"Ford Options" Mach-E Lease vs standard lease - similarities and differences

malba2366

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The Model Y, even with a lower trim level, has higher monthly payments (once you include the tax credit, which may take an additional step but gets you the money faster). Ditto for the Audi e-tron.
If you look at the numbers, that is simply not true. The Mach E options lease comes out worse because sales tax has to be paid on the whole vehicle in states that collect sales tax. If they continue the $2500 options credit, then it is a wash otherwise it is more expensive to lease the Mach E vs the Model Y. The E iron also will end up leasing right around the same price as the Mach E, but that is also a much nicer vehicle.
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eastern refugee

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As automakers push prices of vehicles higher faster than wage growth they need to do this to continue to move metal. It is unfortunate, but the vast majority of Americans have been duped into thinking that living with debt is normal, and only look at the monthly payments.
I totally disagree. If you were self employed you would likely understand it better. When you are self employed you are ALWAYS in debt. It does not matter how big or small there is always some kind of debt. This of us who are self employed understand all to well the concept of MANAGING debt. That folks is THE crucial issue. IT is how ALL business gets done. If you are not in debt as a business then you are not maximizing your potential.
 

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If you look at the numbers, that is simply not true. The Mach E options lease comes out worse because sales tax has to be paid on the whole vehicle in states that collect sales tax.
That's one way to look at it. Maybe not the greatest way to look at it, but a way. However, you could look at it as not having to pay the tax later. Duh! Plus these numbers don't reflect X-Plan pricing which also reduces the monthly. Double Duh!

If you want a closed ended lease which is essentially a subscription, then Ford Options with a high APR is not a good deal. Maybe Polestar or Tesla has something for you. If you want an open ended lease, which is what the vast majority of consumers want, then Ford Options is a good deal.

Unsure why this is so difficult for some to wrap their heads around. Some focus way too much on the monthly, which can be easily manipulated (for example with a down or a recognition of a credit or rebate), which why those focusing on the monthly rarely get the best deal available.

The other way of course is to lock in on one financing option to the exclusion of others. In this regard, instead of complaining about the financing options offered by Ford, why aren't you finding a better option? How many financing entitities are there which offer auto leases? If the lease deal Ford is offering is so terrible then it should be child's play to find thousands of better deals. What's holding you back?

But hey, you think you can lease an Audi e-tron for less. Amusing but you should do that right now and stop worrying about the MME.
 

AndyS_OSU

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That's one way to look at it. Maybe not the greatest way to look at it, but a way. However, you could look at it as not having to pay the tax later. Duh! Plus these numbers don't reflect X-Plan pricing which also reduces the monthly. Double Duh!

If you want a closed ended lease which is essentially a subscription, then Ford Options with a high APR is not a good deal. Maybe Polestar or Tesla has something for you. If you want an open ended lease, which is what the vast majority of consumers want, then Ford Options is a good deal.

Unsure why this is so difficult for some to wrap their heads around. Some focus way too much on the monthly, which can be easily manipulated (for example with a down or a recognition of a credit or rebate), which why those focusing on the monthly rarely get the best deal available.

The other way of course is to lock in on one financing option to the exclusion of others. In this regard, instead of complaining about the financing options offered by Ford, why aren't you finding a better option? How many financing entitities are there which offer auto leases? If the lease deal Ford is offering is so terrible then it should be child's play to find thousands of better deals. What's holding you back?

But hey, you think you can lease an Audi e-tron for less. Amusing but you should do that right now and stop worrying about the MME.
Not to be combative considering you have that covered already...but with Audi’s current lease cash on the e-tron sportback, you could definitely find a few of the trims that would lease for less than $700/mo before taxes. Not terrible for a $70k car.
 

malba2366

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That's one way to look at it. Maybe not the greatest way to look at it, but a way. However, you could look at it as not having to pay the tax later. Duh! Plus these numbers don't reflect X-Plan pricing which also reduces the monthly. Double Duh!

