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The point of leasing is protect your assets: to pass on the cost of depreciation to some else.

What we have is:

  • A new vehicle that starts out behind the main competition, the Tesla Model Y
  • A new vehicle that but for the Federal Tax credit, imho, would not be able to get out the dealer's door because of its price
  • A new vehicle with all the growing pains problems of first year of production
Couple that with the knowledge that Tesla has steadily been reducing their prices and increasing content- it makes me very leery about owning this car outright.

People in this forum have commented that Tesla is a technology company disguised as an auto manufacturer. That may be accurate.

By going electric so much of the intricacies of manufacturing an ICE are out the window and what is left are relatively simple manufacturing processes leaving room for improvements in technology.

Whatever you want to call it, Ford Option Plan, hybrid lease, deferred purchase agreement are "distinctions without a difference" (quoting TimBob):

All that is important in any lease, regardless of what it is called, is how much are the monthly payments?

At this point in time, the closet Ford has come up with if the "Option Plan". However, the projected monthly payments, even considering the Federal Tax Credits, over the term of the plan may make the MachE $7,000 to $10,000 more expensive than the Model Y.

Finally, I am Mustang lover: I admit it is irrational: my first car was a 1966 GT Mustang convertible.

I hate to admit this, if this were a Camaro rather than a Mustang, I would take one look at the prices, projected MF and residuals and say "PASS"

But being a Mustang, the car has a small piece of my heart!



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OK, so here's the thing: I am certain that a form of Moore's law is in effect for BEV batteries. Therefore I believe by 2024/25 there will be a significant increase in battery performance with a commensurate decrease in cost. I am OK having an outdated computer or DSLR, but a $50k vehicle is another matter. I'd rather not have to worry about resale value of an already significantly depreciated asset; non-Tesla BEV's are currently a hard sell, let alone resale in a market with new cars that have significantly better range and longevity.

Regardless of the terminology or functional details, I am looking for an option that allows me to walk away from the car after reasonable payments. If Ford sticks to a very low "back end number" (call it residual or trade-in), the cost will not be competitive and I will go to elsewhere.
 

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OK, so here's the thing: I am certain that a form of Moore's law is in effect for BEV batteries. Therefore I believe by 2024/25 there will be a significant increase in battery performance with a commensurate decrease in cost. I am OK having an outdated computer or DSLR, but a $50k vehicle is another matter. I'd rather not have to worry about resale value of an already significantly depreciated asset; non-Tesla BEV's are currently a hard sell, let alone resale in a market with new cars that have significantly better range and longevity.

Regardless of the terminology or functional details, I am looking for an option that allows me to walk away from the car after reasonable payments. If Ford sticks to a very low "back end number" (call it residual or trade-in), the cost will not be competitive and I will go to elsewhere.
Sorry to be blunt, but Ford is out to make a profit and will not sell the Mach-E at a loss. They don’t have to, it is a promising offering unlike many BEVs out there. Having a higher back-end value cuts directly into their profit margin.
So, if Ford offering a super-low interest rate on the different financing choices is not enough, then i guess you have already made up your mind. :(
 

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Sorry to be blunt, but Ford is out to make a profit and will not sell the Mach-E at a loss. They don’t have to, it is a promising offering unlike many BEVs out there. Having a higher back-end value cuts directly into their profit margin.
So, if Ford offering a super-low interest rate on the different financing choices is not enough, then i guess you have already made up your mind. :(
I don't wish to flog a dead horse but as I have posted before everyone on this forum is unique as to what suits their needs and wants. As to me, I flip my vehicles every 24 to 36 months. If I want it I buy it and whatever happens or doesn't happen when I make my next choice is irrelevant to me at the time that I Lease or purchase. So no matter what the final decision will be for everyone on this forum, I hope that you get what you want and enjoy what you get.
 

