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

BMT1071

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Does it scare anyone to death that after 3 years these things might not be worth more than 35% or so of its original value? We are very seriously considering buying one but the residual projections are concerning. I’ve only seen 1 article with positive residual projections. Can anyone make us feel better about pulling the trigger? Aside from the tax credit? Thanks everyone
Perhaps I'm misunderstanding your post. To me, the biggest plus of the Options plan is that you know you can give the car back at the end of the term.
If for whatever reason the value tanks and you want to get rid of it, you're not on the hook. If you're happy with the car and want to keep it, make/finance the balloon payment and carry on. .
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GoGoGadgetMachE

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did these incentives expire yesterday? They were posted through 3/31 and I don't see them on the Ford site anymore
no. I mean, I guess, yes, but there were other posts on here confirming that they were renewed.
 

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So.... I've read thru the 25 pages of this thread and think I got a pretty good handle on the ins and outs of Ford Options. The answers provided by @hybrid2bev have been great! Thank you for all your help and time in this forum.

I've got some last few remaining questions that I do not believe we're asked here (my apologies if they have been). I've also never leased a vehicle before, so excuse my inexperience with the "lease like" features of Options.

1. Does the option to return the vehicle to Ford only appear at the end of the 36 (or 48) months of the contract? Could the customer decide to return the vehicle in say 12 months? I assume, if they can return it early, that there is some sort of penalty for an early return?

2. If the customer pays more than minimum payment per month, but then ultimately decides to return the vehicle, does Ford refund the overpayments or is it lost? Say the final balloon payment was meant to be 19k but the customer payed it down to 16k, would there be a 3k refund by Ford to the customer?

3. Is there specific amount of time that a customer must remain on Ford Options once they select that as their financing route? Could a customer theoretically finance with Ford Options, take the 2.5k incentive, and then turn around and refinancing the vehicle into a traditional loan with their credit union that same month? I assume Ford would have something in place to prevent gaming the system in this way?

4. Just as a general question, when would it make more sense to return the vehicle the Ford rather than trade it in? I'm thinking (from what I've read) that depreciation is really the biggest factor in decision between return/trade-in? But again, having never leased, I'd assume that trading in the vehicle would be more benefital to the customer looking to get a new vehicle.
 


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1. Does the option to return the vehicle to Ford only appear at the end of the 36 (or 48) months of the contract? Could the customer decide to return the vehicle in say 12 months? I assume, if they can return it early, that there is some sort of penalty for an early return?
I believe you can return it early. You will owe any outstanding fees, the return fee, the balance of the first 35 or 47 monthly payments, and fees for excess wear and tear or mileage.

2. If the customer pays more than minimum payment per month, but then ultimately decides to return the vehicle, does Ford refund the overpayments or is it lost? Say the final balloon payment was meant to be 19k but the customer payed it down to 16k, would there be a 3k refund by Ford to the customer?
Read your specific contract, but my understanding is that prepaying principal will general cause the balloon amount to be lower. You will not be refunded for the difference between the original and current balloon amounts.

3. Is there specific amount of time that a customer must remain on Ford Options once they select that as their financing route? Could a customer theoretically finance with Ford Options, take the 2.5k incentive, and then turn around and refinancing the vehicle into a traditional loan with their credit union that same month? I assume Ford would have something in place to prevent gaming the system in this way?
Again, read your contract. Generally there should not be any prepayment penalty. So you can pay it off very quickly. If you do so within the first three months, this is generally detrimental to your dealer, who will owe a penalty (or lose income, depending on how you see it) to Ford Credit.

4. Just as a general question, when would it make more sense to return the vehicle the Ford rather than trade it in? I'm thinking (from what I've read) that depreciation is really the biggest factor in decision between return/trade-in? But again, having never leased, I'd assume that trading in the vehicle would be more benefital to the customer looking to get a new vehicle.
I'm fuzzy on this, too. Even though I did go ahead and do Ford Options for 36 months, it seems to me that a bunch of things have to align for it to be most worthwhile:
  • Have a new vehicle in mind and it's available at start of month 36.
  • Have not gone way over on mileage.
  • Have not gone way under on mileage.
  • Don't have too much excess wear charges of the nature that Ford cares about but I don't care about.
  • Don't love the Mach-E enough to keep it for more than three years. (I generally keep a car for 7-8 years.)
  • Market depreciation is under balloon + return fee amount.
  • I've made decent use of the money that Ford loaned me instead of just letting it sit in a low interest savings account.
 

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I believe you can return it early. You will owe any outstanding fees, the return fee, the balance of the first 35 or 47 monthly payments, and fees for excess wear and tear or mileage.



Read your specific contract, but my understanding is that prepaying principal will general cause the balloon amount to be lower. You will not be refunded for the difference between the original and current balloon amounts.



