Trade in Value

[Ghost Ryder]

A balloon payment is the lump sum due at the end of the Ford Options.

A 3 year Ford Options agreement would have a balloon due at the end of 3 years. Ford Options lowers the monthly payment by putting a bunch of principal due at the end of the contract. You are paying interest on it all along. The main purpose of Ford Options is to lower the monthly payment (like a lease), but give the owner the tax credit.

When the balloon is due, you can 1) hand in the keys, 2)pay off the balloon, or 3) refinance the balloon into another loan.

I'm on a Ford option plan. And to this day, I couldn't tell you the difference between a lease or the option plan, other than I was able to claim the tax credit with the option plan and not a lease.

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[Mach1E]

Interesting...perhaps these first editions are....practice haha. The Chevy Bolt EV is ranked as one of the most reliable cars made, so I guess it depends on the model. Chevy has built/sold quite a few EV's and Hybrids for more than a decade so maybe that plays a part.

For sure.

That’s basically the conclusion the studies came to as well.

“New models” especially those built from the ground up tend to be less reliable than one that’s had years (or decades) to tweak.

My bet is that as time goes on this will probably change and due to the simplicity BEVs could be more reliable.

That said (here comes the conspiracy theory) there’s no $$ in making a car that never breaks. Would cost too much to make one that durable anyways. And we know for a fact manufacturers cut corners making components “good enough.”

 

[Mach1E]

I'm on a Ford option plan. And to this day, I couldn't tell you the difference between a lease or the option plan, other than I was able to claim the tax credit with the option plan and not a lease.

Practically speaking, to the consumer, they work out about the same.

Technically speaking, with a lease you don’t own the car and with options you do.

And both have a “guaranteed value” at the end of the contract. With a lease you have the option to buy at the end, with options, Ford has a requirement to buy at the end.

And maybe the naming was on purpose, but it works similarly to how call and put “options” work on a stock.

A lease would be like buying a call option (you can choose to buy a stock at a future date at an agreed price). And Ford options would be like Ford selling a covered call option (Ford agrees to give someone else the option to buy a stock they own at a future price).

And if that sounds confusing? That’s because options can get complicated quickly.

 

[eastern refugee]

My wife's 2021 Premium AWD with 64,000 miles. The dealer offered me $35,000. The explanation was the car is like an IPHONE. Once a new one comes out the old ones are next to worthless. Talk about insults. The car was $58,000 new.

 

[Electric Pony]

Was just offered 41,800 on my 2021 Premium AWD Extended battery with 6100 miles
on trade for a certified pre owned MY22 Hundai Iconiq 5 Limited with 3200 miles.
They gave me the Hyundai for the weekend. Liked the car, had some really nice features but you know, I didn't love it like I do my Mach-E. The deal was $9000 and the Mach-E, out the door.
I passed.

 

[devmach-e]

My wife's 2021 Premium AWD with 64,000 miles. The dealer offered me $35,000. The explanation was the car is like an IPHONE. Once a new one comes out the old ones are next to worthless. Talk about insults. The car was $58,000 new.

The car does have 64k miles on it. And you got the tax credit, too. $35K is a little low, but not extremely so.

 

[DennisD]

The car does have 64k miles on it. And you got the tax credit, too. $35K is a little low, but not extremely so.

What I think is quite amusing about this whole thread is that people are curious to know why their value has dropped?

If anyone is thinking about trading in a relatively new car for another new one, you are going to take a bath on it. Outside of the last couple of years, one can typically expect to lose a substantial amount if you keep trading it in for new ones.

Those that paid ADM are like those that purchased Enron back in the day. The only difference is that paying high ADM was a sure loser.

 

[J5hort]

Got some initial Vroom, Carvana quotes on my 2021 Select a year after buying. They were in the 50+ range. Not bad for a $36K after dealer, fed and state rebates and the Ford Option plan. I have to keep until 2024 according to MA EV program (although I already received the $2500). I need $26K to break even in 2024. I scare up a few quotes from Vroom/Carvana not that it is a few years old and has 20K miles on it.

 

[eastern refugee]

The car does have 64k miles on it. And you got the tax credit, too. $35K is a little low, but not extremely so.

well that sucks...but thank you......

 

[ronb5000]

Hi all…..I was getting fed up with the little bugs I kept experiencing with my 2021 Premium AWD ER with 38k miles, so I found a dealer willing to buy it for $41k about 2 months ago. The next week Ford announced the price drop and I think that really killed the resell market. My old car still sits on that same dealer lot today priced at $38k. I think my timing was perfect, and if I had waited a few more days, I probably wouldn’t have been able to sell it.

 

[kennethjk]

A balloon payment is the lump sum due at the end of the Ford Options.

A 3 year Ford Options agreement would have a balloon due at the end of 3 years. Ford Options lowers the monthly payment by putting a bunch of principal due at the end of the contract. You are paying interest on it all along. The main purpose of Ford Options is to lower the monthly payment (like a lease), but give the owner the tax credit.

When the balloon is due, you can 1) hand in the keys, 2)pay off the balloon, or 3) refinance the balloon into another loan.

I don’t think it’s been mentioned and I personally haven’t checked this out but if you do return the car to Ford under scenario 1 and hand them the keys , assuming the FMV of the car is $15k and the ballon payment is $20k there may be $5k of forgiveness income to the unsuspecting

 

[Mach1E]

What I think is quite amusing about this whole thread is that people are curious to know why their value has dropped?

If anyone is thinking about trading in a relatively new car for another new one, you are going to take a bath on it. Outside of the last couple of years, one can typically expect to lose a substantial amount if you keep trading it in for new ones.

Those that paid ADM are like those that purchased Enron back in the day. The only difference is that paying high ADM was a sure loser.

For sure this was expected. The “my car is worth $10k more than I paid for it” of the last two years was inevitably going to end.

I guess people hoped it wouldn’t end so quickly though. But personally, I’m surprised it lasted as long as it did.

$36k trade in on a 2 yr old 64k mile car that cost $51k new sounds……. About right.

Figure they’ll try to retail it for $40k.

Would you pay more than $40k for that used car right now?

 

[Regularmache]

If used vehicle loans were still at 1.9% for 5 or 6 years the car would be affordable to more people. With used auto loans in the 7-10% rangel, the monthly payment removes a lot of potential buyers so prices have to move to make you for that.

 

[duckieslight]

My wife's 2021 Premium AWD with 64,000 miles. The dealer offered me $35,000. The explanation was the car is like an IPHONE. Once a new one comes out the old ones are next to worthless. Talk about insults. The car was $58,000 new.

thats not an insulting offer imo, a new 2023 premium awd is in the low 50s today and with the tax credit your talking mid 40s,, your vehicle is 2 years older and with 64,000 miles, based on the mileage 35k is not unreasonable, if you have under 15,000 miles i could see you getting around 38-40k

 

[DennisD]

If used vehicle loans were still at 1.9% for 5 or 6 years the car would be affordable to more people. With used auto loans in the 7-10% rangel, the monthly payment removes a lot of potential buyers so prices have to move to make you for that.

If you are purchasing a used car in a 5-6 year loan, you are doing something wrong. This is the reason many in this Country are upside down. They make unwise purchases.

One should look at no more than 3 years on a used car loan IMO. If it takes 5-6 years, you need to lower your expectations and shop for something one can afford.

The "low" interest rates were allowing people to make stupid purchases. ADM's were looked at as no big deal. They are now wishing (I would assume) they would have never purchased this MME for such an outrageous price.

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