Anybody know how this works?
I reached a deal to purchase a new 2000 L for 27000.00.
I will pay 7000.00 down and wanted to take the 20,000 over three years. I figured maybe 8-9%.
Well I am British and work for UK based Company. So as I am here part time and am not employed by a US company, No credit. So my girfriend applies. Is given the ok at 11.99% but for 60 months only. I said ok but intend to pay of the loan over 2-3 years.
Got a call today from the dealer stating they are express mailing thr finance stuff and that it will cost more to pay off the loan early. Now I think this is wrong. I feel they are trying to get an extra 5k out of me. surley Ford Credit will not have a policy like that? Anyone know?

 

There are no contracts that I know of that penalize the buyer for paying it off early. Keep in mind, you can negotiate the interest rate just like the price of the vehicle.

They always start out around 12% in my experience...


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Rich
1999.5 SVT Lightning - Red. 100HP Shot NOS, BellTech 3/4 drop, Super Chip(TRAC). K&N Filter. Viper Alarm w/remote start, Sir Michael's roll pan, smooth corners and steps w/billet inserts, clear corner lenses, Cervinis Ram Air hood, ARE Cover w/ wing, Momo billet pedals, cd changer, cover, Phantom boost and nitrous gauges, MTX Thunderform w/ 2 10" MTX Thunder 4000 subs. 5-channel 500w. Clarion amp.(APA5241), (4)Polk Audio 3-way, 130w. DX 7's, Color-matched Muth signal mirrors, Soundproofed cab, BedRug, Trenz billet grills, Piaa 9007 Super Whites, etc. Build #2755
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There isn't any early termination fee with Ford.

Does your girlfriend have a Credit Union? If so, go through them. It is cheaper.

The dealership has a "buy rate" from Ford on the L's and the credit worthness of the buyer. The dealership has probably put on and extra point or two on the buy rate. This difference between what Ford has said and what the dealership gives you is profit to the store. This is how the finance manager makes his/her money.

 

Hilander

First of all, Ford Credit and most other banks etc. have set parameters which dictate having a verified previous U.S. credit employent, and salary history before they will loan you money. Exceptions are made, especially when the buyer is putting down more than 20% as in your case. The finance manager at your dealership needs to go to bat for you with FMCC to make this happen. Your problem is that you have now offered them an alternative buyer(girlfriend) who is more financially lucrative to both FMCC and the dealership if the loan goes through under her name. I hope you realize that it will be her name on the title, not yours. They have probably given her a 60 month term, based on her income only, which determines how much FMCC figures she can repay per month. I know of no reason that the contract couldn't be payed off early. It would be if you traded the truck in, or totaled it out as in what happens to many vehicles before the loan term expires. Just so you know, people with great credit are now charged about 9% for new car loans unless factory incentives apply. 12% for a 60 month term is not totally out of line for a moderate credit risk. Are you sure that your dealership is dealing with FMCC? Most deaaalerships use numerous financial institutions and try to fit you into a program which is acceptable to you but yields the most profit for them. Have you or your girlfriend approached any banks on your own to see if a better rate an be found. Finance managers usually work on a commission only basis. As such, you are paying for the service(and rightfully so) they provide to help secure you a loan. Good luck with the truck, it looks like you got a great price on it. One other thing you should know is that people can and do re-finance car loans at a later date.

Lightning Bob

 

Looks like the folks in the finance department are getting ready to give you a good hosing. They love to do that to people they feel want something at any cost. If it's not what you were expecting or can afford walk away. There is no truck, the L included, that is worth getting in over your head for. Take FORDSALES advice and look for financing elsewhere. These jerks are looking to hit you from two sides. 1) they are stretching the payments way out which generates more interest and 2) they are looking to charge a premium for the interest rate. The longer payment schedule will put you so far upside down that you won't have any (or very little)equity in the truck until sometime into the fourth year. If you need to get rid of it for some reason you will have to bring money to the table when you sell it.

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Rick

Email: ******@tampabay.rr.com

My Mods & More

 

Like TampaBay said, you can negotiate the interest rate just like the purchase price. I did. Interest through FMC was 8.5% when I bought mine. I told them (the finance manager) if they'd go 8% they had a deal (after I made my best price deal with the sales manager) and they took it. Probably could have gotten more, but I WANTED that truck and people were looking at it.

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Jim
Black '00
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gforce

Did you actually go through FMC to get that rate? Here in Calif. FMC's buy rate on the L's to the dealerships begin at 8.9 and go up from there. There isn't anything lower.

The only way to get a lower rate is to have the dealership go through another lender. Not FMC and that is only if the buyer has good credit



[This message has been edited by FORDSALES (edited 11-27-2000).]

 

FORDSALES,

I'm feeling better about this truck all the time. Yes, I'm 99.9% sure it's FMC. I can't find where my wife keeps the stubs and I'm not about to wake her up. I did find the cancelled checks though, and it was made out to Ford Motor Credit. When the payment bill comes in the mail it's typewritten in red - Ford Motor Credit on the return address.

I bought mine in May when rates were beginning to climb back up and the regional finance guys just happened to be there going over the new higher rates with the finance manager before I got to talk to him. I was sweating bullets that I'd even get it at 8.5%, let alone 8%. I'll double check tomorrow to be sure.

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Jim
Black '00
#1,757 of 4,966
Built 3/30/00 (a Thursday!)
Clear corners
J.L. Enhanced R9
J.L. Stage II Ram-Air
FMS oval T/B next
HP booster of my own
G-Tech 13.72 stock

 

Ford may have different rates in different states. 8% is fantastic for an L through Ford. Congrats.

 

When I went to buy my L they said strictly MSRP well that was the easy part. They tried to screw me on the financing. I agreed on 9% and thought that was high, but I guess it's pretty low after reading these posts.

Another thing you might want to try is to actually get a lower interest loan from a bank or lender for the amount of the truck and use that to pay for the truck all at once. If you have good connections or do enough searching you can find some very good rates. One of the companies I work for gives $25,000 loans for 6.5% and they treat their clients very well.

 

When i bought the L Ford wanted 11.99 APR for my truck but I had my insurance company offer me any loan for 7.25 APR. Told Ford and they called and matched it. It is Ford credit and not my insurance company. Try your insurance company because they can always add it on to your bill if you pay it each month. Ford was very cool to do this although they made 39K off me when it was said and done. Later , Justin

 

A credit union is the way to go. I'm getting 3yrs @ 6 1/2% through my credit union for my 01 L.

 

Definitely check out a credit union. Mine is 5 years at 7.xx%.

Undy, hello neighbor.

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Highlander,

If it costs more to pay the loan off early, that sounds like an "Add-On" interest loan. I don't see them too much anymore, but they are stll used for people that are a high credit risk. An add-on loan is where they add the prinicpal to the estimated interest over the life of the loan. If you borrow $20,000, and interest is $10,000, your note will say - loan amount $30,000. Then if you want to pay it off in 2 years, you have to pay the whole $30,000. it's a rip off, but high risk lenders still use it. I would go to a bank or credit union. With that size down payment, your girlfriend should be able to get a better loan deal. Tom

 

That deal that I mentioned before is still going on up here for the Lightning. $36,000(cdn) or $23,000(us) with 0% interest. Not to bad a deal.