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

eastern refugee

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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.
Ummm. Yes there is a GUARANTEE. The balloon value is guaranteed. If it is worth more you win by having the difference credited to your new car or you pay it off or refi the rest. Regardless it is a win. If it is worth less then you still win because you turn it back in. You really cannot loose. Ford says straight out that Ford options is NOT a traditional lease. What you call it is irrelevant. What it does is totally relevant. If you plan on only owning it for 3 years you do the option plan just like you would do a lease. Like I said the name is irrelevant but what your long term is the only thing that matters. If like me you want to stop making car payments and trust the science that BEV can do 259,009 plus then the term is irrelevant and instead it comes down to the concept that one day you will stop making car payments or down the road you can trade it in on YOUR terms rather then at a specific time frame.
 

macchiaz-o

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I found this screenshot of a recent dealer bulletin intended to help educate them on Ford Credit's financing options for the Mustang Mach-E.

In case YOUR dealer is unfamiliar, these are the document codes mentioned in the bulletin:

DB-65219: Tax Credit for the Ford Mustang Mach-E
DB-64934: Ford Mustang Mach-E Financing Options


I ran some calculations on the numbers presented in the upper table. Be aware that it is making several assumptions to reach its dollar figures:
  • buyer qualifies for the full $7,500 federal tax incentive
  • no state incentives are included
  • MSRP is a hypothetical value, and for simplification, no taxes or fees are included
  • the hypothetical loan is assuming a 45% balloon value for the final payment, which for the pictured Select model, would not be possible; this would be the balloon amount for a California Route 1, First Edition, or extended range Premium when coupled with the 7,500 annual mileage option for Ford Options financing purposes
  • buyer qualifies for Ford's best financing rate tiers
  • buyer's address qualifies them for a $2,500 Ford Options incentive
  • buyer returns the vehicle to Ford at the end of the Options or RCL terms (36 months)
  • no excess wear, damage, or mileage fees are included beyond the standard turn-in fee amounts
  • for the "retail" financing (60-month simple interest loan at 1.9%), Total Payments is excluding any hypothetical resale/trade scenario that would in reality impact the net cost of the vehicle when comparing it to other financing options

20210111 Ford Mustang Mach-E Tax Credit.jpg
 

FordPrefect

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This morning I went on the Ford website to begin the process of putting down a deposit, and the menu to choose "Ford Options" in the upper right corner has disappeared. It was there as of last night. Glitch?

Screenshot 2021-01-17 111410.png
 
OP
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This morning I went on the Ford website to begin the process of putting down a deposit, and the menu to choose "Ford Options" in the upper right corner has disappeared. It was there as of last night. Glitch?

Screenshot 2021-01-17 111410.png
I see the calculator, try refreshing your cache or a different browser?

1610900177723.png
 

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I found this screenshot of a recent dealer bulletin intended to help educate them on Ford Credit's financing options for the Mustang Mach-E.
Fantastic resource which makes comparisons super easy.
 

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This is super helpful, thanks @macchiaz-o.

Trying to figure out how low you can get a monthly payment to (ballpark) via Ford Options on, say, a Premium RWD Extended Range? I can get X Plan and the Clean Fuel, which drops a couple grand further, I guess. Is a sub-$500 monthly payment possible, you reckon? (Know incentives change, etc). There's no good online calculator yet to figure that out exactly, right? (Outside of the Ford.com finance stuff, which can't factor everything in).

Related, is it smart to put a full $7500 down to reduce that monthly payment further, on the assumption you will qualify for the full $7500 back on your tax return? I can't really get my head round the mental arithmetic of that(!) - essentially giving an interest free loan to Ford, but paying less monthly...is that better or worse than putting minimal down, paying a higher monthly payment, then getting the $7.5k as bonus cash on your tax return...any help?! My head hurts.

