Question / opinion on financing

[chadrcr]

I must be in the minority here. I still see $500 a month as a high car payment as I haven't had a car payment in 18 years. Vehicles are depreciating assets, just pay them off in cash unless you are getting financing below 2%.

400$ for 4 years on a 20k truck is long gone... adding years does not make it better for those years. 40-50k means more down or more years; one hurts more one hurts more now.?

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[jaruss01]

My credit score is above 800. Finances and savings are tip top shape. Just trying to figure out how to structure this thing.

 

[VictoryLights]

I got 0% for 72 months last year on my Escape.

I'm sure that was a financing incentive that Ford was offering on the Escape. I would be shocked to see anything like that on Bronco next year.

 

[WuNgUn]

I'm sure that was a financing incentive that Ford was offering on the Escape. I would be shocked to see anything like that on Bronco next year.

Not just the Escape, no...
They had a $1500 delivery allowance. That was the kicker for the Escape. Everything else was 0%. Except maybe RS, Raptor and Mach Mustangs.

 

[XCR440]

I think it's safe to say there won't be any special APR rates (of any value at least, may have some 5.9% 60 month or something like that). Ford often has a $500 token rebate on new models, but I think even that on Bronco is pretty iffy, especially considering I don't recall seeing much for cash incentives on Wrangler.

That said, I'm hoping (maybe just wishful thinking) that reservation buyers might get something more than the usual Fordpass points, a $500 value of Fordpass points would be a good way to push customers to Ford accessories ($210 is normal). I know Ford intends to push accessories, part of the dealership program is, that we have to have a meeting with our Ford Accessory distributor (for both Bronco and Sport), and we're going to have "mannequin" units to demo the accessory's (and serve as service loaners), so that will be a huge part of Bronco for Ford

 

[bobbleheadguru]

If the car is that hot, then it will be leasable IMO.
Mustangs lease out starting in the $350-400 range according to my sales guy. He expects Bronco to be in that range, but obviously cannot promise anything until as he says "they are on the ground".

Hope this helps!

 

[TurkeyRun]

Shop around at your local credit union if you have any. The tend to give decent auto rates as they are member owned. Keep your options open.

That's what I was gonna suggest.

Navy Federal (today anyway) has 2.9% for 72 months. I'll see what Ford offers, doubt there will be any promo financing on these. So, as I'm scoping out and dreaming... I figure my worse case will be 2.9%/72.

Plenty of web calculators out there to fiddle with, like "vehicle is $50K, I want a $500/mo payment, what do I need to put down assuming x.x% for y months" and stuff like that.

 

[timhood]

I was thinking of maxing out Ford 1.9% APR @ 72 months,

...Another idea is to put less of a down payment, then wait a year to see if any major problems arise, then I could make a big lump sum payment to get my payments adjusted down to $500/mo. So my question in that situation is - will Ford adjust down my monthly payment, or will they just shorten up the term and keep my payments the same?

First, do not plan on getting 1.9% financing for 72 months. Not from Ford, especially. That is an incentive rate used only to move slower-selling vehicles. Even outside of Ford, that's a rate I've not seen currently, even at credit unions (although it is close to the best I've seen at 2.29%/72 months). I certainly wouldn't plan on rates being lower next year. It's safer to assume they'll be no better than they are now. They might even be a little higher, especially if the economy has recovered well.

Ford (or any other lender) will not reduce your monthly payment if you make a large lump-sum payment on your loan. Doing so will only reduce your balance owed, the total amount of interest you will pay and the date of your last payment. To reduce your payment amount, you would need to refinance the loan, but then you would might be getting "refinance" or used car financing rates, which quite likely would be higher.

If you are financially disciplined, the better move would be to invest the money and continue making your regular payments. If needed, you could draw on that nest egg to make payments. I purchase my last car at 1.99%/60 months (credit union--there were no financing incentives) nearly 100% financed. The money invested returned many times the interest paid. (The caveat is that there are no guarantees in rates of returns on any investment likely to perform much better than your loan's interest rate, but over the 5- or 6-year loan term, you likely will do better.) The advantage with this scenario is you keep your money and could potentially use it for other emergency purposes and you very likely will earn more than you spend in financing the car. The disadvantage is there is no guarantee. You also need to figure in taxes on your investment earnings when you withdraw money (15% on investments held more than 1 year), so you need to earn 2.3% in your investments to break even paying on a 2% loan, for example.

 

[timhood]

That's what I was gonna suggest.

Navy Federal (today anyway) has 2.9% for 72 months. I'll see what Ford offers, doubt there will be any promo financing on these. So, as I'm scoping out and dreaming... I figure my worse case will be 2.9%/72.

Plenty of web calculators out there to fiddle with, like "vehicle is $50K, I want a $500/mo payment, what do I need to put down assuming x.x% for y months" and stuff like that.

Good news for you--you misread Navy Fed's rate. It's 2.29% for 72 months.

 

[Straight 6]

Are you in a situation where you get a tax benefit from leasing?
Might be worth looking at a different car if so or just leasing it anyway

Some situations can allow you to write off your lease

 

[Tdifonzo]

We have plenty saved. 20k in a car doesn’t put us at any risk. Putting personal finances aside -

Question is moreso am I thinking about this right? And will Ford lower my monthly if a make a big lump sum in Year 2?

No, but you can always refinance whenever you want.

 

[Straight 6]

No, but you can always refinance whenever you want.

Refinancing a car is really only sensible if you really made a bad decision in the first place

A new car loan will have a better rate than a used car loan generally. Financing used cars is more expensive than financing a new one

 

[Big Boss]

Am I missing something here or did something change in the last few years where good interest rates from Ford are super hard to get? The last fords I bought (2012 and 2016)I got 0% for 36 months and 0% of 60 months and the 0 for 60 that was with putting hardly anything down. I just jumped on Ford's site now and see

Now I know this is for the end of a sales event but I see

0 for 72 on F-150, Expedition, Explorer
0 for 66 on Fusion
0.9 for 66 on Escape

 

[Tdifonzo]

Refinancing a car is really only sensible if you really made a bad decision in the first place

A new car loan will have a better rate than a used car loan generally. Financing used cars is more expensive than financing a new one

True, but the question whether or not Ford would lower his payment if a lump sum was paid in year 2. The only way to do that would be to refinance.

 

[jaruss01]

OP here - All set. We came to this conclusion earlier. Doing big $ down, and backing into $500/mo and letting it ride out for x months depending on the rates available.

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