Ford Explorer Purchase/Lease

[sadiespapa]

Hi All,

I've been looking at the new Ford Explorer for several months now. With my house recently refinanced, and my credit scores in the best shape in years, i've started taking a serious look at buying a new car. I've really found the new Ford Explorer appealing. With the best lease and purchase offers through Ford Motor Credit, i'm hoping to be in a position to qualify through them.

I contacted a dealer 200 miles away (where the best deals in my state are at.) This dealer had the particular model I want, base 4x4 with Sync and Sirius. It's advertised online for $26975 (but the Internet sales rep clarified I wouldn't qualify for the $500 grad/military rebate) Still, at $27475, I consider this to be a pretty good deal.

I'm open to financing, if I can get the 1.9% 72 month rate, but im also seriously looking at leasing for the first time.

Since this would be my secondary vehicle (im keeping my existing vehicle for daily work commute.) I figure leasing might not be an all bad idea, especially if I can get a payment below $300 and save $120 a month over traditional financing. (When I run calculations with a 7.0%APR/Money Factor, I come in right under $300.)

I contacted the dealer yesterday and explained I would be interested in purchasing at a promo apr, or a favorable lease. I gave the internet sales rep my FICO scores, which I had purchased that same day here at myfico.com. He seemed excited to primarily see what he could do without running a hard pull. 

My scores are 

651 - Experian

635 - Equifax

671 - Transunion

It took him a day, to get back to me and his response ended up being quite brief saying that on a lease im looking at $400-500 a month with $1,000 down. He didnt offer any feedback on purchase options.

Does anybody know what bureau FMC typically pulls?

Should I just give up on the thought of having this car for the summer, and continue saving for a larger downpayment?

Thanks for your feedback.

[lajntx]

I believe it depends on where you live - AND- whatever mood they may be in at the time. I bought two vehicles with them last year, and both times they pulled all 3. YMMV though

[Remember0]

His lease numbers seem odd.

Can you get him to tell you what the residual of the car is (should be quoted as a percentage)?

and what term lease are we talking about?

[sadiespapa]

His numbers were based upon a 36 month term. He wasn't willing to provide any further information without me filling out a credit app. I'm hesitant to do so, because I don't want to waste inquiries in the event no deal happens. He wrote back this evening and told me that Ford Credit uses Equifax, which unfortunately is my lowest score.

[Remember0]

Gotcha, no worries. And yeah, I wouldn't app. Especially if you're not 100% sure you'll be buying at the quoted price.

I'll try to run some numbers in the morning using reasonable assumptions. But just preliminarily, with a 1k dp, for 36 months, a online calculator is showing me ~330+taxes+title+license. Taxes itself would take it to 350 in most states (some states can take it to well over 365). So actually doesn't look like he's THAT far off. I'll run some more #'s in the morning, but his guess of 400-500 might be right for the most part, if a bit high.

[sadiespapa]

That'd be great! Do you work for a dealership? $330 base payment is getting closer to what I would accept for a lease. But I'm thinking, if my payment is gonna be that high id only want to do 2 years, as my credit will be stellar by the end of the term, and I could afford either more car or have less of a payment at that time.

The Internet sales rep wrote me an email very late last night (perhaps as he had time to mull over my inquiry) and said "I will have my finance guy run a scenario at 1.9 for 72 based upon the EQ just to see where you would be at."

I think he's referring to down payment. If a couple grand down can get me the 1.9% promo apr, I'll be all over that.

[Remember0]

So 24 months would make the lease higher to be honest.

Assuming:

Term = 24 months

MF = 4% APR equivalent

Net Cap Cost = 28k (car price + fees)-1k (dp) = 27k

Rediual @ 12k miles: assumed 66% @ MSRP of 32k = 21120

Payment = 345+ttl, 1k due at signing

And honestly I think my assumptions are aggressive. I'd guess that Net Cap Cost by the time you walk out of the dealership will be more like 28-29k. And Residual maybe more like 20k to be honest. Do with thee worst case assumptions (28k cap cost after 1k dp, 20.5k residual), you're looking at 418/month + 1k due at signing.

Personally, I'm not a big fan of leases. See if they can work you in @ 1.9% for 72 months. With a 30k OTD price, you're looking at 524/month. Yes, it's more than a lease. BUT at the end of the day, it's cheaper because you have something to show for it. Remember at the end of a lease you have to buy/lease another car.

[sadiespapa]

Yeah I agree, that makes leasing really ugly. I'd only be interested if the overall cost of ownership was much less. 

I do think I will keep this vehicle long term. I bought my Five Hundred in 2006 and have kept it, so that seems to be my track record so far. 

I dont quite get how you get to $524 a month though... that exceeds my comfortability limit. 

I calculate $30330 after taxes & fees, then 1k down leaves a loan of $29330. When I run $29330 in the auto loan calculator at 2% for 6 years I get $432 per month?

[Remember0]

Yep, its 432.

I think the way I got 524 is by having my stubby fingers make a typo. Sorry about that!

[sadiespapa]

Thanks for your reply Remember!

It looks like I've been approved at Boeing Employee's Credit Union (They pull TU) for 3.99%/60 months or 4.24%/72 months. It's not quite 1.9% but with my score Im not complaining! Im getting the feeling that the dealer doesnt even plan on competing for a lower rate. 

I'll report back once everything comes together. Thanks so much for your help Remember and others!