Finance or Lease your Maverick?

[pxpaulx]

$40K cash for my Lariat with all the bells & whistles. Gonna see if they let me put most of it on credit cards so I can earn those sweet, sweet points.

If they have the 0% financing for 36 months I might pay 50% of it on pickup and do 0% payments for the rest to help boost my impeccable credit score.

Same boat - I will absolutely take a free money loan and put my cash into an index fund, plan out an additional expense for 36/48 months (though 0.9 isn't free, it is well worth it if you want to budget the monthly expense down a small amount).

Sponsored

 

[bschurman]

Same boat - I will absolutely take a free money loan and put my cash into an index fund, plan out an additional expense for 36/48 months (though 0.9 isn't free, it is well worth it if you want to budget the monthly expense down a small amount).

0.9% for $30000 over 48 months is $554. In my book, that's pretty cheap and easy to make elsewhere in that time.

 

[Deleted member 1370]

Make sure you get your own financing if possible.
Good place to start is with a few nationwide credit unions.
Navy Fed, Pen Fed, DCU, BCU or maybe Redstone FCU to name a few.

Redstone will give you the best rate with a 730 FICO 9 EX or higher.
As long as your loan to value is in their sweet spot.

Most of those I've listed above, you can get rates ranging between 1 and 3 percent. Depending on the number of months you opted to finance.

For example, Navy Fed is 2.29% for 72 months.
USAA is 1.89% for 60 months.
Don't get hosed on your rate.
Do your homework. And pull your true Fico scores to see where you are at.

You can go to Experian's main website and pull all three scores.
And several of your other fico scores. Such as Bank card, Auto and Mortgage.

my bank itself is a local creidt union in fact. when it comes closer to actual time of financing i will try with them first and foremost since they are the ones i have my credit card with. so it would be nice to do it all in one place. my fico isnt that high yet. not because i have bad credit. i just dont have much credit. im never late on a payment just starting to build it this year. everyones gotta start somewhere ya know. if i gotta finance with ford im prepared to do that as well. building credit isnt over night and all. so i gotta deal with what i can. i can see my credit score via transunion thats for sure. i dont have a mortgage that experian can go through or any other auto loans but i do have a credit card that should pop up there. basic entry level one but its there. thanks for the info and advice!

 

[OTACORB]

IMHO, If the rates are low 0 - 1.5% then you should not pay cash even if you can. That's cheap money that you can invest elsewhere and make money. Paying cash for something that has cheap credit is not ideal.

Bingo! Plus having that type credit actually helps your credit rating. The bank holds the title and as long as I make the payments the vehicle is mine. I could buy mine is cash, but I've learned the value of using my money wisely and credit sometimes its actually the better move.

 

[Gmood1]

my bank itself is a local creidt union in fact. when it comes closer to actual time of financing i will try with them first and foremost since they are the ones i have my credit card with. so it would be nice to do it all in one place. my fico isnt that high yet. not because i have bad credit. i just dont have much credit. im never late on a payment just starting to build it this year. everyones gotta start somewhere ya know. if i gotta finance with ford im prepared to do that as well. building credit isnt over night and all. so i gotta deal with what i can. i can see my credit score via transunion thats for sure. i dont have a mortgage that experian can go through or any other auto loans but i do have a credit card that should pop up there. basic entry level one but its there. thanks for the info and advice!

I'm not affiliated with any of the sites or financial institutions I suggest. Besides having accounts with them and others.

For sure it takes time. But you can build it a lot faster, if you know how the system works. Your credit history is what takes time. Scores can be manipulated.

There are only two sites you can pull true FICO scores. TransUnion isn't one of these.
https://www.experian.com/ pull them for free here. Just cancel the subscription after you pull them.
It won't cost you a dime. As long as you cancel before the trial ends.

Contact your local CU and ask if they have a Shared secured loan program. Basically you'll borrow money from yourself. They'll report it to the credit bureaus.

Having an active installment loan reporting will give your scores roughly a 30 point boost. Especially once it's paid down to below 30% of the original balance.
Your scores aren't based on how large your loan is or the limit of your credit cards. You can have 3 secured $200 CCs and a $200 secured loan reporting. Scores could easily be in the 700s.



The loan doesn't have to be huge.
$200 to $500 should be more than sufficient. Just make sure the loan is active when you apply for your auto loan.

It doesn't take as long to get them in range as you might think.
If you have a close family member that is a Navy Fed member. You could join through them. They give people starting out great rates from my experience.

