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Discussion Starter #1 (Edited)
Ford is bracing for exceptionally poor resale values on the Mach-E, as revealed by Ford's bulletin of lease residual values sent to dealers.

After 3 years, a rear-wheel-drive Mach-E Select is expected to be worth only 39% of MSRP. These expectations of plummeting resale value are in sharp contrast to Tesla, with many media outlets this year reporting the Tesla Model 3 holds value better than most or all other new car models. It remains to be seen how the Tesla Model Y will fare in terms of resale value.

I have a feeling ford is being conservative here with their numbers. Since it's a long range EV I don't think it will be hit as hard as other EVs that have shorter ranges, such as the Focus electric.

Does this information change anyone's thoughts about leasing vs. financing the Mach-E?

Just to be clear, the chart for Mach-E residuals is based on 3 and 4 years while the chart from iSeeCars is based on 1 year residuals.

Tesla-Residuals.png

Mustang Mach-E Lease Residuals36 months48 months
Select RWD 3P39%32%
Select AWD 3P39%32%
California Route 1 RWD 4P41%34%
Premium RWD 3P40%33%
Premium RWD 4P41%34%
Premium AWD 3P40%33%
Premium AWD 4P41%34%
First Edition AWD 4P41%34%
GT AWD 4P39%32%
 

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I asked this question on another post, is the 41% for the Premium plus 3 or 4 points based on mileage?
 

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I think they are leaving themselves a 15% reserve on the residual for used market resales. The Options residual is like a guaranteed trade in value. Just like other dealer trade-ins, they are vastly lower than the actual value. Traditional leases usually go by the actual value, not what the dealer trade-in will be.

Also, the lower the residual value claimed, the more profit is made on each car.

We will have to wait until someone is finalizing finance details at delivery to find out what the lease residuals will be set at. The EVBite article made the assumption that the Options and Lease would have the same residual.
 

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Well you have factor in all the tax credits, and the fact they know they will have to lower the price when those tax credits expire or if the policies change allowing tax credits for Tesla vehicles. $7500 amounts to 13-15% of the vehicle price. Add 13-15% to those residuals and you are at a reasonable residual for most cars.
 

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Certainly not good press for Ford. Maybe that's why they've added the Red Carpet lease to the mix and haven't announced a residual.
Presenting a lot of alternative facts here. I believe those ‘residuals’ are from the Options financing which allows the buyer to claim the full $7,500 credit.

Spoke to my dealer today regarding the announced lease program. An ER AWD Premium will have a 55% residual after 36mo/15k miles. 57% after 36mo/12k miles.
 

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Presenting a lot of alternative facts here. I believe those ‘residuals’ are from the Options financing which allows the buyer to claim the full $7,500 credit.

Spoke to my dealer today regarding the announced lease program. An ER AWD Premium will have a 55% residual after 36mo/15k miles. 57% after 36mo/12k miles.
 

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Guys:

Even if the residuals are 59% for 36 months, 10K per year, without the $7,500 Fed Tax credit used as a cap cost reduction, the MME is not competitive with the Model Y.

The Model Y MSRP is $49,990. A comparable Premium AW LR is $54,700.

No matter how you do the math the monthly lease rate for the Y will be cheaper.

Here is your yardstick: The Model Y: with no money down, the monthly payment is $633.

Premium AWD LR, $54,700 MSRP, 59% residual (10K miles per year), and a MF of only 2.5% the monthly payment comes to $733.

see: Lease Calculator Mobile by LeaseGuide.com

I was at my dealership yesterday for viewing the MME. Neither the guys from Ford nor my dealer had any information on either financing or leasing.

Rather than endless speculation why not wait a few weeks until the deliveries start: then we will know for sure what financing and/or leasing will cost and with leasing how the MME compares to the Y.

.
 

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Guys:

Even if the residuals are 59% for 36 months, 10K per year, without the $7,500 Fed Tax credit used as a cap cost reduction, the MME is not competitive with the Model Y.

The Model Y MSRP is $49,990. A comparable Premium AW LR is $54,700.

No matter how you do the math the monthly lease rate for the Y will be cheaper.

Here is your yardstick: The Model Y: with no money down, the monthly payment is $633.

Premium AWD LR, $54,700 MSRP, 59% residual (10K miles per year), and a MF of only 2.5% the monthly payment comes to $733.

see: Lease Calculator Mobile by LeaseGuide.com

I was at my dealership yesterday for viewing the MME. Neither the guys from Ford nor my dealer had any information on either financing or leasing.

