Lets Talk Finance!!
Laughing Gas
Joined: Dec 2017
Posts: 1,077
Likes: 8
You’re putting down $25k and then immediately making a $20k or $25k payment and refinancing the balance. I’ll guess the balance is $20k on a $70k truck. Financing the $20k for 3 years @ 3.44% nets you a payment of $586 and interest charges of over $1k for the life of the loan. Why not skip the financing altogether, give up the $500 incentive and keep the $1k worth of interest payments in your pocket?
Thread Starter
|
Fleet Mechanic
Joined: Mar 2006
Posts: 1,519
Likes: 134
I am in New Jersey. I really do not want to purchase the truck outright. Probably will end up financing 25-30K at the most over 3 or 4 years. The interest paid and the $500 I'm saving going with Ford finance, I think its worth it.
More Turbo
Joined: Oct 2017
Posts: 562
Likes: 45
I did that on both of my Super Duties. Even with A+ credit, over 900, the best the dealer would do was around 5.49%. I financed both through FMCC, called them for a payoff in about 2 weeks (before I ever got the first monthly statement), and then went to my credit union and refinanced for 3.49 or less. Just use your SSN to get your account information.
I asked the F&I guy at dealer about the terrible rates that FMCC has and he explained it’s basically people with good credit subsidizing those with bad credit so they can finance them when they normally would get turned down. I’m sure they find many people to hang onto those high rate loans even though they could refi way cheaper. 2-3% cheaper is a couple hundred bucks or more a month just in interest you’ll save, especially on a $60-70k SD. The payment on my current 350 dropped well over $200.
I asked the F&I guy at dealer about the terrible rates that FMCC has and he explained it’s basically people with good credit subsidizing those with bad credit so they can finance them when they normally would get turned down. I’m sure they find many people to hang onto those high rate loans even though they could refi way cheaper. 2-3% cheaper is a couple hundred bucks or more a month just in interest you’ll save, especially on a $60-70k SD. The payment on my current 350 dropped well over $200.
Senior User
Joined: Dec 2018
Posts: 276
Likes: 0
My total cost of financed amount will now be $26,900 over the life of the loan vs. $30,270 with FFS and my monthly payment went down to $449 from $505.
I ended up paying FFS $180 in finance charges on the $24.9K for 34 days and took the $500 off the price of the truck.
More Turbo
Joined: Mar 2018
Posts: 710
Likes: 58
I guess I lucked out because my finance guy did not try to sell me anything extra. He saved us both some time, and it's a good thing because I had no time for BS, had to get home and make hay to pay for this thing lol. Only thing extra was a set of floor liners, and that was at my request.
Trailering
Joined: Jan 2019
Posts: 17
Likes: 0
One other thing you may want to check on as I'm currently researching this myself. Be sure your credit union will finance vehicles that have commercial plates. Apparently, mine doesn't and would put this vehicle in a business class loan where the rates aren't much better than the dealership rates. Now I need to shop around for a new credit union and open an account.
FTE Stories
Ford Trucks for Ford Truck Enthusiasts
Rezvani's Latest Post-Apocalytic Monster Is a Ford F-150 Raptor Underneath
Verdad Gallardo
Top 10 Most Expensive Ford Trucks Ever Sold on Bring a Trailer
Joe Kucinski
2027 Ford Super Duty Buyer's Guide (Every Model, Engine, & Package)
Brett Foote
Top 10 Ford Truck Tragedies
Joe Kucinski
AEV FXL Super Duty - the Super Duty Raptor Ford Doesn't Make
Brett Foote
Lobo Vs Lobo: Proof the F-150 Lobo Should Be Even Lower!
Michael S. Palmer
Ford's 2001 Explorer Sportsman Concept Looks For a New Home
Verdad Gallardo
10 Best Ford Truck Engines We Miss the Most!
Joe Kucinski
2026 Shelby F-150 Off-Road: Better Than a Raptor R?
Brett Foote
Laughing Gas
Joined: Dec 2017
Posts: 1,077
Likes: 8
Hotshot
Joined: Mar 2017
Posts: 10,161
Likes: 1,373
From: Chaz
Does the business use IRS rule only work if you pay cash or can you finance it? You can write it off in 1 year for 100% business use I understand.
Anyway, as far as the $500 goes once you reamortize the loan it may not work out. Maybe put down 99% of the purchase price and see if your credit union will finance it back out to where you want to be. Thats the only way you’ll see anywhere near the $500 savings.
Business equipment loans are going to be higher. A commercial bank will probably do Prime (currently 5.5%) or Prime plus 1% and it will be a shorter time.
I’m in the same spot and getting my truck at the end of next month.
Anyway, as far as the $500 goes once you reamortize the loan it may not work out. Maybe put down 99% of the purchase price and see if your credit union will finance it back out to where you want to be. Thats the only way you’ll see anywhere near the $500 savings.
Business equipment loans are going to be higher. A commercial bank will probably do Prime (currently 5.5%) or Prime plus 1% and it will be a shorter time.
I’m in the same spot and getting my truck at the end of next month.
Hotshot
Joined: Mar 2017
Posts: 10,161
Likes: 1,373
From: Chaz
Laughing Gas
Joined: Dec 2017
Posts: 1,077
Likes: 8
Hotshot
Joined: Mar 2017
Posts: 10,161
Likes: 1,373
From: Chaz
If its a side gig I’d ask your CPA. If its 50% use you can write off in 2 years?
I’d prefer the lower interest rate but I’m buying a house and the entity thats buying it hardly borrows money so I can keep it on that particular balance sheet. buying a house and being self employed even at 10 years mortgage borrowing is more difficult.
I’m buying an F250 to replace an F250 XL but getting a platinum for appearance sake because my sales people comment on my “good ol boy” ways, plus I sometimes need to take clients around. I decided to get another XL regular cab but F150 V6 Ecoboost because I like the rubbermaid grill and interior. I’ll do that personal because I frankly like that more in the battle zome parking around here.
As far as business use goes you do need to be real and realize you’d probably be in a smaller vehicle if it wasnt for the business. And if you live in town like me I damn near Uber everywhere.
I’d prefer the lower interest rate but I’m buying a house and the entity thats buying it hardly borrows money so I can keep it on that particular balance sheet. buying a house and being self employed even at 10 years mortgage borrowing is more difficult.
I’m buying an F250 to replace an F250 XL but getting a platinum for appearance sake because my sales people comment on my “good ol boy” ways, plus I sometimes need to take clients around. I decided to get another XL regular cab but F150 V6 Ecoboost because I like the rubbermaid grill and interior. I’ll do that personal because I frankly like that more in the battle zome parking around here.
As far as business use goes you do need to be real and realize you’d probably be in a smaller vehicle if it wasnt for the business. And if you live in town like me I damn near Uber everywhere.