Just musing on this in the light of the various interest rate hikes.

I'm currently on a 2 year "Options cash plan" deal at 0%. No issues with the deal and I'm doing very nicely with the final balance amount gathering interest in a cash ISA.

It just struck me that even though it's 0% as far as I'm concerned, Ford Credit are financing that sum for 2 years and it must cost them something to do that. So I wondered if there'd be any incentive to settle early. I asked for a figure and it's the same if I settle now or when the 2 years ends (now 21 months away), always assuming I don't just hand the car back at that time.

Just wondering if anyone has been offered an early settlement incentive with a similar 0% deal? A couple of my friends are adamant that they have been in the past, one with Ford, one with a Nissan, but as our late Queen said "recollections may vary"!😀 

 

There will be no incentive if you are on 0%.

You would be better off putting the money in a savings account and keep the 0% running unless you particuarly need it gone from your credit report.

1 hour ago, alexp999 said:

There will be no incentive if you are on 0%.

You would be better off putting the money in a savings account and keep the 0% running unless you particuarly need it gone from your credit report.

Agreed 100%

2 hours ago, Eric Bloodaxe said:

always assuming I don't just hand the car back at that time.

NEVER hand the car back, they are always worth a lot more than the MGFV.

Sell to motorway or even we buy any car, they will settle MGFV and give you the extra

1 hour ago, alexp999 said:

You would be better off putting the money in a savings account and keep the 0% running

Yes, I've done that as I mentioned and that is the plan. I didn't expect to see anything from Ford but was just interested to see what the answer was. I found the process of registering for Ford Account and then accessing the Finance section (verification codes sent by text, etc) a bit of a pain so thought I'd do something while I was in there!😀

12 minutes ago, DaveT70 said:

NEVER hand the car back, they are always worth a lot more than the MGFV.

The options cash plan is classed as HP rather than PCP and is more "half now and half in 2 years time" so it's not strictly a MGFV, basically just half the agreed price so I do expect it will be worth more than that. If not, I still have the walk away option.

I'll be watching residuals very carefully though. There's quite a lot of debate on various forums at the mo about residuals on the Mk 8.5. Two opposing schools of thought basically:

a) The Mk 8.5 is the last of the line, there won't be any more, so residuals will be high

b) The Mk 8.5 is not as good as the original Mk 8 ST (due to reduced spec, facelift front end which is not universally liked, etc) so the last Mk 8s will hold value and the 8.5s won't.

We shall see who's right! There are already some daft prices starting to appear.

 

But all that aside, I guess the answer to my original "ponder" will be "no". I don't trust my friends memories (I suspect they are thinking of interest bearing finance) but thought I'd see if anyone proved them correct!😀

2 hours ago, Eric Bloodaxe said:

Just wondering if anyone has been offered an early settlement incentive with a similar 0% deal?A couple of my friends are adamant that they have been in the past, one with Ford, one with a Nissan, but as our late Queen said "recollections may vary"!

 

 

 

15 hours ago, Eric Bloodaxe said:

The options cash plan is classed as HP rather than PCP and is more

Options cash plan is options but you've put all the money up front so zero payments. It still has MGFV

4 hours ago, DaveT70 said:

Options cash plan is options but you've put all the money up front so zero payments. It still has MGFV

Yes, I agree in effect it's the same thing, although they avoid the use of the term. In the "legalese" in the formal documentation I have, the only things that are "guaranteed" are the customer clearing the balance or handing the car back.

I'll be making a final decision a couple of months before the term ends taking account of values then. MGFV (or whatever they choose to call it) is supposedly a prediction of future residuals (haha)**but with these plans it's more or less literally a figure divided by 2, so your usual caveat about handing back applies even more.

One other thing to note about this plan is that, although described as "2 year", it is in fact 25 months which means anyone handing the car back is paying for the 2 year service just before returning it.

(**I think we discussed on another thread the c*ck-up by VW on the Golf R which was all over VW forums  some years back. The residuals were wildly over-estimated so monthlies were ridiculously low and MGFV accordingly ridiculously high. Anyone trading for another car was laughing, otherwise I don't recall hearing of anyone taking the purchase option!😀)

35 minutes ago, Eric Bloodaxe said:

One other thing to note about this plan is that, although described as "2 year", it is in fact 25 months which means anyone handing the car back is paying for the 2 year service just before returning it.

My '3 year' plan was the same, but I didn't realise at the time.  Was actually 37 months - so I would have been liable for the MOT and possibly any parts failures for the final month if I'd kept it for the full term. 😮 

21 hours ago, Eric Bloodaxe said:

There's quite a lot of debate on various forums at the mo about residuals on the Mk 8.5.

... and some people think that with the cost of living crisis, people won't have money to spend on a decent car and so used car prices will drop in two years time, especially when the new car supply problems get sorted out (which they will eventually).

Like house prices have plummeted once people saw their fuel costs and mortgage payments rise. There's only so much money in the family budget - something's got to give. 

1 hour ago, TomsFocus said:

My '3 year' plan was the same, but I didn't realise at the time.

Lucky escape, then Tom!😀