topic Re: What a Difference a Year or Two Makes! in Auto Loans

What a Difference a Year or Two Makes!

ridgebackpilot — Wed, 18 Nov 2020 01:34:39 GMT

Two years ago, I financed a new 2018 Ford F-150 pickup truck with Ford Motor Credit for zero (0) percent interest. A year later, I traded that vehicle in and financed a new 2019 Ford Edge (for my son) with FMC at the same low rate. In both cases, I received both financial incentives and subsidized financing.

This week, I went back to the Ford dealership to finance another truck. Based on my experiences over the past two years, I had high expectations. I thought I'd receive both financial incentives and zero percent financing from Ford Motor Credit. Boy, was I wrong! The dealership gave me the old runaround: "You can't have both incentives (rebates) and low-interest financing!" They weren't even willing to make a deal worth considering...

Turns out that when the pandemic hit last spring, people stopped buying cars and trucks. The manufacturers responded by offering record-setting low interest rates, long loan terms, and groundbreaking incentives, all at once. Auto buyers responded well and quickly snapped up a lot of inventory. Fast-forward to today, inventory is down and the incentives and low interest rates have all but disappeared. Ford offered me zero percent for 60 months, but any longer term would trigger at least 1.9 percent interest or higher. Fortunately, GM Financial is still offering 0.9 percent interest for 72 months on their trucks.

With a new wave of the pandemic coming on strong, perhaps I should wait and see whether amazing incentives and historically-low interest rates come back? But given the pandemic's impact on auto production, it seems unlikely that inventory will be restored anytime soon. There aren't many trucks and cars sitting at dealerships for months anymore.

I'd be grateful for your thoughts and your advice!

Re: What a Difference a Year or Two Makes!

Anonymous — Wed, 18 Nov 2020 05:58:00 GMT

@ridgebackpilot wrote:
Two years ago, I financed a new 2018 Ford F-150 pickup truck with Ford Motor Credit for zero (0) percent interest. A year later, I traded that vehicle in and financed a new 2019 Ford Edge (for my son) with FMC at the same low rate. In both cases, I received both financial incentives and subsidized financing.

This week, I went back to the Ford dealership to finance another truck. Based on my experiences over the past two years, I had high expectations. I thought I'd receive both financial incentives and zero percent financing from Ford Motor Credit. Boy, was I wrong! The dealership gave me the old runaround: "You can't have both incentives (rebates) and low-interest financing!" They weren't even willing to make a deal worth considering...

Turns out that when the pandemic hit last spring, people stopped buying cars and trucks. The manufacturers responded by offering record-setting low interest rates, long loan terms, and groundbreaking incentives, all at once. Auto buyers responded well and quickly snapped up a lot of inventory. Fast-forward to today, inventory is down and the incentives and low interest rates have all but disappeared. Ford offered me zero percent for 60 months, but any longer term would trigger at least 1.9 percent interest or higher. Fortunately, GM Financial is still offering 0.9 percent interest for 72 months on their trucks.

With a new wave of the pandemic coming on strong, perhaps I should wait and see whether amazing incentives and historically-low interest rates come back? But given the pandemic's impact on auto production, it seems unlikely that inventory will be restored anytime soon. There aren't many trucks and cars sitting at dealerships for months anymore.

I'd be grateful for your thoughts and your advice!

I am waiting and watching to see what happens a month from now based on how the country gets through Thanksgiving. Hoping the new year brings back amazing rates/incentives

Re: What a Difference a Year or Two Makes!

Anonymous — Wed, 18 Nov 2020 08:13:11 GMT

Interesting question

Re: What a Difference a Year or Two Makes!

ccquest — Wed, 18 Nov 2020 15:21:03 GMT

It's all speculative, but I feel like there's a number of businesses right on the brink that may be feeling the hurt in the next few months if things continue the way they are or go back into a more locked down state. If that happens, a lot of people will be losing their jobs (again) and a lot of those original incentives with 3-6 months of deferred payments are going to be coming due shortly. If they can't make the payments now, cars will be getting returned to the lots and very gently used car supply could be up.

So hard to tell how things will go, but there's also the part where a lot of manufacturing things are limited so new car supply has been lower than in the past.

Re: What a Difference a Year or Two Makes!

sccredit — Wed, 18 Nov 2020 16:09:35 GMT

I'm waiting. I was on the fence last year and decided not to buy a truck. DW and I have decided we should now but the pricing in insane to me. Same truck last year to this year is almost $10k higher. I'll wait and buy when the market is right.

Re: What a Difference a Year or Two Makes!

ridgebackpilot — Wed, 18 Nov 2020 21:15:41 GMT

@sccredit wrote:
I'm waiting. I was on the fence last year and decided not to buy a truck. DW and I have decided we should now but the pricing in insane to me. Same truck last year to this year is almost $10k higher. I'll wait and buy when the market is right.

Probably smart to wait. Hindsight is always 20/20; I wish I'd bought a truck in early summer when prices were low and incentives high!

Re: What a Difference a Year or Two Makes!

sccredit — Wed, 18 Nov 2020 21:29:09 GMT

@ridgebackpilot wrote:
@sccredit wrote:
I'm waiting. I was on the fence last year and decided not to buy a truck. DW and I have decided we should now but the pricing in insane to me. Same truck last year to this year is almost $10k higher. I'll wait and buy when the market is right.
Probably smart to wait. Hindsight is always 20/20; I wish I'd bought a truck in early summer when prices were low and incentives high!

With hindsight we'd all be geniuses. I'm not in a hurry, I still have my 2002 F250 diesel and it works great. Probably the smarter move to hold on to it longer. I'll get the new shiny F150 when prices drop. Maybe there will be incentives on the 2021 next year. One can hope.

Re: What a Difference a Year or Two Makes!

ridgebackpilot — Thu, 19 Nov 2020 05:40:10 GMT

Well, as it turns out I was able to make a deal for a new 2020 Ford F-150 4x2 Platinum turbodiesel today. The dealership ultimately offered me a winning combination of heavily discounted price, Ford rebates, and low-interest financing.

Ford Motor Credit offered me 60 months at 0 (zero) percent interest. I ended up taking 1.9 percent interest for 72 months instead. I'll post the details of my transaction in the appropriate thread.

Would I have landed a better deal by waiting? Possibly, although my biggest concern at the moment is the lack of inventory at Ford dealerships. I found only two trucks that I wanted in all of northern California. The three-month closure of the Ford assembly lines in Michigan due to COVID-19 has really reduced the inventory at dealerships all over the country.

Re: What a Difference a Year or Two Makes!

sxa001 — Thu, 19 Nov 2020 05:23:36 GMT

Congratulations on the new truck, I think it is always a gamble but if you found the truck that you wanted and got a deal you were happy with that is all that matters.

Re: What a Difference a Year or Two Makes!

AllZero — Thu, 19 Nov 2020 05:48:04 GMT

Congratulations on your approval! Enjoy the new ride.

Re: What a Difference a Year or Two Makes!

sccredit — Thu, 19 Nov 2020 16:38:33 GMT

Congratulations! That Platinum is an amazing truck. Enjoy the massage while driving.