Again, read your contract. Generally there should not be any prepayment penalty. So you can pay it off very quickly. If you do so within the first three months, this is generally detrimental to your dealer, who will owe a penalty (or lose income, depending on how you see it) to Ford Credit.



I'm fuzzy on this, too. Even though I did go ahead and do Ford Options for 36 months, it seems to me that a bunch of things have to align for it to be most worthwhile:
  • Have a new vehicle in mind and it's available at start of month 36.
  • Have not gone way over on mileage.
  • Have not gone way under on mileage.
  • Don't have too much excess wear charges of the nature that Ford cares about but I don't care about.
  • Don't love the Mach-E enough to keep it for more than three years. (I generally keep a car for 7-8 years.)
  • Market depreciation is under balloon + return fee amount.
  • I've made decent use of the money that Ford loaned me instead of just letting it sit in a low interest savings account.
Thank you for your response! I do not have a contract yet, but definitely plan to read through it once I take delivery to decide if Options will be right for me. I guess I assumed all Options contracts were the same.. but getting the feeling now that it'll vary slightly from dealer to dealer.

The "Don't love the Mach-E enough to keep it" will most likely be the most difficult part of it all!
 

macchiaz-o

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Thank you for your response! I do not have a contract yet, but definitely plan to read through it once I take delivery to decide if Options will be right for me. I guess I assumed all Options contracts were the same.. but getting the feeling now that it'll vary slightly from dealer to dealer.
The text on mine is a bit different from one I'd seen from a Michigan dealer. And the ones in California seem to be unique to Cali. So they do vary... But I think mostly in just small details or regional things.
 

americanflannel

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Remember on early pay off on options, you are paying fixed apr (mine is %2.x) on a set amount (30k? I think in my case) no matter if you pay it off on day one or payment 48 (the balloon payment on a 48 month plan)

So paying it off by refinancing means you are double paying interest on that portion of the purchase price.
 

generaltso

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Remember on early pay off on options, you are paying fixed apr (mine is %2.x) on a set amount (30k? I think in my case) no matter if you pay it off on day one or payment 48 (the balloon payment on a 48 month plan)

So paying it off by refinancing means you are double paying interest on that portion of the purchase price.
That's not true. The interest compounds over time. If you pay the entire balance off right away, you will pay very little interest. That's how almost all loans work.
 

americanflannel

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That's not true. The interest compounds over time. If you pay the entire balance off right away, you will pay very little interest. That's how almost all loans work.
Options isn't a traditional loan, it's more like a lease where you retain "ownership" for tax reasons.

They clearly outline how much interest you are paying in a dollar figure and you are signing to say you will pay exactly that much regardless of when you pay it off. Then there is the ballon payment amount which you either avoid by turning in the car (with a processing fee if you don't do another ford options purchase at the end of this one) within the milage and in good condition or you pay off and the car is yours.

For example, my car is under options and it came to 62k. The only way I am not paying ford is if I pay everything minus the balloon (~21k) and give them the car back at the end of 47 months OR I give them a grand total of 62k which includes ~2k in interest. Those are the only two options in options.

I have read they will let you do a one time bigger payment and basically readjust the remaining payments, but I haven't seen that anywhere in writing except in a forum post.
 

generaltso

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Options isn't a traditional loan, it's more like a lease where you retain "ownership" for tax reasons.

They clearly outline how much interest you are paying in a dollar figure and you are signing to say you will pay exactly that much regardless of when you pay it off.
Sorry, that is incorrect. It's a traditional retail installment contract with a balloon payment. You are not committing to a total interest amount. If you pay it off before the interest accrues, you don't pay the interest.

You can try different scenarios with a balloon loan calculator like this:

https://www.thecalculatorsite.com/finance/calculators/carloancalculator.php
 

americanflannel

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Then they completely lied in addition to overstating all the numbers when they financed me. (Which is believable since they overstated the payments by 75 dollars a month)

when I have a chance I will look at the paperwork to see what it says.

edit: you are correct two different Ford dealers told me incorrect information. If I pay it off today I save 2,789.90 instead Of 48 months from now.

this is actually the perfect loan type for me. We want lower monthly payments but we never go the full length of the loan.
 
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generaltso

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Then they completely lied in addition to overstating all the numbers when they financed me. (Which is believable since they overstated the payments by 75 dollars a month)

when I have a chance I will look at the paperwork to see what it says.
They would have showed you a truth in lending statement that listed the full amount of interest you will pay if the loan is kept for the full term. But that doesn't mean that you are required to keep it and pay that interest.
 
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They would have showed you a truth in lending statement that listed the full amount of interest you will pay if the loan is kept for the full term. But that doesn't mean that you are required to keep it and pay that interest.
And even that TIL box is just an estimate of you paying exactly the monthly payment amount on the exact due date every single month. If you pay anything more or less or pay a day earlier or a day later the estimates will be off.
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