Poll: Ford Options vs Finance

How are you paying for your Mach E?


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back_at_it_19

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Borrowing 50k for 48 months at .9% will accrue $924.15 in interest
Borrowing 50k under the 4 year Options plan: 47 payments of 692.56, and a balloon payment of 20,646, for total payments of 53196.32 to retire the debt. Put another way $3196.32 in interest.

Compared to straight financing at .9%, Options would 'cost' $2272.17 more. If you are in a $1,000 incentive zip code, then it would effectively be $1272 more expensive*. If you are in a $2,500 incentive zip code the 48 month Options plan would be $228 less expensive than financing at the .9% rate over 4 years.*


*[plus $475 to actually return the vehicle unless you trade on a Ford].
And with Options, usually lower payments now (balloon later) and most importantly the ability to walk away in 3-4 yrs regardless of value or equity.
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Woeo

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This is quite misleading. Saving the difference between the monthly for a 48 month purchase and the monthly under a 36 month Options plan won't give you enough to pay the balloon. Not really close. Just run the numbers using the Ford calculator -- you end up only saving enough for half the balloon.
I am comparing 48 month financing to 48 month Options. So were the other posters. .

The payment on 50,000 at .9% over 48 months would be $1,061. Total payments 50,928.

Borrowing 50,000 at 2.25% through options would require 47 payments of 692.56 and a balloon of $20,646.* Total payments 32,550+20646=53196. After incentive 53,196-2500=50696

The payments difference 1061-692.56=368.44
48 months saving 368.44x48=17,685
This is 85% of what would be required to pay the balloon.

Of course saving 1/48, as both @jjwolf & @buffasnow mentioned, of the balloon amount, $430, would be more exact.

*this assumes a 2500 incentive zip code, then applying that incentive against the Options interest To keep total cost roughly the same
 
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MachE2021

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If I do Options and over-estimate my mileage by a lot...say I choose 12,000/yr but after 4 years I only put on 30k total...do they update the residual $$ to account for that?
 

generaltso

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If I do Options and over-estimate my mileage by a lot...say I choose 12,000/yr but after 4 years I only put on 30k total...do they update the residual $$ to account for that?
No. But you can sell it or trade it in instead of turning it in at that point since it would likely be worth more than the residual.
 

Fat Mach

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One thing I learned after leasing my F250 is that the cost to buy it at the end is negotiable. They wanted 19k and I paid them 15k and called it a day. On a percentage basis, that's fairly significant.

Use words like, faded paint, a few dents, kinda smells inside, etc lol.
 


DBC

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I am comparing 48 month financing to 48 month Options. So were the other posters. .
I see that now. My mistake. But it's such a trivial question. If you'd pay Y under Options and X under Financing, then you're asking if X = Y + (X-Y) which is really just X = X.

Strikes me as a lot of meaningless mental accounting and mental accounting is invariably a bad idea. From a dollar standpoint there is very little difference between Financing and Options. The best case for Options is 36 months because reducing the term reduces the importance of the lower interest rate under Financing and increases the importance of the incentive under Options. In this best case if you get the $2500 incentive it's a wash. If you get the $1000 incentive you're out $1500, which is not a bad price to pay if you think you may not want to keep the car.

Going to 48 months makes Options less desirable and it makes the term longer than the warranty, which is a negative.

If you know you want to keep the MME and don't need financing then use Options and pay everything off after six months. This is the one scenario in which Options can save you some money.
 

Woeo

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I see that now. My mistake. But it's such a trivial question. If you'd pay Y under Options and X under Financing, then you're asking if X = Y + (X-Y) which is really just X = X.

Strikes me as a lot of meaningless mental accounting and mental accounting is invariably a bad idea. From a dollar standpoint there is very little difference between Financing and Options. The best case for Options is 36 months because reducing the term reduces the importance of the lower interest rate under Financing and increases the importance of the incentive under Options. In this best case if you get the $2500 incentive it's a wash. If you get the $1000 incentive you're out $1500, which is not a bad price to pay if you think you may not want to keep the car.

Going to 48 months makes Options less desirable and it makes the term longer than the warranty, which is a negative.

If you know you want to keep the MME and don't need financing then use Options and pay everything off after six months. This is the one scenario in which Options can save you some money.
You love to talk about how a $475 disposal fee or $1500 in interest is trivial.
 

available_username2

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If you know you want to keep the MME and don't need financing then use Options and pay everything off after six months. This is the one scenario in which Options can save you some money.
How would that work?
 

VegStang

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This was my understanding.

Get the Options loan, then send Ford Credit a check for the entire balance to close the loan. It's similar to paying cash except that you would get the $2500 or $1000 incentive.
 

ay221

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Get the Options loan, then send Ford Credit a check for the entire balance to close the loan. It's similar to paying cash except that you would get the $2500 or $1000 incentive.
If one's plan is to trade it in, in 3 years, would you still pay off the balance or is there a better way?
 

DBC

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You love to talk about how a $475 disposal fee or $1500 in interest is trivial.
Everyone will have to decide for themselves how much to worry about a $475 disposal fee and how much to worry about the effective price of a new MME coming down by $9000 over the next few years. It's your money so your choice. On the other hand, criticizing someone for worrying more about the $9000 is hardly justified.
 

DBC

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If one's plan is to trade it in, in 3 years, would you still pay off the balance or is there a better way?
This would be a way to save a thousand or two if you weren't planning on using financing (in any form). That said, theoretically, if you financed using Options and planned to turn the MME back in three years, it could save some interest, though this wouldn't seem worth the bother.
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