Financing the 2022 Lightning Purchase - Add Your Options

[Sdctcher]

If you’re buying a Lightning, chances are good that you’re planning on financing.

But before you sign the papers at the Dealership, you might want to consider if you can get better interest rates and lower your payment by financing your next car through a bank or credit union. Waiting to find out your rate or payment at the time of signing means you are a captive of the dealer and subject to pressure.

Many shoppers avoid the bank and just go through the dealer. It’s easier: They can show up, finance the car and drive away — all in the same day. But easier isn’t always better. After all, the dealer’s rates are marked up from the bank’s rates. They have to be for the dealer to make any money. You have a choice whether you want to be a smart shopper.

Ford Motor Credit is not a retail lender. They offer loans exclusive to dealers and advertise rates only on promotions. The Lightning has no promotions nor incentives.

Ford Options Plan is a better choice only for those who would not qualify for a much higher monthly payment through a commercial lender. The Plan does have other "Lease-Back" benefits but from a strictly interest rate standpoint, there is no comparison.

Your bank or credit union holds a few benefits over the dealer. One is that the bank is nearby and you have a relationship. That means you have a better chance of getting the bank to work with you if you fall behind in your payments. That’s especially true if you finance through a small credit union or a local bank.

The bank’s main advantage is that it doesn’t mark up its interest rates -there’s no middleman.

But your bank or credit union does suffer from a few disadvantages. In many cases, dealer quotes on interest rates are negotiable. That’s not true at the bank, where their final offer is almost always the best one. Your bank also won’t shop your credit profile around to different lenders — they’ll only have one offer to give you.

Your Best Advantage =
Go to your bank or credit Union first and see what their offer will be.
Most of us have time before our truck arrives. Shop around. Then visit the dealer. If they can match the bank’s rate, that’s great. If not, stick with the bank. Either way, you’ll have a great bargaining chip.

Sponsored

 

[F150ROD]

If you’re buying a Lightning, chances are good that you’re planning on financing.

But before you sign the papers at the Dealership, you might want to consider if you can get better interest rates and lower your payment by financing your next car through a bank or credit union. Waiting to find out your rate or payment at the time of signing means you are a captive of the dealer and subject to pressure.

Many shoppers avoid the bank and just go through the dealer. It’s easier: They can show up, finance the car and drive away — all in the same day. But easier isn’t always better. After all, the dealer’s rates are marked up from the bank’s rates. They have to be for the dealer to make any money. You have a choice whether you want to be a smart shopper.

Ford Motor Credit is not a retail lender. They offer loans exclusive to dealers and advertise rates only on promotions. The Lightning has no promotions nor incentives.

Ford Options Plan is a better choice only for those who would not qualify for a much higher monthly payment through a commercial lender. The Plan does have other "Lease-Back" benefits but from a strictly interest rate standpoint, there is no comparison.

Your bank or credit union holds a few benefits over the dealer. One is that the bank is nearby and you have a relationship. That means you have a better chance of getting the bank to work with you if you fall behind in your payments. That’s especially true if you finance through a small credit union or a local bank.

The bank’s main advantage is that it doesn’t mark up its interest rates -there’s no middleman.

But your bank or credit union does suffer from a few disadvantages. In many cases, dealer quotes on interest rates are negotiable. That’s not true at the bank, where their final offer is almost always the best one. Your bank also won’t shop your credit profile around to different lenders — they’ll only have one offer to give you.

Your Best Advantage =
Go to your bank or credit Union first and see what their offer will be.
Most of us have time before our truck arrives. Shop around. Then visit the dealer. If they can match the bank’s rate, that’s great. If not, stick with the bank. Either way, you’ll have a great bargaining chip.

Great Post! I'd like to add, get the pre-approval from your bank, maybe the dealer will work to beat the rate/term or match, throw in some extras for taking their financing.

 

[RavenYZF-R6]

My CU honors loan approvals and rates for two months so I already applied with them to lock on a rate and have a bargaining chip with the dealer. Not a bad way to go if you have a good idea of when it will be delivered.

 

[Sdctcher]

Timing is important. The FOMC will meet June 15th and they have already said they will raise rates by 1/2% so we can expect auto loan rates to increase by a like amount soon after. If the current rate can be locked now you will save a good amount of interest over the next 60 months.

