Question about the Ford Options "Renew" choice

[RMoore]

According to the Ford Options plan (https://www.ford.com/finance/finance-options/ford-options/) one can elect to Renew:

Renew: Replace with a new Ford or Lincoln.
Trade in or sell the vehicle to a third party and apply the proceeds to your remaining account balance. Any excess value after settling the account may be used as a down payment toward your new Ford or Lincoln.

Or, one can elect to Retain (can also return, but that's not relevant to my question):

Retain: Keep the vehicle.
Satisfy the account with Ford Credit by paying the final balloon payment and any remaining balance.

Let's say you choose to Renew. If you trade it in to the dealer I assume they will then apply the residual value to the balloon payment, the lender will release the lien, and you can then proceed with the purchase of a new Ford. Another Renew scenario is selling your Mach E privately and using the proceeds to pay off the balloon payment. In that second Renew scenario, how is the Renew option different from the Retain option where you Retain as described above but decide to sell privately, other than you've decided to buy a Ford after you've settled your debt? Is there some other benefit you get if you elect the Renew option and make a commitment to buying a Ford? Let's say you want to Renew and trade in, but the new Ford that you want won't be available when the Options agreement ends--what happens then? Does Ford cancel your debt (i.e. pay off your balloon) and credit you with any difference between the value and the balloon (assuming value > balloon) and you put your order in and wait?

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[spanky99L]

Your making an assumption that the value of the vehicle is MORE than the balloon payoff. If it isnt, you would have to pay the difference. But if thats the case, it's better to just give it back to them.

 

[hybrid2bev]

According to the Ford Options plan (https://www.ford.com/finance/finance-options/ford-options/) one can elect to Renew:

Renew: Replace with a new Ford or Lincoln.
Trade in or sell the vehicle to a third party and apply the proceeds to your remaining account balance. Any excess value after settling the account may be used as a down payment toward your new Ford or Lincoln.

Or, one can elect to Retain (can also return, but that's not relevant to my question):

Retain: Keep the vehicle.
Satisfy the account with Ford Credit by paying the final balloon payment and any remaining balance.

Let's say you choose to Renew. If you trade it in to the dealer I assume they will then apply the residual value to the balloon payment, the lender will release the lien, and you can then proceed with the purchase of a new Ford. Another Renew scenario is selling your Mach E privately and using the proceeds to pay off the balloon payment. In that second Renew scenario, how is the Renew option different from the Retain option where you Retain as described above but decide to sell privately, other than you've decided to buy a Ford after you've settled your debt? Is there some other benefit you get if you elect the Renew option and make a commitment to buying a Ford? Let's say you want to Renew and trade in, but the new Ford that you want won't be available when the Options agreement ends--what happens then? Does Ford cancel your debt (i.e. pay off your balloon) and credit you with any difference between the value and the balloon (assuming value > balloon) and you put your order in and wait?

If you trade it in to the dealer I assume they will then apply the residual value to the balloon payment, the lender will release the lien, and you can then proceed with the purchase of a new Ford.

• No. If you trade it in the dealer will apply the trade in value that you and the dealer agree to. If that is more than you owe, you keep the equity. If the trade in value is less than you owe you will have to make up the difference (out of pocket or roll negative equity into a new loan).

how is the Renew option different from the Retain option where you Retain as described above but decide to sell privately,

• It's a matter of timing. You can sell it privately before or at the time the balloon is due is the renew option. If you want to sell it privately at a later time (after the balloon is due) you need to either refinance or payoff the balloon.

Is there some other benefit you get if you elect the Renew option and make a commitment to buying a Ford?

• Maybe but not specifically for Options. Sometimes there is renewal customer cash offered by Ford but not specially because of Ford Options.

Let's say you want to Renew and trade in, but the new Ford that you want won't be available when the Options agreement ends--what happens then? Does Ford cancel your debt (i.e. pay off your balloon) and credit you with any difference between the value and the balloon (assuming value > balloon) and you put your order in and wait?

• When the term is up you need to take action. If you have a vehicle on order and you want to keep the Mach-E until your new vehicle arrives you'll need to refinance or payoff the balloon to retain the vehicle. When your new vehicle arrives you can trade in the Mach-E or sell it privately.
• If you don't want to keep the Mach-E while you wait you can Return it. The balloon amount is applied towards the amount that you owe. You are responsible for any difference still due, mileage/wear charges and the disposition fee.

 

[RMoore]

If you trade it in to the dealer I assume they will then apply the residual value to the balloon payment, the lender will release the lien, and you can then proceed with the purchase of a new Ford.

• No. If you trade it in the dealer will apply the trade in value that you and the dealer agree to. If that is more than you owe, you keep the equity. If the trade in value is less than you owe you will have to make up the difference (out of pocket or roll negative equity into a new loan).

Thanks for the reply, much appreciated. Yes, I was assuming that the value exceeded the balloon (by at least the $475 disposal fee) since as @spanky99L aptly points out, there wouldn't be much point in renewing--might as well return and not owe more than $475.

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