Ford Won’t Let You Buy Out Your EV Lease at the End
Ford is moving away from traditional leases on its electric vehicles to capitalize on used-car prices and captive financing.
Lessees of new Ford electric vehicles may not be able to buy their leased vehicles at the end of the term, according to a letter sent to dealers. The letter tells dealers in 34 states that leasing customers may not buy out their vehicles at the end of the lease, and that 17 additional states (including the District of Columbia) wouldn't offer buyouts by the end of this year.
The new rules take effect Wednesday for dealers in those 34 states, although it's unlikely that interested lessees can snap up a Mach-E or F-150 Lightning with an option to buy out before then. Ford dealers stopped taking orders for those in-demand SUVs and trucks in April.
A Ford Credit spokesperson told me the logic behind ending lease buy-outs was a push by the automaker toward sustainability, although the financial incentives for Ford Credit could be considerable.
Residual values for used cars have skyrocketed in the past two years, which may be too tempting for Ford Credit to pass on if that trend continues. Ford now offers a balloon-financing program that largely mimics a lease, with a buyout, refinance, or trade-in with equity-earned options at the end of 36 months, albeit at a higher interest rate than outright purchases with financing. Like a traditional lease, the balloon-financing program caps mileage for buyers. Unlike a lease, the balloon-financing payment program transfers title to the buyer, which would make them eligible for a federal tax credit and any applicable state incentives.
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