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Sorry to be blunt, but Ford is out to make a profit and will not sell the Mach-E at a loss. They don’t have to, it is a promising offering unlike many BEVs out there. Having a higher back-end value cuts directly into their profit margin.
So, if Ford offering a super-low interest rate on the different financing choices is not enough, then i guess you have already made up your mind. :(

Instead of $60,400 for the First Edition, how different it would be if the price was $50,400!

Even though I plan to use X-Plan as a Ford stockholder, I am not personally responsible for supporting Ford's efforts to make a profit on each MachE:

We would not be having these discussion if Ford was offering more than Tesla Model Y for less money: Instead Ford is offering less for more money.

As I posted, IMHO without the Federal Tax credit, the MachE would not move out the dealer's door.

We have all seen this "movie" before and and we all know it ends badly: a "new" product comes out, it is hyped, the best thing since sliced bread, people have to be the first one on the block to have it, overpay, only to find 6 to 12 months later the car was the "Emperor's new clothes".

Just my $.02:



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Instead of $60,400 for the First Edition, how different it would be if the price was $50,400!

Even though I plan to use X-Plan as a Ford stockholder, I am not personally responsible for supporting Ford's efforts to make a profit on each MachE:

We would not be having these discussion if Ford was offering more than Tesla Model Y for less money: Instead Ford is offering less for more money.

As I posted, IMHO without the Federal Tax credit, the MachE would not move out the dealer's door.

We have all seen this "movie" before and and we all know it ends badly: a "new" product comes out, it is hyped, the best thing since sliced bread, people have to be the first one on the block to have it, overpay, only to find 6 to 12 months later the car was the "Emperor's new clothes".

Just my $.02:
I agree, a cheaper price-point would be nice. I’m just saying there is a business driver behind what is. Ford said from the beginning, that unlike other ventures they have made into the PEV-space, the MMe would not be sold at a loss. It is key to their EV plans, and the proof that its 11-Billion dollar initial investment is worth it.

As for me, what Ford is offering with the MMe is comparable with Tesla, while it may fall just short in some categories, it surpasses in others. And in no category is it so far off that it would negate its value.

However, the Price/Value equation is subjective and unique to the individual. What is important to one person, is irrelevant to the next. I respect your views, just offering mine as well.

I guess I am more optimistic on what i have been seeing so far. Which is why I already put an order in for a Mach-e.
 

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Sorry to be blunt, but Ford is out to make a profit and will not sell the Mach-E at a loss. They don’t have to, it is a promising offering unlike many BEVs out there. Having a higher back-end value cuts directly into their profit margin.
So, if Ford offering a super-low interest rate on the different financing choices is not enough, then i guess you have already made up your mind. :(
Ford may be out to make a hefty profit, but they also have to ensure that they are competitive. After all, they are the ones trying to penetrate Tesla's market and not the other way around.

Ford has every right to charge whatever they like for whatever feature set they like, and if they want to pad the numbers that's fair game. If they want to package a basic feature like heated seats with a $2300 or $2600 bundle instead of either selling them for a nominal fee or including them like every other BEV, that's their prerogative too. I equally have the right to choose something else when I feel they've taken me for granted. The "super low" interest rates you're talking about will likely not be for the Mach E this fall; on both the finance and options details popups it clearly states that they apply to vehicles purchased from dealer stock by July 6th 2020 (today). They might change the date on it tomorrow, but they still aren't likely to apply to the Mach E this fall.

As for the residual number, the clear signal sent to me from Ford is that they know the Mach E will not hold its value. And by your logic I should be the one to take that big depreciation hit because Ford needs to make more money? One could argue that lower back end is due to the $7500 rebate, but the math doesn't bear that out. With $4500 down a blue Model 3 SR+ (MSRP $39k) leased for 36 months with 15k miles comes to $426. With $12k down on a gray select with tech package (MSRP $46,500) "leased" for 35 months and a too-good-to-be-true rate of .9% still comes to $510; at a more likely rate it will be in the $550-$600 range. With the $7500 from the fed, the effective MSRP is the same $39k but the Tesla is 20% to 25% cheaper. If that ratio doesn't change when the real rates are out, then yes I have made up my mind.
 

