Sponsored

JSJ

Well-known member
Joined
Dec 23, 2021
Threads
4
Messages
72
Reaction score
14
Location
Delaware
Vehicles
Tundra. Model Y and Lightning on order
FWIW, Ford options seems like a really decent deal. Cheaper payment than financing with little risk. At the end of 36-48months..if the true value of the vehicle is higher you just buy it(balloon payment) and then sell it. If residual estimates are too high and/or the market tanks for some reason.....you can trade it in for more than it would be worth on a typical trade in//private sale.

Of course if you like it you can just buy it. Again gives you options with little risk.

Any idea what the interest factor/rate would be like?
How does that work at the end of the options program, if the truck is worth 30k and the buyout is 35k, can’t you just give it back to ford and walk away or do you have to trade it in at ford on a new ford?
Sponsored

 

sotek2345

Well-known member
First Name
Tom
Joined
Jun 7, 2021
Threads
30
Messages
3,673
Reaction score
4,302
Location
Upstate NY
Vehicles
2022 Lightning Lariat ER, 2021 Mach-e GT
Occupation
Engineering Manager
How does that work at the end of the options program, if the truck is worth 30k and the buyout is 35k, can’t you just give it back to ford and walk away or do you have to trade it in at ford on a new ford?
You just give it back at the agreed buy out price (assuming condition and mileage are good). This is a big part of what makes Ford options so attractive - it transfers all of the risk to Ford - great residual value - buy it out and sell/trade/keep it. horrible residual value - Ford eats the difference!
 

JSJ

Well-known member
Joined
Dec 23, 2021
Threads
4
Messages
72
Reaction score
14
Location
Delaware
Vehicles
Tundra. Model Y and Lightning on order
You just give it back at the agreed buy out price (assuming condition and mileage are good). This is a big part of what makes Ford options so attractive - it transfers all of the risk to Ford - great residual value - buy it out and sell/trade/keep it. horrible residual value - Ford eats the difference!
Sounds just like a lease but the only difference is you can claim the tax credit.
 

sotek2345

Well-known member
First Name
Tom
Joined
Jun 7, 2021
Threads
30
Messages
3,673
Reaction score
4,302
Location
Upstate NY
Vehicles
2022 Lightning Lariat ER, 2021 Mach-e GT
Occupation
Engineering Manager
Sounds just like a lease but the only difference is you can claim the tax credit.
And you can trade / sell whenever you want without any fees / penalties - like any other loan. You get the best of both worlds (and the tax credit)
 

metroshot

Well-known member
First Name
Pat
Joined
Aug 26, 2021
Threads
97
Messages
2,127
Reaction score
1,749
Location
Montclair, CA
Vehicles
2022 Lariat F150L + 2023 MME
Occupation
Networking Tech
And you can trade / sell whenever you want without any fees / penalties - like any other loan. You get the best of both worlds (and the tax credit)
Exactly!

I wish other car manufacturers offered this very creative method of financing!

With such a high RV, I am now considering upgrading from the Pro trim to XLT....
And if the Fed tax credit is available when I get it will determine if I can get the XLT...

Now the question is what will be the MF (interest rate for leases) ???

Anyone a MME Ford Options owner want to chime in on the MF they got for their Mustang Mach E ??
 

Sponsored

sotek2345

Well-known member
First Name
Tom
Joined
Jun 7, 2021
Threads
30
Messages
3,673
Reaction score
4,302
Location
Upstate NY
Vehicles
2022 Lightning Lariat ER, 2021 Mach-e GT
Occupation
Engineering Manager
Exactly!

I wish other car manufacturers offered this very creative method of financing!

With such a high RV, I am now considering upgrading from the Pro trim to XLT....
And if the Fed tax credit is available when I get it will determine if I can get the XLT...

Now the question is what will be the MF (interest rate for leases) ???

Anyone a MME Ford Options owner want to chime in on the MF they got for their Mustang Mach E ??
MME GT owner. We got 1.9% interest on Ford options and a $2,500 rebate from Ford. Non-GTs got a little less ($1,500 rebate and 2.49% if I remember correctly)
 

shutterbug

Well-known member
First Name
Joseph
Joined
May 20, 2021
Threads
7
Messages
1,242
Reaction score
1,221
Location
Phoenix
Vehicles
MME GB FE—Dead. F150L Lariat SR. MME Rally.
MME GT owner. We got 1.9% interest on Ford options and a $2,500 rebate from Ford. Non-GTs got a little less ($1,500 rebate and 2.49% if I remember correctly)
Rebate was either $1,000 or $2,500 depending on location and regardless of the trim. The initial Options interest rate was 2.25% and 1.4% for GT. The rate has since gone up. No doubt the interests will be climbing in the near future.
 

sotek2345

Well-known member
First Name
Tom
Joined
Jun 7, 2021
Threads
30
Messages
3,673
Reaction score
4,302
Location
Upstate NY
Vehicles
2022 Lightning Lariat ER, 2021 Mach-e GT
Occupation
Engineering Manager
Rebate was either $1,000 or $2,500 depending on location and regardless of the trim. The initial Options interest rate was 2.25% and 1.4% for GT. The rate has since gone up. No doubt the interests will be climbing in the near future.
Thanks for the clarification. My memory was a bit off.
 

astricklin

Well-known member
First Name
Andrew
Joined
May 24, 2021
Threads
7
Messages
1,578
Reaction score
1,487
Location
Dallas
Vehicles
99 Mercury mountaineer
The only reason I would prefer the traditional lease to the options is if the lease company actually passed through the full $7500 tax credit. Some do and some don't. Personally, I don't qualify for the full credit.
 

