Problem with pre-paying Ford Options lease.

[Sleep7]

Hello!
I just got my first bill and had planned to pay off the whole thing in full. I called Ford to ask them how much the total of payments would be minus the interest since I was paying it off right away.
I was told that I need to pay the whole amount - that even though I was paying off the 35 payment "loan" right away the interest would still be charged.
I spoke to a few supervisors who said that they could not change it and whether I payed it off in 3 years or right away I would still pay the same amount.
Has anyone else had this problem?
Just a heads up to anyone who is planning on doing the same thing.. it seems it's not possible.
When I bought the car they dealership told me that there would be no pre-payment penalty and I would avoid interest payments by paying in advance.
Hopefully somebody from Ford is reading these forums and can clarify this for me.

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[GoGoGadgetMachE]

Hello!
I just got my first bill and had planned to pay off the whole thing in full. I called Ford to ask them how much the total of payments would be minus the interest since I was paying it off right away.
I was told that I need to pay the whole amount - that even though I was paying off the 35 payment "loan" right away the interest would still be charged.
I spoke to a few supervisors who said that they could not change it and whether I payed it off in 3 years or right away I would still pay the same amount.
Has anyone else had this problem?
Just a heads up to anyone who is planning on doing the same thing.. it seems it's not possible.
When I bought the car they dealership told me that there would be no pre-payment penalty and I would avoid interest payments by paying in advance.
Hopefully somebody from Ford is reading these forums and can clarify this for me.

Hmm. Pretty sure one of the hundred Options threads covered this, but @hybrid2bev can address in any event.

 

[smartino]

Definitely check the paperwork you got with the loan. I’m using the Ford Options loan program and mine clearly indicates that there is no pre-payment penalty. The paperwork work you received when you signed for the loan is also on your account on the Ford Credit site.

 

[Sleep7]

Definitely check the paperwork you got with the loan. I’m using the Ford Options loan program and mine clearly indicates that there is no pre-payment penalty. The paperwork work you received when you signed for the loan is also on your account on the Ford Credit site.

I told them that. It didn't matter. She still said my payoff was my regular payment times 35 months. It was like I was explaining to her that 2 plus 2 was 4 and she didn't agree.

 

[MachTee]

Hello!
I just got my first bill and had planned to pay off the whole thing in full. I called Ford to ask them how much the total of payments would be minus the interest since I was paying it off right away.
I was told that I need to pay the whole amount - that even though I was paying off the 35 payment "loan" right away the interest would still be charged.
I spoke to a few supervisors who said that they could not change it and whether I payed it off in 3 years or right away I would still pay the same amount.
Has anyone else had this problem?
Just a heads up to anyone who is planning on doing the same thing.. it seems it's not possible.
When I bought the car they dealership told me that there would be no pre-payment penalty and I would avoid interest payments by paying in advance.
Hopefully somebody from Ford is reading these forums and can clarify this for me.

Simply not true. I received my first statement not even 2 weeks after I bought the car. Right on the statement is my full pay off amount, which was the amount financed via Ford Options, plus ~$80 in interest. I literally just sent the full pay off amount.

Have you already linked your Mach E account with your Ford Credit account? If so, access your Ford Credit account from there, and use the live chat. I did and confirmed everything with the chat rep which was super helpful. I asked if there might be any complication in paying off a new account with the release of the lien and have the title sent. She said absolutely no problem in paying off.

 

[Sleep7]

Simply not true. I received my first statement not even 2 weeks after I bought the car. Right on the statement is my full pay off amount, which was the amount financed via Ford Options, plus ~$80 in interest. I literally just sent the full pay off amount.

Have you already linked your Mach E account with your Ford Credit account? If so, access your Ford Credit account from there, and use the live chat. I did and confirmed everything with the chat rep which was super helpful. I asked if there might be any complication in paying off a new account with the release of the lien and have the title sent. She said absolutely no problem in paying off.

You paid the full amount including the balloon payment? I just wanted to pay the amount minus the balloon payment. I'm not sure I want to keep the car after 3 years

 

[MachTee]

You paid the full amount including the balloon payment? I just wanted to pay the amount minus the balloon payment. I'm not sure I want to keep the car after 3 years

Yes. The 35 remaining monthly payments plus the balloon payment, minus the interest over the 36mos term, plus the interest on one month.

