Ford to eliminate electric vehicle purchase option at the end of lease

RickLightning · Jun 12, 2022

Ford Credit will update new lease agreements in 37 states to specify "you do not have the option to purchase the Vehicle at the end of the lease term"

Applies to EVs only.

This came up on Friday night when I was at a city EV thing trying to sell our 2021 Mach-E (great deal if you're looking) and a Ford dealer rep told me this. They said "Ford wants the cars back at the end of the lease".

In doing some research, including with @hybrid2bev (thanks!) and finding a 6/10 article on CarsDirect.com, this is only for leasing. Up to now, virtually no one has taken that option given the existence of, well, Ford Options. However, as the rate keeps going up, and the incentives reduced / eliminated, leasing MAY increase. But if you can't keep the car, maybe it won't.

Speculation by the Ford dealer rep was that Ford wants the vehicles back so they don't have 8 year / 100,000 mile battery isn't at 70% issues, but that's pure speculation on his part.

I am very glad I got 0.9% on both my 2021 and 2022 Mach-Es (and they are transferrable to any buyer).

Amps · Jun 12, 2022

Robotaxi fleet!

/s

astricklin · Jun 12, 2022

For retail, it's my understanding that Ford is directing most customers to the 'ford option' plan which isn't actually a lease.

astricklin · Jun 12, 2022

Ford wants the cars back because used cars are selling for way more than most calculated residuals. It seems as though Ford doesn't see this situation changing within the next 36 months

RickLightning · Jun 12, 2022

astricklin said:
For retail, it's my understanding that Ford is directing most customers to the 'ford option' plan which isn't actually a lease.

Correct. But as stated the rates are going up, and the incentives very much down.

astricklin said:
Ford wants the cars back because used cars are selling for way more than most calculated residuals. It seems as though Ford doesn't see this situation changing within the next 36 months

Speculation on your part. Might be right. Might not be right.

metroshot · Jun 12, 2022

If Ford really wants the Lightnings back from a lease, then they should raise the RV to more than 60%.

In the years I have leased, I have seen some crazy lease residuals - 70% or more to entice buyers to lease.

Ford needs to do something to entice buyers to lease with Ford and pay less monthly in lieu of the $7500 tax credit that you won't get...

If there is nothing special available when my Lightning arrives next month, I will take my financing with my CU for a traditional loan.

RickLightning · Jun 12, 2022

metroshot said:
If Ford really wants the Lightnings back from a lease, then they should raise the RV to more than 60%.

In the years I have leased, I have seen some crazy lease residuals - 70% or more to entice buyers to lease.

Ford needs to do something to entice buyers to lease with Ford and pay less monthly in lieu of the $7500 tax credit that you won't get...

If there is nothing special available when my Lightning arrives next month, I will take my financing with my CU for a traditional loan.

Options accomplishes all that - you get the tax credit, you get lower payments, and you get guaranteed refinancing of the balloon if needed - or the ability to hand the keys over.

broncoaz · Jun 12, 2022

Closed end leases have been a strategy on several cutting edge new tech vehicles over the years. Saturn did it with the EV1, Honda did it with the hydrogen powered clarity, and probably some others. The main reason has been so they can get all the vehicles back and off the road so they don’t have to support them with spare parts for a decade. Obviously that isn’t the motivation for Ford since vehicles are being sold.

https://www.hemmings.com/stories/20...e-to-provide-replacement-parts-for-older-cars

sotek2345 · Jun 12, 2022

RickLightning said:
Options accomplishes all that - you get the tax credit, you get lower payments, and you get guaranteed refinancing of the balloon if needed - or the ability to hand the keys over.

Options did that with the Mach-e, but the interest rates are so high on the Lightning (and no incentives) that the payments are higher than traditional financing.

metroshot · Jun 12, 2022

sotek2345 said:
Options did that with the Mach-e, but the interest rates are so high on the Lightning (and no incentives) that the payments are higher than traditional financing.

Yah, that's a big bummer for me!

Really wanted Ford Options like the MME incentives & rates on the Lightning.

sotek2345 · Jun 12, 2022

metroshot said:
Yah, that's a big bummer for me!

Really wanted Ford Options like the MME incentives & rates on the Lightning.

Same, but my credit union is still offering 1.99.percent financing for 72 months. Just hope it doesn't go up too much before I take delivery.

Ken · Jun 12, 2022

I think Teslas are currently doing mandatory end of lease returns. Not sure I want that certainty with the Lightning, would rather have the option to choose then rather than now.

IdeaOfTheDayCom · Jun 13, 2022

I've never leased before, but I know some people technically don't "buy" it in the sense of keeping it, but the dealer gives them the difference between the buyout price and an even higher actual street price.

Sometimes they just write them a check for the difference or they use it as a down payment for another vehicle.

As a rule of thumb, this is usually a dealer thing, not something car makers get involved in, so they must be trying to shift people to an entirely new model.

RickLightning · Jun 13, 2022

sotek2345 said:
Same, but my credit union is still offering 1.99.percent financing for 72 months. Just hope it doesn't go up too much before I take delivery.

It is going to be interesting to see the impact of higher rates and lack of incentives on the Lightning. Will demand soften? Will people accept delivery and then flip them? Or, will they accept delivery, then down the road realize they cannot afford it?

Just one example, not using actual figures, to show payment and interest difference.

$80,000 truck, 0.9% (last year's Mach-E loan rate), 4 year loan - payments of $1,697.47, $1,478.63 total interest.

$80,000 truck, 2.5% rate, 4 year loan - payments of $1,753.12, $4,149.89 total interest.

$80,000 truck, 5% rate, 4 year loan - payments of $1,842.34, $8,432.49 total interest.

I bought both my 2021 and 2022 Mach-Es with 0.9% financing (no $2,500 options rebate here). Without Ford Options, many will be priced out of this truck.

metroshot · Jun 13, 2022

RickLightning said:
It is going to be interesting to see the impact of higher rates and lack of incentives on the Lightning. Will demand soften? Will people accept delivery and then flip them? Or, will they accept delivery, then down the road realize they cannot afford it?

Just one example, not using actual figures, to show payment and interest difference.

$80,000 truck, 0.9% (last year's Mach-E loan rate), 4 year loan - payments of $1,697.47, $1,478.63 total interest.

$80,000 truck, 2.5% rate, 4 year loan - payments of $1,753.12, $4,149.89 total interest.

$80,000 truck, 5% rate, 4 year loan - payments of $1,842.34, $8,432.49 total interest.

I bought both my 2021 and 2022 Mach-Es with 0.9% financing (no $2,500 options rebate here). Without Ford Options, many will be priced out of this truck.

This actually has happened to a FB member who got the Lightning delivered to his dealer and the banks won't finance him unless he comes up with 30% down due to the large loan vs. income.

He is trying to find a co-buyer to sign the loan app.

Of course, his dealer wouldn't mind taking possession of the customer's Lightning...

Ford to eliminate electric vehicle purchase option at the end of lease

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