Financing the 2021 Bronco

[Dick_Castlesmurff]

Your credit score isn't the end all be all of the rates you'll be offered.

The rates you are offered will be based on (in roughly this order) the amount of the loan, your debt to income ratio, your credit score, number of your active credit lines with balances, and the length of the loan.

I was once offered a disappointing rate because I hadn't consolidated my student loans, to me was one loan, but to the banks it was 14 loans, even though I had an 820 at the time, what they were more concerned about was my debt income ratio and that I had so many open loans. I called a few different places and they all told me the same thing and offered me the same rate. Ultimately I went with the dealership because the best rate was on their longest term loan. (This is okay - as long as you pay it off early, aka make payments as if its a 4 yr loan even though it's a 6 yr loan or whatever.)

Given those factors, different institutions will sometimes offer different rates, so it's always worth calling around - but typically its the better off you are financially the more institutions will compete for your loan.

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[NayNay]

Angry emails? Geez. I'm glad you're helping folks out. It would suck to see a bunch of excited enthusiasts get fleeced at the dealership because they're taking any deal in order to drive off in their new bronco.

I've actually found that when I take the time to truly explain things to people it works both ways. They are empowered when doing their deals and they also tend to be more likely to purchase from me with less issues/problems. They are more comfortable buying added products at FAIR prices (some places kill people on them). And we get perfect surveys which are extremely important.

 

[JayKrup]

Navy Fed 1.9%

 

[Dick_Castlesmurff]

Say I make 3500-4500$ a month (not consistent numbers because I work a flat rate job), have a 720-730 credit score, and I put up to 10k$ down. Would it be likely I could get approved for a badlands? I assume it’ll cost around 45k$ after fees and whatever few options I add. I’ve never purchased a brand new vehicle or financed before so I need advice.

Edit: 2 door manual badlands without Sasquatch is what I want.

There is nothing stopping you from calling a few banks and credit unions right now to see what they would offer you on a $35,000 car loan (45k car with 10k down.) Given you have about 10 months before you can actually buy the car, you'll be able to either save for a bigger down payment/pay down your existing debt/otherwise improve your financial profile.

But here is the huge elephant in the room.

The thing you don't want to hear, is that you really should NOT be looking to buy a deprecating asset (car) that costs as much as you make in one year. The banks will 100 percent let you do it, the dealers will let you do it, but man I wouldn't recommend it regardless of the interest rate you get. Wait and save for 4 years and buy a used one for ~$22K.

Also consider this, one of the funnest cars I've ever owned was a 1985 Bronco II. I was able to beat the ever loving shit out of it because it was worthless. (I'm actually surprised at their value now, but still you could buy one with cash and sell it for what you bought it for in 4 years- unless you actually destroy it.)

But dad speech over. You'll survive either way.

 

[NayNay]

I want to sincerely thank you for your input here on B6G. It is good for a lot of people to understand financial terms and rates from your side of things since this is what you do every day. There are a lot of people on here that don’t know too much about Debt to Income, credit scores, and terms of the loan vs rebates and it helps to have you explain it so that everyone can know what to expect. Knowledge is power and like I said in my other posts every single one of us needs to become financially literate to build a strong foundation for our future and if that means waiting a year or two for the bronco because you currently have to much debt than so be it. Your future self will thank you for not taking on more than you can handle.

Thank you. I agree. I think what some places miss, that I never do being in a small dealership, is that I want my customers educated, I want them to be empowered, I want them to walk away with clear understanding of what they did and why. This in turn puts them in a position to trade later on and not be buried under water. This benefits the little dealership like us. My customers relationships with our dealership is vital. I absolutely understand that I work for my customers and they are my boss.

 

[Washbjj88]

When I bought my current Ford 6 years ago I walked into the dealer with financing from a credit union and asked if they could beat it and they did probably going to do the same with the bronco.

 

[Dick_Castlesmurff]

@NayNay Thanks for all the info here! I have a score somewhere in the 700s, an income well in 6 digits, and I'm shooting for a 50%+ down payment... but my DTI is probably horrible because of hundreds of thousands in student loans I'm working on. Will I be one of those freak cases to get rejected? Bad terms wont scare me much, I'd just pay it off within a year, but I'm a bit worried I won't get approved to begin with?

From personal experience student loans affected the rates I was offered not because of the total amount but because I didn't have them consolidated so to the banks it looked like 14 separate open loans. (I didn't consolidate because I didn't want to give up on certain benefits.) That being said, I wouldn't be concerned with being outright rejected. Might just add a point to what you're offered.

 

[Bronco4lyfe85]

I’m sure NayNay will chime in here but to kind of answer your question... Student loans are sometimes looked at in a different category than credit cards, auto loans, and Mortgages. They group student loans differently now when calculating DtI since most people now have huge student loans and it was something you took on to further your education and career. At least that’s how the CU I worked for did it, they placed it in a different category. But for the love if God please everyone look at your financial situations and see if you can actually afford this Bronco. It’s sad to see family and friends get stuff taken away from them since they lived above their means.(not saying you are one of those just saying it to everyone in general)

I’m 35 so I can say this but so many idiot kids these days think they deserve the world and they’re buying 50K SS Camaros on $18 an hour, I’ve seen it personally. Our society is obsessed with NOWWWWWW and everyone just has to have everything they want whether they can afford it or not. I was never as bad as these kids but I was careless with money when i was younger. My credit profile, bills I had to pay and garnishments I had to pay for were a hard lesson.