Rather than endless speculation why not wait a few weeks until the deliveries start: then we will know for sure what financing and/or leasing will cost and with leasing how the MME compares to the Y.

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+whether the Fed credit is passed along as a cap-cost reduction.

In the end, its each buyers perceived value and financial situation that will determine their price-point.

If the MMe is outside those parameters for me, i can wait two years to see what is out there. I have no need to buy a vehicle at this point, and I don’t find the Model Y nearly as compelling as I do the MMe to buy now.
 

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+whether the Fed credit is passed along as a cap-cost reduction.
The MME is only competitive with the Model Y if the Federal Tax credit of $7,500 is used as a cap cost reduction in the lease. Without the $7,500 in the lease, the MME is not competitive.

The math is clear: numbers do not lie.
 

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Guys:

Even if the residuals are 59% for 36 months, 10K per year, without the $7,500 Fed Tax credit used as a cap cost reduction, the MME is not competitive with the Model Y.



Premium AWD LR, $54,700 MSRP, 59% residual (10K miles per year), and a MF of only 2.5% the monthly payment comes to $733.

see: Lease Calculator Mobile by LeaseGuide.com

I was at my dealership yesterday for viewing the MME. Neither the guys from Ford nor my dealer had any information on either financing or leasing.

Rather than endless speculation why not wait a few weeks until the deliveries start: then we will know for sure what financing and/or leasing will cost and with leasing how the MME compares to the Y.

.
Follow your own advice.
 

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Sorry to repeat this but I posted it in the wrong thread.
I think that it's worth restating that basing the residual on the MSRP can be misleading as to what the 'buyer' has invested. For example, when I leased my 2018 Fusion Platinum Energi the MSRP was 41K however Ford applied the $7500 Tax Credit and an additional $1500 to the MSRP which resulted in a cost basis of 32K and a residual of $19K (24months, I thought that I would be going BEV a year ago). 45% vs 59% on the residual. It's been nine months since I purchased the Fusion at the end of the lease and the selling price of my model with my current mileage (10,100 due to Covid) and in pristine condition is valued between 21 to 24K which if I get anything more than the 19K residual I'm ahead money plus an extra year of usage. When I showed the Fusion to the dealer his eyes lit up and he said wow I've only seen two other Platinum's in town. So to reiterate my original statement while 44% is the stated residual, the actual residual % will be higher and cash investment lower due to Credits and possible State rebates. Finally, regardless of the potential technological leaps in the next three years there will be people who don't have a spare 50 to 60K to spend on a new MMe and will be looking for a clean previously owned version ergo, if I like it when I see it I'll get it. IJMO/ICBW
 

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Sorry to repeat this but I posted it in the wrong thread.
I think that it's worth restating that basing the residual on the MSRP can be misleading as to what the 'buyer' has invested. For example, when I leased my 2018 Fusion Platinum Energi the MSRP was 41K however Ford applied the $7500 Tax Credit and an additional $1500 to the MSRP which resulted in a cost basis of 32K and a residual of $19K (24months, I thought that I would be going BEV a year ago). 45% vs 59% on the residual. It's been nine months since I purchased the Fusion at the end of the lease and the selling price of my model with my current mileage (10,100 due to Covid) and in pristine condition is valued between 21 to 24K which if I get anything more than the 19K residual I'm ahead money plus an extra year of usage. When I showed the Fusion to the dealer his eyes lit up and he said wow I've only seen two other Platinum's in town. So to reiterate my original statement while 44% is the stated residual, the actual residual % will be higher and cash investment lower due to Credits and possible State rebates. Finally, regardless of the potential technological leaps in the next three years there will be people who don't have a spare 50 to 60K to spend on a new MMe and will be looking for a clean previously owned version ergo, if I like it when I see it I'll get it. IJMO/ICBW
I guess you and I will have to agree to disagree:

The present standard is the Tesla Model Y: The lease with no money down, 36 months, 10.5K per year is $633.

The only way the MME will lease out close to the Model Y is to have a residual above 55% and a cap cost reduction of $7,500 the Federal Tax Credit.

Just look at the numbers:

The MSRP, aka the selling price of the Model Y is $49,990.

The MSRP, aka the selling price of the Premium LR AED is $54,700.

Without the Fed Tax credit in the lease, the MME will always lease out for substantial more than the Model Y.

The numbers do not lie.

.
 

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I guess you and I will have to agree to disagree:

The present standard is the Tesla Model Y: The lease with no money down, 36 months, 10.5K per year is $633.

