Mach-E Financing and RCL Leasing Program Announced

[kdryden99]

And before anybody says the MME will be better 4yrs from now, I am not so sure. Ford won't make any major changes to this car since they can't even make them fast enough. They will still be trying to fill the demand 3-4yrs from so there won't be many financial investments made to the current car. This is not like releasing a Gt350 when you already have a GT, this is a whole new platform and if anything what you might see is a GT500E in 3-4yrs but that wont affect the MME's values because it's not the same customer base and definitely not the same price point, just like the GT wont affect the other trim levels.

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[First Edition]

Here is Jaguar’s language on EV leasing.

“New 2020 Jaguar I-PACE S with 36-month lease, $5,995 due at signing includes $4,361 down, $0 security deposit, $895 acquisition fee and first month's payment; excludes retailer fees, taxes, title and registration fees, processing fee and any emission testing charge. Adjusted capitalized cost used in calculating your monthly payment is based on a capitalized cost reduction that includes a $7,500 lease credit for eligible 2020 Jaguar I-PACE vehicles.”

Pretty clear language on how the $7500 credit is applied.

Using the credit to inflate the residual like Ford Credit does seems odd to me. The actual residual value of the vehicle should be based on the expected value at the time of the lease expiration.

 

[malba2366]

Here is Jaguar’s language on EV leasing.

“New 2020 Jaguar I-PACE S with 36-month lease, $5,995 due at signing includes $4,361 down, $0 security deposit, $895 acquisition fee and first month's payment; excludes retailer fees, taxes, title and registration fees, processing fee and any emission testing charge. Adjusted capitalized cost used in calculating your monthly payment is based on a capitalized cost reduction that includes a $7,500 lease credit for eligible 2020 Jaguar I-PACE vehicles.”

Pretty clear language on how the $7500 credit is applied.

Using the credit to inflate the residual like Ford Credit does seems odd to me. The actual residual value of the vehicle should be based on the expected value at the time of the lease expiration.

Seems like they want to take the cars back and resell them if they are boosting the residual vs doing a cap cost reduction. When most people lease they fixate on the monthly payment which ends up the same either way. If that is actually how they are doing it then the options lease makes a lot more sense.

 

[kdryden99]

Here is Jaguar’s language on EV leasing.

“New 2020 Jaguar I-PACE S with 36-month lease, $5,995 due at signing includes $4,361 down, $0 security deposit, $895 acquisition fee and first month's payment; excludes retailer fees, taxes, title and registration fees, processing fee and any emission testing charge. Adjusted capitalized cost used in calculating your monthly payment is based on a capitalized cost reduction that includes a $7,500 lease credit for eligible 2020 Jaguar I-PACE vehicles.”

Pretty clear language on how the $7500 credit is applied.

Using the credit to inflate the residual like Ford Credit does seems odd to me. The actual residual value of the vehicle should be based on the expected value at the time of the lease expiration.

That's why I think that if they are really doing this, it is just a way to recuperate their capital expenses. They are basically telling you, we don't think this car will be worth much later so lets get as much as we can to pay off what we spent on it. If they really do this a lot of people who are pushing for Ford to succeed will rethink it when they look at the numbers. Maybe they aren't concerned because they see there is a lineup around the block for it, but that lineup might disappear real quick if they they're not happy with the numbers and will just wait.

 

[JTK44]

Would be great if the more savvy ones here could post a lease calculation that simple minds like I could understand. All this talk of money factors and cap reductions make my head go around.

Here is a link to the lease calculator I use:

see: https://www.leaseguide.com/calc/

When you open the link click on "Click here for lease calculator payment" in blue.

Here is the information you need to put in:

• Cap cost: as the MME is being sold at MSRP put in your MSRP
• Cap cost reduction: aka "down payment". Leave this at zero. When you do it a second time put in $7,500 the Federal tax credit.
• Trade in: zero
• Residual: this is truly the unknown. If you think the residual will be 44% multiple the MSRP by 44% and put the number in. Residual are ALWAYS a percentage of the MSR
• Lease term: This is in months. Put in 36 or 48
• Interest rates: Like residuals this is as yet unknown. Put in what you think the interest rate should be.
• Sales tax: I highly recommend putting in the sales tax into the monthly lease payment. So put in your local sales tax

I go back to this link often to change the interest rate and residual to see how it effects the lease payments.

For example with the Model Y, we know the MSRP, the monthly payment , if we assume the interest rate is the same as when you finance, you can solve for the residual.

Hope this helps!

 

[kdryden99]

lol if i add my 8000$ provincial incentive to the an MME AWD EXT i get this now om the site. It definetely changed and if tjis is the price i will unfortunately have to cancel

 

[JTK44]

Excellent summary and thanks for posting. Please note my comments.