Just because the CU is local, doesn't mean they'll give you the best rates.

I started my 18 year old nephew with his credit. He went from no credit in Dec of 2018. To having several trade lines reporting by March of 2019. To buying his first car and home by November of 2019. He was 19 yrs old.

So it's up to you, with a little effort. Even starting from scratch. You'll have good enough scores to get a tier 1 auto loan.

You don't have to get completely ripped off in the process, while you're building your credit.

Ok, back to the regularly scheduled program. lol

If you have any questions or need help, feel free to PM me. I'll do my best to lead you in the right direction.


The days of cash being king are over.
Credit is king now, and worth far more.

 

[Hdang1980]

Yeah, I've heard Ford Financing is pretty generous with their rate tiers as long as you haven't had any delinquencies with them directly in the past.

Ford's rate are better than what my credit union offered me. 2.69% for 48 months. And my FICO score is 750+. I'm hoping Ford's current rates are still available since it seems more likely that my Maverick won't be built before the current expiration date of 9/30/21

 

[stoptothink]

Will walk in capable of paying cash, but it's highly unlikely the financing options will make paying cash the better option.

 

[GrandpaBill]

Cash

 

[Pop2020]

Finance for me. Never been a believer in leases (or "fleeces" as Dave Ramsey says). I'll most likely put down 30% or more and try to pay it off in 2 or 3 years on a 4 or 5-year loan. I like paid-off cars and don't get into the "invest it instead" gamble.

 

[brnpttmn]

finance. Definitely not going to liquidate any assets to pay cash. I'll pay 10% down + [i'm assuming] $4-5K trade-in and that will get me under $500/mo through the current Ford rates at either 36 or 48 months (leaning toward 36). Just refi'd the house (saving about $250/mo) and my son is moving from day care to pre-k this fall (saving about $350/mo). Together, I'll still have positive cash flow with the Mav payment.

 

[jenniferdehner9]

Good information. Thanks.

 

[Arukoru]

A few things for people that might pass by this post:

1) Financing isn't a bad thing, work out the math for how much return you could get from investing in an index fund for a short period of time vs how much the financing costs you, spoiler alert: when debt is cheap you should always finance even if you're a billionaire (which is what they do btw). If you do in fact have the cash available to buy a car in cash, there is almost always a better use of money.

2) Leasing isn't a bad thing, especially on a first year model car. Leasing feels like a bad thing because everyone knows someone that got screwed on a lease but for the most part it is a valid option. Arguably it is the most responsible option for a new year vehicle but usually I recommend leasing on expensive vehicles that aren't a passion purchase. IE: buying a Corvette is fine but I wouldn't buy any mercedes product, I'd lease.

3) This, as many people have pointed out is a new model year vehicle. I for one would be pretty pissed off if my gas tank unloaded itself in my driveway because of the spray in bedliner. I know this was due to an unapproved process but you get my drift. Every new model vehicle has the potential to be a giant pile of crap that goes down in history as the worst car ever. To be fair, you can usually see this coming but just to illustrate the point, it is never the responsible thing to order the latest greatest and newest before anyone else. It is fun, sometimes rewarding, and of course satiates impulses to buy but it is not the responsible thing to do no matter how you twist it.

@everyone

Please stop giving super general advice like "financing is bad" or "only a fool pays in cash". There are reasons to do both, most people should finance most of the time in most economies but it isn't a binary always or never thing. My grandfather bought everything in cash after he retired so my grandmother didn't have to keep up with a thousand bills. Was this financially sensible? No but it was perfectly valid logic.

 

[martyi48]

The post above by Arukoru is pretty accurate. If I can get 0% money for however long, of course I'm going to finance. I can pay cash and never miss it but free money is free money. I have owned Mercedes vehicles in the past and still drive one but I never leased as there was no tax write off involved. In my case, it made little sense. I've known people who have leased Mercedes and you better not bring the car back with even a tiny scratch or dent. They put these things under a microscope and make you pay plenty for any damage, however slight. You are also restricted to miles and heaven forbid if you do any mods on the car. The feeling of "ownership" is gone and that is one of the most satisfying things about buying and "owning" a car. For all these reasons, lease is out for me no matter how attractive the rates are. However, I am fully aware that some people must lease to get into the car.

Chances are I will pay cash. I ordered a pretty loaded Lariat in June but no build date yet so late spring delivery is the best I can hope for. The "0%" rates will probably be gone by then.

Sponsored