Thanks for all the great insights on this forum. Much appreciated...
 

macchiaz-o

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Trying to figure out how low you can get a monthly payment to (ballpark) via Ford Options on, say, a Premium RWD Extended Range? I can get X Plan and the Clean Fuel, which drops a couple grand further, I guess. Is a sub-$500 monthly payment possible, you reckon? (Know incentives change, etc). There's no good online calculator yet to figure that out exactly, right? (Outside of the Ford.com finance stuff, which can't factor everything in).
The online calculator is pretty good with its numbers... You can simulate for things like the X-Plan and CA Clean Fuel discounts by just increasing the down payment amount by those amounts.

I ran some rough numbers for you, with an assumption that you're in a rate tier that'll qualify for the 2.25% APR. You could get more accurate numbers from your dealer.

To get the monthly payment below $500, you'd need to have a substantial down payment (which includes your trade-in vehicle, cash, incentives, etc.), and it helps if you choose a 48 month term rather than 36 months, and fewer annual miles rather than more.

Here's an example...

Assuming you put down $12,500 in cash and trades PLUS the $500 you may have already given your dealer as a build-to-order deposit, PLUS Ford's $2,500 Options incentive (assuming you get that one??) PLUS the $100 ADA incentive, PLUS your CA clean energy $1,500, and assuming a 9% sales tax rate and no other state fees (I've no idea what CA fees are like):

If you take a 10,500 miles per year Ford Options loan with a 36-month term, it'd be roughly $555/month for months 1-35 and about $21,890 for the final payment in month 36. (If you choose to keep the car.)

Whereas if you did the same but opted for 48 months instead of 36, it'd be about $500/month for months 1-47 and about $18,405 for the final payment.

Related, is it smart to put a full $7500 down to reduce that monthly payment further, on the assumption you will qualify for the full $7500 back on your tax return? I can't really get my head round the mental arithmetic of that(!) - essentially giving an interest free loan to Ford, but paying less monthly...is that better or worse than putting minimal down, paying a higher monthly payment, then getting the $7.5k as bonus cash on your tax return...any help?! My head hurts.
Hard to say whether it's better to pay out the $7,500 for an auto loan or better to use it for other purposes... Totally depends on how you would use it. For me, I'd rather long term invest that money and delay payment on the loan since the loan interest rate is fairly low.

But yes, a bigger down payment helps bring down the monthly payments. If I recalculate without the $12,500 cash+trade, then your 1-35 monthly becomes roughly $915 and the 1-47 monthly is roughly $775.

Ford Options is like a standard retail contract but with the final payment adjusted to be a large balloon payment. So you can take your $7,500 tax credit and apply it to the loan without penalty, if you wanted to (or you can use your tax credit for other things... it's totally your choice). Apparently, Ford will also have a way to do a one time loan modification so that you can use a large payment, like that $7,500 for example, to recalculate your remaining monthly payments and make them smaller.

I can play out that scenario, too.

Let's say you put in $5,000 cash+trade on the day of purchase, and that's in addition to the cash deposit (500) you've already made, and your California incentive.

Then your 35 month payments on the 10,500 miles/year option are about $770/mo. Or for 47 month payments, about $665/mo.

Now let's say that 14 months after you start the loan, you decide to contact Ford Credit and send them an extra check for $7,500 to use towards a loan modification. Then if I'm calculating it right, your new remaining payments will drop down to about $420/month or $435/month (on the 36 or 48 month options, respectively).

So that's a pretty good way to lower payments, too.
 

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wow, massively helpful. thank you sir.

tracking with all of that...i think(!)

One clarifying question - where did you get the $12.5k down number from? Just an arbritary number to get to a low payment? The Ford dealer materials example you just previewed had only 10%/4.4k down and got to 650ish/month - curious as to the difference.

I'm from the school of "put as low a down payment down as possible" normally, but tempted to break that rule with respect to the tax credit to try and limit the payment as much as possible. (Current lease is 600/month and would love to beat it).

I'll play more with the calculator to try and gamify. Couple of dealers i've spoken to so far (in LA area) seem very much in dark on finance options. Blind leading the blind...

