New Bronco, Dealership avoided Ford Credit option like the plague

[northernlights]

Help me understand, just put a deposit and buy order on an in transit Badlands to a Colorado dealer. Got 3k off the MSRP but he wouldn't throw in any discounts if I used Ford Credit for financing. Tried to steer me towards a credit union with a 6+% APR. No thanks. Said I would pay cash. Still honored the discount. Also had limited interest in buying back my '12 Ford Explorer. What gives? I thought dealerships got incentivized to use Ford Credit?? Used cars are down that much now a days that nobody wants them??

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[KillerPenz]

He probably gets a larger kickback by steering you towards the credit union.

 

[TXBronco1313]

2 weeks ago I got my heritage limited which is technically a badlands for 6k under sticker and I was able to use my points. Seems like that dealer is trying to discount the bronco as little as they can

 

[MillerAndCheeto]

Help me understand, just put a deposit and buy order on an in transit Badlands to a Colorado dealer. Got 3k off the MSRP but he wouldn't throw in any discounts if I used Ford Credit for financing. Tried to steer me towards a credit union with a 6+% APR. No thanks. Said I would pay cash. Still honored the discount. Also had limited interest in buying back my '12 Ford Explorer. What gives? I thought dealerships got incentivized to use Ford Credit?? Used cars are down that much now a days that nobody wants them??

Scummy predatory sales tactics, where they get kickbacks from the credit union.

As for your 10+ year old trade-in, no, nobody wants those old vehicles on their lot. They would just get it sold at an auction anyway to a used car dealer.

 

[CMillBronco]

Help me understand, just put a deposit and buy order on an in transit Badlands to a Colorado dealer. Got 3k off the MSRP but he wouldn't throw in any discounts if I used Ford Credit for financing. Tried to steer me towards a credit union with a 6+% APR. No thanks. Said I would pay cash. Still honored the discount. Also had limited interest in buying back my '12 Ford Explorer. What gives? I thought dealerships got incentivized to use Ford Credit?? Used cars are down that much now a days that nobody wants them??

I just got done going through a CO purchase and many of the dealers around here really suck! Let me know which one you're dealing with and I'll see if they're one of the ones on my list. I ended up buying from Phil Long Ford, they let me use Ford credit at 3.9/60 months and didn't add any BS like apperance package for $700. Also $3k is ok but you should be able to get $4k depending on what trim, I had $8700 off a $57k Badlands offered.

 

[GA_Warthog]

Help me understand, just put a deposit and buy order on an in transit Badlands to a Colorado dealer. Got 3k off the MSRP but he wouldn't throw in any discounts if I used Ford Credit for financing. Tried to steer me towards a credit union with a 6+% APR. No thanks. Said I would pay cash. Still honored the discount. Also had limited interest in buying back my '12 Ford Explorer. What gives? I thought dealerships got incentivized to use Ford Credit?? Used cars are down that much now a days that nobody wants them??

It is becuase there were certain rebate offers avilable for customers paying cash or using outside (non-Ford Credit) financing. If he switched you to financing through Ford Credit, you would have lost the rebate.

 

[northernlights]

It is becuase there were certain rebate offers avilable for customers paying cash or using outside (non-Ford Credit) financing. If he switched you to financing through Ford Credit, you would have lost the rebate.

Okay that much seems obvious. But why would Ford undercut their own Finance division with this kind of offer? Seems canabalistic.

Also working with the Ford Durango Dealer and they have been pretty straitforward and honest with the transaction to date. Of course I won't fully rest assured until I take delivery. Currently sitting on a rail car somewhere in MI. Hopefully rail freight moves over the holidays...

 

[LarryZiegler]

Scummy predatory sales tactics, where they get kickbacks from the credit union.

As for your 10+ year old trade-in, no, nobody wants those old vehicles on their lot. They would just get it sold at an auction anyway to a used car dealer.

Just because dealers may get kickbacks or offer customer incentives doesn’t always mean the consumer is getting charged for it. When I bought my Honda Pilot in 2013, Honda Financial offered an additional $1,000 discount in using them along with 0.9% interest for 5 yrs. For those paying cash, the loan just had to be active for 90 days as the condition for the promotion. Go figure on how that works in the financial world, but obviously things like that get offered. 6% interest today is not predatory, but it also might not be the most competitive rate either.

