Rebates Come, Rebates Go.....
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Rebates Come, Rebates Go.....
It seems one of the more popular questions on this forum is, "what do you think the rebates will be in the next 2 weeks/ 2 months/ 2 years?" I'm afraid this is the one question I can't answer because I don't have a direct connection to Ford's Executive VP in charge of rebates. It would be totally foolish on my part to try to predict the dollar amount of a future incentive, because I honestly don't think even Ford knows what they're going to be. Hey, rebates took quite a jump right after September 11, 2001, but I'll bet NO ONE could have predicted that on September 10th, could they?
Last edited by Carlene; Aug 18, 2004 at 09:40 PM. Reason: Took out the Sarcasim - Carlene
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From: Louisville, KY
Depends on how long you think it will take to pay off your new rig. To figure it out, first find out what rate you will pay if you take the rebate instead of the low/no financing. If, for example, you would pay 5.9% for 60 months, and you buy a $30,000.00 truck and putting 20% down, then you are looking at a payment of $462.87. Make that for 60 months and you have paid back a total of $27,772.33 for the $24,000.00 you borrowed. That means you paid $3,772.33 in interest, so if the rebate is larger than that, then you come out ahead. (Ignoring the time value of the rebate). This assumes you will not pay off the truck early. If you plan to pay it off after 2 or 3 years, then you will almost always come out better taking the rebate.
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Some additional rebate questions--I'm in the process of buying a 2004 Ranger. I was offered an additional $1,000 rebate if I financed part of the purchase with Ford. Interestingly, while a number of dealers had the same offer, there was variability in the minimum amount to be financed, ranging from $1,000 to $7,000 or $10,000. Also, I was told that I would have to keep the loan open for at least 3 months prior to paying it off, even though there is absolutely not prohibition on prepayment or early payoff in the fine print on the back of the financing contract. Any insights?
Kent Kester
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kkester-
The minimum amount financed varies from one Ford Credit office to another; for us, it's $7000. The dealer that wants you to keep the loan for 3 months before you pay it off is insuring that he gets his commission from Ford Credit. Pay it off before that, and Ford Credit revokes his payment, hurting the dealer's finance department income. You can pay off the loan as soon as you have your account number.
The minimum amount financed varies from one Ford Credit office to another; for us, it's $7000. The dealer that wants you to keep the loan for 3 months before you pay it off is insuring that he gets his commission from Ford Credit. Pay it off before that, and Ford Credit revokes his payment, hurting the dealer's finance department income. You can pay off the loan as soon as you have your account number.
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From: Louisville, KY
Originally Posted by kkester
Some additional rebate questions--I'm in the process of buying a 2004 Ranger. I was offered an additional $1,000 rebate if I financed part of the purchase with Ford. Interestingly, while a number of dealers had the same offer, there was variability in the minimum amount to be financed, ranging from $1,000 to $7,000 or $10,000. Also, I was told that I would have to keep the loan open for at least 3 months prior to paying it off, even though there is absolutely not prohibition on prepayment or early payoff in the fine print on the back of the financing contract. Any insights?
Kent Kester
Kent Kester
Welcome to the forum.
I'm not in the car business, but I can tell you that dealers make money off of the finance charges you pay when you borrow from the manufacturer. So, in many case, Ford dealers can give you an "incentive" if you borrow from Ford Motor Credit. My guess (and it is only a guess) is that the minimum amounts varied because they were self imposed by the individual dealers based on how much money they wanted to make off of your financing. As for the 3 month minimum, and it not being in the fine print of the contract, that's part of the game as well. More than likely the dealer will get no kick back from Ford if unless the loan stays active for 90 days.
Hope this helps. Maybe somone who is really in the business can chime in here and correct me if I'm wrong.
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From: Silver Spring, MD
I wonder how much additional profit from Ford the dealer loses if I pay off the loan soon after I get the first bill?
Kent Kester
Kent Kester
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My guess is all of it. They figure if they get you to make a couple of payments you, and your budget, will get used to it and maybe you will find something better to do with the money instead of paying off your truck!
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