Ford Wants To Suck More People Into 84-Month Loans

[Bikeman315]

Time to buy!!! Not…..

https://jalopnik.com/ford-wants-to-suck-more-people-into-84-month-loans-1847839621

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[Carbide]

People actually still finance thru dealerships?

 

[Inthehighdesert]

Zero percent for 84 months, that’s a bad deal.

 

[ChrisJ]

Yeah I got "sucked" into a zero percent loan.

 

[shogun32]

how is zero for 84 months a problem? Ford is losing at least 4-6% on inflation alone. And you get to pay them back with ever more rapidly depreciating dollars. Granted you want the value of the loan to be less than the value of the car toot sweet but it will take FOREVER at that kind of pay-off schedule. So that is ONE downside.

0%84 is what we called 'vendor financing' back in the big, bad 80's and it bankrupted a number of Tech darlings.

The unseen downside of this though is the tendency to keep hiking the damn MSRP. My 2020 F150 was 54K but it had 12k of rebates and markdowns on it so with TTL I walked out owing 45. The very premise of pricing a truck for 54K is asinine. 42k is still nuts but at least tangentially honest.

I set my max price for a vehicle using 5% interest rate, and no more than 60 month term. I adjust the gross price of the vehicle till I get that monthly number to where I want it. I of course do NOT finance at that interest rate - I stay under 2%. Then I use the delta as extra monthly payments. If Finance offers a 6 or 7 year term at <2% I'll take it and bump the monthly till the term is back to no more than 60 months. But I also actually have down-payment(s) or extra in the budget to get the payoff down to between 36-48 months. By 18 months in (no more than 24) you want to be right-side up on the loan, but sooner the better. Some people use the down-payment (before or after financing) to get the loan residual under the depreciation schedule from the beginning.

 

[Interceptor]

Not everybody can afford new car payment, and a high down payment, this can really help. This like all things in life can be good, or bad.
Personally I like these loans. I'm not a rich man, and never will be. I'm always in financial protection mode, "the what ifs" in life.
So I get the longest payment schedule I can so my payment will be low. Then I pay the loan off as quickly as I can.
My 2019 I purchased in October of 2019 new. I just paid off 2 weeks ago. During that time if I would have gotten sick, lost my job etc.... I could managed my car payment.
Don't take life for granite, it can throw you for a loop overnight.

 

[Deleted member 35644]

Sure, throw the sheep a longer term so they can afford the monthly payment on our jacked up prices. Smart.....on their part.

 

[Stage_3]

More money for Ford Credit!!! lol


I'd do it to get a lower monthly payment and send in one and a half payment at a time and pay it off before the note was up. LOL
Like I'm currently doing. I literally don't have to make another payment until May of 2023.

 

[20VGT]

Not going to blame ford for this, I'm sure other manufactures are offering 84 months as well. With cars and trucks selling for over 50k, 84 months is going to help the people that shop by what's my payment. With the way things are going, I would not be surprised if 96 months becomes a reality in the future. I may not agree with it, but if it helps them sell cars and people want to make payments that long then more power to them.

 

[shogun32]

More money for Ford Credit!!! lol

ahh, but then you have the magic of tranches, selling them off as AAA-rated bonds and then losing your ass and wiping out the buyers of the "securitites" when your loss provision and risk disclosures were rose-colored rubbish.

 

[shogun32]

I literally don't have to make another payment until May of 2023

yeah PenFed and BoA did that. I just laughed and kept paying it down. My other CU and such were rather more traditional - the payment was due EVERY month no matter how much you might be "ahead".

 

[Stage_3]

ahh, but then you have the magic of tranches, selling them off as AAA-rated bonds and then losing your ass and wiping out the buyers of the "securitites" when your loss provision and risk disclosures were rose-colored rubbish.

LOL

 

[Stage_3]

yeah PenFed and BoA did that. I just laughed and kept paying it down. My other CU and such were rather more traditional - the payment was due EVERY month no matter how much you might be "ahead".

I still pay the car monthly even though I don't owe a payment for almost 2 years. I get the 0% Ford Credit bill mailed out to me, and pay as much as I like each month. I'm "hoping" to have it paid off in a year.

 

[Jimmy Dean]

as long as the interest remains low (or better zero), the better. Hell, I'd take a 20 year 0% interest loan on a car all day. But then, I keep my cars 20-30 years. I am actually just about to list the only car I've bought new for sale soon, it is a 2002.

BTW, if you do have a <3% loan, do not pay extra on it please. Put that money into the market or any other investment. if you get into financial straights, you can pull it out, with the >3% profit it has made you. if you don't, then eventually you have an account that is returning a new monthly payment every month for free.

 

[KeyLime]

Given the age demographics of Mustang owners these days I'm not sure an 84 month loan is a good bet. Hell, at my age I think twice before buying green bananas.

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