Update to financing options?

[eastern refugee]

With deliveries imminent what are most people going to do

finance

or

options

I sit here and look at all of these numbers and well trying to get a vibe on the majority. Let’s forget the $7500. Just asking options versus financing. This question is excluding tax implications. Just strictly one payment versus the other

1. what is your choice

2. why the choice

Sponsored

 

[jhalkias]

With deliveries imminent what are most people going to do

finance

or

options

I sit here and look at all of these numbers and well trying to get a vibe on the majority. Let’s forget the $7500. Just asking options versus financing. This question is excluding tax implications. Just strictly one payment versus the other

1. what is your choice

2. why the choice

People where Options customer cash is $2500 are leaning more toward options, and where it is only$1,000 more toward the .9% financing.

 

[eastern refugee]

People where Options customer cash is $2500 are leaning more toward options, and where it is only$1,000 more toward the .9% financing.

What I think would be the NEXT great financing tool would be to add a NEW option to the Options aspect. You have the 3 choices today

Return
Buy
Walk away.

What if you could have the option to have at the beginning an already credit approved buy at the end of the option turn. Think of it this way.

Instead of not knowing what the balloon refi price would be it could be part of the contract?? So say at the end of the 3 or 4 year option term you could buy the car at a guaranteed say 5% because it is used. However instead of having ZERO idea what it would be now you know it at day 1. It would create a guaranteed second sale on the same car. In this way technically you woukd be taking say a $60,000 car and giving it an 8 or 9 year term as an option. At 19500 miles per year the guaranteed price is $17,000. Well if I have a pre negotiated contract the interest rate becomes less important. A $17000 car the payment might be say $450. Well if you are currently paying $850 which is close to the option price on a $60,000 FE now I get to keep my car at 50%
LESS payment it might be a good choice. OTA means my car is essentially new. But I love my car and the payment drops. Hmmm Ford could now sell that same car for say $65,000 increase the guaranteed price say to $20,000 and guarantee a second sale because I NOW have the choice to buy my car and cut the payment by day 50% but I KNOW this now because it is in my lease package. I could say have a predetermined interest rate as an option at a cost line you do a warranty. Your car is X price but if you want to guarantee a X interest rate at the end you can pay an extra $10 per more month NOW and have that interest rate/payment guaranteed without credit approval.

 

[hybrid2bev]

What I think would be the NEXT great financing tool would be to add a NEW option to the Options aspect. You have the 3 choices today

Return
Buy
Walk away.

What if you could have the option to have at the beginning an already credit approved buy at the end of the option turn. Think of it this way.

Instead of not knowing what the balloon refi price would be it could be part of the contract?? So say at the end of the 3 or 4 year option term you could buy the car at a guaranteed say 5% because it is used. However instead of having ZERO idea what it would be now you know it at day 1. It would create a guaranteed second sale on the same car. In this way technically you woukd be taking say a $60,000 car and giving it an 8 or 9 year term as an option. At 19500 miles per year the guaranteed price is $17,000. Well if I have a pre negotiated contract the interest rate becomes less important. A $17000 car the payment might be say $450. Well if you are currently paying $850 which is close to the option price on a $60,000 FE now I get to keep my car at 50%
LESS payment it might be a good choice. OTA means my car is essentially new. But I love my car and the payment drops. Hmmm Ford could now sell that same car for say $65,000 increase the guaranteed price say to $20,000 and guarantee a second sale because I NOW have the choice to buy my car and cut the payment by day 50% but I KNOW this now because it is in my lease package. I could say have a predetermined interest rate as an option at a cost line you do a warranty. Your car is X price but if you want to guarantee a X interest rate at the end you can pay an extra $10 per more month NOW and have that interest rate/payment guaranteed without credit approval.

Here is what the back of my Options contract says. If you are not in default you can for sure refi the balloon. The refi the monthly payment will be the same as my monthly payments were as long as I refi for 36 months or less.

 

[AndyS_OSU]

Here is what the back of my Options contract says. If you are not in default you can for sure refi the balloon. The refi the monthly payment will be the same as my monthly payments were as long as I refi for 36 months or less.

So a refi at 2.25%? That would be pretty good actually

 

[dtbaker61]

So a refi at 2.25%? That would be pretty good actually

if that is the rate 4 years from now....

 

[hybrid2bev]

So a refi at 2.25%? That would be pretty good actually

It doesn't say the rate will be the same only the payment at 36 months.

 

[dtbaker61]

I have asked my dealer to look into the 'Options' plan, and be ready to explain it to me.... if indeed the rate is .9% for 48 mo, with a $1500 incentive, that's free money. I can always re-fi with my bank at the end if I want to.

my bank is offering 2.25% for 60 mo right now. so, the Options Loan sounds better 'for now'.

 

[hybrid2bev]

I have asked my dealer to look into the 'Options' plan, and be ready to explain it to me.... if indeed the rate is .9% for 48 mo, with a $1500 incentive, that's free money. I can always re-fi with my bank at the end if I want to.

my bank is offering 2.25% for 60 mo right now. so, the Options Loan sounds better 'for now'.

The tier 0/1 Options rate is 2.25% not 0.9%. You're conflating the APR financing with Options.

 

[dtbaker61]

The tier 0/1 Options rate is 2.25% not 0.9%. You're conflating the APR financing with Options.

oh shoot, just when I thought I had it figured out. I guess I need a summary as I got lost in the thread.....

in VERY basic terms, what are the choices for financed purchase (not Lease).
- 2.25% 48mo Options plan, with balloon at end of term
- .9% APR for ?? mo

 

[mburtsvt]

At the end of the day "options" would be the best for me as long as the $2500 incentive is still available at point of purchase. Even if I refinance the whole thing in 6 months it's still $2500 in my pocket.

 

[AndyS_OSU]

It doesn't say the rate will be the same only the payment at 36 months.

Man I'm confused. My 48 month Options plan payment NOT including taxes will be around $670/mo. If that stayed the same over a 3year refi of my estimated $17k ballon note I'd effectively be paying some astronomical interest rate at that point, right?

 

[hybrid2bev]

Man I'm confused. My 48 month Options plan payment NOT including taxes will be around $670/mo. If that stayed the same over a 3year refi of my estimated $17k ballon note I'd effectively be paying some astronomical interest rate at that point, right?

Your monthly payment with Options should already include taxes (because it's like a normal retail loan not a lease). My interpretation is that you could just shorten the term of the refi to keep your payments the same. But you're right that the rate could change.

 

[macchiaz-o]

Here is what the back of my Options contract says. If you are not in default you can for sure refi the balloon. The refi the monthly payment will be the same as my monthly payments were as long as I refi for 36 months or less.

What does it say for option 3?

 

[hybrid2bev]

What does it say for option 3?

** Be sure to read your own contract too **

Sponsored