Mach-E Financing and RCL Leasing Program Announced

[efisher]

Yes that would be nice, but like you I doubt that would happen.

As we now know that the First Edition will not be first production, main reason I ordered, and that even the select models have production dates ahead of the First Edition, if you had it over to do again, would you ordered the FE?

I really expected to have my FE for several months before other MME arrived - that would have been "cool" to have the exclusivity for a few months.

Not having that exclusivity, if I had it to over again, I would have just ordered a premium LR AWD and saved $3600.

What about you?

I am not sure. Since I live in NJ my price was capped at 55k to qualify for the $5k affordable EV credit. So, the FE was never under consideration. However, I love the FE colors compared to the Premium colors and do like the FE badging. Would I have purchased the FE if I could get the additional credit? Maybe. If it were just me making the decision, yes, but my wife would have been against it.

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[efisher]

Once you commit to pass on the Federal tax credit that is what you do:

It is like being pregnant: either you are or you are not.

So it must be $7,500.

BTW, a MF of .001 equates to 2.4% which is neither high nor low, so no big deal.

No, that is not how it works. You must have a matching tax liability to get the full amount. While I would guess that is the case for most people looking at this car, it may not be true if most of your income comes from tax-free sources, such as municipal bonds or similar passive sources.

 

[JTK44]

No, that is not how it works. You must have a matching tax liability to get the full amount. While I would guess that is the case for most people looking at this car, it may not be true if most of your income comes from tax-free sources, such as municipal bonds or similar passive sources.

You misunderstood me:

I was not talking about the buyer and his ability or inability to capture the full value of the Federal Tax credit. There is no question that to take advantage of the full $7,500 credit the buyer must have a minimum of a $7,500 Federal tax liability. If it is less, then the credit is limited to his liability.

What I was referring to is the post where it was suggested that instead of a cap cost reduction in the lease of $7,500 it might be only $5,000.

My observation is that would not happen.

Since I posted I have given additional thought and have come to the conclusion it would be very, very difficult for Ford to pass on anything less than the full $7,500 as a cap cost reduction:

If Ford were to give a $5,000 cap cost reduction the next immediate question would be: What happened to the other $2,500.

 

[efisher]

Don't stress. If you keep the car the residual simply doesn't matter. At the end of 10 years pretty much all cars are worth about the same.

Also if you're stressed that the MME won't hold its value then just either lease or use Ford Options. I've seen people pull out spreadsheets to calculate whether leasing or buying is better. That's a waste of time since the cost is more or less the same. With leasing you have an acquisition and disposal fee but that's minor. What leasing or Ford Options gives you is the ability to walk if you don't like the car. So it's a bit like insurance.

If you can make use of the tax credit then Ford Options is a better deal. You have the option of buying, you get the tax credit, and you have built in financing if you decide to buy. If you can't use the tax credit then lease.

FYI the MME will not "hold its value" if you define "holding its value" with reference to its current MSRP. Every MME sold comes with a $7500 check from the federal government. Not to mention state incentives. When those go away, and we know the federal credit will, Ford will have to reduce the price of the MME to stay competitive. Basically that means a reduction in MSRP, either explicitly or implicit in the form of discounts. When this happens the price of a used MME will drop -- if you can get a new MME for $43K you aren't going to buy a a one year old MME for $43K. However, if you look at whether the MME will hold its value relative to what you paid for it, then I suspect it will. Again if you're worried about this use Ford Options or lease.

Personally I'm inclined to go with Ford Options. I'm confident that the MME will be great, but there might be some technology on the later models that I might want. No idea how this will work out.

Part of the problem here is that the current Mach-E price reflects the $7500 credit. Specifically, Ford can mark up the price, (and make additional profit on each vehicle sold,) because they know that consumers will take the tax credit into consideration while making their purchase decision.

As the way things stand, we know that this tax credit will phase out over the next several years and we can expect that Ford will accordingly lower the price of the Mach-E. The residual price of the vehicle will be diminished by a decline in the new vehicle price. It is not that Ford is unwilling to stand by the future value of the Mach-E, rather, they know that they will be reducing the new vehicle price.