Here is a link to the lease calculator I use.

see: https://www.leaseguide.com/mobcalc/

A lease is not very complicated. You pay for the percent of the vehicle you use during the lease period. That is the difference between what you pay for the car and the residual, which is usually stated as a percentage of MSRP but doesn't have to be.

Residual is always a percentage of MSRP.

Additionally you have to pay interest on the portion of the vehicle you've used. This includes the car which hasn't depreciated AND the residual -- you've borrowed the entire vehicle so you have to pay interest on that. Money factor is just an interest rate that takes depreciation and residual into account. You get it by dividing the interest rate by 2400. Or if you have the money factor just multiply by 2400 (money factor of .02 = interest rate of 4.8%).

Add those together, then add the sales tax, and that will be the monthly payment. There are some minor things like acquisition cost and so forth that don't amount to much.

Let's assume a 36 months lease. If a vehicle costs $50K and the residual is $24K then you pay $26K in depreciation over 36 months or $722.22/month ((50,000 - 24,000)/36). The interest calculation is a little different than you might expect. The money factor is created so that if you add the residual to the purchase price and then multiply by the money factor you get the interest payment. In this case, if the interest rate was 2%, then the money factor would be .0008, and the interest per month would be $61.67 (($50,000 + $24,000) X .008).

Pretty much anything other than this is a game of smoke and mirrors. A manufacturer can reduce the lease payment in several ways. The biggest involve either reducing the purchase price or raising the residual. These are not the same since if the residual goes up then buying the vehicle as the end of the lease is less appealing because the price is higher. The other way is through what is called "lease cash". This is really just a reduction in the purchase price but has the advantage of not reducing MSRP and not being a "discount".

In the industry increasing the residual or lowering the interest is called a "supported lease"

At the end of the lease when the residual is higher than the value of the car, the term that is used is "upside down": 99% of all leases are "upside down": the car is not worth the residual. This is the reason that at the end of the lease 85% of lessee turn in their car.

Another approach which makes no actual sense but which consumers seem to like is to require more down so the monthly payments are less. If you pay $3600 down then over 36 months your monthly will be $100/month less.

Also note that sales tax will be added to the monthly payment or collected on the down payment. The amount will depend on the sales tax rate in your jurisdiction.

Hope this helps.

IMO opinion it is far worse than "makes no actual sense" and here is why:

In the event your leased car is stolen or totaled in a crash your insurance company is only liable for the balance of the lease payments plus the residual.

To make this point consider the following two scenarios:

The car is $50,000 and the residual is $20,000. The lease term is 48 months. Assume interest rate of 2.5% and sales tax of 7%. You put no money down and roll everything into the lease including the sales tax. Using the calculator above your monthly payments are $698.

Now assume after one year, 12 payment, your car is totaled or stolen. Your cost is $8,376 ($698 x 12)

Your insurance company pays off the balance of 36 payments and the residual.

Now same numbers but you put down $10,000 and pay the sales tax up front. Once again the car is either stolen or totaled after one year. The insurance company is liable for the balance of 36 months and the residual.

Your monthly payments are now $479 a month. Your total lease payments are $5,748 ($479 X12).

To the $5,748 you must add:

• Down payment $10,000
• Sales tax on down payment: $700 (remember the only time you reduce the sales is when you trade in a car)
• Sales tax: sales tax is computed on the sum of the payments: $1,609 ($479 X48X7%)

This totals $18,057.

So what you have is an additional $10,000 real out of pocket loss by putting money down and paying the sales tax up front vs. rolling everything into the lease.

Now look at from the insurance company's point of view:

• Where you put nothing down they are responsible for $25,128 (36 months @$698) plus $20,000 (residual) total $45,128
• Where you put down $10,000 and paid the sales tax upfront: $17,244 (36 months @$479) plus $20,000, total $37,244.

By putting down $10,000 and paying sales tax upfront, great deal for the insurance company, not so good for you!

Keep the above in mind when the salesmen suggest to you to put money down and/or pay the sales tax up front in order to reduce the monthly payment.

JUST SAY NO: Instead put everything into the lease including the acquisition fee aka "bank
fee"

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[JTK44]

I have leased two BMW i3s. Both times the $7,500 was listed as a credit against the selling price. Additionally, I leased both cars *after* they announced that the next year's model would have increased range. In both cases, BMW ended up *increasing* the residual to make the payment lower. The residual was actually higher on the earlier model with less range than the current model.

(BTW, all this led to these leases being dirt cheap--I'm not expecting that with the MME.)

EXACTLY:

Contrary to what others are posting her, any residual below 55% for three years, 36 months 10K per year is a terrible lease.

Every other manufacturer's leases put the Federal Tax credit of $7,500 into the lease as a cap cost reduction aka "down payment" and the residuals are 55% or greater for 36 months, 10K miles per year.

The Ford Option plan with a residual at 44% is nothing more than deferred payment plan. It is not a lease.

