Ford Options Deal Structure Estimate

[Malacandra]

This may sound like,a weird question…

I financed through Ford Options because of the $2500 incentive, but I actually have the cash to pay off that loan at any point. On the other hand, my dealership treated me exceptionally well (no, seriously!) and it’s my understanding that if I pay off the loan too soon, they miss out on their cut in arranging the financing.

Does anyone know what that period is? 3 months? 6 months?

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[hybrid2bev]

This may sound like,a weird question…

I financed through Ford Options because of the $2500 incentive, but I actually have the cash to pay off that loan at any point. On the other hand, my dealership treated me exceptionally well (no, seriously!) and it’s my understanding that if I pay off the loan too soon, they miss out on their cut in arranging the financing.

Does anyone know what that period is? 3 months? 6 months?

It's usually 90 days.

 

[Epps]

Ford Options Programs now extended through Feb 28th, 2022.

#21312 - Ford Options APR (for 36/48 terms)
Non-GTs best rate 2.49%
GTs best rate 1.4%

Bonus cash #14052 - Ford Options Retail Bonus Cash

That is good news, except of course everyone's delivery dates just got pushed back another 3 months.

 

[RickMachE]

I believe it's 3 payments, not 90 days, but could be wrong.

Question - what is the 36 and 48 month loan rates for Tier 0/1? Still 0.9% or did those go up too?

 

[Rudy Bega]

I have a bit of a background in auto finance, so I wanted to walk through a potential purchase for everyone here using Ford Options.

I have a 2022 Mustang Mach-E Premium ER on order. The MSRP is $57,140, I live in Ohio and my tax rate is 7%

I have X-Plan and my dealer has agreed to sell it at X-plan.

X- Plan Price: $56,272.20
Doc Fee: $100.00
Sales Tax: $1,111.05 (Ohio taxes on the trade difference so I calculated the tax figuring an estimated trade value of $40,500)
License Fee: $35.00 (Transfer plates from current EV.) Ohio charges a $200 per year surcharge for Plug in vehicles.
Subtotal: $57,518.25
Rebates: -$2,750.00 (Ford Options on the calculator for my region shows $2000 in incentives and I have a $750 PCO resulting from the 2021 to 2022 conversion)
Deposit: -$500.00
Total: $54,268.25

For the sake of simplicity I am going to assume no money down. I drive a ton so I am figuring the options payment at 19,500 miles per year. Based on these parameters, the balloon amount is as follows:

36 months: 40% of MSRP ($22,856.00)
48 months: 33% of MSRP ($18,856.20)

At 2.49% APR (what is showing on the calculator for my region) here are the payments:

36 months: $953.89
48 months: $814.99

Ford offers mileage options at 7500, 10500, 12000, 13500, 15000, 16500, 18000, and 19500. Basically for every mileage band you go down from the 19,500 I put above you add 1% to the percentages I put above. So if you chose 36 months and 7500 miles, the balloon % would be 47%.

When a dealership does a Ford Options contract, there should be a spot in their dealer management system that says "balloon amount" The dealership would simply fill the appropriate balloon amount into that field and the payment should calculate for them and print correctly on their contract. In the payment disclosure section it would read something like this:

35 monthly payments of $953.89 beginning on 2/2/2022
1 payment of $22,856.00 due on 3/2/2025

The paperwork is a standard FMCC installment contract there is no special contract for Ford Options. There is an additional addendum that the dealer has to submit that explains the options at the end of the 36 months:

Keep and pay the balloon in full
Refinance (in some states Ford is REQUIRED to refinance the contract on request from the customer)
Turn back into Ford (Subject to mileage overage, + excess wear and tear charges)

I hope this has been helpful for everyone. Please do not get caught up in the APR or rebates. Those vary by region and individual customer (if you have a private offer). Ford, in the past, has offered incentive protection on ordered units so that you got the better of the rebates at the time of order or at the time of delivery. Many of us ordered a 2021 and had them converted to a 2022. I am not sure that incentive protection works across model years, although I think it would be the right thing for Ford to do.

Let me know if you have any questions.

Very helpful, thanks, do you get incentive protection for Ford Options? Meaning back to my June 6th order date. I should be closing on a GTPE within the week.

 

[hybrid2bev]

I believe it's 3 payments, not 90 days, but could be wrong.

Question - what is the 36 and 48 month loan rates for Tier 0/1? Still 0.9% or did those go up too?

Assuming you make your payments on time it's about the same thing (unless you do 45 days to first payment).

