Ford and Interest

[samintx]

Did I hear on the radio that FORD was offering zero financing for up to 6 years? I know they are up for the options of taking the company Private or team up with Nisson or another car company trying to get the company back on their feet.

Check into it if you are interested in a new car. Might be a good deal.

[SteveJobs]

http://money.cnn.com/2006/08/23/news/companies/ford/

[elmo3]

It's never a good deal. You end up with a car you cannot sell under any circumstances--not only because it's a Ford, but because everyone else who may want a Ford will simply buy new under those circumstances.

You buy a $20,000 vehicle, and you drive off with a $10,000 vehicle. Scary.

Better to take a Honda or Toyota.

[SteveJobs]

There are tons of other motives than resale value.

[MacMagus]

> Check into it if you are interested in a new car. Might be a good deal.

Except it's a Ford.

FORD Loyalty:
Flip it, Overhaul it, Repeat until Death.

[grad]

Toyota and Honda offer much more car for the money, and are far more reliable.

[Michael]

We have been driving Ford Rangers and Honda Accords for years. I can always count on about $500 worth of repairs on the Ranger in a 100,000 mile ownership; I don't believe I've ever spent anything on a non-maintenance repair on an Accord in 25 years over 5 Accords. I'd buy the Honda pickup for the reliability, but it's way too much $.

[Pat]

In ten years of owning Ford trucks, I've never had an out of pocket repair and only one warranty claim; a leaking o-ring.

Wow, what a piece, huh?

[raz]

Regardless of how you value a Ford, the point here is that they are effectively reducing the price of the vehicle to the future value of the payments over 6 years.

For example, at (3% inflation) next year's payments have a present value of only 97 cents on the dollar. And those dollars are worth about 86 cents in 6 years. So, the present value of those payments is far less.

Typically, these deals are worded as "0% interest or up to $5000 cash back" - where "up to $5000" is really "the present day value of the discounted future cash". I saw no mention of that in the linked article.

What I did see was the implication that they're going to make this offer good to people with "less than stellar" credit. Depending on how low they go on the credit worthiness scale, this could turn Ford into the Rent-A-Center of cars. I'd expect to see a ton of repos hit the market as soon as the economy hits a speed bump.

[elmo3]

From Ford's web site:

*Not all buyers will qualify for Ford Credit Financing. 0% APR financing for 72 months is not available with any other incentive offers and excludes Ford GT, LCF, F-650/750. 72 months at $13.89 per month per $1000 financed with 10 % down. Take new retail delivery from dealer stock by 9/5/06. See dealer for qualifications and complete details.

I guess I don't care about the details enough to go to a dealer...