If you want a closed ended lease which is essentially a subscription, then Ford Options with a high APR is not a good deal. Maybe Polestar or Tesla has something for you. If you want an open ended lease, which is what the vast majority of consumers want, then Ford Options is a good deal.

Unsure why this is so difficult for some to wrap their heads around. Some focus way too much on the monthly, which can be easily manipulated (for example with a down or a recognition of a credit or rebate), which why those focusing on the monthly rarely get the best deal available.

The other way of course is to lock in on one financing option to the exclusion of others. In this regard, instead of complaining about the financing options offered by Ford, why aren't you finding a better option? How many financing entitities are there which offer auto leases? If the lease deal Ford is offering is so terrible then it should be child's play to find thousands of better deals. What's holding you back?

But hey, you think you can lease an Audi e-tron for less. Amusing but you should do that right now and stop worrying about the MME.
I can not even understand what you are posting....

1. None of these programs are open ended leases. An open ended lease does not have a fixed residual value, the leasee is responsible to pay the difference between the assumed residual in the lease and the actual value at the end of the lease. Open ended leases are a horrible idea for most auto customers, and I do not know of anyone besides you who looks for open ended auto leases.

2. Virtually all auto leases in the US are closed end leases (with a guaranteed residual).

3. I think everyone can look and notice that the Ford lease is horrible. Typically an outside bank will offer poorer leases than the manufacturers captive leasing company. An outside bank does not have the ability to certify vehicles and gain revenue from that, and the outside bank does not have an interest in improving sales.

4. Ford options is not an open or closed ended lease, it is a financing program with a balloon payment. In this program the customer pays sales tax on the entire vehicle. In most states, leasees only pay sales tax on the portion of the vehicle value used (sale price minus residual value). Since Ford's actual lease is so terrible, most people are looking at this options program as a surrogate for a lease. There is no "paying tax later" on a lease - unless you buy out the vehicle. So with Ford Options, even if you elect to return the vehicle to Ford you will pay sales tax on the entire vehicle.

5. When comparing leases between 2 different vehicles what else should one compare? In the end you are paying the monthly payments plus down payments...there is nothing else to compare.
 
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malba2366

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I totally disagree. If you were self employed you would likely understand it better. When you are self employed you are ALWAYS in debt. It does not matter how big or small there is always some kind of debt. This of us who are self employed understand all to well the concept of MANAGING debt. That folks is THE crucial issue. IT is how ALL business gets done. If you are not in debt as a business then you are not maximizing your potential.
I agree with you 100% that using financing to run a profitable business, or even financing vehicles to keep money in the stock market is a great move expecially in the current rate environment. However, this is not what the majority of people are doing. Financing an vehicle for 72 or 84 months just to get to a payment you can swing is just putting yourself in a cycle of debt.
 
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I'd say you'r3e in the ballpark depending on DMV fees and acquisition. I think Ford lease acquisition is in the $600-700 range but not sure what they do on options. If you add that and $250 DMV fees it's probably closer to $760/mo
Thank you!
 

UW2

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A couple of things to keep in mind:
  • I believe the balloon note is MSRP x residual %, so using your numbers it would be $58,700 x 38% = $22,306
  • The 2.25% Options rate is the Tier 0/1 rate. If you score lower (Tier 2-5) then the rate will be higher.
  • There is no acquisition fee on Ford Options (because it's a retail installment contract)
  • Options is 47 or 35 monthly payments + 1 balloon note to equal a 48 or 36 month term
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eastern refugee