Thanks again.
 

macchiaz-o

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wow, massively helpful. thank you sir.

tracking with all of that...i think(!)

One clarifying question - where did you get the $12.5k down number from? Just an arbritary number to get to a low payment? The Ford dealer materials example you just previewed had only 10%/4.4k down and got to 650ish/month - curious as to the difference.

I'm from the school of "put as low a down payment down as possible" normally, but tempted to break that rule with respect to the tax credit to try and limit the payment as much as possible. (Current lease is 600/month and would love to beat it).

I'll play more with the calculator to try and gamify. Couple of dealers i've spoken to so far (in LA area) seem very much in dark on finance options. Blind leading the blind...

Thanks again.
$12.5k gets the OP close to the 30% max down payment allowed with Ford Options for his particular trim/options, plan pricing, and available incentives.

The salespeople probably won't know too much on financing. But what about the finance department at the dealer? Are one of those people available to field potential buyer questions?

At some point while buying a car, your salesperson will hand you over to a financing person. At least, that's been my experience in the past.
 

FredT

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@macchiaz-o So the bottom line from your example is that Ford Options is less expensive than RCL. However, depending on where you live, the difference is smaller than appears there. Where I live in California, the sales tax will be in excess of $2000 more on Ford Options.
 

macchiaz-o

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@macchiaz-o So the bottom line from your example is that Ford Options is less expensive than RCL. However, depending on where you live, the difference is smaller than appears there. Where I live in California, the sales tax will be in excess of $2000 more on Ford Options.
I think you're referring to Ford Credit's example that was sent to dealers as a dealer bulletin?

I've never considered going with RCL. I'm not a fan of leasing, personally. So I didn't look into it.
 

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@macchiaz-o So the bottom line from your example is that Ford Options is less expensive than RCL. However, depending on where you live, the difference is smaller than appears there. Where I live in California, the sales tax will be in excess of $2000 more on Ford Options.
In order to get to the nitty gritty on the lease/ford options. In a Red Carpet Lease Ford is on the title and the $7500 goes as a down payment. In the option lease you are on the title and therefore you have to APPLY for the credit through your taxes. RCL you get the full $7500 when you sign the contract. Ford Option is on you. Is one more expensive than the other?? No one really knows the true answer to that because it TOTALLY depends on how much you owe in taxes.

For me personally if there was an RCL I jump on it in a heart beat because the $7500 is pure cash and goes towards the down payment. Now that being said, the rest of the lease is exactly the same. The ONLY issue with leases is that you need to get the mileage right. If you over estimate then you can get a refund on the miles not used as you paid for them up front at a discounted rate. If you are short then you MAY be forced to buy the car because the money owed on the car is so much that it is cheaper to refi it then to trade it in and either pay the full amount of the overage to roll it into another car. Way to often people look at the lowest mileage to get the cheapest price per month.
The problem is that at the end you pay for it. In short it is better to OVER estimate mileage then under estimate.

What is not showing is that there is an 84 month contract for purchasing at 5.9% which is rough $50.00 less per month then the 72 month contract. Lastly some people use the lease as a way of getting a longer contract. Say the residual is less than what the car is worth. In that circumstance you can refinance the car as a used car but get it at a far cheaper rate. I have also seen under this scenario that Ford has taken the difference between the market value at the time and the residual value and used the difference as a down payment on the new used car contract. Once again it really in the end comes down to what your ultimate plans are.


Instead of looking at the monthly payment you need to decide are you keeping the car or are you looking to change cars every 3-4 years. With the MME the entire concept of maintenance factors over time due to mileage are no longer an issue. OTA also makes a used car virtually the same as a new one in terms of technology unless something drastically changes. None of us know what can be done OTA for an absolute certainty. I do know that Tesla was able to increase the range of their cars through an OTA. so anything I think is possible through OTA as long as the hardware is installed and to the best of my knowledge everything is installed so it comes down to ok due you want this download X. if so it will cost you ay $500.00 or Ford could do a subscription OTA say where you pay like $20 per month and it covers whatever the downloads are. From all of my reading Ford is looking for additional revenue streams and I can easily see subscription for OTA being one
 

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In a Red Carpet Lease Ford is on the title and the $7500 goes as a down payment.
I don't believe that's true. Ford takes the tax credit into account when setting the residual value on the RCL. They don't use it as a down payment. That's part of the reason so many people are unhappy with the RCL offering.
 
