Poll: Ford Options vs Finance

How are you paying for your Mach E?


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JellyBelly

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This discussion makes the disdain for dealers grow even stronger, as if it weren't already. I don't doubt that there can be "some" variation in a score based on source, but could it really be like 25-50 points? Also, the ability of dealers to just tack on to a rate just as a money grab is ridiculous.
I agree that this is just a way for the dealers to make additional $$ by charging more rate or diverting to their choice lenders. I don't see the point in Ford coming out with options for financing when they are not provided by dealers. But again I have never been in this situation - all my last new car buys - no issues with dealers offering Mfr financing or better outside alternatives.

This is the fist time buying a car is such a challenge - finding a dealer with No ADM, accepts X Plan, refundable deposit and now offers Mfr financing or better





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DBC

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This is the fist time buying a car is such a challenge - finding a dealer with No ADM, accepts X Plan, refundable deposit and now offers Mfr financing or better
My gut reaction is that not offering Ford Financing in order to get a larger kickback from a "partner" financial institution would be ADM, which would violate the representation that the dealer would not seek ADM.

Additionally claiming that someone doesn't qualify for a given loan rate when in fact they do is a straight out point of sale misrepresentation.

Having said this, we don't know all the facts so let's withhold judgement.
 

Carlsbad9

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Your FICO score alone does not determine your Tier. Yes, a higher FICO is more likely to score better but that's not always the case. The scorecards are more complicated than that.

The Ford Options rate of 2.25% is the net rate for Tier 0/1 approvals. Rates for Tier 2-5 are higher. Dealers are allowed mark up.

@Carlsbad9
Thanks. The salesperson said I was tier 1. I didn't know there was a tier 0 that was higher. My income is also strong so don't know what could be on the scorecard working against me. I broker home loans so am pretty familiar with credit & underwriting process in that world at least. I'll ask when the finance person gets into the office.
 

hybrid2bev

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Thanks. The salesperson said I was tier 1. I didn't know there was a tier 0 that was higher. My income is also strong so don't know what could be on the scorecard working against me. I broker home loans so am pretty familiar with credit & underwriting process in that world at least. I'll ask when the finance person gets into the office.
Tier 1 is a much larger bin than Tier 0 so it's easier to land there. But it's irrelevant in your case because Tier 0 and 1 have the same net rate on the Options program. I wouldn't worry about being Tier 1 at all.
 

DBC

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I'll ask when the finance person gets into the office.
Could be a couple of things. Might be an honest mistake resulting from not understanding the program. Given you might have been the first this is certainly possible. Alternatively it might have been that, as you know, commissions are a driving force and the finance person may have seen an opportunity for a larger commission at your expense.

Always good to give them the opportunity to go through Door Number One. :)
 

Regularmache

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Crazy isn’t it? Seeing some of the financing conversations with deliveries looks like it’s one more potential challenge to overcome.
Or angle to get the dealer a retail car. Then they report to Ford on reason Res Holder not taking delivery they just type in, Customer couldn't Finance. Bam, got a retail Mach E for sale and markup.
 
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JellyBelly

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Thanks. The salesperson said I was tier 1. I didn't know there was a tier 0 that was higher. My income is also strong so don't know what could be on the scorecard working against me. I broker home loans so am pretty familiar with credit & underwriting process in that world at least. I'll ask when the finance person gets into the office.
I have a feeling this is going to get resolved the right way. They are just not familiar with the Options process.
 
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DBC

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I have a feeling this is going to get resolved the right way. They are just not familiar with the Options process.
I suspect you are right. Never hurts to be optimistic. Has to be a buzz kill though if you're the customer having to deal with this.

The advantage in not being in the first wave.
 

timbop

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Holy cow! I called the finance manager at my dealer, and he actually knew about and understands the options plan and said there'd be no issue with it!

Now I just need the car to get here...
 

mamejunkie

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Is there any reason for those with $$$ cash to NOT go with the Ford Options and then just pay off early? Seems like a no brainer. But also if its too good to be true...
 

JellyBelly

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Is there any reason for those with $$$ cash to NOT go with the Ford Options and then just pay off early? Seems like a no brainer. But also if its too good to be true...
Yes it would make sense to save the incentive. If you pay off in say 6 months - its not a lot of interest and at least will result in decent savings.

Now my response assumes the buyer has already decided to pay in cash.

I just say this so that we dont get into debates regarding whether this move i.e., paying all off in cash on day 1 or 6 months later is economically right thing to do or if people will get a better return in the market.
 

efisher

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Is there any reason for those with $$$ cash to NOT go with the Ford Options and then just pay off early? Seems like a no brainer. But also if its too good to be true...
There are several reasons, the biggest is if you can earn a better return than 2.5 percent than you should pay the minimum upfront and stretch the payments out for as long as you can.
 

opennetus

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Is there any reason for those with $$$ cash to NOT go with the Ford Options and then just pay off early? Seems like a no brainer. But also if its too good to be true...
Personally, I don’t think it makes any sense to use cash or pay off early in the current economy. Loan rates are super low and the stock market is booming. It is better to dump into the stock markwt and make a return of 10%+ with minimal effort than to settle for 2.25% by paying off Ford Options early.

To me, the choice is either a standard loan for 48 months for the ultra-low 0.9% interest rate, or taking Ford Options at 36 months for the cash incentive and than refinancing the ballon payment at the end to stretch out the loan farther. Another advantage of Ford options is that your monthly payment is smaller, allowing more of your money to stay in the stock market longer.

In my mind, a longer term loan is not that valuable since you can always take out another car loan after you pay off the car (up to its current market value), in order to invest the equity into something else and take advantage of cheap interest rates. If you need lower monthly payments, Ford options is the better deal.
 
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macchiaz-o

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I was having a tough time making sense of all the options, too. So I created a calculator. Working out the math in the calculator helped clear things up in my mind...

Maybe this will help you, too.

https://1drv.ms/x/s!ApbGIUelGmJ-s9hQWdOSPLkXVkpcrA?e=WX5FM8

You need to edit all the yellow cells (and maybe others) to represent your unique situation. But the link is set to view-only. So to get started, you'll need to save off your own copy.

CAVEATS:
  • There might be mistakes. OK, there are definitely mistakes. Use at your own risk.
  • I understand how X-Plan prices are calculated. I'm not 100% sure on A/Z/D plans so those might be a little off.
  • I made this for me. In Arizona. Where you live, there might be some differences in how Cash Price is calculated, or taxes, or other things.
  • This doesn't estimate anything for Red Carpet Leasing (RCL). It's just for cash, traditional simple interest financing, or Ford Options.
  • It can help you see how a one-time Ford Options loan adjustment will impact future payments and overall interest paid. I'm not sure if my method for adjusting the loan will match up with what Ford Credit will do.
  • Again, use at your own risk. I'm NOT responsible for your finances or your financial decisions.
I fixed an issue that was causing calculations to only work properly in Office 365 and Office on the web. Now it works in older versions of Office, too, and maybe other XLSX compatible programs.

There are several smaller improvements and bug fixes.

Remember to start by selecting the correct trim level in cell C1. Then check and correct all of the yellow cells.
 

Crazynyc

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Hi All,

I am a new buyer and contacted the dealer and they got the financing for 0.9% for 48 months and $5000 down.
Is there any incentives for taking loan with Ford.
 

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