Financing Your Lightning

[Sdctcher]

Tis the season for some of us to turn our thoughts on how we are going to pay for our new Lightning.

For Example Purposes I am using my own Lariat ER with Max. Trailer Tow Package (+$825) and Destination Charges (+$1,695) for a Total of $79,994. I agreed with my Dealer to add what I viewed as a reasonable ADM of $3,000 because I believe waiting for the 2023 Trim would have added at least that much onto MSRP. Now, add Kentucky Sales Tax of 6% ($4,980) and Document Fees af about $1,000 (Kentucky bases plate cost of about 1%/year). My total should be about $88,000. From that I deduct my $1,000 Deposit and about $500 for using my available Ford Points. Total out of pocket $86,500 to drive it home in my case.

Options:

CASH

First Mr. or Ms. Moneybags wants to pay Cash. The best Banks and Credit Unions are paying about 1/2 % on their Stash. But if they have their money in a Mutual Fund or Stock/Bond IRA they can expect a gain of about 1 % per month during the remainder of 2022. So unless inflation and finance rates go crazy and/or the market crashes, it would be better to finance as much as possible and leave the Stash invested as long as possible. You would be deducting the monthly finance charge from your market "winnings" (not adjusted for tax liabilities).

In my case I need to generate a tax liability payable in 2023 of $7,500 in order to get my Tax Credit so (being old) I will take a RMD (Required Minimum Distribution) by the end of 2022. At that time I will pay down or pay off my possible loan.

AUTO LOAN

Currently (April) the best Banks and Credit Unions are charging about 2 1/2 % for 36 Month Financing.

My own Lightning probably will not be delivered until August so I have to guess where rates are going. I guess 4%. The initial monthly interest on $36,000 @ 4% for 36 months would be about $120.

My three Credit Scores are all around 800 and our income is high enough to justify a $1,000/month payment so I can qualify for the lowest rates. Others, I am sure, will pay more for less because of their own financial situation. Being old and saving for a lifetime has its benefits.

FORD OPTIONS LEASE

Currently, I do not know enough about the plans so I will leave this for others to discuss. I would not use it if it increased my overall financing costs or my expected Tax Credit.

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[LightningShow]

I ran the numbers on a 65-month loan from my CU vs Ford Options. My CU currently has 1.25% rates up to 65mo (obviously subject to change) and I used 2.5% for FO (based on what rates are for MME). I also assumed a $2500 incentive for Ford Options, as that is the current incentive for the MME. Not sure if it will be the same for the Lightning but I'm going with it.

Ultimately, even with the $2500 incentive, I didn't see much of a benefit going with FO. You're protecting yourself against high depreciation but the chances the truck is going to lose well over 50% value in 36mo (or over 60% in 48mo) are pretty low. After 36 or 48 months you're going to end up taking out another loan to pay the balloon anyway (I assumed 36mo, 4%). Net payments for FO+36mo were 3-4k more than the straight 65mo loan (and also that would be 72 or 84 months total, though I do plan to keep the truck 6-7 yrs).

Unless the gap in the rates goes down significantly between now and when I get my truck, I'll be going through my CU.

 

[Ruination]

I am going to guess the best financing option will be with ford.

They are still 0.9 for 36 and 2.9 for 60.

It's a bummer we are going to miss the rates of yesteryear.

 

[Sdctcher]

I ran the numbers on a 65-month loan from my CU vs Ford Options. My CU currently has 1.25% rates up to 65mo (obviously subject to change) and I used 2.5% for FO (based on what rates are for MME). I also assumed a $2500 incentive for Ford Options, as that is the current incentive for the MME. Not sure if it will be the same for the Lightning but I'm going with it.

Ultimately, even with the $2500 incentive, I didn't see much of a benefit going with FO. You're protecting yourself against high depreciation but the chances the truck is going to lose well over 50% value in 36mo (or over 60% in 48mo) are pretty low. After 36 or 48 months you're going to end up taking out another loan to pay the balloon anyway (I assumed 36mo, 4%). Net payments for FO+36mo were 3-4k more than the straight 65mo loan (and also that would be 72 or 84 months total, though I do plan to keep the truck 6-7 yrs).

Unless the gap in the rates goes down significantly between now and when I get my truck, I'll be going through my CU.

I believe this CU advantage would change if one were to prepay the entire Ford Options in six months or less.

Also, my CU increased the 36 month rate from 1.79% to 2.49% on April 1 after the Fed raised their rate. Are you sure your CU is at 1.25?

 

[LightningShow]

I believe this CU advantage would change if one were to prepay the entire Ford Options in six months or less.

Also, my CU increased the 36 month rate from 1.79% to 2.49% on April 1 after the Fed raised their rate. Are you sure your CU is at 1.25?

It's 1.99% as of today but they have several incentives that add up to 0.75%.

Honestly, I don't understand the Ford Options plan. Granted, I grabbed a spreadsheet from the MME forum which may or may not be right. The payment is the exact same as a loan the same rate but you pay a $500 "disposal fee" (whatever that means) and get the option to turn it in at what will almost certainly be a low residual. I guess they do technically give you an "option", so the name makes sense, but it doesn't add up financially unless you think the value on the truck will tank in 36 months (which is hard to believe considering the supply of EV trucks on the used market in the next few years will be nearly zero).

 

[Viper GTS]

DCU is still at 1.24% for 65 months on EVs with direct deposit:

https://www.dcu.org/borrow/vehicle-loans/auto-loans.html

I bought two EVs in the last ten days using them.

