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To whom!!!
What kind of question is that? Under the Option plan you as the owner are free to sell the vehicle or trade it in or walk away. Whether or not you chose or are able to is another issue but frankly it's still in the plan.
 

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It's obvious I need to do more research before I close this deal! I get more confused by the day :oops:
It is not confusing at all:

If you are afraid of depreciation then you cannot buy the MME.

Personally I think in the next three years there will be plethora of BEV to choose from. Between now and then I expect range to go up, charging times to come down and prices to also come down.

Just look at Tesla and their vehicles: From the S to the Model 3 and the Model Y and X in between look what has happened:

  • Range has increased
  • Charging time has decreased
  • Price has decreased
What this means is that every owner of a Tesla will take a big hit when they go to either sell or trade in their cars.

The only way to protect yourself against this type of excessive depreciation is to lease.

It is that plain and simple.

Ford knows this as well and I believe this is one of the reasons they have not come out with a lease: they do not want to have the MME come back in three or four years when the lease ends.

Hope this clarifies.

.
 

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What kind of question is that? Under the Option plan you as the owner are free to sell the vehicle or trade it in or walk away. Whether or not you chose or are able to is another issue but frankly it's still in the plan.
I was being a bit sarcastic and I apologize.

All I meant is that imo the market for a used MME three or four years from now will be very, very soft.

Of course you will be able to sell the MME, but at a great loss.

Reminds me of an old story.

The broker calls his client about a hot stock. The client buys 1000 shares at 10. The he buys another 1000 shares at 15. The stock goes to 20 and he now buys 2000 shares. It then goes to 30 and he buys another 5000 shares. Then it goes to 50 and he tells his broker to sell.

The broker replies: "To whom?"
 

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But with the Options plan don't you have the ability to skip the ballon payment and walk away?
Yes you CAN walk away. That is how the options plan is lease-like. At the end you can do 1 of 3 things: walk away, pay/refinance the balloon and keep the car, or roll any equity in the car (above the ballon pmt) into another car as a "trade in".
 

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Thanks guys. Very good input, much to ponder!
My pleasure, good luck and no matter what you decide enjoy your decision. As a rug merchant in Singapore once told me " If you were happy with the price that you negotiated , don't let someone else spoil it for you after you leave"😉
 

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I was being a bit sarcastic and I apologize.

All I meant is that imo the market for a used MME three or four years from now will be very, very soft.

Of course you will be able to sell the MME, but at a great loss.

Reminds me of an old story.

The broker calls his client about a hot stock. The client buys 1000 shares at 10. The he buys another 1000 shares at 15. The stock goes to 20 and he now buys 2000 shares. It then goes to 30 and he buys another 5000 shares. Then it goes to 50 and he tells his broker to sell.

The broker replies: "To whom?"
No worries
 

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Yes you CAN walk away. That is how the options plan is lease-like. At the end you can do 1 of 3 things: walk away, pay/refinance the balloon and keep the car, or roll any equity in the car (above the ballon pmt) into another car as a "trade in".
If you finance a car, you can walk away as well: you can sell the car and if sales price is more than what you owe you make a profit. If less then you owe additional money.

The point of leasing are many fold, but key points are:

  • Reduce your sales tax; and
  • Protect you on depreciation
With a residual between 41% and 44% the Ford Option plan does not give you protection against depreciation. That is a loss of almost 60% in three years!

Unlike a lease where you pay sales tax on the sum of the lease payments, with the Ford Option Plan you pay sales tax on the purchase price. The difference in sales tax alone can be several thousand dollars.

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If you finance a car, you can walk away as well: you can sell the car and if sales price is more than what you owe you make a profit. If less then you owe additional money.

The point of leasing are many fold, but key points are:

  • Reduce your sales tax; and
  • Protect you on depreciation
With a residual between 41% and 44% the Ford Option plan does not give you protection against depreciation. That is a loss of almost 60% in three years!

Unlike a lease where you pay sales tax on the sum of the lease payments, with the Ford Option Plan you pay sales tax on the purchase price. The difference in sales tax alone can be several thousand dollars.

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Correct, in Nevada the sales tax is 8,25% which on the full purchase price (in my case) of $53, 700 is $4,430 vs 8.25% of 56% of the MSRP. However, let's revisit the residual yes it's 44% of the MSRP under the Option Plan but no one is paying the full MSRP as long as the Federal tax credit is around and for those of you lucky enough to be getting State rebates the cost is significantly less. Again $53700 - $7500 = $46200. If the residual is 44% on the MSRP of $53700 that means while your monthly payments were $30072, you paid $7500 less in taxes which equals out of pocket $22572(plus interest) and the residual is $23,628. That means that your actual residual is around 51% not 44%. Given that I just finished homemade Korean BBQ Beef with Thai Sticky Rice and a fabulous Junmai Daiginjo Sake my math maybe questionable however there is little doubt that I will be fact checked.🧐
 

