Ford Options questions

[SnBGC]

The last sentence is wrong. With the $1,000 incentive, you save $1,000 in principal, AND you save the additional amount of interest.

......and I wasn't taxed on it either. But that could be a state by state thing.

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[generaltso]

I am putting maximum 30% down so this does not count against my 30%.

This is incorrect. The rebate is "free money" towards your down payment. For example, if the total cost of your car is $50,000, the maximum you can put down would be $15,000 and your Options loan amount would be $35,000. But you'll only have to pay $14,000 out of pocket to get the full $15,000 credited to the cost of the car. In this scenario, you get the full $1000 (or $2500) up front, and it has no impact on the amount financed or the interest paid.

 

[Mr. Mach-E]

The $1000 came right off the sale price of the car.
In my case I had X-Plan so the Selling Price on the contract is $58,722.20.
Then a line item that they listed as REBATE for -$1,100.00 which was the $1000 finance incentive and the $100 for signing the paper saying I won't sue Ford for hands free not being operational yet.

The Price of Car After Equipment Change line reads $57,622.20.
Then they taxed that amount and worked the rest of the numbers.

I beg to differ. It came off the price of the amount being financed but it did not come off the balloon payment because that is a firm residual calculation. So you only save 2.25% interest on the $1,000 during the 3 or 4 year option period. Still it does reduce the cost of the “option“ to buy one’s car if above water or walk away if under water. I will use the Ford Option plan for to obtain the future price protection. But I will pay 30% down to reduce my interest cost for the balloon option.
Another thought or two...Not sure why Ford didn’t just reduce the interest rate to equal the savings on the $1,000 reduction of principal during the 36 or 48 months.
Or they could have revised the residual value to equal this interest savings.

 

[Mr. Mach-E]

The last sentence is wrong. With the $1,000 incentive, you save $1,000 in principal, AND you save the additional amount of interest.

You never save the $1,000 in principal because you don’t pay the loan off. You walk away after 36 or48 months or buy the car at its published residual value.

 

[Mr. Mach-E]

This is incorrect. The rebate is "free money" towards your down payment. For example, if the total cost of your car is $50,000, the maximum you can put down would be $15,000 and your Options loan amount would be $35,000. But you'll only have to pay $14,000 out of pocket to get the full $15,000 credited to the cost of the car. In this scenario, you get the full $1000 (or $2500) up front, and it has no impact on the amount financed or the interest paid.

Disagree per prior postings.

 

[Mr. Mach-E]

This is incorrect. The rebate is "free money" towards your down payment. For example, if the total cost of your car is $50,000, the maximum you can put down would be $15,000 and your Options loan amount would be $35,000. But you'll only have to pay $14,000 out of pocket to get the full $15,000 credited to the cost of the car. In this scenario, you get the full $1000 (or $2500) up front, and it has no impact on the amount financed or the interest paid.

disagree per prior postings

 

[Mr. Mach-E]

The $1000 came right off the sale price of the car.
In my case I had X-Plan so the Selling Price on the contract is $58,722.20.
Then a line item that they listed as REBATE for -$1,100.00 which was the $1000 finance incentive and the $100 for signing the paper saying I won't sue Ford for hands free not being operational yet.

The Price of Car After Equipment Change line reads $57,622.20.
Then they taxed that amount and worked the rest of the numbers.

Yes, they worked up the rest of the numbers but most folks do not understand that magic. That $1,000 does not come off the price you pay for the car if you buy it at pop the ballon time and if you walk away, you don’t get it because iyou never paid the loan off in full with its $1,000 reduction. So good by to it either way except for the $22.50 annual interest savings for the 3 or 4 year Ford Option period.

 

[Mirak]

You never save the $1,000 in principal because you don’t pay the loan off. You walk away after 36 or48 months or buy the car at its published residual value.

This is weird. So you're basically saying that even if you pay off the loan, this is different than balloon financing and that bonus cash you thought you saved is still going to be owed when you pay off the loan. This makes zero sense and is contrary to what everyone else is saying here.

