ford offering 60 months finace free

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gary s

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just saw a commercial for the 2010 edge & escape at 60/0%.

good deal.

still down in the sunshine state, so not sure if this is a regional promo or across the nation.
 
yes toy is doing 60/0 on the recalled models.

ford is taking a good op to jump on toy with the offer.

geez, last nite it seemed like every commercial was another auto mfg pushing their vehicles.



i have been driving my sisters 10 honda crv the past few days and damn that is one nice ride. well built and a perfect small suv, imo
 
Main issue with interest free loans is, you are upside down almost to the day it is paid off.



You really need to pay MUCH more than the minimum or actual payment due in order for the no interest option to work for you..
 
coastie,



you may or may not be upside down depending on the residual of the vehicle.



interest free beats ANY interest bearing loan. you are paying for just what you borrowed (principal), nothing extra (interest).



it doesn't have to be just a vehicle. wouldn't it be nice if you had an interest free mortgage :grin:
 
Gary.



You will find that with interest free they are almost always 60 months. As a result, almost until the very end, you will have a vehicle that is worth less than the payoff.



If you intend on keeping it, then yes, the value vs. payoff is not important. If you plan on trading it in before it is paid off, it will be a challenge to break even at best.



Is it a good tool, Yes. When you use it to your advantage by paying ahead of schedule.
 
Coastiejoe said:
Main issue with interest free loans is, you are upside down almost to the day it is paid off.
Click to expand...



Please explain that to me, because I would have thought just the opposite.



On a loan with interest you start out paying the MOST interest and the LEAST principle at the beginning, and those two factors swap at the end of the loan where you then pay MOSTLY principle and little interest.



That means for an interest bearing loan you are paying down the principle much slower than the same loan, for the same amount, during the same term if paying NO interest.



So, logically, the interest-free loan would have you paying down more, more quickly, moving you out of the "under water" status much more quickly.





UPDATE: I see Coastie explained himself above. The issue isn't interest-bearing vs interest free, but the 60 month term. Yes, I agree, if you take TOO LONG to pay for a car then the amount you pay per month may not keep up with the depreciation. That's common sense.



TJR
 
Last edited by a moderator:
Maybe I'm confused...



My 07 ST was purchased with a 60 month interest FREE loan. Are you telling me that if I pay the minimum payment, I'm upside down until the end?



My confusion is the statement "Main issue with interest free loans is, you are upside down almost to the day it is paid off."



Unless my ST is worth nothing in 60 months, that doesn't make sense. :banghead:
 
My confusion is the statement "Main issue with interest free loans is, you are upside down almost to the day it is paid off."
Click to expand...



Depends on the down payment. The only benefit to an interest free note is that if you have to borrow money, its a good thing. If you don't, the rebate is an actual reduction in the purchase price.
 
but carry this a bit further, if you have a 0% loan, you have no real incentive to pay it down faster (make more than the minimum pmt) because it's not costing you anything, you're using someone else's $$ for nothing so to speak. But in 5 years, what will the vehicle be worth. You could get lucky/fortunate and have decent residual value, or you may not. Even through no fault of your own, a bad wreck and its repaired, will hurt residual value to some extent. Besides, how many people keep a vehicle for 5 yrs anymore. They get tired of it, or need something bigger, smaller, more mpg, etc., and trade it in, THEN they are definitely making bubbles!
 
Just Jimmy,



Read Coasties follow-up. Some people are "assuming" things not originally stated in Coastie's original assertion. His original assertion, as stated, if nothing is assumed, is simply misleading if not actually incorrect.



Interest-free is cheaper in the long run, and has the for being "above water" (right-side up) quicker than interest-bearing *IF ALL OTHER FACTORS* are equal (same loan payoff, same down payment, same amount financed).



The assumptions that Coastie and others were making is that one typically can ONLY get 0% at 60 months, or 0% in lieu of rebates; and that the longer period (with smaller payments), and the higher amount borrowed (due to a foregone rebate) means an increased liklihood and/or duration of being "under water".



Still, with all things being equal, I don't see how you can beat 0%.



I *LOVE* money. Especially *OTHER PEOPLE'S MONEY!*"



TJR
 
Seems that there are different "deals" regarding incentives and interest rates. I recently looked at the 2010 Sport Trac. The dealer in MA. told me Ford was giving $2000 incentive with interest rates at the following: 3 yr = 0%, 4yr = 0.9%, 5 yr= 1.9%, and 6yr = 2.9%. I went to the Ford site to build my Trac and when I clicked check for incentives", I had to give my zip code. Being retired AND divorced I no longer have the finances to pay cash for a new vehicle.:cry:
 

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