Ford Options questions

[timbop]

The $1000 reduces the amount you have to pay for the car for the first 36/48 months. It doesn't change the balloon, but you still paid more than $1000 less for the first portion of your ownership than you would have without it. If you pay the balloon off at the end you are paying the same balloon amount regardless, but your net cost of ownership is STILL $1000 less. Even if you turn the car in you pay $1000 less than you would have.

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[generaltso]

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.

I think I've said all I can here. I just caution everyone to not get caught up in this. The $1000 or $2500 rebate counts towards your down payment.

 

[Mr. Mach-E]

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

wrong...you were only making principal and interest payments but since you did not pay it off in full, the $1,000 is vapor once the balloon is popped at 36 or 48 months. You just saved interest on it.

 

[generaltso]

wrong...you were only making principal and interest payments but since you did not pay it off in full, the $1,000 is vapor once the balloon is popped at 36 or 48 months. You just saved interest on it.

If you're putting the max 30% down, your borrowed amount is fixed at 70% of the cash price. The rebate comes off your 30% down, not the 70% loan.

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

 

[Mr. Mach-E]

The $1000 reduces the amount you have to pay for the car for the first 36/48 months. It doesn't change the balloon, but you still paid more than $1000 less for the first portion of your ownership than you would have without it. If you pay the balloon off at the end you are paying the same balloon amount regardless, but your net cost of ownership is STILL $1000 less. Even if you turn the car in you pay $1000 less than you would have.

disagree. Principal was reduced during 36 or 48 months so one saved 2.25% interest but not a $1,000 savings because loan (and its $1.,000 reduction) is not received since loan is never paid in full.

 

[Mr. Mach-E]

If you're putting the max 30% down, your loan amount is fixed at 70% of the cash price. The rebate comes off your 30% down, not the 70% loan.

So I put down $1,000 less, no big deal.

 

[generaltso]

So I put down $1,000 less, no big deal.

Right, you just saved $1000. Not sure how you're arguing against that.

 

[timbop]

disagree. Principal was reduced during 36 or 48 months so one saved 2.25% interest but not a $1,000 savings because loan (and its $1.,000 reduction) is not received since loan is never paid in full.

Yes the loan IS paid in full: either you write a check to ford for the balance, finance it, or you return the car.

The $1000 incentive is no different than your cash down payment.

1. Without the $1000 if you put $15k down your payment is X, and the balloon is Y
2. With the $1000 you put $14k down and your payment is X and the balloon is Y, but you have an extra $1000 in your checking account. That's "real" money in your pocket

 

[Woeo]

wrong...you were only making principal and interest payments but since you did not pay it off in full, the $1,000 is vapor once the balloon is popped at 36 or 48 months. You just saved interest on it.

There is stupid and then there is stupid. There is no hope for you.

Ignore

 

[Mirak]

So I just called Ford Credit to get to the bottom of this. I just spoke to a frontline CSR so take this for what it's worth, but she sure sounded like she knows what she's talking about.

She said Ford Options is still just a regular retail contract, albeit with some lease stuff grafted onto the back end (if you turn your car in, you could get hit for exceeding your mileage, etc.). The key for those who want to treat this like regular financing is this: Your balloon at the end of the period is just the amount or principle plus accrued interest you still owe - just like any other balloon financing.

So my balloon is not a set amount. If I pay additional principle early, my balloon goes down. There is no prepayment penalty. I could pay this thing off in a year, as I intend to, and all I'm going to owe is the principle and whatever interest accrues. The bonus cash, like the down payment, reduces my principle (well, technically, it reduces the amount I borrow in the first place).

I still don't know what Mr. Mach-E is trying to say, but he's wrong at least for my purposes.

 

[eltonlin]

disagree per prior postings

"ignoring" per prior postings...

 

[generaltso]

I still don't know what Mr. Mach-E is trying to say, but he's wrong at least for my purposes.

I think we can all at least agree on that

 

[Mickey the T]

So I just called Ford Credit to get to the bottom of this. I just spoke to a frontline CSR so take this for what it's worth, but she sure sounded like she knows what she's talking about.

She said Ford Options is still just a regular retail contract, albeit with some lease stuff grafted onto the back end (if you turn your car in, you could get hit for exceeding your mileage, etc.). The key for those who want to treat this like regular financing is this: Your balloon at the end of the period is just the amount or principle plus accrued interest you still owe - just like any other balloon financing.

So my balloon is not a set amount. If I pay additional principle early, my balloon goes down. There is no prepayment penalty. I could pay this thing off in a year, as I intend to, and all I'm going to owe is the principle and whatever interest accrues. The bonus cash, like the down payment, reduces my principle (well, technically, it reduces the amount I borrow in the first place).

I still don't know what Mr. Mach-E is trying to say, but he's wrong at least for my purposes.

I thought that I had read here that if you paid extra principal down early that it didn't have an effect on the balloon payment--you would just be zeroing out the 35 or 47 payment prior to the schedule. If you reduce the balloon and turn in the car, what happens then?

 

[Mirak]

I thought that I had read here that if you paid extra principal down early that it didn't have an effect on the balloon payment--you would just be zeroing out the 35 or 47 payment prior to the schedule. If you reduce the balloon and turn in the car, what happens then?

That's an interesting question. To which I would appreciate an answer. But I'm done calling Ford Credit.

 

[Stang68]

Another question regarding options...if I select the 48 month option but then want to, say, get into a GT in 34 months or something am I able to do that by turning/trading in the car? Does it act like normal financing like that or is it a hard 48 months?

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