Negative Equity After A Buyback

[ARK]

Fair enough. When an ex-wife is involved, all bets are out the window . I used to drive 35,000/year just to commute to my office, so I get that part.

Not my business but EV really doesn't fit a 35,000/yearly commute, IMO. I tried for years to make it financially work (on paper) and couldn't, not even with a Model 3. I hope you are going back to ICEV. I hope you get the finance part worked out.

I’d say if he can do that while charging all at home (e.g., something like a 150 mile daily commute), his savings must be pretty big.

Also agree with whoever suggested getting Ford to give you a new Mach-E, OP. Rolling over negative equity twice seems financially brutal especially in this interest rate environment.

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[jay1122]

I did a 35,000 mile annual commute for 15 years. My round trip was 170 miles a day. A 300-mile EV in the winter real range barely leaves buffer, and it doesn't leave any room for impromptu trips during the day. That type of distance in most cities is 3.5 to 4 hours seat time every day. If you have to add another 30 minutes to get a buffer charge time wise you don't just want to add more time to your day. My company had no desire to add EVSE to the facility.

If you are getting paid to drive (and charge) that's maybe a different story, but it sounds like the OP was commuting since it was his personal car.

if the range is not enough for a single day, I could definitely see the problem. I am doing 20-25K annually. Charge everyday at home. No maintenance and cheaper than gas. I gotta say it was great so far. I just hope it will continue to be problem free. Just saw from another thread a dealer asking $1600 to replace a camera cable. Can't imagine what the dealer will charge if something important like suspension or AC breaks.

 

[Ruben Anthony]

Buyback Team coordinator reached out to me and let me know he is just waiting to hear back from the dealer for the turn in, tentatively scheduled for Monday, 29-Jan.

I figured it myself that since Ford needs the title reverted back to them, Ford Finance needs to close my loan so I do need to come up with about $7,500. Technically I would need only about $6,500 since the buyback team did the calculation based on my payoff before my last payment. I have since halted auto pay.

I don't have credit card debt so I requested and got a cash advanced of $5,500 dropped into my bank account. That, plus the two grand I have in savings will cover what I owe.

Once Ford Finance pays off the loan they will give me a refund (snail mail me a check) for the $1,000 of overpayment. That plus the $4,500 (including $3,500 EV rebate) tax refund will allow me to pay back my credit card and zero out all my debt again.

I did learn my lesson. I'm already in the process of buying a Hyundai Sonata Hybrid and based on KBB I'll lose about 50% of value over three years and 100K miles, I drive a lot.

I got approved for a car loan and I'm going to pay a slightly higher monthly payment with a 60 month loan instead of 84 months. This will keep my balance equal to new car's depreciating value. I am not sure this would be possible with a Mach-E unless I were to put a large down payment first. According to KBB, my Mach-E lost about 33% of its value in about six months and 10,000 miles.

 

[Mach1E]

Buyback Team coordinator reached out to me and let me know he is just waiting to hear back from the dealer for the turn in, tentatively scheduled for Monday, 29-Jan.

I figured it myself that since Ford needs the title reverted back to them, Ford Finance needs to close my loan so I do need to come up with about $7,500. Technically I would need only about $6,500 since the buyback team did the calculation based on my payoff before my last payment. I have since halted auto pay.

I don't have credit card debt so I requested and got a cash advanced of $5,500 dropped into my bank account. That, plus the two grand I have in savings will cover what I owe.

Once Ford Finance pays off the loan they will give me a refund (snail mail me a check) for the $1,000 of overpayment. That plus the $4,500 (including $3,500 EV rebate) tax refund will allow me to pay back my credit card and zero out all my debt again.

I did learn my lesson. I'm already in the process of buying a Hyundai Sonata Hybrid and based on KBB I'll lose about 50% of value over three years and 100K miles, I drive a lot.

I got approved for a car loan and I'm going to pay a slightly higher monthly payment with a 60 month loan instead of 84 months. This will keep my balance equal to new car's depreciating value. I am not sure this would be possible with a Mach-E unless I were to put a large down payment first. According to KBB, my Mach-E lost about 33% of its value in about six months and 10,000 miles.

I like everything about this except you buying another new car.

Get a Sonata that’s a couple years old and already has some miles. It’ll save you a ton of money.

 

[TheSteelRider]

Buyback Team coordinator reached out to me and let me know he is just waiting to hear back from the dealer for the turn in, tentatively scheduled for Monday, 29-Jan.

I figured it myself that since Ford needs the title reverted back to them, Ford Finance needs to close my loan so I do need to come up with about $7,500. Technically I would need only about $6,500 since the buyback team did the calculation based on my payoff before my last payment. I have since halted auto pay.