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I agree with you 100% that using financing to run a profitable business, or even financing vehicles to keep money in the stock market is a great move expecially in the current rate environment. However, this is not what the majority of people are doing. Financing an vehicle for 72 or 84 months just to get to a payment you can swing is just putting yourself in a cycle of debt.
no it is not. No one who owns their business puts in a stock market. I like what you say but you are looking at the MME through the eyes of a consumer. When you own your own business you look at money and stuff VERY differently. You have payroll, rent office expenses etc. the MME in my opinion is a way of controlling debt. Most people look at a car purchase as a 3 year deal and turn it in for another. Me personally is looking at the MME as a car that I can buy and will last 250-500,000 miles. As such if it takes 7 or 8 years to pay off it is a short term liability which one day will be an asset. It is bugetsble in that I now do not have to worry about expensive maintenance or gas. This is why I bought an FE. Maybe 3 years from now I will turn it in on a Shelby MME but again it will come down to how I factor the price in among all of my other business expenses. Remember Covid is DESTROYING small business. At 64 I have to weight every option and how my business does in the future. If anyone things will eventually go back to the way it was then they are delusional. Covid will create a NEW normal. That new normal may be 2-3 years down the road. When you own your own business you spend SIGNIFICANT time trying to figure just that point out. Most small business owners have zero dollars for retirement. Our retirement plan is our business. Maybe it is having someone run it and pay you or maybe it is you working less but the concept of walking away is really not a reality unless you are one of the few who can sell the entire business for a boatload. Most do not. Most are mom and pop operations. Anyway sorry for the diversion.

my point is buying a car is just an expense that gets listed with rent payroll etc. making that as little as possible is key. This is THE why term is irrelevant.
 

malba2366

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no it is not. No one who owns their business puts in a stock market. I like what you say but you are looking at the MME through the eyes of a consumer. When you own your own business you look at money and stuff VERY differently. You have payroll, rent office expenses etc. the MME in my opinion is a way of controlling debt. Most people look at a car purchase as a 3 year deal and turn it in for another. Me personally is looking at the MME as a car that I can buy and will last 250-500,000 miles. As such if it takes 7 or 8 years to pay off it is a short term liability which one day will be an asset. It is bugetsble in that I now do not have to worry about expensive maintenance or gas. This is why I bought an FE. Maybe 3 years from now I will turn it in on a Shelby MME but again it will come down to how I factor the price in among all of my other business expenses. Remember Covid is DESTROYING small business. At 64 I have to weight every option and how my business does in the future. If anyone things will eventually go back to the way it was then they are delusional. Covid will create a NEW normal. That new normal may be 2-3 years down the road. When you own your own business you spend SIGNIFICANT time trying to figure just that point out. Most small business owners have zero dollars for retirement. Our retirement plan is our business. Maybe it is having someone run it and pay you or maybe it is you working less but the concept of walking away is really not a reality unless you are one of the few who can sell the entire business for a boatload. Most do not. Most are mom and pop operations. Anyway sorry for the diversion.

my point is buying a car is just an expense that gets listed with rent payroll etc. making that as little as possible is key. This is THE why term is irrelevant.
Yes, I am writing as a consumer. I would rather invest my money in the market and borrow at 2.5% than paying for the car in cash. For my needs/tax strategies I do not see the Mach E as a good business vehicle for me. I do have a business...and my business vehicle is a SUV with GVWR over 6000 lbs, which I was able to write off 100% in the first year using section 179 and bonus depreciation.
 

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Financing an vehicle for 72 or 84 months just to get to a payment you can swing is just putting yourself in a cycle of debt.
So now you're claiming that the way to save money is with sequential subscription fees? That's hilarious since everyone should recognize that this is the most, not the least, expensive path. This follows because while depreciation may be a constant percentage, the absolute dollar hit is greater in the initial years because the base is higher. That $50K vehicle might be losing $10K per year in depreciation over the first three years but only an average of $4K per year for the next six. This is not, BTW, breaking news.

So yes, the most cost effective approach is to finance over 72 or 84 months. The next most cost effective approach is to go with an open end lease. And the least cost effective approach is to go with a subscription fee (closed end lease). In this regard, Ford Options is actually superior to a straight purchase for reasons which should be obvious.

Also of note is that another big drawback of a subscription is that it eliminates the biggest advantage a consumer has when auto shopping -- timing. If you own a vehicle you can decide when to pull the trigger, which gives you the biggest advantage since auto prices vary considerably over time. For example, Tesla has cut the price of the Model S by something like $15K this year. So simply by waiting a few months you could have saved yourself a bundle.

