Ford Options Finance Charge

[koorb]

Picked up me GTPE last week and everything went smooth with Ford Options even
though this was the dealers first. I went in a week before to advise them of my choice
and they had not heard of it….but they spent the time and had the contract all ready
for me with 1.4% for 36 months.
The one issue that I noticed was the total interest amount of roughly $1,670. The finance guy
and GM agreed it seemed high. They committed to run it through Ford Credit. I was told today that
Ford approved the contract.
Do we really get charged on the full value of the MME ?
What have others seen ?

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[generaltso]

Do we really get charged on the full value of the MME ?

No, you get charged interest on the full loan amount, which includes the balloon. Were you expecting something different?

 

[rohankumar]

No, you get charged interest on the full loan amount, which includes the balloon. Were you expecting something different?

That's correct, which is your case would be $50,188.11.

 

[Neil4Real]

Yes, I literally spent 2 hours at my dealer because Ford Credit couldn't even explain to the dealer, or me, that you get charged interest on the full amount because, while similar to a lease, it is not one and the balloon at the end counts towards the amount financed.

That's awesome you got such a low rate, do you still get the $2,500/$1,000 rebate? I accepted it as it made sense for why they gave the $2,500 which fully negated the interest completely, making it essentially 0%.

The one thing that I found that SUCKS with Ford Options, and the dealer didn't offer/clarify, was that GAP is not included. Since I went in so heavily with the "similar to a lease" mindset, obviously why I argued about being charged interest on the full amount, I assumed GAP was included. NOPE. Sucks big time.

 

[GoGoGadgetMachE]

The one thing that I found that SUCKS with Ford Options, and the dealer didn't offer/clarify, was that GAP is not included. Since I went in so heavily with the "similar to a lease" mindset, obviously why I argued about being charged interest on the full amount, I assumed GAP was included. NOPE. Sucks big time.

this is fair.

If you haven't yet done so, ask your car insurance company what a gap option would add. it's usually a very small amount compared to the overall policy cost and for a vehicle like ours with a large price and currently essentially unknown resale value (*), it's probably worth it.

(*) the market being what it is right now some folks are reporting on here "making" money on their cars at sale/trade-in, but I would not expect a car insurance company to care about that on payoff

 

[HuntingPudel]

Huh, I am planning on as large a downpayment as I can swing. I certainly hope the interest is charged only on the amount loaned and not on the amount of the vehicle. That would defeat the purpose of the down. ??

 

[yngwenli]

No, you get charged interest on the full loan amount, which includes the balloon. Were you expecting something different?

What? I thought if you paid it off early, you don't have to pay the full interest over the life of the loan?

Could someone clarify if that's how it works?

Maybe it's all a wash with the $$ incentive so Options is pointless if you plan to pay it off early?

 

[generaltso]

What? I thought if you paid it off early, you don't have to pay the full interest over the life of the loan?

You don’t. But the Truth in Lending statement shows the total interest you will pay if you take the loan to its full term.

 

[hybrid2bev]

You don’t. But the Truth in Lending statement shows the total interest you will pay if you take the loan to its full term.

Yes, but it’s only an estimate not a fixed amount. The simple interest estimate is based on you paying the exact amount due on the exact day it’s due every month of the term. Pay more / less or pay early / late and the estimate will be off.

 

[Mcarter]

I took Gap through my credit union and it only added about $6 more to my monthly payment. Took delivery of the vehicle Saturday and I did not have to pay a ADM there was a $1,000 difference (more) on the Ford website than on my invoice, ask the dealer what it was for they couldn’t explain it (so they say) but after I showed them what my sticker price was they quickly told me I would be paying sticker price and that’s what I did.

 

[MachEnation]

The $7500 federal tax credit + $5000 state rebate was -- for me -- my state-subsidized gap insurance.

 

[koorb]

Thanks for all the responses. I did get a $1,000 rebate as well as the 1.4% interest rate.

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