Why Ford Credit is abandoning Leasing for Mach E

[FredT]

But that's never the full value of the credit in a leasing scenario. You'll get more value from the credit by taking the title.

But I did get the full credit on my last lease, clearly enumerated on the lease documents.

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[Blinkin]

But I did get the full credit on my last lease, clearly enumerated on the lease documents.

Did you get to apply a $7500 credit to your federal tax return? Or did you get the capital cost reduced by $7500? Because those are not the same thing, and you're not eligible to do the former if you don't have possession of the title.

 

[FredT]

Did you get to apply a $7500 credit to your federal tax return? Or did you get the capital cost reduced by $7500? Because those are not the same thing, and you're not eligible to do the former if you don't have possession of the title.

Cap reduction. But really my only objection to Ford Options is that it results in higher sales tax. I'll be keeping the car for only three years, so with Ford Options I'd be paying sales tax up front on the residual at end of contract.

 

[hybrid2bev]

Because with Options it’s a simple interest retail installment balloon note loan. You pay sales tax on the whole cash sales price (follows the normal retail financing tax rules for your location). In that respect there’s not a residual, it’s the second part of your payment schedule.

 

[hybrid2bev]

Having to pay sales tax on the whole amount and the lack of a 24 month option for Options makes it very unattractive to me. Probably unattractive enough to bail on the Mach.

I‘ll call my dealer to see if he has any real options, rather than Ford’s forced upon us Options.

You’re free to finance your purchase at any financing institution, not really forcing you into Options.

I would ask you to keep an open mind until you see what the financing program details are at your time of your delivery.

 

[FredT]

So once again, Ford Motor Company demonstrates a complete lack of effectiveness in communicating.

Why can’t Ford just be upfront, honest and transparent with potential buyers? Why is communicating so difficult for the Ford Motor Company?

If Options is really just the same thing as leasing, but better! than why cant Ford offer a 24 month option, like every other vehicle in their line up? What prevents this? And why must we pay sales tax on the entire vehicle, when with leasing you don’t. ( a non trivial issue in Calif). But Ford wants us to believe that Options is basically the same thing as leasing. It’s not.

If Options is necessary due to the tax credit, than why isnt Options necessary for the other Ford vehicles that have EV tax credits, i.e. Fusion, Aviator, Corsair, Escape? Why is it “exclusive” to the Mach?

So far, Ford can’t/won’t answer these questions, which gets back to the continuing theme on many threads here, and that’s Ford Motor Company’s inability to effectively communicate.

I think if you read what @hybrid2bev says it's pretty clear. Also try this:

Ford Options

Also, state tax rules have nothing to do with Ford. They are set by each state.

 

[FredT]

What??

 

[macchiaz-o]

Options doesn't behave "just like a lease" in important ways.

1) Sales Tax is due on the entire purchase price of the vehicle. With leasing, the sales tax is not based on the sales price or capitalized cost.

2) Options durations are less flexible, there is no 24 month Option available. 36 months is the shortest. Why is that?

3) No Gap Insurance with Options

Did you check to see if California requires sales tax to be paid in full even when payments are made in installments?

If you want gap insurance, buy it.

From your posts, I have the impression that this is pretty important to you -- at least 10 posts mention leasing. Keep in mind that the car's not for sale yet, and we don't yet know what finance options will be offered to you when you're ready for delivery. That said, have you contacted Ford customer service with your concerns? Were they helpful?

 

[hybrid2bev]

Q: Will the Mach-E be available for lease?

A: There will be a lease-like product offered. It will behave just like a lease, but the key difference being that the vehicle will be titled in the customer's name (rather than Ford Motor Company). The reason for this feature is to pass 100% of the government EV tax credit to the customer.


Options doesn't behave "just like a lease" in important ways.

1) Sales Tax is due on the entire purchase price of the vehicle. With leasing, the sales tax is not based on the sales price or capitalized cost.

2) Options durations are less flexible, there is no 24 month Option available. 36 months is the shortest. Why is that?

3) No Gap Insurance with Options


p.s. to Ford, your dealers also claim Options is "just like a lease". Is that what Ford Credit is training them to say?

p.p.s to Ford, if Ford is going to claim this is just like a lease, is it not incumbent upon Ford Credit and the dealers to more accurately disclose why it's not just like a lease?

I can see why Options is not legal in some states.

1. Ford Options behaves like a lease (return option and mileage/wear limits). But it’s structured like a retail installment contract and not lease. That’s why Options is lease-like not lease-exact.

2. How many people would qualify for or sign up for a $1200-$1400 a month payment to get a 24 month term? Very, very few to the point of making it not worth the effort to support having 24 month term available. It’s a lot of work involved.

3. Yes GAP is not automatically included but it is available for purchase if you choose.

The dealer training says lease-like but like all things Mach-E it requires some reading. The Ford Options program has been dormant for several years now. Unfortunately we’re dealing with a relatively low volume Mach-E and even lower volume of Ford Options contracts. So maybe the dealer knowledge and prioritization to learn is not up to Mach-E Forum standards yet.

 

[malba2366]

or this:


Just to keep it simple why that is, let me point out that as an individual you have to earn enough money in the tax year to have a $7500 tax liability. Corporate P&L and tax law is far different than an individual filing a 1040.

But you're probably right - Ford just wants to screw its potential customers so they don't buy their cars.

People who do not have a $7500 tax liability are typically not buying $45-55K cars.

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