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Maybe someone could enlighten me on the issues being raised on pricing and loan rates. Ford has posted the MSRP and options pricing. I ordered my MMe knowing what I will be paying for the model and options. I asked my dealer what Ford Credit's rate was and his response was that there was no "fixed" rate. It will depend on a variety of factors at the time of the actual financing/contract. Right now we are approximately 15 weeks from production and 16 weeks from the General Election which may or may not change the financial markets. It's open and clear what the costs are for a MMe and barring a meltdown by The Fed the loan rate will be approximately the same for a Tesla and a MMe unless Ford Credit offers incentives. Time will determine whether one company or the other was the "right" choice. However, using Tesla's cancellation rate on reservations which has averaged 12% and applying it to the MMe reservations (not including dealer orders) there appears to be a demand for the MMe that should carry into the secondary market. But as Dennis Miller used to say on his HBO show "It's just my opinion, I could be wrong"
 

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Ford may be out to make a hefty profit, but they also have to ensure that they are competitive. After all, they are the ones trying to penetrate Tesla's market and not the other way around.

Ford has every right to charge whatever they like for whatever feature set they like, and if they want to pad the numbers that's fair game. If they want to package a basic feature like heated seats with a $2300 or $2600 bundle instead of either selling them for a nominal fee or including them like every other BEV, that's their prerogative too. I equally have the right to choose something else when I feel they've taken me for granted. The "super low" interest rates you're talking about will likely not be for the Mach E this fall; on both the finance and options details popups it clearly states that they apply to vehicles purchased from dealer stock by July 6th 2020 (today). They might change the date on it tomorrow, but they still aren't likely to apply to the Mach E this fall.

As for the residual number, the clear signal sent to me from Ford is that they know the Mach E will not hold its value. And by your logic I should be the one to take that big depreciation hit because Ford needs to make more money? One could argue that lower back end is due to the $7500 rebate, but the math doesn't bear that out. With $4500 down a blue Model 3 SR+ (MSRP $39k) leased for 36 months with 15k miles comes to $426. With $12k down on a gray select with tech package (MSRP $46,500) "leased" for 35 months and a too-good-to-be-true rate of .9% still comes to $510; at a more likely rate it will be in the $550-$600 range. With the $7500 from the fed, the effective MSRP is the same $39k but the Tesla is 20% to 25% cheaper. If that ratio doesn't change when the real rates are out, then yes I have made up my mind.
Sorry timbop, i was just stating facts, but it sounds like i have offended you in some way. If i have, my apologies.

i have had 0% financing from Ford on my last two vehicles. So the to-good-to-be-true rate of 0.9% is very possible, that’s if the buyer’s FICO score meets Ford Credit requirements. These rates are at Fords discretion, and we need to wait and see what will be available at the time of closing.

As i have posted elsewhere, the back-end balloon payment is most likely the trade-in value of the vehicle, not the true residual. So based on a conservative trade-in mark-down of 25%, The residual is more like 56%, not 45%. You can always do a private sale to a third party for more than the surrender value is. Yes, this is a nuisance, but it is still an option.

I don’t know how ‘hefty’ a profit margin is worked in to the price, but I do know Ford has two disadvantages when it comes to pricing the vehicle. First is the middle-man, the dealerships cut of the vehicle cost. And secondly, they do not make their own batteries yet.

Also, where Tesla can build crap quality vehicles and magically everyone says, “oh its growing pains” Ford would be buried alive if there were even a fraction of the issues Tesla has with quality. So they have to do this right and cant afford to cut-corners. Because of this, I think fit, finish and overall quality will exceed Tesla.

As you said, you have every right to do what you want. The reservation is not binding in any way.
 

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At the end of the lease I look at the residual and compare it to KBB.com trade in value. Through the years I have found that trade in value pretty much approximates wholesale value. This is what your car is worth - not the price the dealer sells it for or what you can get selling privately. If you have to sell you car you get wholesale. If you have time and energy, you might get above wholesale - but maybe not.

