I already said several times...these are the published rates for their special promotions...it has nothing to do with his credit.
Ford offering 2.9% for 36 months or 8.9% for 84 months
- Thread starter PWMDMD
- Start date
There’s nothing special about these rates. In fact they’re higher than the market
Yeah...that's my point...these suck and are atrocious. Someone said they must suck because his credit sucks and I'm saying no, these are the best (sucky) rates they are offering.
The problem is that the dealer usually will push you into their financing. The way I do it - get whatever they offer and refi right away. My last deal was getting 4.4% from the Bank of America, make 1 payment and refi for 1.7% with DCU.
Funny how folks still can't figure out that Ford doesn't need to have low rates at the moment - they are short on cars to sell as it is with the Chip shortages. Tough to sell cars you don't have, and if you are going to sell them it doesn't hurt to line your pocket at the same time...
And as pointed out, just finance elsewhere...
And as pointed out, just finance elsewhere...
I work for an auto company at a very low level and don't wish to name it. No, it's not Ford.
The market has completely changed in the year since the COVID new-vehicle sales crash. Now it's a 100% seller's market. There is no reason to keep offering the 0%–0.9% deals for 5–8 years that we've been seeing. My opinion is that Ram will soon drop that 0%/84 month offer. And I can't blame Ram.
Projections in the industry are that if supply holds, 2021 will be a record year for US new-vehicle sales. People who kept working have $$$ saved, because if they could work from home, their job expenses such as commuting went way down. Add the stimulus money and now you see people with enough for a big down payment for a new ride.
Supply can't hold. That's the problem. The chip "shortages" (sneer quotes are intentional) will lead to lack of inventory across the industry by summer's end. Most automakers are concentrating on big sellers and important features for applying the chips they can get.
So there is no need for the crazy financing deals from last year. The manufacturers can't make enough to meet demand, so of course interest rates will go up.
Used vehicles are going through the roof too. Just bought a very clean 2011 Ford Ranger, last year for that US–spec model, after months of looking. I watched prices increase week by week on Craigslist and elsewhere, and the crazy thing is seeing 20–year-old Rangers going for nearly $10K. Even junk with a badly rusted frame was going for $5K. For the 2011 I paid about 25% down and financed the rest through a credit union at under 3.99% with really good credit. I could have paid cash, but preferred to keep my cash reserves. Frankly, 3.99% for a used vehicle ain't bad.
For perspective, as a young adult in 1988 I paid 12% on a new Ford using Ford Credit. If you're borrowing, today's rates are crazy good by comparison. The alarming thing about that 8% for the long-term deal today is this: it's a sign Ford expects inflation to be a problem soon. If there's any one thing that company does well, it's bean-counting.
Mark my words: higher interest rates on longer terms are a leading indicator of inflation to come.
The market has completely changed in the year since the COVID new-vehicle sales crash. Now it's a 100% seller's market. There is no reason to keep offering the 0%–0.9% deals for 5–8 years that we've been seeing. My opinion is that Ram will soon drop that 0%/84 month offer. And I can't blame Ram.
Projections in the industry are that if supply holds, 2021 will be a record year for US new-vehicle sales. People who kept working have $$$ saved, because if they could work from home, their job expenses such as commuting went way down. Add the stimulus money and now you see people with enough for a big down payment for a new ride.
Supply can't hold. That's the problem. The chip "shortages" (sneer quotes are intentional) will lead to lack of inventory across the industry by summer's end. Most automakers are concentrating on big sellers and important features for applying the chips they can get.
So there is no need for the crazy financing deals from last year. The manufacturers can't make enough to meet demand, so of course interest rates will go up.
Used vehicles are going through the roof too. Just bought a very clean 2011 Ford Ranger, last year for that US–spec model, after months of looking. I watched prices increase week by week on Craigslist and elsewhere, and the crazy thing is seeing 20–year-old Rangers going for nearly $10K. Even junk with a badly rusted frame was going for $5K. For the 2011 I paid about 25% down and financed the rest through a credit union at under 3.99% with really good credit. I could have paid cash, but preferred to keep my cash reserves. Frankly, 3.99% for a used vehicle ain't bad.
