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Discussion Starter · #1 ·

$499/Month, $4,500 down. 10K miles/year.

So MME Ford Options has a Bogie now....
 

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$499/Month, $4,500 down. 10K miles/year.

So MME Ford Options has a Bogie now....
Seems kind of high for a 36 month Model Y lease.

$6,000 payments a year X 3 = $18,000 + $4,500 = $22,500 for 30,000 miles.

And you still have to add State Sales Tax & Registration.
 
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Cheap compared to the Ford "Option Plan":

Presently for 36 months, 10,000 miles per year, X-Plan pricing and assuming a balloon of 43% of MSRP, and further putting down the Federal Tax credit of $7,500 as a "cap cost deduction", and interest rate of only 1.9%, the monthly payments come to $784 per month, or $28,224.

see: Auto Lease Calculator – Best car lease payment calculator

Tax: In New York, on a lease we are taxed on the total of the lease payments and down payment: On the Model Y, the total is $22,500: the tax at 8.625% is $1,940, total out of pocket, $24,440.

As the Ford "Option plan" is a purchase the tax is on the purchase price. Using X-Plan pricing the First Edition, MSRP $60,400. will cost $59,467. The tax will be $5,128, total out of pocket, $33,281.

Over three years that makes the First Edition $8,841 more or $245 a month more than the Model Y.

I agree with you that $499 plus $4,500 for a $49,990 car is not cheap but it is compared to a First Edition at $51,967 (X-Plan price less Federal Tax credit of $7,500) it is.

I think between now and delivery of my First Edition two things will happen:

  • Tesla present lease rate is not that attractive. Between now and the end of the year Tesla will further enhance their lease options.
  • Ford will have to alter their "Option Plan" to be more competitive
Just my $.02!



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I think between now and delivery of my First Edition two things will happen:
  • Tesla present lease rate is not that attractive. Between now and the end of the year Tesla will further enhance their lease options.
  • Ford will have to alter their "Option Plan" to be more competitive
I agree, neither the Model Y lease or Ford Option Plan look attractive to me.

If Ford offers a Financing Plan of 36 Months or longer at under 2%, I will take that and should be able to easily cover the interest expense on the loan with the $60,000 or so cost invested in the Market instead.
If they don’t, I plan on paying cash or maybe a similar low interest loan from my Credit Union.
 
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Discussion Starter · #5 ·
Can someone more familiar with a lease explain what happens in this scenario?

I trade in a car for $15K for the MME Ford options or the MY with Tesla lease.
The minute I drive the car off the lot I get rear ended.. No one gets hurt but the car is totaled.

As I understand it, since I own the MME under Ford Options, depending on the insurance plan, I am covered basically for the full cost of the car. However, with the MY, I essentially lose the down payment (in this case the trade in value).

This is the reason I've been advised against trading in a car for a lease greater than the lease down payment.
 

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Can someone more familiar with a lease explain what happens in this scenario?

I trade in a car for $15K for the MME Ford options or the MY with Tesla lease.
The minute I drive the car off the lot I get rear ended.. No one gets hurt but the car is totaled.

As I understand it, since I own the MME under Ford Options, depending on the insurance plan, I am covered basically for the full cost of the car. However, with the MY, I essentially lose the down payment (in this case the trade in value).

This is the reason I've been advised against trading in a car for a lease greater than the lease down payment.
Simple answer: Yes and Yes.

Under a lease, your insurance covers the balance of the lease payments plus the residual. The money put down is lost. The fact that it was a trade does not matter. I suggest taking the money from the trade in. Do not put it into a lease.

I have posted and I repeat, never put any money down on a lease: the only exception is MSD (multiple security deposits) usually 10. The MSD can significantly reduce the MF and the MSD is refundable at the end of the lease.

However, not all states permit MSD: NY for example does not: your case above, I do not know when you get your MSD back: when the car is totaled or the end of the lease. As the lease payments have been substantially reduced, I suspect the refund is at the end of the lease and not when the car is totaled - but I could be wrong.