99% of leases are "upside down" in that the residual is more than the trade in value: this is one of the main reasons to lease: to fix your depreciation cost.

Presently the Ford Option is the only plan that fixes your depreciation. When I converted my reservation to an order, the calculator indicated a balloon, which is the buyback of 44%. That means I have paid depreciation of the difference of 56% which makes the monthly payments not competitive with the Model Y - not by a few dollars per month but by hundred of dollars per month - even after giving credit to the $7,500 Federal tax credit.

When the MachE finally hits the showroom I will examine it closely and take a test drive. At that time I will determine if it "blows me away" so that I can justify the price.

I really want to go green and I can afford to pay extra for a BEV. On the other hand, I am hard pressed to pay more per month for a First Edition, MSPR $60,080 than a Mercedes E450 (not the 4 cylinder but the 362 HP hybrid electric) with a MSRP $74,000.

When I put my reservation in for the First Edition, I was leasing a Ford Edge Sport: this was my second Sport. Each had a residual of 55%. Being a BEV and based on Tesla, I expected the residual on the MachE to be equal if not better than the Sport. Never in my wildest dreams did I anticipate a residual of 44%.

In fact I have never heard of a residual below 54%.

If that 44% stands, Ford is telling us something: the only question is will we believe it?



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Ford may be out to make a hefty profit, but they also have to ensure that they are competitive. After all, they are the ones trying to penetrate Tesla's market and not the other way around.

Ford has every right to charge whatever they like for whatever feature set they like, and if they want to pad the numbers that's fair game. If they want to package a basic feature like heated seats with a $2300 or $2600 bundle instead of either selling them for a nominal fee or including them like every other BEV, that's their prerogative too. I equally have the right to choose something else when I feel they've taken me for granted. The "super low" interest rates you're talking about will likely not be for the Mach E this fall; on both the finance and options details popups it clearly states that they apply to vehicles purchased from dealer stock by July 6th 2020 (today). They might change the date on it tomorrow, but they still aren't likely to apply to the Mach E this fall.

As for the residual number, the clear signal sent to me from Ford is that they know the Mach E will not hold its value. And by your logic I should be the one to take that big depreciation hit because Ford needs to make more money? One could argue that lower back end is due to the $7500 rebate, but the math doesn't bear that out. With $4500 down a blue Model 3 SR+ (MSRP $39k) leased for 36 months with 15k miles comes to $426. With $12k down on a gray select with tech package (MSRP $46,500) "leased" for 35 months and a too-good-to-be-true rate of .9% still comes to $510; at a more likely rate it will be in the $550-$600 range. With the $7500 from the fed, the effective MSRP is the same $39k but the Tesla is 20% to 25% cheaper. If that ratio doesn't change when the real rates are out, then yes I have made up my mind.

When comparing one leas rate to another, I think the better way to do it is without money down. Then you are comparing apples to apples to apples.

When you compare the two, you must take into account the Federal Tax Credit.

From the Tesla calculator, the SR RWD Model 3 MSRP $39,000, 10,000 miles, 36 months comes to $506 per month.

The comparable model MachE would be the Premium standard range RWD, with a MSRP of $51,100. Assuming MF of .9% financing and 44% residual and using the Federal Tax Credit of $7,500 as a cap cost reduction (deposit), 10,000 miles, 3 years the monthly payment comes to $597.

If we assume MF of 2.9% the monthly payment comes to $650.

As you see, unless the residual is improved, the MachE is more expensive than the Tesla.
 

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Don't know in the US, but in Canada the numbers are out and we have 2.99% up to 72 month financing and 3.49% up to 48 month leasing. Those who signed there order now have this rate fixed and may switch at a lower rate if available at delivery time.
 
