0% approval from Ford Motor Credit IF we purchase warranties

[Anonymous]

hi all - we were majorly upside on a car and needed to get into something larger for our family. We were originaly approved at a higher APR but when we went to sign papers, the APR had changed to 0% IF we bought an extended warranty and a couple of other warranties. Ended up doing the deal at 0% with Ford Motor Credit.

Even with the warranties purchased, we are saving money in the long run. The warranties are less than the internet would have been on the original deal. So I'm okay with the deal.

But my question is - did they totally sucker us in to buying the warranties? Or would Ford Motor Credit really only offer 0% if we would have bought the warranties?

[Anonymous]

Yes they did sucker you in.  But you can cancel the warranties at any time.  I would.  You will get a check back if you financed them in with the car.  And you are all good.  Dealers can be such A-holes sometimes.  But you should be able to cancel them right now.

[fltireguy]

Yes - they flat out lied to you. Since they obviously could not make any money from you on the financing, they made it up on the warranties.

Easy fix - Cancel the warranties!

[Anonymous]

thank you both! I think we were both just shell shocked at the 0% haha

If I cancel the warranties, my payments would stay the same I would just pay it off earlier, right?

Or, as creditnewguy said - do I still pay the full amount and the warranty company will write me a check?

[pipeguy]

Check and see if you traded a cash rebate for 0% financing, which is usually the case one or the other, check your cost of financing and if is more than your 0% financing, you are ahead. You mentioned you were quoted a high APR, depending on your credit picture, that may or may not be a proper rate. As far as the extended warranty, if you don't want it cancel it - generally these are cheaper through your insurance company if you want an extended warranty.

[Anonymous]

thanks! We technically did trade a $1,000 rebate for the 0% I guess but then they further discounted the car $800 so I was comfortable with it.

if I cancel the warranty, is it just removed from the loan balance? Or would they expect me to pay the full loan amount and refund a check for the warranty?

[pipeguy]

Could be either way, especially since you have not made any payments yet. A while a go a dealer slipped a GAP package into my loan - this is after at least 3 times saying no thank you, no,no thank you and NO! When I reread the documents at home I was more than PO"d and went after the dealer through GM, social media, BBB, Ally, etc. The ended up canceling and refunding the $800+ cost and it showed up as a "payment" against my loan balance rather than a refund check. I suspect if the extended warranty is through Ford Motor Credit that'll happen if it's through sone "dealer approved" outside company, you might get a check. 

Edit/Add:  If your cash rebate was only $1000, I'd guess you are much better off with the 0% loan depending on loan amount and number of years.

[Anonymous]

yes, I feel that we were better off that way. definitely since they reduced the selling price of the car some to offset the rebate we "lost" when we went with the 0%.

i'm going to give it a week or so for all the paperwork and everything to get complete and then i'll look at cancelling the warranty. they are NOT through ford motor credit .which i was originally told they were - so it kinda all made sense to me. give me 0% but make your money on the warranty. now that i found out the warranty is NOT through ford, it made me ask questions.

[jason0618]

Yeah they could have gotten you 0% either way, but they're entitled to make a profit. By giving you 0% and a good deal on the warranty, you yourself said you're happy and the dealership made a little bit of profit. That's par for the course. They aren't required to give you the absolute best rates, just as they aren't required to discount the warranty.
Taking advantage of you would have been to keep your rate high and tell you the bank required warranty purchase. Offering you 0% as a package with the warranty still nets you a deal that saves you money, so why screw the finance guy and the dealership by immediately canceling?
That said, if there's still a lien, the warranty cancellation will just be applied to the loan. Your payment won't change, and in a few years if something breaks you'll have the same payment and the dealer will be happy to remind you that you canceled the warranty as they charge you full retail for A replacement part.

[jason0618]

As an aside, my "non-gm" extended warranty just paid $2600 to replace several things on my car without question. So don't use the fact that it's not a Ford warranty talk you out of keeping it.