The calculation I did was on the Select trim, so the story could be different for GT. Can you share your purchase price and total loan amount? I am still coming up with $650/mo for a GT. (MSRP deal, $0 down, 72mo, 8% ttl).
A $69K TRX base trim is actually worth about $86K wholesale, so it has about $10K to $15K of positive equity in it upon delivery. This is why it’s a popular flip.
As a keeper, if the payoff is $58K after 2 years, that means the vehicle would need to depreciate more then $28K to be upside down. IMO this is highly unlikely. It’s more likely the truck will be worth $70K in two years and you will still get to recapture some of that positive equity.
Balloon loans certainly do introduce an amount of risk. Everyone will have a different comfort level.
Yeah it’s only good for base build.
For loaded build, 90k and you probably pay 80k for it. Then balloon loan over 3 years you paid $9k just for interest, where as if tranditional loan you only pay ~$2k
If doing 3.24% & 36/7.5, only paid $2400 more than tradition loan
I think $60k for loaded TRX is a very conservative assumption. So I admit this is truly a great deal…
You can work this payment down to the mid 800’s if you can qualify for a lower rate (which is likely, I would suggest using 3.24%) and then set the annual mileage to minimum, since you will buyout the car at end the of the term, mileage doesn’t matter. Keep in mind this calculator is showing a “with 10% tax” situation, where-as you described Ford’s payment as plus tax.
The key here isn’t the MRM offered by AFG? right now it’s $92K, but by the time the car arrived at dealer, what if this MRM changed? or you place a order right now, you can lock all the rates and MRM offered in this screen shot?
From what I have seen, AFG will only update MRM values once a year (annually). I would consider the MRM locked, but the rate can vary like any other rate, lock-in terms would be up to the offering credit union. Of course MSRP can change at any time.
I recommend starting the process to apply for a balloon loan about 2 weeks before vehicle planned delivery.
In order to compare one balloon loan program with another, we would need to break down the complete specifics of the program and deal. A more simple comparison can be done just looking at MRM, RV and rate for a specific model and trim. If you can share such data from BMW I can provide the corresponding AFG data.
However, given that no BMW’s appear on the AFG “hot list” I suspect the outcome may not be fantanstic.
I’ve done these payment saver loans for last 10 years. If you do this on cars that retain their value, you’ll come out ahead every single time. My Golf Rs were at $300/mo and when I sold/traded them, I still had equity, same with my RS3 and now with my M3. I just did a refi with one of these and my 82k M3 is $645/mo. That’s cheap.
I’ll be doing the same thing with my wife’s new '23 TRD Sequioa and our minivan which will be offered on Turo. Payment is one things … .why tie up capital with a car when they’re a depreciating asset … make them work for ya ;).
Absolutely, I had a list of banks that had them in another thread that was posted here. Right now I’m using Deere Credit Union. I didn’t qualify with any other means other than investments (had to bring $10k over in order to qualify) but if you do payment saver credit union, just see what pops up in the search. What state are you in?
Quick question since I am not familiar with WA tax laws,
What is this tax friendliness you’re talking about here in WA? I am from WA and maybe I can calculate my expected payments better.
Also, by looking at the AFG calculator, this is applicable for used cars as well (from recent years), right?
One thing that’s not clear to me (and excuse me for the very noob question) - if I sell the car after 12 months on a 60 month term balloon loan, what am I on the hook to pay? I initially thought it’s just the Balloon Payment but then I used the calculator and I don’t think it makes sense that I’ll need to pay just $4k?
I am trying to decide whether to finance/lease a new car or finance a CPO’d one - when checking for a used one’s price - it appears that the MRM/CRV is lower than the car’s selling price. What’s your take on higher selling price than the MRM/CRV? does it matter anyways?
Yeah, so let’s say your car is purchased for 50k, and you have a MRM of 40k, with a hypothetical residual at the end of the balloon of 60%.
That means you owe the depreciation between 50k and .6*40k (24k). Which is 26k, but if it was 40k, you’d owe the 16k total, you’re paying pure depreciation vs residualized (not to mention the APR on that).
I think he means OR which has 0 sales tax and is one state lower?
I crossed up my PNW states, I meant Oregon not WA. Reference here is any states without sales tax, or states which may offer a sales tax exemption on certain vehicle types (eg; NJ and EVs)