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No offense taken @MachDrive, I was just pointing out that the ability of Ford to dictate terms isn't guaranteed. I have no illusions of Tesla quality and prefer the UI of the Mach E, but I am not going to take all of the hit on depreciation. I don't think I am alone, but there certainly seem to be enough early adopters who are willing to do so right now that Ford will have success with the Mach E in 2021 (if the reservation numbers are assumed to be a counter). The real question is: "what happens after that?" Ford will then have to outcompete Tesla if they want more than modest sales numbers in the BEV space, particularly when the tax incentives go away.

Audi, Volvo, BMW, and Jaguar have all failed to make a dent in Tesla's market leadership despite Tesla's glaring flaws. IMO it's for one reason: price and value. Even Tesla had virtually insignificant sales and never came close to profitability until they came out with the mid-priced model 3's. Chevy had a brief moment in the sun with the Bolt, but now that the SR+ is in the same price bracket with far better features and styling the Bolt is struggling without massive discounts. Hyundai and Kia have a good chance if they ever increase production, but they'll also have to do something about DCFC charging rates to really make the move. Ford has a chance since the Mach E has much more competitive specs, but they are still lagging: charging speed, cost of DCFC, acceleration, and fuel efficiency are all still behind enough to be significant. What Ford does have is a more familiar UI, styling, and the fact they know how to build cars that don't fall apart or have paint that peels off. That might be enough to establish real market penetration, but it might not.

Ford needs to learn from their own history. The Model T didn't become wildly successful because it was a better car, it did so because it was the first affordable car. Functionally it was "good enough", but the fact that the average Joe could buy it led to Ford's absolute dominance until competitors followed suit. In the case of BEV's TESLA is the company that did it, and FORD is the competitor that is trying to squeeze in. Ford is going to have to be better and cheaper than Tesla to make real inroads, and right now they are only cheaper on purchase price due to the tax incentives that are temporary.
 

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When comparing one leas rate to another, I think the better way to do it is without money down. Then you are comparing apples to apples to apples.

When you compare the two, you must take into account the Federal Tax Credit.
Whether it's $4500 down on the Tesla and $12k down on the MME or $0 down on the Tesla and $7500 down on the MME the net difference in payments is the same, isn't it?
 

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Instead of $60,400 for the First Edition, how different it would be if the price was $50,400!

Even though I plan to use X-Plan as a Ford stockholder, I am not personally responsible for supporting Ford's efforts to make a profit on each MachE:

We would not be having these discussion if Ford was offering more than Tesla Model Y for less money: Instead Ford is offering less for more money.

As I posted, IMHO without the Federal Tax credit, the MachE would not move out the dealer's door.
In reality, Ford probably under-priced the First Edition. Remember they had to stop taking reservations in N.A. after only 14 days or so --- sold out.
I would have still made that reservation at a considerably higher price point.

I have a different opinion of the Model Y and didn’t even consider it as an option --- with the Mach-E, I’m like a teenager waiting for the arrival of his first new car.
 
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Whether it's $4500 down on the Tesla and $12k down on the MME or $0 down on the Tesla and $7500 down on the MME the net difference in payments is the same, isn't it?
Yes if both leases have the same interest rate: No if the interest are different, but pretty much similar.

When you do not put a deposit down you get the true cost of leasing.

When you lease there a number of reason why you should never put any money down, I repeat never put any money down on a lease.

That is a totally different topic and since there will be no leases on the MachE it will be saved for a another day.
 

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Don't know in the US, but in Canada the numbers are out and we have 2.99% up to 72 month financing and 3.49% up to 48 month leasing. Those who signed there order now have this rate fixed and may switch at a lower rate if available at delivery time.

In Canada are there leases? Here in the US because of the Federal Tax credit of $7,500 goes to the owner, Ford is not offering leases but instead the "Ford Option Plan".

If Ford is offering leases in Canada can you provide:

  • MF (money factor) or interest rate
  • residual: what is the percentage of MSRP?
It would be helpful for 36 months, 10,000 miles per year.

Thanks.



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So when you order from the dealer, you don't have to specify lease or purchase?
Not until the actual purchase, usually when you pick up the car. That is when the fininacing terms, including the current interest rates available at that time, are determined.
 
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