Some Lenders will lock 30-60 days. Some Lenders will allow financing and payments to begin early if the dealer will allow signing prior to vehicle delivery. But it would pay to investigate.

Now that deliveries of the Lightning have begun I expect delivery-to-customer probably 30 days from Build.

Unfortunately, August 1 Builds and after probably will not be able to do anything now about June interest rate hikes. But the FOMC has said they will hike another 1/2% in July. So you can play this game all over again in July.

 

[rdr854]

If you’re buying a Lightning, chances are good that you’re planning on financing.

But before you sign the papers at the Dealership, you might want to consider if you can get better interest rates and lower your payment by financing your next car through a bank or credit union. Waiting to find out your rate or payment at the time of signing means you are a captive of the dealer and subject to pressure.

Many shoppers avoid the bank and just go through the dealer. It’s easier: They can show up, finance the car and drive away — all in the same day. But easier isn’t always better. After all, the dealer’s rates are marked up from the bank’s rates. They have to be for the dealer to make any money. You have a choice whether you want to be a smart shopper.

Ford Motor Credit is not a retail lender. They offer loans exclusive to dealers and advertise rates only on promotions. The Lightning has no promotions nor incentives.

Ford Options Plan is a better choice only for those who would not qualify for a much higher monthly payment through a commercial lender. The Plan does have other "Lease-Back" benefits but from a strictly interest rate standpoint, there is no comparison.

Your bank or credit union holds a few benefits over the dealer. One is that the bank is nearby and you have a relationship. That means you have a better chance of getting the bank to work with you if you fall behind in your payments. That’s especially true if you finance through a small credit union or a local bank.

The bank’s main advantage is that it doesn’t mark up its interest rates -there’s no middleman.

But your bank or credit union does suffer from a few disadvantages. In many cases, dealer quotes on interest rates are negotiable. That’s not true at the bank, where their final offer is almost always the best one. Your bank also won’t shop your credit profile around to different lenders — they’ll only have one offer to give you.

Your Best Advantage =
Go to your bank or credit Union first and see what their offer will be.
Most of us have time before our truck arrives. Shop around. Then visit the dealer. If they can match the bank’s rate, that’s great. If not, stick with the bank. Either way, you’ll have a great bargaining chip.

Another option (assuming Tier 1 credit) is to have the bank’s or credit union’s interest rate (which you may be able to find on line so that you do not need a hard credit pull by applying for the actual loan)and take that published rate to the dealer. If more convenient, you can always finance with the dealer and then refinance with your bank or credit union after the fact if you can get a materially better rate. I did that with my Suburban in 2019.

The dealer has every incentive to try and play ball with you because they don’t want an immediate payoff that would negate their commission.

 

[Firestop]

Great and timely post. I have been shopping lending options/rates for weeks, watching rates slowly rise while waiting for my Blend date. I narrowed it down to a Credit Union that currently is offering a standard 2.79% rate (up to 60 mos.), with a 0.25% reduction for EV purchases.

Ironically, I got both my 6/10 Blend from Ford and a call from the Loan Officer yesterday. The LO said to come in before 6/1 to apply for the loan as they received internal notification rates are moving up….I have an appointment on 5/31…hopefully my Lightning will arrive before my 60 day loan lock expires

 

[metroshot]

Great Post! I'd like to add, get the pre-approval from your bank, maybe the dealer will work to beat the rate/term or match, throw in some extras for taking their financing.

Yes, this is the best strategy to pressure the dealer to find a lower rate.

Banks like PenFed or Ligthstream will cut you a check for the loan ahead of time and send it to you. All you have to do is show it to the dealer.

The dealer will try to one up and beat the lender's terms.

And if you choose the dealer's rate, you send back the check to the lender.

That's what I did with my Honda this year.

 

[MickeyAO]

Looks like PenFed has already raised rates...60 and 72-month loans are already above 3% unless using their car buying service (not really an option for this group).

 

[Sdctcher]

JUST SAYING:

Are you taking delivery of a 2022 or 2023 Ford Lightning this year?

If the answer is "Yes", then consider yourself among the "Elite". Not just because you are Lucky to get one, but because you are Lucky your budget can afford the price.

