Ford Options...Penalty for Additional Payments?

GoGoGadgetMachE

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So I'm not @hybrid2bev or anything but I think we've been told that if you do Ford Options, then pay it off very quickly, like 3 months or something, then the dealer gets their hand slapped. Ford really doesn't want you to pay it off that fast.

I take that statement (as some others have said) to mean that "if we didn't make enough money off you in interest to have gone through all of this with you, we're going to charge you a little to make up for it". That fits with the idea that they don't want it paid off immediately.

Beyond that @hybrid2bev has said repeatedly on here that it's an installment loan with a balloon payment that they are fine with you paying off early. I think this is just a small "but" on that.
 

hybrid2bev

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So I'm not @hybrid2bev or anything but I think we've been told that if you do Ford Options, then pay it off very quickly, like 3 months or something, then the dealer gets their hand slapped. Ford really doesn't want you to pay it off that fast.

I take that statement (as some others have said) to mean that "if we didn't make enough money off you in interest to have gone through all of this with you, we're going to charge you a little to make up for it". That fits with the idea that they don't want it paid off immediately.

Beyond that @hybrid2bev has said repeatedly on here that it's an installment loan with a balloon payment that they are fine with you paying off early. I think this is just a small "but" on that.
Yes and this is why I try to always say to read your contract before signing.

In this instance it's a generic "LAW" contract in California not a proprietary Ford Credit contract document like mine was in Michigan. The language is slightly different and generic because the contract form used by many, many auto lenders not just Ford Credit so it has to fit how other companies will service their loans too.
 

ColoradoMachE

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Any resolution to this? I'm about to purchase with Ford Options to get the rebate but want to pay off.
 

Motomax

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It’s a minimum interest amount and it’s not specific to Options. My previous finance contract with Toyota had the same wording. Although, that one had a specific day that it went into effect so you had a week to pay it off before it applied. I didn’t see that date on this contract.
Edit: found the box
Ford Mustang Mach-E Ford Options...Penalty for Additional Payments? 7DE048B4-CDB1-4350-B641-657C92AA5EDC
 


MachTee

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Any resolution to this? I'm about to purchase with Ford Options to get the rebate but want to pay off.
I paid mine off as soon as I received the first statement about 2 weeks after I bought the car. The statement has a full payoff figure including the final balloon payment. I sent that amount electronically. Within a week I received a notarized letter of the release of lien. Another week later I received a check for twenty-something dollars for over payment of intererst. In total I paid about $40 in interest for the 3 weeks. Another week later I received a print of the contract stamped "contract paid in full". Another couple weeks later I received the title along with another notarized lien release statement. The only thing I did was send that payment and I did nothing else so it couldn't have been easier.

So there is no penalty in paying off early. Whether the dealer got wrist slapped by Ford I wouldn't know. I did tell the dealer upfront that I fully intend to pay it off right away.
 

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I paid mine off as soon as I received the first statement about 2 weeks after I bought the car. The statement has a full payoff figure including the final balloon payment. I sent that amount electronically. Within a week I received a notarized letter of the release of lien. Another week later I received a check for twenty-something dollars for over payment of intererst. In total I paid about $40 in interest for the 3 weeks. Another week later I received a print of the contract stamped "contract paid in full". Another couple weeks later I received the title along with another notarized lien release statement. The only thing I did was send that payment and I did nothing else so it couldn't have been easier.

So there is no penalty in paying off early. Whether the dealer got wrist slapped by Ford I wouldn't know. I did tell the dealer upfront that I fully intend to pay it off right away.
I'm curious: did you pay off the entire loan, including the balloon payment, or just the "lease" portion?
 

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You have to pay all of it off, otherwise you are just preparing principal.
 

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No one gets anything slapped. If you don't make 3 payments, the dealership doesn't get an incentive from Ford Credit.
 

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No one gets anything slapped. If you don't make 3 payments, the dealership doesn't get an incentive from Ford Credit.
I moved mine to a CU after 2 months. I specifically asked the dealer if they got penalized if I paid it off right away. Most RV loans it’s 6 payments. I asked the finance manager if I had to make 3 or 6 payments for them to get the incentive. He said it didn’t matter and I could pay it off right away and it wouldn’t affect them. Maybe he was misinformed.

I will probably do the same thing on the next one, but may wait 3 payments.
 

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I bought my GT in March using Options so that I could get the $2500 credit. Before the first payment was due I paid off the balance of the loan and AFAIK was not assessed any pre-payment fees.

If you do plan to pay off your Options loan, call Ford Credit and get the exact balance. I made my payment online with the Ford Credit CSR walking me through the payment, including identifying the exact amount needed (interest is accrued daily). I used ACH for the payment.

I specifically asked the finance guy at the dealership about the supposed "penalty" to the dealership if you pay off the loan before three months, and he said he'd not heard of any such thing and he wasn't at all concerned if I paid in full right away.

I also asked him about the odd pre-pay language in the contract that the OP originally asked about and the finance guy was surprised by the language. But he told me that if I was charged the fee he'd personally refund me! I wasn't charged extra, so it was a moot point.
 

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I moved mine to a CU after 2 months. I specifically asked the dealer if they got penalized if I paid it off right away. Most RV loans it’s 6 payments. I asked the finance manager if I had to make 3 or 6 payments for them to get the incentive. He said it didn’t matter and I could pay it off right away and it wouldn’t affect them. Maybe he was misinformed.

I will probably do the same thing on the next one, but may wait 3 payments.
That is nice of you to look out for the salesperson in that way.
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