Financing Balloon after Ford Options

[generaltso]

The weird thing is here

I also used the Ford Options, but with only 2 years for now, because I wanted the monthly payment to be low (going for 3 years would increase the monthly payment significantly)
However ... In the terms of contract, I can too, extend it for 12 months at the same monthly rate ...
So If I don't want to finance the balloon after the 2 years, I can keep it one more year... I don't either understand the logic, but ... it is not that bad for this particular application

Interesting. The only options in the US were 3 year or 4 year.

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[MachEUser]

How would it work if the ballon amount amortized over 3 years even with 0% interest is more than your current payment? The contract states payment will stay the same if paid in 36 months or less.

 

[generaltso]

How would it work if the ballon amount amortized over 3 years even with 0% interest is more than your current payment? The contract states payment will stay the same if paid in 36 months or less.

Then the payment will increase to whatever it needs to be to pay it off in 36 months.

 

[Luke]

I’m waiting on confirmation from Ford Finance. But this was their proposal. I can breakdown the ballon payment in 36 months and maintain the same 3.25% interest rate.

 

[Xweb]

On a similar note... I did a 48-month Options lease. I see the base warranty is 36 months. Any suggestions on what to do for months 36-48 in terms of a warranty? I am planning on giving it back after 4 years. Would buying an extended warranty make sense for the 1 year piece of mind? I usually lease for 3 years and always have the base warranty, so this is new to me.

 

[Luke]

On a similar note... I did a 48-month Options lease. I see the base warranty is 36 months. Any suggestions on what to do for months 36-48 in terms of a warranty? I am planning on giving it back after 4 years. Would buying an extended warranty make sense for the 1 year piece of mind? I usually lease for 3 years and always have the base warranty, so this is new to me.

Good question. I was looking into the Flood Ford extended warranty. But not sure how much it covers.

 

[macchiaz-o]

On a similar note... I did a 48-month Options lease. I see the base warranty is 36 months. Any suggestions on what to do for months 36-48 in terms of a warranty? I am planning on giving it back after 4 years. Would buying an extended warranty make sense for the 1 year piece of mind? I usually lease for 3 years and always have the base warranty, so this is new to me.

Find out how much the warranty costs. Ensure that amount is covered by your emergency funds (checking or savings or whatever). Enjoy year 4 and your cash. Done!

 

[ChuckA]

Ah, OK. It was the "But the refinanced payment will increase to 10% higher than the current payment." part that was confusing. I've not seen that in the contract text before.

My options contract says the interest rate will change, the payment stays the same, and the principal must be paid in less then 36 months (I estimate mine would be 30 months to payoff.). I guess the refinancing of the balloon is different in CT.

 

[ChuckA]

How would it work if the ballon amount amortized over 3 years even with 0% interest is more than your current ipayment? The contract states payment will stay the same if paid in 36 months or less.

It means they would increase your monthly payment so at the end of 36 months you owe $0.

 

[MachEUser]

But then the contract language is inaccurate if payment would go up. It says payment will be the same amount.

 

[solarmoo900]

Called Ford Credit, and after an hour of calls and getting to the supervisor's supervisor they said they'd call me back within 14 business days with an answer, sigh

 

[generaltso]

But then the contract language is inaccurate if payment would go up. It says payment will be the same amount.

It says the payment will stay the same IF it can be paid off in 36 months. If not, the payment will go up to whatever it would need to be to pay off the balance in 36 months.

 

[silverelan]

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:

Thanks for this! I'm still close to 2 years away from the balloon payment but I really got to thinking about what I agreed to sitting in the dealer's F&I office back in late 2021.

I've got this same language in my contract. Seems to me that the original finance rate is extended an additional 36 months if we want to finance the balloon payment through Ford Credit?

 

[macchiaz-o]

I've got this same language in my contract. Seems to me that the original finance rate is extended an additional 36 months if we want to finance the balloon payment through Ford Credit?

Yes, that's the end result I achieved in my case... 36 months at the same interest rate as my original loan. It's actually a modification/rescheduling of the original loan, so there was no new contract etc. Just a verbal agreement with Ford Credit.

When I log in to the online account manager site, it now shows me $598.45 due monthly and 36 payments remaining. (I haven't made the first 'new' payment yet.)

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