A 2022 Lariat ER will set you back at least $86,000 (Including Sales Tax and Fees). With a Down Payment of $6,000 you will Finance $80,000 for 60 Months @ 3% for a Monthly Payment of $1,440/Month OR $17,280/Year (if you are quick and credit-worthy).

The US Census Bureau estimates Annual Median Family Take Home Pay in Mississippi of $37,000/Year.

In general, experts recommend spending 10%–15% of your income on transportation, including car payment, insurance, and fuel.

In Mississippi 10% - 15% = A Maximum Monthly Payment (Not Including Insurance or Fuel) of $310/Month (Annual $3,700) to $460/Month ($5,520/Year).

This exceeds the Maximum recommendation by almost $12,000/Year. Good Luck finding a Lender.

The US Census Bureau estimates Annual Median Family Take Home Pay in New Jersey of $65,000/Year.

In general, experts recommend spending 10%–15% of your income on transportation, including car payment, insurance, and fuel.

In New Jersey 10% - 15% = A Maximum Monthly Payment (Not Including Insurance or Fuel) of $540/Month (Annual $6,500) to $812/Month ($9,750/Year).

This exceeds the Maximum recommendation by almost $8,000/Year. Good Luck finding a Lender.

It seems that if your Lender follows established New Auto Financing Guidelines (and if your Credit Score is above 750) you will need a Family Take Home Pay of $150,000 to $175,000/Year.

Congrats!

This means you are richer than 99% of others in the Whole World and richer than 95% of those in the United States!

I expect that of those that Reserved the Lightning last year perhaps 50% had Hearts Bigger than their Wallets, and will Eventually Cancel.

Also, I expect that of those that do Order the Lightning this year perhaps 25% have Hearts Bigger than their now depleted Wallets, and will have to Cancel, making more Lightnings available for Dealers to Sell (at Inflated Prices, of Course).

So, Have Heart! If Not Heart, at least have Wallets!.

 

[VTbuckeye]

JUST SAYING:

Are you taking delivery of a 2022 or 2023 Ford Lightning this year?

If the answer is "Yes", then consider yourself among the "Elite". Not just because you are Lucky to get one, but because you are Lucky your budget can afford the price.

A 2022 Lariat ER will set you back at least $86,000 (Including Sales Tax and Fees). With a Down Payment of $6,000 you will Finance $80,000 for 60 Months @ 3% for a Monthly Payment of $1,440/Month OR $17,280/Year (if you are quick and credit-worthy).

The US Census Bureau estimates Annual Median Family Take Home Pay in Mississippi of $37,000/Year.

In general, experts recommend spending 10%–15% of your income on transportation, including car payment, insurance, and fuel.

In Mississippi 10% - 15% = A Maximum Monthly Payment (Not Including Insurance or Fuel) of $310/Month (Annual $3,700) to $460/Month ($5,520/Year).

This exceeds the Maximum recommendation by almost $12,000/Year. Good Luck finding a Lender.

The US Census Bureau estimates Annual Median Family Take Home Pay in New Jersey of $65,000/Year.

In general, experts recommend spending 10%–15% of your income on transportation, including car payment, insurance, and fuel.

In New Jersey 10% - 15% = A Maximum Monthly Payment (Not Including Insurance or Fuel) of $540/Month (Annual $6,500) to $812/Month ($9,750/Year).

This exceeds the Maximum recommendation by almost $8,000/Year. Good Luck finding a Lender.

It seems that if your Lender follows established New Auto Financing Guidelines (and if your Credit Score is above 750) you will need a Family Take Home Pay of $150,000 to $175,000/Year.

Congrats!

This means you are richer than 99% of others in the Whole World and richer than 95% of those in the United States!

I expect that of those that Reserved the Lightning last year perhaps 50% had Hearts Bigger than their Wallets, and will Eventually Cancel.

Also, I expect that of those that do Order the Lightning this year perhaps 25% have Hearts Bigger than their now depleted Wallets, and will have to Cancel, making more Lightnings available for Dealers to Sell (at Inflated Prices, of Course).

So, Have Heart! If Not Heart, at least have Wallets!.