The only way the MME will lease out close to the Model Y is to have a residual above 55% and a cap cost reduction of $7,500 the Federal Tax Credit.

Just look at the numbers:

The MSRP, aka the selling price of the Model Y is $49,990.

The MSRP, aka the selling price of the Premium LR AED is $54,700.

Without the Fed Tax credit in the lease, the MME will always lease out for substantial more than the Model Y.

The numbers do not lie.

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Your purchase decision is heavily weighted on monthly payment cost. Others may not be. Everyone has their own criteria as to what is important. So, not everyone will agree with each other.

I am financing. Some may argue its not the prudent decision, but its what I prefer. In my case, the MMe is actually cheaper than a MY (final MMe price $42,300–not counting x-plan yet, vs MY at $45,990-added white interior) I happen to live in NJ, which currently has excellent EV incentives and makes this possible.

In closing, everyone will do what they feel is best for them and thier situation. The MMe suits my needs, to others it may not be practical. Outright financing may not be feasible for some, others prefer it.

“To each, their own.”
 

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Great points made.

A deeper dive into these numbers could reveal more. Ford probably mapped out the worst end of depreciation.
 

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This is a copy of my post #330 from macheclub.com:

It compares the monthly payment including sale taxes of:

  • Lease on Tesla Model Y
  • Ford Option Plan for the MME Premium LR AWD with Federal Tax credit of $7,500 and incentive of $2,500
  • Ford Option Plan MME Premium LR AWD with Federal Tax credit of $7,500 but no incentive
  • Lease on Premium LR AWD with 57% residual and interest of 5.4%
  • Normal lease on Premium LR AWD with 54% residual, interest of 3% and using the Federal tax credit of $7,500 as a cap cost reduction.
I have not included any state tax credit as they vary from state to state and certain states have phase outs based on the MSRP of the EV.

I have treated the taxes as following:

  • Most states charge sales tax on EV's. If your state does not, then disregard the taxes.
  • When you lease, 44 out of 50 states charge sales tax on the sum of the payments. I will use this method in computing taxes: monthly payment X 36 X 8.625% divided by 36 (months)
  • Where I live the sales tax is 8.625%. Some states have higher and some states have lower taxes.
There are also acquisition fees, disposal fees, documents fees: These are not yet set and I have not included them.


Tesla Model Y Lease:

The monthly payment for the Model Y is $633. The sales tax, $633 X 36, $22,788 X 8.625% is $1,966, monthly $55.

From Tesla.com: Total monthly payment including tax $688.




3221




Premium AWD LR: Option plan:


The first example will use:

  • Full Federal tax credit of $7,500 as a down payment
  • Include the $2,500 incentive:
The monthly payments come to $675.

As this is a sale and not a lease, the sales tax is calculated on the Sales Price, $55,800 X 8.625%, $4,813. This is $134 a month.

From Ford.com: Total monthly payment including tax $809.



3222



The second example is without the $2,500 incentive:

The monthly payments are $749 a month. The sales tax is the same, $4,813. The monthly tax payments are $134.





From Ford.com: Total monthly payment including tax $883 a month.

3223




Next is a typical lease assuming:

  • MSRP $55,800
  • Residual of 57%
  • Interest rate of 5.4%
The residual and interest rate have been posted by others.

The monthly payments are $864. The sales tax, $864 X 36, $31,104 X 8.625% is $2,672, monthly is $75

Total monthly payment including tax $939.



3224



Now here is what a "normal lease" should look like for 36 months, 10K per year:

If Ford offered this lease, it would make sense

  • MSRP $55,800
  • Residual of 54%
  • Interest rate of 3%
  • Includes Federal tax credit of $7,500 as a cap cost reduction
The monthly payments come to $603 a month. Sales tax is $603 X 36, $21,708 X 8.625% $1,872, monthly payment is $52.


Total monthly payment including tax $655.

3225



This monthly payment including tax is less than the Model Y as you would expect, as the MSRP of the Premium LR AWD, $55,8000 less the Federal Tax Credit of $7,500, $48,300 is less than the MSRP of the Model Y, $51,190.



Summary of monthly payments including tax:

  • Model Y: $688
  • Premium AWD LR with $2500 incentive and Federal Tax Credit $7,500, $809
  • Premium AWD LR Federal Tax Credit $7,500 but without the $2500 incentive, $883
  • Lease on Premium AWD LR, residual 57%, interest 5.4% $939
  • Normal lease on Premium AWD LR, residual 54%, interest 3%, Federal Tax Credit of $7,500 included $655

If my math is incorrect please advise.

.
 
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