 

[kdryden99]

In any case if you really think about it, if you buy this car Ford believes its trade in value in 4 years will only be 34% of what you paid regardless of whether you got the 7500$ or not. It will make a lot of people think twice about buying the car.

 

[efisher]

You misunderstood me:

I was not talking about the buyer and his ability or inability to capture the full value of the Federal Tax credit. There is no question that to take advantage of the full $7,500 credit the buyer must have a minimum of a $7,500 Federal tax liability. If it is less, then the credit is limited to his liability.

What I was referring to is the post where it was suggested that instead of a cap cost reduction in the lease of $7,500 it might be only $5,000.

My observation is that would not happen.

Since I posted I have given additional thought and have come to the conclusion it would be very, very difficult for Ford to pass on anything less than the full $7,500 as a cap cost reduction:

If Ford were to give a $5,000 cap cost reduction the next immediate question would be: What happened to the other $2,500.

It would go to Ford's after tax bottom line.

 

[kdryden99]

Part of the problem here is that the current Mach-E price reflects the $7500 credit. Specifically, Ford can mark up the price, (and make additional profit on each vehicle sold,) because they know that consumers will take the tax credit into consideration while making their purchase decision.

As the way things stand, we know that this tax credit will phase out over the next several years and we can expect that Ford will accordingly lower the price of the Mach-E. The residual price of the vehicle will be diminished by a decline in the new vehicle price. It is not that Ford is unwilling to stand by the future value of the Mach-E, rather, they know that they will be reducing the new vehicle price.

So why are we buying this car then??? It's almost like a big F U to us as first adopters and I think its total BS. We have been the most patient. I hope this gets to the CFO cause there needs to be some revisions done before we get it. Having people put more money down upfront to cover the depreciation is like Ford saying "ya we know it'll go down in price so since you guys want the car now pay the extra up front cause" As first adopters we get screwed twice, more upfront and more depreciation.

 

[malba2366]

Part of the problem here is that the current Mach-E price reflects the $7500 credit. Specifically, Ford can mark up the price, (and make additional profit on each vehicle sold,) because they know that consumers will take the tax credit into consideration while making their purchase decision.

As the way things stand, we know that this tax credit will phase out over the next several years and we can expect that Ford will accordingly lower the price of the Mach-E. The residual price of the vehicle will be diminished by a decline in the new vehicle price. It is not that Ford is unwilling to stand by the future value of the Mach-E, rather, they know that they will be reducing the new vehicle price.

This is Spot on. The purpose of the tax credit is to lower the price temporarily to give the manufacturers the opportunity to reach economies of scale. The tax credit is not designed to incentivize buyers to chose one vehicle over another. We have seen already seen this at work at Tesla...the vehicle price dropped in concert with the declining tax credits over time. The true lease will probably residualize around 48-50% for a 36m/10k lease with the tax credit as a cap cost reduction...do not expect heavily subvented leases like you would at BMW.

 

[efisher]

Don't stress. If you keep the car the residual simply doesn't matter. At the end of 10 years pretty much all cars are worth about the same.

Also if you're stressed that the MME won't hold its value then just either lease or use Ford Options. I've seen people pull out spreadsheets to calculate whether leasing or buying is better. That's a waste of time since the cost is more or less the same. With leasing you have an acquisition and disposal fee but that's minor. What leasing or Ford Options gives you is the ability to walk if you don't like the car. So it's a bit like insurance.

If you can make use of the tax credit then Ford Options is a better deal. You have the option of buying, you get the tax credit, and you have built in financing if you decide to buy. If you can't use the tax credit then lease.

FYI the MME will not "hold its value" if you define "holding its value" with reference to its current MSRP. Every MME sold comes with a $7500 check from the federal government. Not to mention state incentives. When those go away, and we know the federal credit will, Ford will have to reduce the price of the MME to stay competitive. Basically that means a reduction in MSRP, either explicitly or implicit in the form of discounts. When this happens the price of a used MME will drop -- if you can get a new MME for $43K you aren't going to buy a a one year old MME for $43K. However, if you look at whether the MME will hold its value relative to what you paid for it, then I suspect it will. Again if you're worried about this use Ford Options or lease.

