Financing Ford Options balloon payment

[billy_at]

My Ford Options contract ends on July 31. I want to finance the balloon payment and keep the car. I've called Ford Credit twice, and they told me that I need to wait until the contract ends - then, up to 14 days after the contract is over, I'll get a DocuSign giving me the option of financing the balloon payment.

This makes me super nervous - I'd rather have everything sorted out before the balloon payment comes due.

Has anyone else gotten these same instructions? Did you just have to wait until you got your email?

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[MachhE-CT]

I have not gotten there yet. But if you read all the fine print in your lease co tract that is exactly what they are telling you. Assuming your credit is good
Then the whole process should be pretty easy. The payment to buy the car is called the residual value not a
Balloon payment. If you planned to do this from the beginning you should have bought the car outright and not leased it. The residual value is often above the KBB which puts you underwater on the loan. It’s now a used car and the interest rates on used cars are higher than new car loans and the terms are shorter. Financially it makes more sense to turn this car back to Ford and buy a new one or a used one with a price that represents the actuall KBB value. I may buy mine out but I am
Putting cash away in 5 percent account and in three years I will 3/4 of what I need to buy the car. Still not sure that’s smart. But at least I have a solid down payment on a new one

 

[luckie]

I have not gotten there yet. But if you read all the fine print in your lease co tract that is exactly what they are telling you. Assuming your credit is good
Then the whole process should be pretty easy. The payment to buy the car is called the residual value not a
Balloon payment. If you planned to do this from the beginning you should have bought the car outright and not leased it. The residual value is often above the KBB which puts you underwater on the loan. It’s now a used car and the interest rates on used cars are higher than new car loans and the terms are shorter. Financially it makes more sense to turn this car back to Ford and buy a new one or a used one with a price that represents the actuall KBB value. I may buy mine out but I am
Putting cash away in 5 percent account and in three years I will 3/4 of what I need to buy the car. Still not sure that’s smart. But at least I have a solid down payment on a new one

I think OP is talking about the “Ford Options” plan where you buy the car at the start but have an option to unload it, as if it were a lease, when the final payment (a big ballon payment) is due.

 

[RickMachE]

My Ford Options contract ends on July 31. I want to finance the balloon payment and keep the car. I've called Ford Credit twice, and they told me that I need to wait until the contract ends - then, up to 14 days after the contract is over, I'll get a DocuSign giving me the option of financing the balloon payment.

This makes me super nervous - I'd rather have everything sorted out before the balloon payment comes due.

Has anyone else gotten these same instructions? Did you just have to wait until you got your email?

Yes, everyone. This is the way it works.

 

[tbrumleve]

I have not gotten there yet. But if you read all the fine print in your lease co tract that is exactly what they are telling you. Assuming your credit is good
Then the whole process should be pretty easy. The payment to buy the car is called the residual value not a
Balloon payment. If you planned to do this from the beginning you should have bought the car outright and not leased it. The residual value is often above the KBB which puts you underwater on the loan. It’s now a used car and the interest rates on used cars are higher than new car loans and the terms are shorter. Financially it makes more sense to turn this car back to Ford and buy a new one or a used one with a price that represents the actuall KBB value. I may buy mine out but I am
Putting cash away in 5 percent account and in three years I will 3/4 of what I need to buy the car. Still not sure that’s smart. But at least I have a solid down payment on a new one

On a Ford Options, the contract lists the number of payments (35 @ $$) and a final 1 @ the “residual”. That’s known as a “balloon payment” that is equal to the residual. Semantics mostly. The finance dept kept calling it a balloon payment. ??‍ The interest rate is the same as your options rate when they give you the offer. If you have a credit union, they can sometimes get you a better rate on a used car loan, depending on when you started the options program.

 

[RickMachE]

I have not gotten there yet. But if you read all the fine print in your lease co tract that is exactly what they are telling you. Assuming your credit is good
Then the whole process should be pretty easy. The payment to buy the car is called the residual value not a
Balloon payment. If you planned to do this from the beginning you should have bought the car outright and not leased it. The residual value is often above the KBB which puts you underwater on the loan. It’s now a used car and the interest rates on used cars are higher than new car loans and the terms are shorter. Financially it makes more sense to turn this car back to Ford and buy a new one or a used one with a price that represents the actuall KBB value. I may buy mine out but I am
Putting cash away in 5 percent account and in three years I will 3/4 of what I need to buy the car. Still not sure that’s smart. But at least I have a solid down payment on a new one

You appear to have no knowledge of Ford Options.

 

[ryan9751]

In this situation right now and it's infuriating, even though I have a pretty good idea of how it works from reading other experiences on the forum.

1. Notified Ford Credit 30 days in advance.
2. Was given verbal confirmation of my interest rate, however they cannot send a new financing agreement until 14 days after balloon payment is due.

This is where the process falls apart - It sounds to me like I'm essentially agreeing to a new 30K financing contract before seeing it or having the terms in writing.

Agent says If I do not agree once new terms come out I can still return vehicle. Which is of course contrary to the contract which states " You must give the vehicle to the creditor no later than the balloon payment due date"

I'm not really expecting to have a problem with the new contract, but if I did for some reason I expect I will have very little time to find another vehicle.

 

[billy_at]

I really hated this whole process but I can confirm that it does work as described. You just have to wait and wait. Nothing will change or seem to be working until the 14th day.

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