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Correct, in Nevada the sales tax is 8,25% which on the full purchase price (in my case) of $53, 700 is $4,430 vs 8.25% of 56% of the MSRP. However, let's revisit the residual yes it's 44% of the MSRP under the Option Plan but no one is paying the full MSRP as long as the Federal tax credit is around and for those of you lucky enough to be getting State rebates the cost is significantly less. Again $53700 - $7500 = $46200. If the residual is 44% on the MSRP of $53700 that means while your monthly payments were $30072, you paid $7500 less in taxes which equals out of pocket $22572(plus interest) and the residual is $23,628. That means that your actual residual is around 51% not 44%. Given that I just finished homemade Korean BBQ Beef with Thai Sticky Rice and a fabulous Junmai Daiginjo Sake my math maybe questionable however there is little doubt that I will be fact checked.🧐
I believe you are not correct:

Sales tax in on the selling price.

For example if the selling price is $53,700 you pay tax on that amount. In your case at 8.25% $4,420. The only exception I am aware of is when you trade in a car. The amount of the trade in is deducted from the selling price and you are charged tax on the net amount.

The Federal Tax credit of $7,500 has no effect on the sales tax due.

In my example I only used the depreciation component of the lease payment. I did that as I assume the interest rate on both the Option Plan and Lease should be more or less the same they would offset.

As the residual of the lease is 56%, the depreciation payments represents 44%. The sum of those payments, representing 44% of the MSRP and not 56% of the MSRP times 8.25% would be your tax due. 44% of $53,700 is $23,628 @ 8.25% tax will be $1949.

That is a difference of $2,471.

As to the Federal Tax Credit:

If you do the Ford Option plan you will get back in the tax year you titled the car, $7,500. There are many things you can do with the the $7,500.

  • You can choose to put the $7,500 towards the purchase price. This will reduce your monthly payment. This will still keep your residual at 44%
  • You can choose to apply the $7,500 towards the residual. This will also reduce your monthly payment.
  • You can take the $7,500 and invest it or spend it.

Keep in mind the same will be true if you lease. The $7,500 will reduce in a similar manner your monthly payments.

So whether you include or not include the Federal Tax credit the relative payments of the option plan vs. leasing remain the same.

The exception is if Ford does not put the $7,500 into the lease. As I have posted I am not interested in the Option Plan because of the low residual. If Ford does not put the $7,500 into the lease the monthly payments will not be competitive and I will not delivery of the FE.

FYI: applying the $7,500 credit under the Ford Option to you car, $53,700, your monthly payments for 36 months come to $712. To this must added sales tax of $4,430, an extra $123 per month. That makes your monthly payment, with the Federal tax credit in the plan, $835 a month.

That is a lot of money to pay a month for a $46,200 car with a balloon of $23,628!

.
 

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I believe you are not correct:

Sales tax in on the selling price.

For example if the selling price is $53,700 you pay tax on that amount. In your case at 8.25% $4,420. The only exception I am aware of is when you trade in a car. The amount of the trade in is deducted from the selling price and you are charged tax on the net amount.

The Federal Tax credit of $7,500 has no effect on the sales tax due.

In my example I only used the depreciation component of the lease payment. I did that as I assume the interest rate on both the Option Plan and Lease should be more or less the same they would offset.

As the residual of the lease is 56%, the depreciation payments represents 44%. The sum of those payments, representing 44% of the MSRP and not 56% of the MSRP times 8.25% would be your tax due. 44% of $53,700 is $23,628 @ 8.25% tax will be $1949.

That is a difference of $2,471.

As to the Federal Tax Credit:

If you do the Ford Option plan you will get back in the tax year you titled the car, $7,500. There are many things you can do with the the $7,500.

  • You can choose to put the $7,500 towards the purchase price. This will reduce your monthly payment. This will still keep your residual at 44%
  • You can choose to apply the $7,500 towards the residual. This will also reduce your monthly payment.
  • You can take the $7,500 and invest it or spend it.

Keep in mind the same will be true if you lease. The $7,500 will reduce in a similar manner your monthly payments.

So whether you include or not include the Federal Tax credit the relative payments of the option plan vs. leasing remain the same.

The exception is if Ford does not put the $7,500 into the lease. As I have posted I am not interested in the Option Plan because of the low residual. If Ford does not put the $7,500 into the lease the monthly payments will not be competitive and I will not delivery of the FE.

FYI: applying the $7,500 credit under the Ford Option to you car, $53,700, your monthly payments for 36 months come to $712. To this must added sales tax of $4,430, an extra $123 per month. That makes your monthly payment, with the Federal tax credit in the plan, $835 a month.

That is a lot of money to pay a month for a $46,200 car with a balloon of $23,628!