I don't have credit card debt so I requested and got a cash advanced of $5,500 dropped into my bank account. That, plus the two grand I have in savings will cover what I owe.

Once Ford Finance pays off the loan they will give me a refund (snail mail me a check) for the $1,000 of overpayment. That plus the $4,500 (including $3,500 EV rebate) tax refund will allow me to pay back my credit card and zero out all my debt again.

I did learn my lesson. I'm already in the process of buying a Hyundai Sonata Hybrid and based on KBB I'll lose about 50% of value over three years and 100K miles, I drive a lot.

I got approved for a car loan and I'm going to pay a slightly higher monthly payment with a 60 month loan instead of 84 months. This will keep my balance equal to new car's depreciating value. I am not sure this would be possible with a Mach-E unless I were to put a large down payment first. According to KBB, my Mach-E lost about 33% of its value in about six months and 10,000 miles.

I'm not in the business of telling someone not to do something, but I have experience with this sort of situation in my family so I feel compelled to at least share. Your post, while a decent plan, sounds familiar enough to me that I would like to recommend that you don't go through with this.

This,

I like everything about this except you buying another new car.

Get a Sonata that’s a couple years old and already has some miles. It’ll save you a ton of money.

is a better plan. There are a couple things about your new choice that send up red flags for someone who already has had to roll (or deal with) negative equity twice.

(1) Buying yet another new car. I strongly second the opinion that you need to go used this time. Going used was the decision that ended the cycle for my close relative in this exact position.
(2) Buying a Hyundai. In your situation, you need a car that lasts as long as humanly possible. If you follow the advice of going used, then you really need to consider a Toyota or a Honda. Those two models consistently outlast other brands, in general.
(3) Getting a Hybrid. It isn't clear to me why you are going BEV / Hybrid given your financial situation. This is just added cost that you could spend elsewhere in your life, or more quickly gain equity in your purchase. If you must go Hybrid, again please PLEASE consider a Prius. Their are many, many stories of 15 year old Prius's still going.
(4) I fully realize you have had issues with your MME. But, it sounds like they were all covered under warranty. So, while definitely a pain that I cannot deny, it's a vehicle you own that is still covered by warranty. It is really so bad that you can't wait it out another 8 - 12 months to gain more equity and ride it out until you can eliminate the thousands of dollars hit? For instance, you can keep the MME and still use your tax refund to pay down some of its equity so at least you are not underwater. Ride it out for 6 - 12 months and if it just continues to fail, then OK. But, if it works and serves you well for another year, not only will you not be underwater but maybe you will finally be above water, and you can trade and buy whatever you want with confidence.

P.S. I completely realize I am just a rando on the internet. So, I encourage you, rather than listen to me, or anyone else please talk to a financial adviser and also a seasoned mechanic. With both of their recommendations, move forward.

Here is an internet mechanic that I personally believe is trust worthy and gives good advice that matches with my personal experience.

 

[AliRafiee]

@Ruben Anthony what was the outcome?

 

[Ghost Ryder]

Honestly, in the past I've always stayed ahead of depreciation and it was never an issue. But last year when used car prices plummeted after going up the 2019 Mustang got away from me.

I didn't want a car with 100,000 miles (I drive about 35,000 miles a year) so I traded it in for a brand new 2023 Mach-E Select with plans on closing the gap over three years.

I did not expect the HVBJB to go bad on me in the first two weeks. Or the replacement to go bad. Or the second replacement to malfunction.

I'm pretty good with money. I just suck at marriage. I had my car paid off, no credit card debt, and $90,000 grand in the bank when I met my ex-wife.

Now I'm still paying off leftover credit card debt and have a car payment after my divorce. But hey, I kept my house. But I'm not refinancing my mortgage anytime soon. I can probably come up with the cash, I'd just rather roll it over into a new car loan.

I'm not sure what's worst for your financial well being, a drug habit, a gambling addiction, or an ex-wife. But if I had to guess, I go with the ex-wife.

 

[TigerEye104]

I would strongly suggest looking at anything other than Hyundai or Kia ICE/hybrid google about the oil consumption issues. My wife just traded her 2017 Santa Fe in on the Honda CRV Hybrid b/c she was consuming 2.2qts of oil every 1000 miles and Hyundai was dragging it out until we were going to run out of warranty so we got rid of it while we could.

 

[Ruben Anthony]

I'm not in the business of telling someone not to do something, but I have experience with this sort of situation in my family so I feel compelled to at least share. Your post, while a decent plan, sounds familiar enough to me that I would like to recommend that you don't go through with this.

