F-150 Lightning Residual Values for Ford Options Plan Released (compared to Mach-E)

[greenne]

You are correct. Thank you for clarifying.

But essentially you would "turn it in"--exchanging the truck for the remaining balloon amount waived(paid off). You wouldn't get any cash out of the deal.

To Tom's point about sales tax is that you can apply the balloon towards another Ford vehicle. In that case I would think you would not pay tax on that amount as I would be a credit towards a new vehicle(kind of like trade in credit).

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[shutterbug]

To Tom's point about sales tax is that you can apply the balloon towards another Ford vehicle. In that case I would think you would not pay tax on that amount as I would be a credit towards a new vehicle(kind of like trade in credit).

I don't think that's correct.

 

[ExCivilian]

I don't think that's correct.

It is in your state's (AZ) case but not mine (CA)

 

[shutterbug]

It is in your state's (AZ) case but not mine (CA)

if you aren't paying the final balloon payment, you can't apply it to your next vehicle. You can only do it if the value of your Lightning is higher than the final payment and then you only get the credit of the difference, In such a case you'd be probably better off selling it to Carvana (or something similar) and use the proceeds to pay off the loan. I don't think it matters what state you are in.

 

[ExCivilian]

if you aren't paying the final balloon payment, you can't apply it to your next vehicle. You can only do it if the value of your Lightning is higher than the final payment and then you only get the credit of the difference, In such a case you'd be probably better off selling it to Carvana (or something similar) and use the proceeds to pay off the loan. I don't think it matters what state you are in.

I see the confusion. I was discussing this in the context of the the value of the truck being higher than the amount owed and was only referring to reducing the new vehicle's purchase price by the excess value rather than the "balloon payment" itself.

The example I thought we were discussing was someone with an F150 valued at $50K with a $40K ballon payment due could return the vehicle to the dealer and buy the next one $10K less expensively. In AZ that would reduce your tax liability for the vehicle to the new price that is $10K less whereas in CA we'd be charged tax on the full MSRP (and to add insult to injury we're also taxed on any incentives that get applied).

In the context we are discussing, it does matter which state one is in because CA is one of the states that charges full sales tax on a sale regardless of credits, rebates, down-payments, etc. whereas AZ is one of the states that bases the tax liability on the final purchase price.

It's like that for all products in CA. In CA, for example, if your phone carrier "sells" you a phone for $200 or even $0 Californians still pay tax on the $1200 MSRP I don't know if AZ treats vehicle purchases differently from other purchases; in CA all private property is taxed like this (including used property).

Vehicle leases are calculated differently. In CA we're only charged taxes on the use of the vehicle for the month. Some states charge all the taxes up front in leases, too--I don't know where AZ is on that.

 

[adoublee]

I found this on Ford website under financing, with the Lightning specifically included. Indicates down payment (net trade value) can't exceed 45%, and doesn't reduce balloon payment amount.

 

[GDN]

I found this on Ford website under financing, with the Lightning specifically included. Indicates down payment (net trade value) can't exceed 45%, and doesn't reduce balloon payment amount.

Quote "Down payment may neither reduce the final Options payment" ....So does this mean that the balloon portion is going to be predefined and equal to the residual value percentages that have been published?

 

[adoublee]

Quote "Down payment may neither reduce the final Options payment" ....So does this mean that the balloon portion is going to be predefined and equal to the residual value percentages that have been published?

Yes, that is the way I understand it. So monthly payments could be quite low until the balloon payment. They are basically financing half the vehicle price, leaving up to you to finance the second half or give the vehicle back. Will there be any difficulty getting a loan for half the value of a 3 or 4 year old lightning to make the balloon payment, or should one have cash ready to contribute? Might want to hold the tax credit for that.

 

[ExCivilian]

They are basically financing half the vehicle price, leaving up to you to finance the second half or give the vehicle back.

Is this how options works? You finance everything except the ballon portion? If Ford is going to carry $40K of the balance without interest that goes a long way toward offsetting those taxes I was worried about...

Will there be any difficulty getting a loan for half the value of a 3 or 4 year old lightning to make the balloon payment

No, although your lender may charge a higher rate for a "used" vehicle than a "new" one.

 

[JSJ]

Anyone have any rough idea on what payments would be like for the lightning using Ford options?

 

[Ken]

take the MSRP, add tax, subtract the residual, and then divide by 36. To account for financing multiply each payment by about ~1.04-1.05. For a 80k Lariat in CA with 9% tax and 50% residual that means you are financing about $46k. Payments for 36 months would be about 1350-1400.

 

[VTbuckeye]

Is this how options works? You finance everything except the ballon portion? If Ford is going to carry $40K of the balance without interest that goes a long way toward offsetting those taxes I was worried about...


No, although your lender may charge a higher rate for a "used" vehicle than a "new" one.

I don't know if they are carrying the interest cost of the balloon payment, but I doubt it. Hypothetically...If the balloon payment is 40k and the interest rate is 2.5%, then there will be 1k of interest accruing each year, so in order to not accumulate a higher balance approximately 83-85 dollars per month will be required to cover the interest on the balloon. It would be great if they didn't charge for the balloon interest, but I can't see that happening.

 

[shutterbug]

I don't know if they are carrying the interest cost of the balloon payment, but I doubt it.

You are correct. They are not.

 

[shutterbug]

No, although your lender may charge a higher rate for a "used" vehicle than a "new" one.

My understanding was that you will be able to refinance with FMC at the original rate. FWIW, my credit union charges 1.79% for new 4 year term and 1.99% for used. I've no doubt the rates will be significantly higher in 4 years,

 

[ExCivilian]

Thanks for all this info but if I'm going to get charged interest on $40K that I can't even pay down then I don't really see the advantage of Options in this specific scenario.​

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Far better to just buy it outright given it's almost certainly going to be worth more than the residual when it's all said and done. I don't have any plans on selling my truck anyway...I'm just trying to get through the tax gauntlet as best I can with minimal collateral damage ​

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I believe this Ford's redesign will be some type of skateboard and/or unibody-type build like every other "truck" being released in the near future and I don't want that. Rather, I already have that with the Touareg.​

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