I expect to do the same with my Lightning, though I doubt rates will still be that low when a MY 2023 arrives.

 

[TRP]

It's 1.99% as of today but they have several incentives that add up to 0.75%.

Honestly, I don't understand the Ford Options plan. Granted, I grabbed a spreadsheet from the MME forum which may or may not be right. The payment is the exact same as a loan the same rate but you pay a $500 "disposal fee" (whatever that means) and get the option to turn it in at what will almost certainly be a low residual. I guess they do technically give you an "option", so the name makes sense, but it doesn't add up financially unless you think the value on the truck will tank in 36 months (which is hard to believe considering the supply of EV trucks on the used market in the next few years will be nearly zero).

With the MME the biggest incentive was a $2500 rebate that went along with the Options plan. A lot of owners went this route and then either paid off the loan or refinanced

 

[yed19]

We are adding solar in at the same time as the charger install and I am not sure that Ford didn't miss an opportunity on the financing front for a partnership. Since we are financing both the truck and the solar, it would have been really nice to do both at the same time with the same financing.

 

[RickLightning]

Tis the season for some of us to turn our thoughts on how we are going to pay for our new Lightning.

For Example Purposes I am using my own Lariat ER with Max. Trailer Tow Package (+$825) and Destination Charges (+$1,695) for a Total of $79,994. I agreed with my Dealer to add what I viewed as a reasonable ADM of $3,000 because I believe waiting for the 2023 Trim would have added at least that much onto MSRP. Now, add Kentucky Sales Tax of 6% ($4,980) and Document Fees af about $1,000 (Kentucky bases plate cost of about 1%/year). My total should be about $88,000. From that I deduct my $1,000 Deposit and about $500 for using my available Ford Points. Total out of pocket $86,500 to drive it home in my case.

Options:

CASH

First Mr. or Ms. Moneybags wants to pay Cash. The best Banks and Credit Unions are paying about 1/2 % on their Stash. But if they have their money in a Mutual Fund or Stock/Bond IRA they can expect a gain of about 1 % per month during the remainder of 2022. So unless inflation and finance rates go crazy and/or the market crashes, it would be better to finance as much as possible and leave the Stash invested as long as possible. You would be deducting the monthly finance charge from your market "winnings" (not adjusted for tax liabilities).

In my case I need to generate a tax liability payable in 2023 of $7,500 in order to get my Tax Credit so (being old) I will take a RMD (Required Minimum Distribution) by the end of 2022. At that time I will pay down or pay off my possible loan.

AUTO LOAN

Currently (April) the best Banks and Credit Unions are charging about 2 1/2 % for 36 Month Financing.

My own Lightning probably will not be delivered until August so I have to guess where rates are going. I guess 4%. The initial monthly interest on $36,000 @ 4% for 36 months would be about $120.

My three Credit Scores are all around 800 and our income is high enough to justify a $1,000/month payment so I can qualify for the lowest rates. Others, I am sure, will pay more for less because of their own financial situation. Being old and saving for a lifetime has its benefits.

FORD OPTIONS LEASE

Currently, I do not know enough about the plans so I will leave this for others to discuss. I would not use it if it increased my overall financing costs or my expected Tax Credit.

Ford Options is NOT a lease. You retain the full tax credit. If it includes a $2,500 incentive (rebate), only an idiot wouldn't take it and then refinance if they could get a lower rate.

Ford Options rates at time of ordering (which I haven't seen published) are locked in, and you can take those vs. the ones at time of delivery. On the Mach-E, when I ordered on 5/29 Options was 2.25%, it's now 2.49%. Ford Credit had a promotional rate of 0.9% for 4 years, it's now 2.49%.

I will take 0.9% for 4 years, but in my state Options only rebates $1,000.

 

[GDN]

Do you all really think that the Options could have a rebate on the Lightning? It doesn't make sense, other than they will make plenty over 7 or 8 years of financing.

I'm also assuming that there is no early payoff penalty on the Options Plan and hence being able to pay it off early.

 

[LightningShow]

DCU is still at 1.24% for 65 months on EVs with direct deposit:

https://www.dcu.org/borrow/vehicle-loans/auto-loans.html

I bought two EVs in the last ten days using them.

I expect to do the same with my Lightning, though I doubt rates will still be that low when a MY 2023 arrives.

Yup, that's my CU. I bought my Bolt with them last year as well.

 

[LightningShow]

With the MME the biggest incentive was a $2500 rebate that went along with the Options plan. A lot of owners went this route and then either paid off the loan or refinanced

That makes a lot of sense, that might be the way to go if they offer a good incentive on the Lightning.

 

[monsterlag]

We are adding solar in at the same time as the charger install and I am not sure that Ford didn't miss an opportunity on the financing front for a partnership. Since we are financing both the truck and the solar, it would have been really nice to do both at the same time with the same financing.

You really wouldn’t want that. Solar via Sunrun is ridiculously expensive and a bad deal every time.



I will be doing FO. Will be flipping the car after a year for something else so it makes the most sense.

 

[yed19]

You really wouldn’t want that. Solar via Sunrun is ridiculously expensive and a bad deal every time.



I will be doing FO. Will be flipping the car after a year for something else so it makes the most sense.

Not SunRun.

 

[Fordskeptic]

If Ford were to sell me a Pro in 2023-2024 and still offer Ford Options, I'd be inclined to go that route, even with the $500 disposal fee and whatever bitter pills Ford wants me to swallow. Not a definite, as the devil is in the details, but leaning that way.

Of course the big IF is whether the Pro will still be available to retail customers.

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