.
Too much Sake perhaps. What I meant to post is that with a residual of 44%, the 56% is what you are making payments on with sales tax added to the payment. Rather than sales tax on the entire MSRP at time of purchase unless you trade it in and get the tax refund on the portion of unused purchase price. If I applied the $7500 to a lease taxable amount that was also incorrect on my part. I was so 'in the weeds' with the numbers that actually started to confuse myself on what it was I was trying to say. However, what I was trying to post was that with leasing you can pay less sales tax and that the residual of 44% is technically incorrect if one factors in the Tax Credit and any rebates into the purchase price. Which means that what you pay or walk away from at the end of the financing term isn't the MSRP difference but rather MSRP less discounts. Good catch thanks.
 

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Too much Sake perhaps. What I meant to post is that with a residual of 44%, the 56% is what you are making payments on with sales tax added to the payment. Rather than sales tax on the entire MSRP at time of purchase unless you trade it in and get the tax refund on the portion of unused purchase price. If I applied the $7500 to a lease taxable amount that was also incorrect on my part. I was so 'in the weeds' with the numbers that actually started to confuse myself on what it was I was trying to say. However, what I was trying to post was that with leasing you can pay less sales tax and that the residual of 44% is technically incorrect if one factors in the Tax Credit and any rebates into the purchase price. Which means that what you pay or walk away from at the end of the financing term isn't the MSRP difference but rather MSRP less discounts. Good catch thanks.
If you going to post after drinking Sake, I think as friends on this forum, you are obligated to share the Sake with us!

No harm.

As you correctly posted, one of the reasons to lease is that sales tax is only the sum of the lease payments vs. buying and paying tax on the sales price.

With a trade in, the tax is on the sales price less the value of the trade in.

.
 

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If you finance a car, you can walk away as well: you can sell the car and if sales price is more than what you owe you make a profit. If less then you owe additional money.
When I said "walk away" I meant without paying anything else if the car is worth less than the "residual". With a buy you make out in 2 cases (value >= owed), but lose in the third case (value < owed). For options you essentially "win" in all 3 cases, unless you put more mileage than you were allotted or damaged the car.
 

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When I said "walk away" I meant without paying anything else if the car is worth less than the "residual". With a buy you make out in 2 cases (value >= owed), but lose in the third case (value < owed). For options you essentially "win" in all 3 cases, unless you put more mileage than you were allotted or damaged the car.
Unfortunately in Nevada the Options isn't an option
 

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When I said "walk away" I meant without paying anything else if the car is worth less than the "residual". With a buy you make out in 2 cases (value >= owed), but lose in the third case (value < owed). For options you essentially "win" in all 3 cases, unless you put more mileage than you were allotted or damaged the car.

My goodness:

The balloon is set at 44%.

Are you suggesting that the MME after three years, 10K per year will be less than 44%?????

The only car I know that has that kind of depreciation is FIAT.

If the MME after three years holds less than 44% of its value Ford is in big "shi*"!!!


.
 

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The only way to protect yourself against this type of excessive depreciation is to lease.
The best way to protect against vehicle depreciation is to not need a personal motor vehicle (walk, bike, use public transit).

Second best way is to buy used and hold for a long time.

Third way is to buy a cheaper, non-premium car and keep it more than 3 years.

Fourth might be to buy a premium car and keep it more than 5 years or so.

In my opinion, leasing is somewhere on the list after these first four options.

The point of leasing are many fold, but key points are:
  • Reduce your sales tax; and
  • Protect you on depreciation
The first four options above will save me more in sales tax than leasing, and I will realize less depreciation, as well.
 

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My goodness:

The balloon is set at 44%.

Are you suggesting that the MME after three years, 10K per year will be less than 44%?????

The only car I know that has that kind of depreciation is FIAT.

If the MME after three years holds less than 44% of its value Ford is in big "shi*"!!!


.
I invite you to look at chevy bolt resale values
 

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I invite you to look at chevy bolt resale values
To that you can add the BMW i3 and Audi eTron.

But those of course are the absolute worst of the worst BEV cars - cars that I would never ever consider getting.

Surely you do not feel the MME is in that category do you?
 

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To that you can add the BMW i3 and Audi eTron.

But those of course are the absolute worst of the worst BEV cars - cars that I would never ever consider getting.

Surely you do not feel the MME is in that category do you?
I don't, but it is a cautionary tale. Ford hasn't been a Wall Street favorite for a long time and there are a lot of things that can come on the BEV scene by 2024. I don't like the low residuals any better than you do, but I do understand it. If they continue to offer the $2500 incentive on 48 month options I am going to take that route and see what the landscape looks like in 4 years. I'll probably just pay it off, but if there are much better choices at that time I can take the equity from such a low balloon (or walk away if there no equity). I figure as long as I don't do anything stupid to damage the car I can't lose.

Oh, and in NJ there is no sales tax on BEV's so I don't have to worry about the tax ramifications of lease vs options.
 

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Scheduled production date December 7th, first edition Grabber Blue. Ontario Canada.
 
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