That ability is lost in a subscription model since in this model the contract dictates the timing. So saving a hundred bucks a month may not be such a great deal if it compromises your ability to time and costs you $15K.
 

malba2366

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So now you're claiming that the way to save money is with sequential subscription fees? That's hilarious since everyone should recognize that this is the most, not the least, expensive path. This follows because while depreciation may be a constant percentage, the absolute dollar hit is greater in the initial years because the base is higher. That $50K vehicle might be losing $10K per year in depreciation over the first three years but only an average of $4K per year for the next six. This is not, BTW, breaking news.

So yes, the most cost effective approach is to finance over 72 or 84 months. The next most cost effective approach is to go with an open end lease. And the least cost effective approach is to go with a subscription fee (closed end lease). In this regard, Ford Options is actually superior to a straight purchase for reasons which should be obvious.

Also of note is that another big drawback of a subscription is that it eliminates the biggest advantage a consumer has when auto shopping -- timing. If you own a vehicle you can decide when to pull the trigger, which gives you the biggest advantage since auto prices vary considerably over time. For example, Tesla has cut the price of the Model S by something like $15K this year. So simply by waiting a few months you could have saved yourself a bundle.

That ability is lost in a subscription model since in this model the contract dictates the timing. So saving a hundred bucks a month may not be such a great deal if it compromises your ability to time and costs you $15K.

Google is your friend. You should google "lease", "vehicle subscription" "open ended lease" and "balloon financing" so that you understand the differences between them.

Ford options is a balloon financing plan with a guaranteed buyback price. it is NOT a lease - open ended, close ended or otherwise.

Open ended leases are absolutely the worst deal for financing an automobile, I don't think you understand what it is...but that is off the topic of this thread, since Ford does not offer an open ended lease on this vehicle.

Vehicle subscriptions also are not a relevant discussion here, because Ford does not offer a subscription program for this vehicle.
 

DBC

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Yes, I am writing as a consumer. I would rather invest my money in the market and borrow at 2.5% than paying for the car in cash. For my needs/tax strategies I do not see the Mach E as a good business vehicle for me. I do have a business...and my business vehicle is a SUV with GVWR over 6000 lbs, which I was able to write off 100% in the first year using section 179 and bonus depreciation.
Do you know what the GVWR of the MME is? I don't. But given its curb weight is approaching 5000 pounds it wouldn't be inconceivable that its GVWR is over 6000 pounds.

Also depreciating a vehicle leads to recapture issues. So that write-off may come back as income at a latter date. Plus you have all the record and income requirements. If you were really smart you'd lease a Chevy Bolt and use miles.

As for investing money in the stock market, that's a fine idea with a ten or even a five year time horizon. With a three year time horizon it's not.
 

DBC

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Google is your friend. You should google "lease", "vehicle subscription" "open ended lease" and "balloon financing" so that you understand the differences between them.
And if you were half as smart as you purport to be then you'd understand the difference between form and substance. Ford Options is a lease like product. Quibble all you want but there is no substantive difference in how Ford Options and an Open Ended lease works.

And, unlike some, I don't need to Google basic terms like these! LOL And if you want to be picky about form, there is no "guaranteed buyback" in Ford Options. You simply return the vehicle and a credit in the amount of the balloon is applied to your account.
 
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malba2366

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And if you were half as smart as you purport to be then you'd understand the difference between form and substance. Ford Options is a lease like product. Quibble all you want but there is no substantive difference in how Ford Options and an Open Ended lease works.

And, unlike some, I don't need to Google basic terms like these! LOL And if you want to be picky about form, there is no "guaranteed buyback" in Ford Options. You simply return the vehicle and a credit in the amount of the balloon is applied to your account.
Yes there Is a huge difference...you obviously have no idea what you are talking about.

1. In an open ended lease there is NO guaranteed buyback price. The leasee has to pay the difference between the residual and market value at the end of the lease. I don’t know why you keep bringing this up...there are virtually no open ended auto leases out there.


2. Ford options will apply an amount equal to your balloon payment if you chose to return the vehicle thus it functions like a CLOSED END lease EXCEPT for that fact that sales tax is due on the entire vehicle price not only the lease amount.
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