If I pay off the darned loan, Ford Options should be exactly the same as balloon financing: I owe the principal and any accrued interest and that's it. It's a loan. Right?! Getting a little frustrated here.

 

[generaltso]

Disagree per prior postings.

What postings are you referring to? Here's a posting from @hybrid2bev (who works for Ford Credit).

https://www.macheforum.com/site/threads/ford-options-payment-option.112/post-51926

Maximum Down Payment on Ford Options contracts is 30% of the cash price.
Down Payment includes:
 Cash Down Payment
 C&I (other money from Ford)
 Rebates
 Trade-In

 

[generaltso]

Yes, they worked up the rest of the numbers but most folks do not understand that magic. That $1,000 does not come off the price you pay for the car

Please stop posting this. It's not correct, and you're going to confuse people. Poor @hybrid2bev has already worked so hard in so many threads to explain how this all works. I hate to have that undone here.

 

[Mr. Mach-E]

This is weird. So you're basically saying that even if you pay off the loan, this is different than balloon financing and that bonus cash you thought you saved is still going to be owed when you pay off the loan. This makes zero sense and is contrary to what everyone else is saying here.

If I pay off the darned loan, Ford Options should be exactly the same as balloon financing: I owe the principal and any accrued interest and that's it. It's a loan. Right?! Getting a little frustrated here.

You won’t pay off the Ford Options. You will make 35 or 47 payments and then walk away or pay the agreed residual value which is a predetermined % of cost.
It is conceivable that Ford lowered the residual % to reflect the $1,000 prinicipal reduction but I doubt it. It is gone either way...buy or walk away.

 

[generaltso]

If I pay off the darned loan, Ford Options should be exactly the same as balloon financing: I owe the principal and any accrued interest and that's it. It's a loan. Right?! Getting a little frustrated here.

Don't get frustrated. My advice is to not pay attention to what Mr. Mach-E is posting about the Options rebate. Just listen to @hybrid2bev, as his info comes right from the source and he's already cleared this up.

 

[Mr. Mach-E]

This is weird. So you're basically saying that even if you pay off the loan, this is different than balloon financing and that bonus cash you thought you saved is still going to be owed when you pay off the loan. This makes zero sense and is contrary to what everyone else is saying here.

If I pay off the darned loan, Ford Options should be exactly the same as balloon financing: I owe the principal and any accrued interest and that's it. It's a loan. Right?! Getting a little frustrated here.

Never said it is still going to be owed at the end of the Ford Option plan when you buy the car or sell it. You just won’t get it because it reduced the principal and interest only during the 36 or 48 months. After you walk away or buy the car at its residual value, it is gone because it was only in the lower principal you paid 2.25% interest on for 36 or 48 months. Residual value is not lowered by $1,000 if you buy the car and if you walk away, it is also gone.

 

[Mr. Mach-E]

Don't get frustrated. My advice is to not pay attention to what Mr. Mach-E is posting about the Options rebate. Just listen to @hybrid2bev, as his info comes right from the source and he's already cleared this up.

I have reviewed the wonderful Ford Options spread sheet and the $1,000 is reflected in the unpaid principal being $1,000 lower for 35 months or 47 months but then it is gone once 36 months or 48 months hits because you walk away and never receive the $1000 lowerd prinicipal in full cause you did not pay it off or you bought the car at its independent residual value that has not been lowered by the $1,000. Again, the $1,000 reduction in the Ford Options plan is only during the time you pay the 2.25% interest. Once the loan is done at 36 or 48 months, it is gone.
Any wagers?

 

[Woeo]

The way I see it the $1,000 reduces the amount you borrow and pay interest against for 36 or 48 months. When it comes down to buying the vehicle, the residual % value is applied against vehicle cost exclusive of the $1,000 reduction.
So If you walk away or buy it for the ballon amount, there is no $1,000 savings either, just the $22.50 savings per year in interest.

No. You will have paid 1000 [plus interest savings for 35 mos] less over the 35 mos. .

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