Can you prepay or “pay off” your lease?

[Techun]

I’m pretty sure you never want to prepay a lease. I think if you wreck it you won’t get your money back.

Correct. With a lease you want to put as little down as possible!

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[Jfman]

Alright thanks for the heads up everybody. I will inquire to verify just in case.

 

[mike8675309]

If you lease a Bronco, can you later pay off your lease to avoid paying interest on it?

I may lease my ordered Bronco for tax purposes and I was hoping I could pay off the lease early with the money I have saved up.

Thank you all.

It's not interest on a lease. Instead, it's a Money Factor, and that number is predetermined when the lease is written and doesn't change over time. If they let you buy out, you will have to pay off the amount of your lease plus the residual value which is all documented in your lease paperwork.

 

[Lifeliberty]

It is possible that because of finance laws in Canada it works differently there, but in the US you can think of it like rent to own. When you rent an apt, you sign the lease for a certain amt over a certain period of time, you owe that amt.

And with rent to own, at the end of the lease you have the option to buy, and your lease payments lowered the amt owed to buy. Or you can just walk away but you get nothing back

 

[Boxer4]

It's not interest on a lease. Instead, it's a Money Factor

To convert the money factor to an interest rate multiply it by 2400
Ex. Money factor = .0029166 ( x 2400 ) = 7% interest rate

 

[JohnnyBronco]

I didn't think you were able to lease the Bronco yet?

Been leasing mine from delivery 16 months ago

 

[JohnnyBronco]

Your dealer can negotiate an early "buyout" of your lease. And due to desirability they may offer you more than you owe as they can then resell at substantial profit.

Let's consider hypothetical . Msrp $60k with a 60% residual means at lease end your vehicle for you to buy is $36k. But it is worth $50k on open market. You can buy and resell and even factoring in sales tax on purchase can easily clear $10k. Dealer does not pay tax so they can clear much more and they also might get to buy it at less than your buyout price.

 

[KompressorV12]

Never ever prepay a lease lol EVER. Set aside the fact you’d lose that money in case of accident or theft, you get nothing in return. Basic savings accounts are topping 5% APY right now

 

[Stlrfan152]

I’m pretty sure you never want to prepay a lease. I think if you wreck it you won’t get your money back.

Ive heard this too

 

[Jfman]

This guy says that Ford does not use a money factor, uses interest. He also states that you pay interest on the whole value of the car and not just on the lease amount.

 

[Jfman]

Update: I leased the car in March and could not prepay the lease as advised here.

I instead put my money in a money market fund that yields just a little bit less than what the rate I have so it evens out.

Also: Back in March was able to lower my lease interest rate to 5.49%(instead of the advertised 6.99%) by making a special 7700$ refundable deposit (not a down payment) with Ford Credit which is the equivalent of ten lease payments as it was explained to me.

I get the 7700$ back at the end of the lease and even if the vehicle is totalled, the 7700$ comes back to me.

I am in Quebec Canada and here they call this “dépôt multiple” -rough translation “multiple deposits” where you set money aside with the creditor for leased vehicle to get a rebate on the lease rate.

 

[BroncocnorB]

This guy says that Ford does not use a money factor, uses interest. He also states that you pay interest on the whole value of the car and not just on the lease amount.

He’s an idiot

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