Personally I'm inclined to go with Ford Options. I'm confident that the MME will be great, but there might be some technology on the later models that I might want. No idea how this will work out.

For me, it depends on the interest rate.

 

[macchiaz-o]

It would go to Ford's after tax bottom line.

And all the up front non-recurring costs of establishing a leasing offering for the very small number of U.S. Mach-E customers that would probably choose to go this route.

JTK44 already stated on the other forum that the leasing choices that just revealed these last few days are well beyond showstopper level for him/her, and in addition the Ford Options and traditional financing are also non-starters. And yet they are what they are.

But the deal killer way beyond breaker is the published lease rates.

 

[JTK44]

You are overstating the Model Y advantages:

• While the EPA range comparison is valid. the Model Y suffers disproportionately in real world milage comparisons.

Nor do we know how the MME will far in real world. I was comparing "apples to apples" which is all we have now.

• The acceleration numbers do not differ enough to be significant.

Model Y 0-60, 4.8 seconds. MMW projected 5.4 seconds. That difference is almost 20%. While I never plan to race the car, I believe a 20% difference is significant.

• Handling why include it unless you are deliberately trying to mislead. As you say there is no current Mach-E data.

Almost everyone who has reviewed the Model Y remarks about how good the handling is. That is one of its selling points. Perhaps you may missed what I said: "this may change once we have independent reviews of the MME. "

• Using the First Edition as your basis for price comparison instead of the Premium or Select is either dumb or an attempt to deliberately mislead!

I have on order the First Edition: you will note that is fully disclosed in my signature.

• The charging infrastructure is for now a point in Tesla's favor but becoming less and less so as time goes on and third-party charging stations open across the country.

Yes and until that happens, the charging infrastructure is built out which may take several years, this a distinct advantage to Tesla.

I believe what I posted was accurate.

 

[kdryden99]

I find it funny that they price there car like a Tesla Y, try to go after Tesla but they compare the depreciation to Kia Soul or Chevy Bolt when in dvrrybodys mind this car is superiir to those. I see this as Ford trying to rebuild capital upfront from customers.

 

[efisher]

More important: First Edition in my mind at last means "First production".
To be "First" I was willing to pay a premium: $1,600.

But it turns out that First Edition is not first production. There are build dates for the Premium in November and build dates for the select in December and build dates for the First Edition in January.

What the First Edition turned out to be is "Special Edition"

The Premium AWD LR, mechanically identical to the First Edition, was reduced $3,000 but the First Edition only $1,000. The delta grew from $1,600 to $3,600.

At the time of the price reduction we continued to think that First Edition was First Production.

It was only in September and October, long after we converted our reservations to orders, when we were notified of production dates did those of us who ordered the First Edition realized that our cars were not first production.

So bottom line: there will be select and premium models out on the road before some of us even get our First Editions!

.

.

Waaaaaa

 

[efisher]

Nor do we know how the MME will far in real world. I was comparing "apples to apples" which is all we have now.

Model Y 0-60, 4.8 seconds. MMW projected 5.4 seconds. That difference is almost 20%. While I never plan to race the car, I believe a 20% difference is significant.

Almost everyone who has reviewed the Model Y remarks about how good the handling is. That is one of its selling points. Perhaps you may missed what I said: "this may change once we have independent reviews of the MME. "

I have on order the First Edition: you will note that is fully disclosed in my signature.



Yes and until that happens, the charging infrastructure is built out which may take several years, this a distinct advantage to Tesla.

I believe what I posted was accurate.

• We may not know the Mach-E real world range, but we know that the Model Y real vs. EPA range is exceptionally bad.
• Your acceleration numbers are wrong. If you compare like-for-like, then you want to compare the model Y numbers against the Mach-E Premium AWD which also has 0-60 in 4.8 seconds.
• So, you are assuming because the Model Y handling is good the Mach-E handling will be bad? Wait until there is actual information to compare before you put this in the win or loss column.

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