Problem with pre-paying Ford Options lease.

Rich_Maine

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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.
Hi,

I also took the options plan to get the $2500 discount. When I received my first bill, there was a payoff amount shown at the top. I sent that amount in in lieu of payment. I received a small check a couple of weeks later to repay interest overcharge. My title arrived shortly thereafter. I did not contact Ford at all.

But a sidenote....when I bought the car at dealer, FI lady warned me that I would have to pay full loan amount even if prepay. I pointed out the reg Z clause to her but she didn't waver. I knew she was wrong but she probably got some training to that effect. I also mentioned that the dealer might be a clawback of the 2500. I offered to split that for a discount and keep the loan for 6 months. She told me that would never happen. So of course I paid in full at first bill and hope she got stuck for the credit!

Just send them the payoff amount, it's also shown in your online account.
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MachTee

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Hi,

I also took the options plan to get the $2500 discount. When I received my first bill, there was a payoff amount shown at the top. I sent that amount in in lieu of payment. I received a small check a couple of weeks later to repay interest overcharge. My title arrived shortly thereafter. I did not contact Ford at all.

But a sidenote....when I bought the car at dealer, FI lady warned me that I would have to pay full loan amount even if prepay. I pointed out the reg Z clause to her but she didn't waver. I knew she was wrong but she probably got some training to that effect. I also mentioned that the dealer might be a clawback of the 2500. I offered to split that for a discount and keep the loan for 6 months. She told me that would never happen. So of course I paid in full at first bill and hope she got stuck for the credit!

Just send them the payoff amount, it's also shown in your online account.
Oh that's a slick way to try to get $1250 from them LOL. Same here I paid it off fully 2 weeks after I took delivery. Just came here to update that I also received a small check from Ford for over payment of interest. The difference here is my state is taking 8-12 weeks to title the car so it'll be at least that long before I receive the title.

Is there really a clawback clause? I told them multiple times that I was going to pay it off right away and that I was only interested in Options because of the $2500. If they did get a clawback, not my problem :p

And BTW the OP wasn't interested in a full payoff which includes the balloon payment. He only wanted to pay the 35 remaining payments without paying the balloon.
 

Accord07

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I understand that this thread is about reducing the amount of overall interest payment, and my opinion is probably among the minority here, but I won't make payments early after my order is delivered and all the papers are signed. I took out a loan for the last three cars I bought even though I could have paid all cash up-front, because it was easier for my cash flow: the interest rates were low enough that it made more sense for me to leave the money in investments. During the loan period that included 2008 the investments barely broke even so I incurred a net cost due to interest payments, but for the other two the returns easily outstripped the interest expenses. There are inherent risks involved with all investments, while savings on interest expense are guaranteed by making loan payments early. It depends on each individual's situation and risk tolerance.
 

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Following up on what Accord07 just said, and maybe this is obvious, but is getting the extra $2500 off the reason for doing the Ford Options approach even if you want to pay the entire amount (36 mos plus balloon) right away? I'm not seeing any other reason but maybe I'm missing something.
 
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Sleep7

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Following up on what Accord07 just said, and maybe this is obvious, but is getting the extra $2500 off the reason for doing the Ford Options approach even if you want to pay the entire amount (36 mos plus balloon) right away? I'm not seeing any other reason but maybe I'm missing something.
That's why I did it
 


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That's why I did it
I did it for the $2,500 incentive. The $2,500 was added to my down payment, reducing the price of the car.

I knew I wanted to keep the car, so paid off in entirety at first payment about 40 days later with $80 interest. Final savings = $2,420.
 

bs1055

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I did it for the $2,500 incentive. The $2,500 was added to my down payment, reducing the price of the car.

I knew I wanted to keep the car, so paid off in entirety at first payment about 40 days later with $80 interest. Final savings = $2,420.
I think I will go this route as well.
 

GrisGris

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The 35 monthly payments before the balloon payment can be prepaid with the following results. The final balloon payment due will be reduced exactly by the amount of interest saved (interest prepaid plus interest pre-compounded). Conversely, turning the car back in will result in a refund of the amount of interest saved. The 36 months of interest on the balloon principal will still be paid either way. The 36 months of interest on the rest will be saved.
But if you prepay all your pre-balloon installments don't you continue to get billed monthly for the same principal+interest payment? I would love to prepay this to avoid that portion of the interest (so, only incur interest on the balloon/residual) for the 36 months but I don't want to reduce the benefit of (and only reason I did) Options - the guaranteed ~$24k residual value.
 

Alan

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But if you prepay all your pre-balloon installments don't you continue to get billed monthly for the same principal+interest payment? I would love to prepay this to avoid that portion of the interest (so, only incur interest on the balloon/residual) for the 36 months but I don't want to reduce the benefit of (and only reason I did) Options - the guaranteed ~$24k residual value.
Once the sum of all payments equals or exceeds the minimum monthly payment times 35, then there will be no further billing. When the total payments occur before the 36th month, then some interest will have been paid that was not due, and that amount will be subtracted from the final balloon amount if you keep the car, or refunded if you turn the car in.
 

GrisGris

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Once the sum of all payments equals or exceeds the minimum monthly payment times 35, then there will be no further billing. When the total payments occur before the 36th month, then some interest will have been paid that was not due, and that amount will be subtracted from the final balloon amount if you keep the car, or refunded if you turn the car in.
That's great! Is that what you did?
 

jennq

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I think I will go this route as well.
But don't forget there is also the $475 disposal fee. Still a good deal as you get almost 2k from Ford to do it that way.

Edit: I think this is inaccurate. Now that I read it more clearly it seems that one would only pay that fee if they turn the car back into Ford, which one wouldn't do if one were paying the loan off. Right?
 
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bs1055

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But don't forget there is also the $475 disposal fee. Still a good deal as you get almost 2k from Ford to do it that way.
Thank you, I didn't know this. Is there any other downside to doing this? Assuming you're in a position to pay it off in this manner at all.
 

jennq

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Thank you, I didn't know this. Is there any other downside to doing this? Assuming you're in a position to pay it off in this manner at all.
Ok, wait, I think I got this wrong. Looks like you only pay the disposal fee if you turn the car back in. Not if you keep it. And if we are paying it off, we are keeping the car. I'm pretty tired. Does that seem to be what this says?

Also, when I use the calculator at Ford.com it only seems to give me two options: to calculate an Options payment, or pay cash. I think I read somewhere else on here that there is no traditional lease for MME? So much to read. Glad we have time!

Ford Mustang Mach-E Problem with pre-paying Ford Options lease. 1628054816929
 
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macchiaz-o

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Ok, wait, I think I got this wrong. Looks like you only pay the disposal fee if you turn the car back in. Not if you keep it. And if we are paying it off, we are keeping the car. I'm pretty tired. Does that seem to be what this says?

Also, when I use the calculator at Ford.com it only seems to give me two options: to calculate an Options payment, or pay cash. I think I read somewhere else on here that there is no traditional lease for MME? So much to read. Glad we have time!

Ford Mustang Mach-E Problem with pre-paying Ford Options lease. 1628054816929
You only owe the $475 disposition fee if you return the vehicle to Ford at the end of the term. If you buy the car you do not owe a disposition fee.

Yes you can get the "Red Carpet Lease" for the Mustang Mach-E. The rates are not as good. But if you are in a situation where you don't qualify for the full federal tax credit, and you don't plan to keep the vehicle more than 2 or 3 years, then RCL may be an option worth considering.
 

MachoHulkWarrior

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Question for everyone - where do I find info about the incentive for Ford Options? I went to their website and didn't see any incentive mentioned. Was it only for a limited time?
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