Oh, I don't know if you can pay just the 35 remaining payment without the balloon and avoid paying the interest. I didn't know that's what you're trying to do.

 

[NJDevFan30]

You paid the full amount including the balloon payment? I just wanted to pay the amount minus the balloon payment. I'm not sure I want to keep the car after 3 years

What you're attempting to do conceptually works in your favor but that's not how the loan is structured.

You have 35 smaller payments and 1 larger balloon payment. When you prepay you are paying down your principal faster, thus saving on interest, but unless you pay it off entirely you still owe next month's payment. You will only be paying interest on your remaining principal balance, which includes the balloon payment. Month by month you will be reducing your principal balance and thus your final balloon payment.

Simply put, prepaying saves interest but it also diminishes the advantage of the Options contract if you want the option to hand the car back at the end of your contract.

Only you can decide what your main objective is: saving interest or having the ability to walk away in 3 years.

 

[machefan]

Yes. The 35 remaining monthly payments plus the balloon payment, minus the interest over the 36mos term, plus the interest on one month.

Oh, I don't know if you can pay just the 35 remaining payment without the balloon and avoid paying the interest. I didn't know that's what you're trying to do.

Agreed, you can only pay in full for complete ownership (no lien). You can’t just pay off the payments early with the remaining ballon in place. I’m not sure it would reduce the interest rather just get you ahead. Maybe others know the fine print.

 

[Sleep7]

Yes. The 35 remaining monthly payments plus the balloon payment, minus the interest over the 36mos term, plus the interest on one month.

Oh, I don't know if you can pay just the 35 remaining payment without the balloon and avoid paying the interest. I didn't know that's what you're trying to do.

If I can't do that then whatsv

What you're attempting to do conceptually works in your favor but that's not how the loan is structured.

You have 35 smaller payments and 1 larger balloon payment. When you prepay you are paying down your principal faster, thus saving on interest, but unless you pay it off entirely you still owe next month's payment. Month by month you will be reducing your final balloon payment.

Simply put, prepaying saves interest but it also diminishes the advatage of the Options contract if you want the option to hand the car back at the end of your contract.

Only you can decide what your main objective is: saving interest or having the ability to walk away in 3 years.

All I'm trying to do is

Agreed, you can only pay in full for complete ownership (no lien). You can’t just pay off the payments early with the remaining ballon in place.

That's what they are telling me. That was not made clear to me when I bought the car. The opposite was told to me

 

[Skelton]

Edit: I'll retract my statement on Ford Options prepayment. I don't have the details from Ford, but the entire line of questioning is confusing.

Frankly, it sucks that people at the dealership might've incorrectly explained something, but in the end you probably can't prove that. All that's going to be there is the contract you signed that says otherwise.

 

[generaltso]

Just like a lease, paying early won't save you money on interest. It's unfortunate that you didn't understand that, but I cannot imagine there will be any compensation by Ford for it.

To be clear, paying off the loan early absolutely will save you interest. But if you’re not including the balloon payment, you’re not paying off the loan.

 

[Sleep7]

Just like a lease, paying early won't save you money on interest. It's unfortunate that you didn't understand that, but I cannot imagine there will be any compensation by Ford for it.

It's not what I understood. It's what I was told. I was told I could save interest by prepaying part of the loan. Just like every other loan

 

[NJDevFan30]

Just like a lease, paying early won't save you money on interest. It's unfortunate that you didn't understand that, but I cannot imagine there will be any compensation by Ford for it.

I'm fairly certain paying early DOES save you interest. My understanding is it's just like any other simple loan (i.e. mortgage). Pay early, save interest.

What you can't do though is make payments 1-35 early and expect that you don't owe a payment until payment 36 (the balloon).

 

[Sleep7]

To be clear, paying off the loan early absolutely will save you interest. But if you’re not including the balloon payment, you’re not paying off the loan.

When you prepay part of your mortgage, don't you save on how much interest you pay?

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