But within 5 years I paid off all of that, I bought a house and a 50K car for myself and I have slowly added new credit cards that I pay off 100% every month to reap the rewards. I’ve calculated everything involved in buying this Bronco and with the added payment I’ll be at 38% and I am more than happy with that. Especially knowing my DTI will go down as I pay off my student loans and refinance my house to remove the PMI. I’d like to be around 28-30% with the cars within the next 3-5 years which is doable. That way before 40 I can truly enjoy life and travel and be care free financially.

 

[siddious33]

if interest rate is low then it’s not that brutal. A 45k loan @ 3% over 72 months is only an extra $1200 or so in interest over the term vs. a 48 month loan. Make some extra payments here and there and that will be reduced. I’ve never done an 84 month loan.

I've actually done a 120 month loan before. I didn't carry it to term. Put a reasonably large down payment on the car and paid it down early. I then sold the car before I hit the ten year mark anyway. At the time of the loan the rate difference from 72 months to 120 months at my credit union was less than 1 percent.

I'm not recommending anyone go do that, but in my situation, it got the monthly payment for a high end specialty car down fairly low. I paid more than that per month, but I had to option to pay less if I needed the cash flow for some reason. Any way, I ended up paying the whole thing off less than six years in, and then sold that car not long after that so I was basically buying the options of a lower monthly payment and a longer term if I needed it by upping the interest rate a very small amount.

It took discipline to always pay a much larger amount each month than the set payment, but it was not a bad situation if you commit to doing it that way.

Now I agree, if you're stretching just to get into a car by doing a really long loan and even that monthly payment is going to be dicey for you, that's a bad idea. You're going to struggle to make that payment and if you take the full term to repay the car, 10 years is a LONG time to do that. Even with a down payment, you'll likely be upside down on any car for years and years and years with that loan. If you do something like an 84 month or longer loan at least put Gap Insurance on the car to protect yourself if it's a total loss.

 

[CrazyHorse]

It's my understanding that the rates are locked with the Ford Financing for few weeks at time, from 8/18-9/8 currently. No one know what the rates will be like next year and what the Fed will be doing. Ford usually offers these across the whole line except for the low-volume, specialty vehicles like GT(500)s and Raptors. It's unreasonable for them to aim at moving 200k units if they bump up the rates. One of the financial newsletters from MotleyFool mentioned that Ford has one of the highest margins on the Bronco, at nearly $7500 per unit.

 

[da_jokker]

Ya know... elections are coming up. Depending on how people vote, not only will everyone have the RIGHT to buy a house, have internet, and have a cell phone on a Min wage job, but maybe they will toss in a Bronco as well because it's up to the "Rich" to make sure the "poor" get all life's rewards too!

But seriously... my financial plan.... buy a crap load of Apple and Amazon and double my $$ before now and delivery day.. will more than pay for whatever trim/package I want

 

[LarryZiegler]

It's my understanding that the rates are locked with the Ford Financing for few weeks at time, from 8/18-9/8 currently. No one know what the rates will be like next year and what the Fed will be doing. Ford usually offers these across the whole line except for the low-volume, specialty vehicles like GT(500)s and Raptors. It's unreasonable for them to aim at moving 200k units if they bump up the rates. One of the financial newsletters from MotleyFool mentioned that Ford has one of the highest margins on the Bronco, at nearly $7500 per unit.

With COVID-19 affecting the economy, I don't see the Fed making any upwards adjustments as they have just recommitted to leaving things close to 0 until at least 2022. I just re-fied my house at a 30 year fixed rate of 2.6% and I have heard the rate has come down to 2.4%. We are seeing house prices increasing as a result of these unheard of low interest rates in combination with a low inventory of available houses for sale and a low volume of new construction. I have some peripheral involvement with Habitat For Humanity and COVID-19 has slowed completed construction of these homes by several months.
Auto sales are an important factor in the economy, thus I see low/tiered financing rates for the Bronco being available next year as the economy recovers, although the election results come November could create some change.

 

[Straight 6]

Not really......in the realm of sales both vehicles are hoped to be 6 figure sellers. If we were comparing Vehicles with different production goals, like the Raptor F-150 you’d be right. The Bronco is not a low production vehicle

But they're not the same vehicle

Would you expect ecosport financing to be the same as transit financing? Or escape financing to be the same as f250 financing?

Sales goals, market demand, competition all play a part in what offers are made.

Just because both have bronco in the name I wouldn't count on the same incentives and programs.

 

[Straight 6]

Ya know... elections are coming up. Depending on how people vote, not only will everyone have the RIGHT to buy a house, have internet, and have a cell phone on a Min wage job, but maybe they will toss in a Bronco as well because it's up to the "Rich" to make sure the "poor" get all life's rewards too!

But seriously... my financial plan.... buy a crap load of Apple and Amazon and double my $$ before now and delivery day.. will more than pay for whatever trim/package I want

Dude. People shopping for bronco's are the poor

And those stocks won't double before delivery day

 

[Straight 6]

if interest rate is low then it’s not that brutal. A 45k loan @ 3% over 72 months is only an extra $1200 or so in interest over the term vs. a 48 month loan. Make some extra payments here and there and that will be reduced. I’ve never done an 84 month loan.

The problem is few people are smart and disciplined enough to use the loan wisely. Also longer loans are generally at higher rates than shorter loans.

In your example the guy that can afford the 45k 48 month loan (996 monthly payment). Would now look at a $65k loan on a 72 month term because the payment is similar.

Most haven't been financially educated, and long loans just let people get themselves in bad situations

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