Under the option plan you get the value of the car: but here again I would be leery: At this point the value of the MME is totally unknown.

Sales tax: on a lease, most states charge sales tax on the sum of the lease payments plus any deposit. Whether you use the trade in as a deposit or not, the sales tax will be the same.

On the Option Plan, which is a purchase, the value of the trade in will not be subject to sales tax.
 

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Discussion Starter · #7 ·
Under a lease, your insurance covers the balance of the lease payments plus the residual. The money put down is lost. The fact that it was a trade does not matter. I suggest taking the money from the trade in. Do not put it into a lease.

Under the option plan you get the value of the car: but here again I would be leery: At this point the value of the MME is totally unknown.

Sales tax: on a lease, most states charge sales tax on the sum of the lease payments plus any deposit. Whether you use the trade in as a deposit or not, the sales tax will be the same.

On the Option Plan, which is a purchase, the value of the trade in will not be subject to sales tax.
I've heard but not actually taken money from a trade in. Is this common practice? Dealers write you a check?

We intend to purchase and keep our MME. There is an additional cash incentive to go with Ford Options and we get the tax benefit on our trade in (~$3,500 total I estimate). For someone looking to "lease" with Ford Options... it doesn't seem like a too good a deal but for a purchase, it makes a lot of sense to go with it rather than financing on my own. There's always the pay for it full and walk away option but I don't want to sell any investments paying 6~12% dividends to avoid a 2.1% loan.
 

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I've heard but not actually taken money from a trade in. Is this common practice? Dealers write you a check?

We intend to purchase and keep our MME. There is an additional cash incentive to go with Ford Options and we get the tax benefit on our trade in (~$3,500 total I estimate). For someone looking to "lease" with Ford Options... it doesn't seem like a too good a deal but for a purchase, it makes a lot of sense to go with it rather than financing on my own. There's always the pay for it full and walk away option but I don't want to sell any investments paying 6~12% dividends to avoid a 2.1% loan.
Sales Tax: On $15,000 @6% that is tax savings of $900. @9% $1350.

Option Plan vs. straight financing: a lot depends on:

  • rate of interest
  • incentives if any
When your MME comes in, best to check what the interest rate for straight financing vs. Option Plan. The option plan per month should be cheaper because of the balloon at the end.

However, if you plan to keep the MME, at this point, without any knowledge of long term reliability, that is a big "if", then if the interest on straight financing is .09% vs. 2.5% on the option plan, then financing would be better assuming the incentives are the same.

What I have always done is take "pencil to paper":

See where you are, actual out of pocket payments after 24, 36 and 48 months financing vs. Option plan. Always include taxes.

Keep it simple and do not put any money down. All calculators permit you to put zero down.
 

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Discussion Starter · #9 ·
Sales Tax: On $15,000 @6% that is tax savings of $900. @9% $1350.

Option Plan vs. straight financing: a lot depends on:

  • rate of interest
  • incentives if any
When your MME comes in, best to check what the interest rate for straight financing vs. Option Plan. The option plan per month should be cheaper because of the balloon at the end.

However, if you plan to keep the MME, at this point, without any knowledge of long term reliability, that is a big "if", then if the interest on straight financing is .09% vs. 2.5% on the option plan, then financing would be better assuming the incentives are the same.

What I have always done is take "pencil to paper":

See where you are, actual out of pocket payments after 24, 36 and 48 months financing vs. Option plan. Always include taxes.

Keep it simple and do not put any money down. All calculators permit you to put zero down.
Ford Options: $2,500 cash incentive and 2.25%.
Ford Credit: No cash incentive and 1.9%.

Sales tax for my county is 8.125% (I💔NY). I'm seriously worried what NY state will do to make up the loss of tax revenue in 2020 including EV tax credits. Good thing they're captured at the time of purchase. Already they're shaking down the local utilities. Any guesses to who will eventually bear the burden of these fines if they stick?

 
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