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In order to get to the nitty gritty on the lease/ford options. In a Red Carpet Lease Ford is on the title and the $7500 goes as a down payment. In the option lease you are on the title and therefore you have to APPLY for the credit through your taxes. RCL you get the full $7500 when you sign the contract. Ford Option is on you. Is one more expensive than the other?? No one really knows the true answer to that because it TOTALLY depends on how much you owe in taxes.

For me personally if there was an RCL I jump on it in a heart beat because the $7500 is pure cash and goes towards the down payment. Now that being said, the rest of the lease is exactly the same. The ONLY issue with leases is that you need to get the mileage right. If you over estimate then you can get a refund on the miles not used as you paid for them up front at a discounted rate. If you are short then you MAY be forced to buy the car because the money owed on the car is so much that it is cheaper to refi it then to trade it in and either pay the full amount of the overage to roll it into another car. Way to often people look at the lowest mileage to get the cheapest price per month.
The problem is that at the end you pay for it. In short it is better to OVER estimate mileage then under estimate.

What is not showing is that there is an 84 month contract for purchasing at 5.9% which is rough $50.00 less per month then the 72 month contract. Lastly some people use the lease as a way of getting a longer contract. Say the residual is less than what the car is worth. In that circumstance you can refinance the car as a used car but get it at a far cheaper rate. I have also seen under this scenario that Ford has taken the difference between the market value at the time and the residual value and used the difference as a down payment on the new used car contract. Once again it really in the end comes down to what your ultimate plans are.


Instead of looking at the monthly payment you need to decide are you keeping the car or are you looking to change cars every 3-4 years. With the MME the entire concept of maintenance factors over time due to mileage are no longer an issue. OTA also makes a used car virtually the same as a new one in terms of technology unless something drastically changes. None of us know what can be done OTA for an absolute certainty. I do know that Tesla was able to increase the range of their cars through an OTA. so anything I think is possible through OTA as long as the hardware is installed and to the best of my knowledge everything is installed so it comes down to ok due you want this download X. if so it will cost you ay $500.00 or Ford could do a subscription OTA say where you pay like $20 per month and it covers whatever the downloads are. From all of my reading Ford is looking for additional revenue streams and I can easily see subscription for OTA being one
I've added some clarifications:

In a Red Carpet Lease Ford is on the title and the $7500 goes as a down payment
Yes Ford is the title holder on RCL. On RCL the tax credits are applied towards the residual not as a down payment.

RCL you get the full $7500 when you sign the contract.
No, the $7500 is not applied in that way.

For me personally if there was an RCL I jump on it in a heart beat because the $7500 is pure cash and goes towards the down payment.
There is an RCL available. No, the $7500 is not applied as a cap cost reduction (down payment)

If you over estimate then you can get a refund on the miles not used as you paid for them up front at a discounted rate.
This is only true if you select the 19,500 miles per year plan and purchase extra miles on top of that.

If you are short then you MAY be forced to buy the car
You can also trade the vehicle in to avoid the excess mileage charges or roll the charges into your next loan.

In short it is better to OVER estimate mileage then under estimate.
Keep in mind you will not get a refund if you select more miles per year than you use: example if choose 15k per year and only drive 12k you will not get a refund.

What is not showing is that there is an 84 month contract for purchasing at 5.9% which is rough $50.00 less per month then the 72 month contract.
FYI. The qualifications for 84 month financing are harder than 72 month financing. On a 84 month loan you'll be upside down in the vehicle for much longer (don't plan on trading out in 2-3 years).
 
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