Financing the 2021 Bronco

[Kickit]

Curious as to how it works if you still owe on your trade in but the amount you owe is less than the KBB value of the vehicle. Is it usually recommended to use more money on the downpayment or would it be better to have a smaller downpayment and just payoff in full the trade in prior to trading it in? And if you trade in a car whose value is less than what you owe do they just apply the difference to the new vehicle purchase? I’ve heard dealers really try to swindle you on the trade in......

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[RiseAbove]

Anyone planning on paying straight cash money ?

 

[Garbone]

Anyone planning on paying straight cash money ?

That or take it out against my 401k and pay myself back at 6% interest. I need to math it out to see if one is better than the other.

 

[Straight 6]

That or take it out against my 401k and pay myself back at 6% interest. I need to math it out to see if one is better than the other.

Terrible plan, if you change jobs it'll immediately be due in full. Retirement isn't to be screwed around with, don't touch it.

 

[Tre]

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.

I can't help but wonder what the residual value of these will be. If they hold their value like Jeeps have, it's hard to justify buying a used one with 50k on the clock for a similar price to what you can get a new one for with some of the pricing being offered at the various dealers on here.

Especially when you take into consideration that incentives (both interest rates and cash money) are nowhere as favorable on used vehicles, in my experience.

 

[nomnom]

i thought ford was offering 48 month 0% APR?

 

[Chamberlin]

Curious as to how it works if you still owe on your trade in but the amount you owe is less than the KBB value of the vehicle. Is it usually recommended to use more money on the downpayment or would it be better to have a smaller downpayment and just payoff in full the trade in prior to trading it in? And if you trade in a car whose value is less than what you owe do they just apply the difference to the new vehicle purchase? I’ve heard dealers really try to swindle you on the trade in......

I was about to post something similar....

My question is when is the trade-in factored in? In December ordering process, or when we sign papers in June? Obviously my trade-in will be worth less by the time June comes around (it's a BMW after all LOL). Thankfully, I'm ahead of the depreciation curve, and I expect to have at least $10K in equity by the time Broncos start arriving. When it comes to trade-ins, how are dealers working with this situation where you've got a reservation made one month, an order placed almost 6 months later, and the delivery of the vehicle 6 more months after that? Obviously most of us are not putting many miles on our vehicles these days, but it's not like the dealer is going to give you full trade-in value in December and tell you to keep it clean, accident-free and to keep the miles off until June so you can maintain that trade-in value. So I'm guessing you could discuss it with your dealer in December, but the actual trade-in value won't be assessed until you are in the showroom ready to pick up your Bronco in June. ?

Of course there's the common mantra that you never discuss the existence of your trade-in until *after* you've cut a financing deal with your salesperson... but I don't think I would do that myself. I will probably discuss it with my dealer in December, and if they flat out tell me they're not going to give me anywhere near KBB trade-in value for my excellent condition, high spec, low mileage, CPO w/extended warranty BWM, then I've got 6 months to sell it on my own before June rolls around.

BTW, @Kickit in Arizona the nice thing about a trade-in is that it reduces your tax burden by the trade-in value. So if your Bronco is $50K, and your trade-in is worth $20K (paid off or not, I believe), then you'd only be paying taxes on $30K. Of course there are the actual city and state tax rates to consider, but the tax savings based on your trade-in (for some cases) could mean that you're better off trading it, vs. trying to sell it yourself for a higher value to make up the difference.

 

[Mopar2Bronco2021]

Idk how dealer financing works. With a 750-760 credit score rating and $70-80k 2018 income, Toyota denied my finance request for a used $15k corolla lmao (financing $10k). My DTI was less than 25% at the time, no missed payments, etc. Maybe they knew I wouldn’t keep it long enough for them to make any money on the loan given my age or something idk.

 

[Garbone]

Terrible plan, if you change jobs it'll immediately be due in full. Retirement isn't to be screwed around with, don't touch it.

Over the last year my 401k returned 7%. Max term is 24 month so do I think return on the 401k will exceed 6% for the next two years starting next June?

 

[KindaOrange]

At times Ford (might) offer... an extra 1000 but you have to finance using their standard rate which is usually around 5% and up. In those situations it's best to take the money and flip to a credit union shortly after.

Savage haha

Come in with a credit union offer (don't tell anyone). Have Ford offer the rebate... sign to take the rebate... then call up Ford Credit next day & buyout the finance contract with the credit union's money.

A. Cash Rebate is yours.
B. Low interest rate is also yours.

 

[mC.242]

For credit scores, anything above 670 falls into the "good" range for ratings and should get you a competitive rate. I would suspect though in order to get the really sweet promo deals you might need something more like 700-720 and up. Keep in mind the down payment also plays a big part.

 

[Straight 6]

Over the last year my 401k returned 7%. Max term is 24 month so do I think return on the 401k will exceed 6% for the next two years starting next June?

You must be in relatively low risk investments, those returns seem conservative. It should be pretty easy to beat 6%.

That's the minor of the 2 issues though, if you change jobs you have to pay it back immediately or you get zinged with a nasty early withdrawal penalty. That early withdrawal is the one that would really hurt

 

[bigsky713]

i thought ford was offering 48 month 0% APR?

0% for up to 72 months currently. That offer expires 9/8/2020. We'll all have to wait and see what offers are after that.

 

[Texas Sunshine]

My current vehicle is paid for and will still have some warranty left on it next year and it should be a decent trade. I am just tightening my budget to pay cash for the difference. Kids are grown and my expenses are less than most. I don't make emotional purchases so I stay debt free.

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