APR rates are Tier 0/2 approvals.
APR for 2022 and 2021 models:
Non-GT: 36 and 48 months = 2.49%
GT: 36 = 1.9% and 48 = 2.9%

 

[RickMachE]

Assuming you make your payments on time it's about the same thing (unless you do 45 days to first payment).

APR rates are Tier 0/2 (Ford Options is Tier 0/1)
APR for 2022 and 2021 models:
Non-GT: 36 and 48 months = 2.49%
GT: 36 = 1.9% and 48 = 2.9%

Appreciate it.

So, if I take my 2022 and sell my 2021, financed with 0.9% for 48 months vs. the 2.25% Ford Options with $1,000 bonus, I will end up taking Ford Options for 48 months and the bonus cash. I'll have to run the numbers to factor that into the potential sale of the 2021, but I expect it will still work out by thousands to sell the 2021 and take the 2022, assuming it ever arrives.

 

[Rudy Bega]

Yes the bonus cash program is still active as well. (I can only see the specific $ amount for my region.)

That is good news, except of course everyone's delivery dates just got pushed back another 3 months.

Not mine! 1/28 it arrived in KC. Expected at Dealer Friday. Question: what is bonus cash for Michigan, Novi zip 48375

 

[hybrid2bev]

Not mine! 1/28 it arrived in KC. Expected at Dealer Friday. Question: what is bonus cash for Michigan, Novi zip 48375

Ford Option bonus cash in Michigan is going to be $1,000. (I'm in SE MI too.)

You can estimate the amount for your area on the Ford Build and Price website by selecting the closest dealer to you.

 

[jonkMACHE]

Does the incentive still exist for cars picked up in February? I went to the Ford website and when I build it out I not longer see the $2500...

 

[jonkMACHE]

Ford Options Programs now extended through Feb 28th, 2022.

#21312 - Ford Options APR (for 36/48 terms)
Non-GTs best rate 2.49%
GTs best rate 1.4%

Bonus cash #14052 - Ford Options Retail Bonus Cash

Where can I find this on Ford's website? I just want to make sure I have the info in hand when I visit the dealer.

 

[Rudy Bega]

Understand. I was faced with 2.25 on Options (not 1.4 like I typed here), vs. 0.9%. In your case, it's $500 or so over 4 years.

When my 2022 comes in, and I'm faced with giving up my 0.9% loan on my 2021 and paying 2.49% on a 2022, then it will be interesting to see what the regular loan is.

Curious, why sell the 21 when it has more features ie power lift gate and acoustic front windows and is about 2K cheaper? Is it because you can get more on your 21 used?

 

[RickMachE]

Curious, why sell the 21 when it has more features ie power lift gate and acoustic front windows and is about 2K cheaper? Is it because you can get more on your 21 used?

In short, we can buy a car stickered $3,200 higher for basically the same price. Will we notice the loss of those two features IF they are actually removed (dealer says they may not be, and they may be on carried over 2021s made 2022s like ours).

With the tax credit, we can sell our 2021 for at least $5,000 more than we paid for it (including the tax credit), and with our A-Plan price we can net at least what we paid. Maybe more if supply is still tight. And, get a fully updated car, with BlueCruise for 3 years (vs. 1 year free WHEN it's enabled on the 2021), without mileage on it.

Seems like a no-brainer, depending when it comes in and if it's perfect. We ordered on 5/29, then bought the exact same car from a cancelled order a month later.

 

[hybrid2bev]

Where can I find this on Ford's website? I just want to make sure I have the info in hand when I visit the dealer.

https://www.ford.com/suvs/mach-e/2021/

Pretend to order a Mach-E. Click on the calculator in the upper right of the screen. Select Ford Options and then calculate the payment.

 

[bosbruce]

So basically the real benefit of the options financing plan over a longer term traditional loan is just that you have a lower monthly payment given the smaller amount you are financing. But the residual amount left on the balloon I suppose the question is what will be the value of the car in year 3 or 4 and if the depreciation is much more given new battery technology and all then you have much better outcome versus a traditional lease because you also captured the $7500 tax break plus ford options $2,500. I suppose the problem is there is history here to benchmark what a 2025 Ford new Mach E would cost and what a 3 or 4 year old 2021 Mach E would resell for. If the supply chain issues are still here by then, you could do really well with this plan. Hehe

After selling my 2018 Tesla Model 3 AWD+ for more than I paid for it last year and looking at what dealers would give me for my 1 y/o Mach E ($13k more than I paid for it last March after MA, US, and Ford incentives), I have been considering splurging on a 2022 Model S ... If only it had a real steering wheel!

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