasonable residual would be $25K. The government now gives a $5K credit/rebate. What does the manufacturer do? Obviously it increases MSRP to $55K since that effectively leaves FMV at $50K.

For leasing it has choices. It can increase the residual to $30K or 55%. It can use the $5K as cap reduction and leave the residual at $25K or 45%. It can do a combination of these. Or, as Ford has done with Ford Options, it can leave the MSRP at $55K and the residual at $25K and let the customer have the $5K as a rebate. And of course there are other factors it can use, such as incentives and interest rates.

So the answer to the question of "where that $7500 went" is: With Ford Options as a rebate to the customer. With RCL to the residual.

Great explanation, thanks! The bottom line for me is that since I will only keep the car for three years, I don't really care what the residual is other than how it affects the overall cost. At the moment I cannot make that determination because Ford doesn't include RCL in the finance tools on Ford.com (why?). Right now if I compare Ford Options on Mach-e with a lease from Tesla Model Y (which I am not considering) or VW ID.4 (which I am), Ford Options is not a very good deal. I would love to be able to see if RCL is better or worse than Options.

 

[generaltso]

Right now if I compare Ford Options on Mach-e with a lease from Tesla Model Y (which I am not considering) or VW ID.4 (which I am), Ford Options is not a very good deal. I would love to be able to see if RCL is better or worse than Options.

Options becomes a much better deal if you factor in the $7500 tax credit. Assuming you qualify for the full credit, you can refinance the loan and put the additional $7500 into it to reduce your payment.

 

[FredT]

Options becomes a much better deal if you factor in the $7500 tax credit. Assuming you qualify for the full credit, you can refinance the loan and put the additional $7500 into it to reduce your payment.

Right, I am factoring in the tax credit and it is still not a very attractive deal. Looking at total three-year cost factoring in all the available incentives and rebates, Ford Options is about $3500 more than a Model Y lease, and substantially more than that for an ID.4 lease.

 

[eltonlin]

Right, I am factoring in the tax credit and it is still not a very attractive deal. Looking at total three-year cost factoring in all the available incentives and rebates, Ford Options is about $3500 more than a Model Y lease, and substantially more than that for an ID.4 lease.

Yeah, there are a bunch of long threads on this point.

 

[First Edition]

Right, I am factoring in the tax credit and it is still not a very attractive deal. Looking at total three-year cost factoring in all the available incentives and rebates, Ford Options is about $3500 more than a Model Y lease, and substantially more than that for an ID.4 lease.

A list of January lease deals for EVs from InsideEVs for comparison purposes. Nothing on ID4 or MME yet.

January 2021 EV Lease Deals

 

[DBC]

Right, I am factoring in the tax credit and it is still not a very attractive deal. Looking at total three-year cost factoring in all the available incentives and rebates, Ford Options is about $3500 more than a Model Y lease, and substantially more than that for an ID.4 lease.

You're missing something. The Model Y with $4500 down and counting the $1500 CA Clean Vehicle rebate is $499/month. The MME with $4500 down plus the $7500 tax credit and counting the same $1500 CA Clean Vehicle rebate (total down $13500) is $497.82/month with Ford Options. Easy to confirm these numbers. Just go to the websites.

Depending on your state you may pay more for the MME because you have to pay sales tax on the residual. More than balancing this out would be that with the MME the buyout price is attractive and no additional sales tax would be due. The Model Y is a closed end lease so you don't have the option of buying it. Plus there is a reason why one of these vehicles is winning awards and one isn't. Not to mention that one of these vehicles offers a hands free driving option for $500 and one offers a non-hands free driving option for $10,000.

Hard to compare the VW ID.4 to these because it won't be AWD and it won't have similar performance. But it will be less expensive because it will be a less expensive vehicle. If that works for you go for it. The Chevy Bolt will be much less than the VW ID.4 because it's an even less expensive vehicle. That might work even better if you're looking for value.