RickLightning

Well-known member
Joined
Jan 17, 2022
Threads
79
Messages
4,968
Reaction score
6,557
Location
SE MI
Vehicles
'22 Lightning ER Lariat,'22 Mach-E Premium 4X
Good point, if interest rates get too high, I'd probably buy the truck outright as I really hate paying interest :) will have to see what it is and if I will tolerate it..
Most people with the "I don't want to finance" mindset fail to do a calculation as to how much money they are leaving on the table.

For example, with Ford Options (on the Mach-E), you get a $1,000 or $2,500 incentive, depending on your state, to use it. Hate financing? Take the incentive, then the next week pay off the loan in full. Or refinance somewhere like PenFed.

If the decision is $2,500 in your pocket and paying off next week, vs. paying cash, and you select paying cash, then you aren't making a wise financial decision.
 

Sponsored

RickLightning

Well-known member
Joined
Jan 17, 2022
Threads
79
Messages
4,968
Reaction score
6,557
Location
SE MI
Vehicles
'22 Lightning ER Lariat,'22 Mach-E Premium 4X
The only reason I would prefer the traditional lease to the options is if the lease company actually passed through the full $7500 tax credit. Some do and some don't. Personally, I don't qualify for the full credit.
Keep in mind that sometimes you can take steps to qualify. For example, converting a traditional 401K or IRA to Roth. Or, selling some assets that have capital gains (although this might be a bad decision unless your capital gains rate changes over time).
 

astricklin

Well-known member
First Name
Andrew
Joined
May 24, 2021
Threads
7
Messages
1,578
Reaction score
1,487
Location
Dallas
Vehicles
99 Mercury mountaineer
Keep in mind that sometimes you can take steps to qualify. For example, converting a traditional 401K or IRA to Roth. Or, selling some assets that have capital gains (although this might be a bad decision unless your capital gains rate changes over time).
I don't really understand intentionally generating taxable events in order to get them then refunded. It's a zero net gain. If I am going to be doing these things anyway, then yes, I should time them accordingly. However if I have no intention of doing either of those things then it makes no sense to do them just to get the taxes back that I never would have had to pay.
 

RickLightning

Well-known member
Joined
Jan 17, 2022
Threads
79
Messages
4,968
Reaction score
6,557
Location
SE MI
Vehicles
'22 Lightning ER Lariat,'22 Mach-E Premium 4X
I don't really understand intentionally generating taxable events in order to get them then refunded. It's a zero net gain. If I am going to be doing these things anyway, then yes, I should time them accordingly. However if I have no intention of doing either of those things then it makes no sense to do them just to get the taxes back that I never would have had to pay.
In the absolute, you are correct.

However, people often want to move their traditional retirement accounts to Roth accounts so that they can grow tax free. Doing so generates taxable income. Retirees often do this between retirement and taking Social Security. This gives you the ability to convert some of those funds without having any tax.

As far as capital gains, as I said, it would only make sense under two situations. One, you will be in a higher capital gains bracket in the future. Second, you're buying the vehicle anyway, and are getting the tax credit. You do a transaction to generate capital gains now, instead of when you need the money in a few years, and pay no tax, vs. doing it in a few years and paying the tax then.
 

Deleted member 9341

Guest
You just give it back at the agreed buy out price (assuming condition and mileage are good). This is a big part of what makes Ford options so attractive - it transfers all of the risk to Ford - great residual value - buy it out and sell/trade/keep it. horrible residual value - Ford eats the difference!
Did you find the fine print outlining all of the details? I can’t seem to find them on the Ford site. Ford Options sounds essentially like an open-end lease vs a typical closed-end lease which everyone is familiar with. And generally speaking open-ended leases DO require the lessee to eat the difference between market value and residual value if market value is lower. Hence you rarely see them. It may not be the case here but the details seem conspicuously missing. Normally it probably wouldn’t matter much, but my first EV had a market value that ended up being $10k under the residual at lease end so ugly things can happen.

Ford F-150 Lightning F-150 Lightning Residual Values for Ford Options Plan Released (compared to Mach-E) 2626D57D-7213-407B-B145-9E9014B9ED32
 

sotek2345

Well-known member
First Name
Tom
Joined
Jun 7, 2021
Threads
30
Messages
3,673
Reaction score
4,302
Location
Upstate NY
Vehicles
2022 Lightning Lariat ER, 2021 Mach-e GT
Occupation
Engineering Manager
Did you find the fine print outlining all of the details? I can’t seem to find them on the Ford site. Ford Options sounds essentially like an open-end lease vs a typical closed-end lease which everyone is familiar with. And generally speaking open-ended leases DO require the lessee to eat the difference between market value and residual value if market value is lower. Hence you rarely see them. It may not be the case here but the details seem conspicuously missing. Normally it probably wouldn’t matter much, but my first EV had a market value that ended up being $10k under the residual at lease end so ugly things can happen.

2626D57D-7213-407B-B145-9E9014B9ED32.jpeg
It isn't a lease - it is a balloon payment loan with a buyback equal to the balloon payment. Per the Ford website, excess mileage and wear charges apply, but no mention of the actual residual value at loan end.

https://www.ford.com/finance/finance-options/ford-options/
 
 





Top