Refinancing Ford Options

[billy_at]

My Ford Options plan is going to end in a few months. In my state (NJ), the contract says that if I decide to keep the car, it rolls over into a new loan with the same monthly payment.

At my current Ford Options monthly payment, the entire balloon will be paid off in less than two years. That's needlessly quick for me - I'd rather have a lower monthly payment and pay it off over three or four more years.

When Ford Options expires, can I refinance the loan into a simple 3- or 4-year auto loan? Can I do that just by calling / writing to Ford Options, or do I need to get a bank to set up the loan?

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[AKgrampy]

My Ford Options plan is going to end in a few months. In my state (NJ), the contract says that if I decide to keep the car, it rolls over into a new loan with the same monthly payment.

At my current Ford Options monthly payment, the entire balloon will be paid off in less than two years. That's needlessly quick for me - I'd rather have a lower monthly payment and pay it off over three or four more years.

When Ford Options expires, can I refinance the loan into a simple 3- or 4-year auto loan? Can I do that just by calling / writing to Ford Options, or do I need to get a bank to set up the loan?

I think your best option is to contact Ford Credit to see what financial options are open to you. If they do not meet your needs then you may need to refi thru another source.

 

[hybrid2bev]

My Ford Options plan is going to end in a few months. In my state (NJ), the contract says that if I decide to keep the car, it rolls over into a new loan with the same monthly payment.

At my current Ford Options monthly payment, the entire balloon will be paid off in less than two years. That's needlessly quick for me - I'd rather have a lower monthly payment and pay it off over three or four more years.

When Ford Options expires, can I refinance the loan into a simple 3- or 4-year auto loan? Can I do that just by calling / writing to Ford Options, or do I need to get a bank to set up the loan?

The max refi term is 36 months and you'll keep the same interest rate with no credit check. The contract should say something to the effect of you can refi for 36 months or less to keep the same monthly payment.

It does not simply 'roll over' into a new loan, you have to call Ford Credit after your last regular payment has posted and setup a refi of the existing loan.

You can refi with another bank/CU, but probably at a higher interest rate and an inquiry on your credit.

 

[eStang]

The max refi term is 36 months and you'll keep the same interest rate with no credit check. The contract should say something to the effect of you can refi for 36 months or less to keep the same monthly payment.

It does not simply 'roll over' into a new loan, you have to call Ford Credit after your last regular payment has posted and setup a refi of the existing loan.

You can refi with another bank/CU, but probably at a higher interest rate and an inquiry on your credit.

Can confirm what is stated here - this is what I did. Super easy to accomplish over the phone with a call to Ford Credit. You will keep the same interest rate that you originally had. Note that they cannot initiate the process until after your last regular payment posted. So call them at the beginning of the month when the balloon payment comes due. You'll get a confirmation and new terms showing up in the Ford Credit app within a day.

 

[ridgebackpilot]

My memory of the Ford Options contract is hazy. Don't we also have the option to trade in our MMEs on a new Ford EV? If so, how is the value of our current MME calculated?

If anyone has done this, I'm curious what terms you were offered for the deal?

 

[eStang]

My memory of the Ford Options contract is hazy. Don't we also have the option to trade in our MMEs on a new Ford EV? If so, how is the value of our current MME calculated?

If anyone has done this, I'm curious what terms you were offered for the deal?

if you turn it in as part of a trade, the recovery fee (or whatever they call it - like $500) is waived - and your balloon payment is forgiven. You get no value toward the replacement vehicle.

 

[hybrid2bev]

My memory of the Ford Options contract is hazy. Don't we also have the option to trade in our MMEs on a new Ford EV? If so, how is the value of our current MME calculated?

If anyone has done this, I'm curious what terms you were offered for the deal?

See if this helps. (It's a long page, keep scrolling)

https://www.ford.com/finance/finance-options/ford-options/

 

[benk016]

if you turn it in as part of a trade, the recovery fee (or whatever they call it - like $500) is waived - and your balloon payment is forgiven. You get no value toward the replacement vehicle.

That is incorrect. If you trade in for another Ford, it is like any trade, and any equity of the vehicle goes towards the new loan.

There are 3 options

If you just turn the car in without a trade, then the balloon is forgiven, and no equity paid out.

 

[AKgrampy]

That is incorrect. If you trade in for another Ford, it is like any trade, and any equity of the vehicle goes towards the new loan.

There are 3 options

If you just turn the car in without a trade, then the balloon is forgiven, and no equity paid out.

But what if there is negative equity?

 

[hybrid2bev]

But what if there is negative equity?

If you TRADE the car in that is when the value is important, if you have negative equity it would be dealt with on your new financing either by paying it down or refinancing it with another lender. In this case you should consider how much negative equity there would be if you trade vs. charges of just turning the car in.

But, if you TURN the car in then the balloon amount from your contract is applied as a credit towards your loan outstanding balance. The current vehicle wholesale value is not relevant. You'll pay for any excess mileage/wear, disposal fee and any past due amounts/charges.

 

[benk016]

But what if there is negative equity?

If you have negative equity, you would be smart to just pay the $475 fee, and let them have it to satisfy the contract.

If you're buying another car, just do it as a purchase without trade.

 

[AKgrampy]

If you have negative equity, you would be smart to just pay the $475 fee, and let them have it to satisfy the contract.

If you're buying another car, just do it as a purchase without trade.

That is what I have been thinking but have another 19 months to go.

 

[HuntingPudel]

I am probably going to refinance my balloon payment. Partially because the car will have *some* value after the final payment is made on the balloon (vs. knowing it's going to be worth less than the balloon payment when the balloon comes due). Partially because obtaining a replacement car in the exact configuration I want between the date of my final normal payment and the date that my balloon comes due is super-iffy. Partially because my current interest rate (and if that interest rate holds for the refinance on the balloon) is very small. Of course, I might change my mind if a dealer gets a car in exactly how I want it and Ford has some screamin' deal on them during those 30 days between payment #47 and the balloon being due. ?‍?

 

[eStang]

That is incorrect. If you trade in for another Ford, it is like any trade, and any equity of the vehicle goes towards the new loan.

There are 3 options

If you just turn the car in without a trade, then the balloon is forgiven, and no equity paid out.

Thanks for the correction/clarification. In my case my equity was negative, and dealer recommended turning it in, and they were going to cover the disposal fee in the form of a discount on the new car. So it wasn't going to technically be a trade in.

In the end, I just re-fied balloon since there wasn't enough difference/improvement in ride quality. Will be likely replacing it with something else TBD.

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