This,


is a better plan. There are a couple things about your new choice that send up red flags for someone who already has had to roll (or deal with) negative equity twice.

(1) Buying yet another new car. I strongly second the opinion that you need to go used this time. Going used was the decision that ended the cycle for my close relative in this exact position.
(2) Buying a Hyundai. In your situation, you need a car that lasts as long as humanly possible. If you follow the advice of going used, then you really need to consider a Toyota or a Honda. Those two models consistently outlast other brands, in general.
(3) Getting a Hybrid. It isn't clear to me why you are going BEV / Hybrid given your financial situation. This is just added cost that you could spend elsewhere in your life, or more quickly gain equity in your purchase. If you must go Hybrid, again please PLEASE consider a Prius. Their are many, many stories of 15 year old Prius's still going.
(4) I fully realize you have had issues with your MME. But, it sounds like they were all covered under warranty. So, while definitely a pain that I cannot deny, it's a vehicle you own that is still covered by warranty. It is really so bad that you can't wait it out another 8 - 12 months to gain more equity and ride it out until you can eliminate the thousands of dollars hit? For instance, you can keep the MME and still use your tax refund to pay down some of its equity so at least you are not underwater. Ride it out for 6 - 12 months and if it just continues to fail, then OK. But, if it works and serves you well for another year, not only will you not be underwater but maybe you will finally be above water, and you can trade and buy whatever you want with confidence.

P.S. I completely realize I am just a rando on the internet. So, I encourage you, rather than listen to me, or anyone else please talk to a financial adviser and also a seasoned mechanic. With both of their recommendations, move forward.

Here is an internet mechanic that I personally believe is trust worthy and gives good advice that matches with my personal experience.

On this forum I am asking for the opinion of "randos" so I get I what I ask for.

Anyways, you make great points that I can't disagree with. But as I get older I do weigh pros and cons pragmatically, but in the end my happiness is what weighs the most.

I cannot see myself happy in a Toyota Prius. It's a "vugly" car. I am most happy in a convertible sports car. But due to rising gas prices here in California I have decided to go for something fuel efficient.

So I look for the happy medium. I have bought both new and used, and I definitely prefer new. I love being the first owner of a vehicle and not having to worry if proper maintenance was performed.

In my life I have purchased three vehicles brand new, and leased three brand new vehicles. I have also purchased four used vehicles.

Financially it makes sense to go with a low mileage used vehicle since that initial drop in depreciation is baked into the price with some profit for the dealer added in. But those are also miles that chip away at the manufacturer's warranty. I drive A LOT. My last used car I bought had about 40,000 miles on it in February 2022. By August of 2023 it was over 94,000 and the extended warranty I purchased was about to expire.

I thought about just getting another warranty to protect myself from major engine and transmission issues that could arise, but in the end I decided "Go new and go electric". EVs have long warranties for the major stuff and I could save money on gas.

And yes, you are right. My Mach-E might have finally been fixed after three attempts. And if fails a fourth time it is still covered under the warranty. But like a cheating girlfriend, there's only so many times I can get burned before I call it quits.

You only live once, and I just want to live with as many of life's little luxuries that I can afford. I may have taken a small financial hit in my divorce. But with a great job, a great military pension, no kids and an ex-wife who took a deal that was financially advantageous for both of us, I can absorb a few financial dings here and there. But I will definitely pay more attention to amortization schedules on car loans and the depreciation of the older vehicles of the same model of the vehicle I am purchasing.

 

[BTRYPWRDPONY]

I would strongly suggest looking at anything other than Hyundai or Kia ICE/hybrid google about the oil consumption issues. My wife just traded her 2017 Santa Fe in on the Honda CRV Hybrid b/c she was consuming 2.2qts of oil every 1000 miles and Hyundai was dragging it out until we were going to run out of warranty so we got rid of it while we could.

I agree--I work in the industry and the 2.4L(mostly) KIA/HYUNDAI motors are junk. We replace at least 3 engines a week.

 

[Logal727]

I always come to this forum for financial advice.

 

[Logal727]

hen you should seriously consider taking them up on a replacement car rather than a buyback.

You can do that??? I've always thought you have to basically just buy a new car them if you want the same model.

 

[Neil4Real]

You can do that??? I've always thought you have to basically just buy a new car them if you want the same model.

Yes, it is up to the manufacturer but I've seen reports on here of people being offered either replacement or buyback from Ford. Depending on the issue, people have been able to continue using their car until the replacement arrived, too. You can also push to get a higher model, if you wanted to, though you have to pay the difference.

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