 

[Brian_B]

Okay that much seems obvious. But why would Ford undercut their own Finance division with this kind of offer? Seems canabalistic.

Internal financing on a car isn't necessarily meant to be a profit center in and of itself - it's a means to move cars off the lot.

So you are right, if Ford Credit were it's own business unit - Ford is undercutting them. But they are tied to Ford, otherwise they wouldn't ever do things like 0% interest, or interest less than the Prime rate. Ford's willing, at times, depending on the market conditions and car inventory and other things - to take a (relatively small) loss on the financing to move vehicles, which have a decent margin attached to them.

So why would they take a loss on financing and then take another with stacked rebates and other incentives? Sometimes it's what it takes to move cars, but Ford is in the business of making a profit, so they want to get as much as they can for the product they provide. It's all about the margin on the vehicle.

 

[lakesinai]

Help me understand, just put a deposit and buy order on an in transit Badlands to a Colorado dealer. Got 3k off the MSRP but he wouldn't throw in any discounts if I used Ford Credit for financing. Tried to steer me towards a credit union with a 6+% APR. No thanks. Said I would pay cash. Still honored the discount. Also had limited interest in buying back my '12 Ford Explorer. What gives? I thought dealerships got incentivized to use Ford Credit?? Used cars are down that much now a days that nobody wants them??

Regarding old car trade-in, he's not going to sell it on his lot, too old. To auction. If you have a relationship with a dealer, they may work with you to a point, but a 13 year old car?

 

[indio22]

Just because dealers may get kickbacks or offer customer incentives doesn’t always mean the consumer is getting charged for it. When I bought my Honda Pilot in 2013, Honda Financial offered an additional $1,000 discount in using them along with 0.9% interest for 5 yrs. For those paying cash, the loan just had to be active for 90 days as the condition for the promotion. Go figure on how that works in the financial world, but obviously things like that get offered. 6% interest today is not predatory, but it also might not be the most competitive rate either.

Similar to my Kia purchased in 2020, Kia corporate was offering $2,000 discount if using their financing. I had been planning to pay cash, but instead did the financing to get the discount. Within a couple weeks after purchase, I payed off the majority of the financing, then waited 3 months to pay off the remainder.

 

[northernlights]

Internal financing on a car isn't necessarily meant to be a profit center in and of itself - it's a means to move cars off the lot.

So you are right, if Ford Credit were it's own business unit - Ford is undercutting them. But they are tied to Ford, otherwise they wouldn't ever do things like 0% interest, or interest less than the Prime rate. Ford's willing, at times, depending on the market conditions and car inventory and other things - to take a (relatively small) loss on the financing to move vehicles, which have a decent margin attached to them.

So why would they take a loss on financing and then take another with stacked rebates and other incentives? Sometimes it's what it takes to move cars, but Ford is in the business of making a profit, so they want to get as much as they can for the product they provide. It's all about the margin on the vehicle.

It must not be a great job to be the head of Ford Credit with quotas and numbers to meet. And then Ford tells you, "oh by the way this month there will disincentives to use Ford Credit...we are directing traffic away from your business to competitors..."

 

[Copperhorse73]

Just purchased a ‘24 big bend, Ford was offering 5.9% for 60 months, which I assumed would be the best deal out there. The finance manager got me 5.46% through a bank. kickbacks or not, I was happy he got me something a little better than Ford was offering

 

[Nc211]

Ford Credit probably doesn’t want to lock in the loans right now to be honest. With the treasury yields not coming down, and forecasters now leaning back towards rates staying elevated if not increasing again, they may not be wanting to sweeten the pot for new loans on their books at the moment. The fixed rate loans get discounted in value when interest rates rise. I know that sounds counter intuitive to what we hear lately with the Fed cutting the short term rates recently, but the long term benchmarks (which are the treasury bond yields) drive most of the cost of lending, and they’re being stubborn. The word “inflation” is creeping back into the forecasting models again unfortunately.

 

[northernlights]

Well that worked out well. Live out here in SW CO. Bronco was loaded on a train on 12/18 and is now sitting on the dealer lot ready for delivery. Not bad. 2 week delivery from MI to CO by rail/car carrier.

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