For perspective, as a young adult in 1988 I paid 12% on a new Ford using Ford Credit. If you're borrowing, today's rates are crazy good by comparison. The alarming thing about that 8% for the long-term deal today is this: it's a sign Ford expects inflation to be a problem soon. If there's any one thing that company does well, it's bean-counting.
Mark my words: higher interest rates on longer terms are a leading indicator of inflation to come.My last three vehicles were financed through the dealership - one vehicle at 0% and two at 0.9%. Hard to beat those rates…
My last three vehicles were financed through the dealership - one vehicle at 0% and two at 0.9%. Hard to beat those rates….
I think everyone has figured it out.
Noted. I think it's as you said before though, it's a good time to make a profit and they're doing that. If everyone had higher rates, then I'd take it as a sign. When just one company charges higher rates, it's only a sign that they're trying to cash in. Probably makes it easy for the dealers to tie in the financing rate with the sale. If you bring your own rate, maybe they negotiate harder or kill the deal.The alarming thing about that 8% for the long-term deal today is this: it's a sign Ford expects inflation to be a problem soon. If there's any one thing that company does well, it's bean-counting.
0% is awesome
I got offered that at 60 months or a few thousand off our VW to not use the financing. I get good about manufacturer money off the selling price of vehicle and you felt great about using like mortgage points to lower the interest rate.
JHZR2
Staff member
That was kind of my thought on this... They probably make more money the second time around, and want to have folks lease so they get the returns.
Add to it a likelihood of an economic collapse (so make the money upfront, and keep it coming through interest payments to account for the losses on defaults that will happen regardless of rate), and the current shortage of chips and vehicles, and they can ask whatever they want.
JHZR2
Staff member
It is highly dependent upon the situation. If banks allowed you to get seven figures in debt, and you paid it off, you probably had much higher income potential than many.
When the average family income is like $55k/year or whatever it is, that’s a pretty horrible situation. It may be cheaper to live in the middle of nowhere or a burned out slum, but the cost of food, gas, electricity, and other commodity items doesn’t drop. The math isn’t rocket science, and the average person of meager means has to spend less. They aren’t getting a better deal, so they have to spend less. Debt is a trap for them. Some folks with high earning potential can absorb the cost. Some folks with no earning potential can’t. It’s not one size fits all.
Sell a $50k vehicle on payments to someone making $50, because they can afford the monthly is downright stupid. Buying something on credit at 17% because the monthly isn’t too high is stupid. This sort of stupid is why Ramsey exists. I used to listen to his podcast when I drove a ton and needed something else to pass the time after music gets old. I don’t listen anymore because I don’t drive as much and don’t have the time. But the concepts likely haven’t changed, and it’s not rocket science. It’s the emotion of building stuff that is the issue.
Now is the worst time to buy a vehicle-new or used. I will wait down the road 18 to 24 months for the 10 to 12 grand off pickups. I can be very patient. When this happens-those who bought at MSRP will see equity literally evaporate before their eyes.
My issue with Dave is he would've probably advised me to NOT take on the debt that allowed me to build a business and make a great living. Had I done it his way, I would've had to save the money to get my education and start my venture, "pay cash" for all of it, meanwhile while years and years are going by and I'm making nothing. Some things are risky but they offer a big payoff. I was willing to bet on myself and it paid off.
My real point is he tends to be too cookie-cutter. I agree, if you're down and out, have no skills, aren't willing to bet on yourself, you don't have a plan, and you're poor/broke, his method is a decent option. If you're young, have some debt, have an education or unique skill set, have a good plan, and are willing to take a gamble with other people's money in the form of debt, it can really pay off - quickly.
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