There are many people who will overspend the guidelines based on income. It may not be a wise financial decision, but it could be without problem if the rest of someone's financial positions are sound. If they didn't over spend on a house 10 to 15 years ago and therefore are spending well under 25 to 30 percent of their income on the house. For example, our household income is in the top 10 percent for our area, but our mortgage/insurance/taxes is only 13 percent of gross income (allowing us to be stupid with transportation money). And, though it would be I'll advised we could contribute less than the IRS maximum to my 403B and our Roth iras (we squeak in just below the max income before phase out there freeing more money for cars.

 

[Ruination]

So how long is that logix rate lock good for?

 

[Sdctcher]

Reposted from another related thread:

The only ways Ford Options makes sense are:

1. You cannot qualify for a higher monthly payment because of income, debt, or credit score; or
2. You plan on paying off the lease early or refinancing in a few months; or
3. You do not trust that resale values will stay high and want to transfer risk to Ford; or
4. By the time your truck arrives Ford rates become competitive.

I ran the monthly payment schedule on both 36 and 48 months and the 36 month was actually lower because of the much lower 41% residual.

I just locked in a 60 month 2.89% with my credit union. The credit union direct route would give me a 30 day lock but the dealer guaranteed a 90 day lock through the same credit union.

My deal = $25k down, finance 60k with 63 monthly payments of $1,027.80.

Some credit unions will lock 30 - 90 days.

Expect marketplace rates to increase by up to 1/2 point by the end of June, and another 1/2 point by the end of July. Then, who knows?

 

[metroshot]

Reposted from another related thread:

The only ways Ford Options makes sense are:

1. You cannot qualify for a higher monthly payment because of income, debt, or credit score; or
2. You plan on paying off the lease early or refinancing in a few months; or
3. You do not trust that resale values will stay high and want to transfer risk to Ford; or
4. By the time your truck arrives Ford rates become competitive.

I ran the monthly payment schedule on both 36 and 48 months and the 36 month was actually lower because of the much lower 41% residual.

I just locked in a 60 month 2.89% with my credit union. The credit union direct route would give me a 30 day lock but the dealer guaranteed a 90 day lock through the same credit union.

My deal = $25k down, finance 60k with 63 monthly payments of $1,027.80.

Some credit unions will lock 30 - 90 days.

Expect marketplace rates to increase by up to 1/2 point by the end of June, and another 1/2 point by the end of July. Then, who knows?

Have you looked at Ford Flex ?

Traditional financing that gives you lower payments the first 3 years and then the remaining term goes up to compensate.

Might be good for someone who does not want to keep it (or to resell) and get a lower monthly ??

 

[Aspesi4]

Have you looked at Ford Flex ?

Traditional financing that gives you lower payments the first 3 years and then the remaining term goes up to compensate.

Might be good for someone who does not want to keep it (or to resell) and get a lower monthly ??

I was interested in Ford Options and the Ford Flex program you mention just to keep the monthly payments as low as possible. However, with rates near 5%, going to traditional financing is the way to go.

 

[Pjlightning]

Reposted from another related thread:

The only ways Ford Options makes sense are:

1. You cannot qualify for a higher monthly payment because of income, debt, or credit score; or
2. You plan on paying off the lease early or refinancing in a few months; or
3. You do not trust that resale values will stay high and want to transfer risk to Ford; or
4. By the time your truck arrives Ford rates become competitive.

I ran the monthly payment schedule on both 36 and 48 months and the 36 month was actually lower because of the much lower 41% residual.

I just locked in a 60 month 2.89% with my credit union. The credit union direct route would give me a 30 day lock but the dealer guaranteed a 90 day lock through the same credit union.

My deal = $25k down, finance 60k with 63 monthly payments of $1,027.80.

Some credit unions will lock 30 - 90 days.

Expect marketplace rates to increase by up to 1/2 point by the end of June, and another 1/2 point by the end of July. Then, who knows?

Here’s a good deal:

CAFCU just started a special discount of 0.50% starting today,
June 6th to June 10th,

bringing their rate down to

1.74%

up to 60 months
(80% Loan to Value).

Promo code is: CAFCU83

It’s their 83 year Anniversary

(1.99% above 80% LTV)

Sponsored