Ford Mustang Mach-E Has An Unusual New Financing Option

Electric Vehicles / 9 Comments

Forget traditional leasing.

The 2021 Ford Mustang Mach-E is certainly not your traditional SUV. Aside from bearing an iconic nameplate, it's also the Blue Oval's first-ever electric vehicle built from the ground-up. No doubt there are great expectations. And at the same time, Ford is taking advantage of this opportunity by changing the way Mach-E customers will order their vehicles.

Last week we learned sales will be done entirely online if customers prefer, meaning they won't have to step foot in a showroom.

Today, CarsDirect has come across more information that expands upon this alternative purchase method. Those planning to lease a Mach-E instead of buying one are in for a slight surprise. Forget the traditional leasing model. Introducing the Ford Options Plan offered by Ford Credit. The key element to it something balloon financing, a type of loan with lower monthly payments in exchange for a larger one-time payment at the end of loan period.

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Ford Options, in an email to dealerships, describes this method as a "lease-like offering." Ford's website also claims customers will have more flexibility compared to a loan for the same loan term. Here's an example. A 2021 Mach-E Select is being advertised for $604 for 36 months with a $4,390 down payment and 2.25 percent APR. There's also a 10,500-mile yearly limit.

To compare, a traditional 36-month loan period with a promotional rate of 0.9 percent APR amounts to $1,073, or $469 per month more than the Ford Options Plan.

Bear in mind, however, the Ford Options Plan will require an $18,898 balloon payment at the end of the contract. Then again, unlike a traditional vehicle purchase, customers have the option to return the Mach-E to Ford Credit or buy it outright. Now, there is one important disadvantage with a balloon payment with an electric vehicle: the $7,500 tax credit.

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In this case, Ford isn't factoring in the value of that tax credit, which basically means consumers will receive it in the form of "lease cash." Ford, however, maintains this will give customers control of the tax credit but doesn't outright mention not all buyers will even qualify for the full amount. What does this all mean?

Basically, Mach-E customers hoping for a lease option with significant upfront savings won't be happy. Sure, there can be $0 down for a Mach-E Select with balloon financing at $734 per month. However, that's also four times as much per month compared to the latest and cheapest Chevy Bolt offer. Also, Ford is also limiting balloon financing to 36 and 48-month lease periods. A regular loan can be up to 84 months.

The Ford Mustang Mach-E is certainly new territory for the company and it remains to be seen whether balloon financing will have mass appeal.

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Source Credits: CarsDirect

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