What others miss on this forum is that the sales tax on the Ford Option Plan, as it is a sale, title goes to the purchaser, is the sales tax on MSRP - the selling price.

On a lease the tax is on the sum of the lease payments plus sales tax on any cap cost reduction.

The sales tax savings on the Option Plan vs. a lease is many thousands of dollars.

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[JTK44]

Here's my problem with this. Many of you believe that the car wont hold its value due to the tax credit but the low production numbers and limited competition should do exactly the opposite. Other than the Y there is nothing competitive on the market now and the ID.4 which will be competitive is easily 2-3years away since it will be delayed so there the tax credit should easily get offset.
Those comparing with the I3 release, we all knew that it was over priced compared to its competition but BMW was banking on it being a BMW for ppl to buy it. There were other options available and the demand was not as high for the I3 as it is for the MME or the ID4.
Ford should really consider giving its product a chance and let the first adopters decide if it will hold its value rather than trying to recover mosy of its capital from those who have been waiting the longest and the most patient. We will end up paying the price longer term (6-7yrs) but short term they should really throw us a bone.
Giving us first adopters an extra incentive would really help and for those who say that will lower the value of the car I thing its wrong. Look at the Nissan Gtr. It's a limited run car, highy sought out car and has gone up every year they've released a new one. In canada it was 80k$ now its 120k$. Why? cause the product held its own against the competition and in many ways when it first came out it release reminds me of this MME release.

I own a many, many thousands of shares of Ford stock, and I cannot subscribe to your thinking.

The present standard is the Tesla Model Y.

It leases, with ZERO money down, 36 months, 10.5K miles per year, $633 a month.

Everyone who is following BEVs know;

• Range is increasing
• Charging times are coming down
• Prices are going down not up: Tesla has had several price decreases while increasing the range of their cars

I have just viewed the MME and thereafter the Model Y: they are far more similar than not.

To be competitive the price of the MME, both purchase and leases must be in line with the Model Y.

Those who pay more now for the MME vs. the Model Y, imo will regret that decision when it comes to either sell or trade in their MME.

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[eltonlin]

EXACTLY:

What others miss on this forum is that the sales tax on the Ford Option Plan, as it is a sale, title goes to the purchaser, is the sales tax on MSRP - the selling price.

On a lease the tax is on the sum of the lease payments plus sales tax on any cap cost reduction.

The sales tax savings on the Option Plan vs. a lease is many thousands of dollars.

.

Which I believe is the reason for the current incentives on the Option plan. The $2500 may be enough to make the sales tax difference a wash.

 

[JTK44]

Which I believe is the reason for the current incentives on the Option plan. The $2500 may be enough to make the sales tax difference a wash.

If you read carefully the $2,500 applies from cars in dealer's stock.

Of course there are no MME in dealer's stock.

It remains to be seen if this incentive will be there once the MME start arriving.

 

[malba2366]

If you read carefully the $2,500 applies from cars in dealer's stock.

Of course there are no MME in dealer's stock.

It remains to be seen if this incentive will be there once the MME start arriving.

They just say that so that if you order and the incentives change you don’t expect the same incentives. Whatever incentive that is in place when your car comes in are applicable because it is then in “dealer stock”. Unfortunately Ford does not allow 90 day incentive locks like BMW does.

 

[JTK44]

They just say that so that if you order and the incentives change you don’t expect the same incentives. Whatever incentive that is in place when your car comes in are applicable because it is then in “dealer stock”. Unfortunately Ford does not allow 90 day incentive locks like BMW does.

I think all the MME coming in are reservations converted to orders, so none will be "in stock."

I am presently leasing an E450 Mercedes. Like BMW, Mercedes "locks" in incentives for 90 days - but those incentives were not limited to "dealer's stock". I ordered my Mercedes and it took 10 weeks for delivery, but I "locked" in the incentive at the time of order and I got it.

In any event in 2/3 weeks we will find out if there any incentive, lease rates with residuals and the terms of financing and the Ford Option Plan.

 

[Woeo]

There are some minor things like acquisition cost and so forth that don't amount to much.

Acquisition fee & Disposition fee can add $1,000-$1500 to a lease cost.

What others miss on this forum is that the sales tax on the Ford Option Plan, as it is a sale, title goes to the purchaser, is the sales tax on MSRP - the selling price.

On a lease the tax is on the sum of the lease payments plus sales tax on any cap cost reduction.

The sales tax savings on the Option Plan vs. a lease is many thousands of dollars.
.

Not the case in Maryland or Virginia, Arkansas, Illinois, Oklahoma, & Texas.
Sales tax is collected on MSRP for financed sales, option sales, or lease contracts.

Those who pay more now for the MME vs. the Model Y, imo will regret that decision when it comes to either sell or trade in their MME.

Certainly not when they have it in the driveway though.

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