Ford Options Early Buy-Out

[nIceWhite]

I'm doing through this BS with my dealer right now. They don't want to do Ford Options. I have no leverage though besides calling corporate because they'd be happy if I abandoned my order so they could jack up the price for someone else.

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[Arsenic17]

The balloon is part of the principal, so you'll just be prepaying part of the loan at that point.

I understand the balloon in principal too, but will paying principal down to that value early alter your monthly payment during the Options term? My guess is no and that it would work like a mortgage where you payment is fixed regardless of principal, but not sure. If you overpay any amount, that will bring your principal below the balloon amount early and may impact your options at the end to trade it in.

 

[Arsenic17]

I'm doing through this BS with my dealer right now. They don't want to do Ford Options. I have no leverage though besides calling corporate because they'd be happy if I abandoned my order so they could jack up the price for someone else.

My dealer was clearly not experienced doing options and just "mashed buttons" in some situations, but they were willing to do it at least, even if it was more work and confusing for them. Good luck... we really do have no leverage ---

 

[generaltso]

I understand the balloon in principal too, but will paying principal down to that value early alter your monthly payment during the Options term? My guess is no and that it would work like a mortgage where you payment is fixed regardless of principal, but not sure. If you overpay any amount, that will bring your principal below the balloon amount early and may impact your options at the end to trade it in.

If you pay extra, I think it will just prepay future payments. You could ask them to apply extra payments to principal, but I don't believe they will recalculate the interest so your payments would stay the same. If that leads to the balloon amount being lower, you definitely wouldn't want to turn the car into Ford Credit at the end of the term.

There was talk about Ford Credit offering a one time recalculation for people who wanted to apply their tax credit to the loan. Not sure if that ever materialized.

 

[hayhayday]

Prepayments both pushout the due date and immediately reduce interest. I have been paying $100 a week to test and each week the interest charge decreases by $0.02-0.03 which corresponds to my 1.4% rate for a week on $100. My next due date is in Feb for the contracted amount, but gets pushed another month when sum of prepayments equals a months payment. IIRC the return option is for the amount of the scheduled final payment amount so you might get a refund if you returned the vehicle and the final amount due was less than scheduled amount due to lower interest charges from prepayments.

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