Financing a "build"

[JCE2]

At 66 years year old it looks like I am going t finally get my dream car. mustang. Was reading this forum last night and was dismayed to discover that instead of the 6-8 week build time I envisioned it is more like 5 months! Is this true even if I am building a simple ecoboost? All that is really stopping me from buying off the lot is I want MY color and MY stripes etc. (no drastic add-ons etc.). In any event my real question is how do you finance a build? In the past I have always simply financed thru the dealer for the purchase of a car on their lot. This time I want to pre-arrange financing with my credit union, but dont most loan agreements have an "expriation" (ie. the terms of the loan are good for 30 days). So if my build takes 5 months, do I wait until it arrives to finance not knowing what the final terms will be, or can I finance now and simply wait until the car arrives to "activiate" the loan? Would love to hear how others would do it. I expect to have my downpaymnt in October so thought I could place my order in August and be safe knowing the car wont arrive until after then (yes, I know I will need $500-$1000 down to place the order. Thanks for any suggestions

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[JCE2]

Just for the record: Ordering a Yellow Ecoboost premium, with the hood & side stripes, and adding in the Copilot 360+ and B&O stereo. Other than that sticking pretty much with the defaults.

 

[Zig]

For the most part financing an ‘order’ works pretty much the same as buying from the lot. The ‘deposit’ is the dealer’s acknowledgment by you that the car is sold, unless you order something way way way out there - and the chances of you being able to order two different racaros for example are pretty low - they will most likely be able to sell it even if you aren’t able to complete the sale. Preapproval / prequalified via credit union will usually have an duration days (30 or so) but in reality they already know exactly how much it will be out the door but are normally very hesitant to complete a sale without product in hand for customer satisfaction and verification of required roadworthy inspection.

 

[roadpilot]

Welcome to the forums, @JCE2.

Ordering a vehicle shouldn't cost you a single dime. I've lost count the number of cars we've ordered. My dealership never makes me put a nickel down.

If your dealership wants money down to order, just make sure the paperwork you get (at the time you place the order) states that the deposit is fully refundable. Bottom line, unless you're ordering a pink Mustang with orange polka dots and a 3 cylinder engine, the dealership has to order cars, trucks, and SUVs for dealer stock anyway.

Any dealership who requires a non-refundable deposit should get your middle finger in their direction as you walk away.

As long as you know you have good credit and can get a loan now, there's no real reason to even apply for a loan right now. It could be two months or six months. Either way, they'll have to re-run your credit and re-approve you months from now, so there is no reason to add a hard inquiry to your credit history at any of the three major CRAs.

And remember: When the vehicle arrives, deposit or no deposit, you are NOT obligated to purchase it if things have changed (e.g., your financial situation changes).

 

[Skye]

Welcome.

https://www.mustang7g.com/forums/threads/introduce-yourself-to-mustang7g.156050/

I'm going to drone on about several things. This isn't your first rodeo. Maybe some additional feedback will help. Maybe not.

Writing things down helps me in many ways. I started my process with a simple notebook. Dates, conversations, facts, references, etc., could all be readily referred to later. Saving any e-mails in a specific folder helps to.

https://www.creditkarma.com/advice/i/hard-credit-inquiries-and-soft-credit-inquiries

If not already familiar, above is an article on the distinction between "hard" and "soft" credit pulls.

With that, I do think it's a good idea to shop around for a loan and financing now.

You should know your credit score today. If you don't, study that on-line to get it. Go to the lenders of interest and play hypotheticals and what-ifs, without filling out or committing to anything.

Interest rates are one study of focus, but look at any administrative fees, options if paying back early, penalties, duration options, etc.

I consider doing the above part of the budgeting process, something to get a feel for now, so there are no surprises later. Once Ford gifts you a VIN and the build date approaches, you can return to the lender and begin an application, or at least advise them with an update.

I'd also do the same with your insurance carrier. Again, just to get a feel for things. Without a VIN, they might not give you a hard number.

There's certainly a chance things can change. While interest rates are expected to stay where they are for longer, they are not expected to go higher. However, a softening economy could cause lenders to scrutinize people more, possibly change terms.

Some institutions may offer a "lock" on rates or a loan, but they typically go for 30-90 days, you have to pay for that, and, it doesn't seem worth it for this amount.

Three places I'd consider are your Credit Union, the dealer and your insurance carrier.

Regarding the deposit, many ask for $1000, but are often flexible. The dealer I worked with, it didn't matter if I paid-in-full on order or a few hundred dollars. For refunds, unless it's something really unique, it's difficult to see a dealer holding you to it anyway. Always good to discuss these things.

While chatting about financing and deposits, confirm the dealer supports Price Protection. Sometimes Ford increases pricing after an order is in. Price Protection is just that: people with orders in continue to pay what was originally agreed to. The overwhelming majority of dealers support Price Protection. Some don't.

Once you have agreed to a car price, confirm with the dealer there will be NO add-ons (nitrogen in the tires, special brake lights, tint, fabric protection, etc.) unless you want it. Dealers add things on to pad their profits.

It'd also be good to confirm with the dealer then what the expected Admin fees at closing will be.

I'd also discuss allocations (pairing your order with a slot on the assembly line), and timelines. Allocations are generally not an issue. A slot opens, your order is paired, and that's that. For dealers that sell very few of those vehicles, or, a lot of those vehicles, difficulty securing an allocation can delay things. Your salesperson can talk to you about that. And don't let them use terms like "special allocation" as an excuse to charge a premium. It's an allocation, plain and simple.

Good Luck.

https://www.mustang7g.com/forums/threads/guide-for-newcomers-ordering-vehicles-at-the-dealer.157583/

https://www.mustang7g.com/forums/th...elivery-inspection-checklist-released.157411/

https://www.mustang7g.com/forums/threads/new-car-acceptance-checklist.158844/

https://www.mustang7g.com/forums/threads/tsbs-ssms-and-recalls-for-the-24-mustang.157809/

https://www.mustang7g.com/forums/th...ide-washing-detailing-essentials-list.161072/

 

[roadpilot]

If not already familiar, above is an article on the distinction between "hard" and "soft" credit pulls.

With that, I do think it's a good idea to shop around for a loan and financing now.

Without a hard pull, they will only tell him that top tier credit scores are looking an N.NN% APR today. That has no bearing on 5 months from now, nor does it guarantee anything even if the rates don't change.

Yes, always good to know what your approximate risk scores are, but the scores you get from CK or even from the freebie stuff from your banks/credit cards are what we call "fake-o" (versus FICO). The reason is every single lender weights the pieces of their algorithm differently. One might put more emphasis on a recent late payment and less on a 2-year-old bankruptcy, while another might weight them opposite.

That said, those fake-o scores will at least let you know the general ballpark for your risk scores, but they can be wildly different. Back in the 00's, I ran a web site that provided no-cost credit repair tips. I know more about the FCRA (Fair Credit Reporting Act), the FDCPA (Fair Debt Collection Practices Act), and everything and anything related to credit risk scoring than 20 people will learn in a lifetime.

I could be dead wrong, but I get the impression that the OP has no issues with his credit risk, but simply wants to know what things he should do and when as he prepares to order a new vehicle.

I'd also do the same with your insurance carrier. Again, just to get a feel for things. Without a VIN, they might not give you a hard number.

Just grab a VIN from a comparable vehicle found in dealer inventory.

There's certainly a chance things can change. While interest rates are expected to stay where they are for longer, they are not expected to go higher. However, a softening economy could cause lenders to scrutinize people more, possibly change terms.

I would not put anything past the current administration and their policies.

Three places I'd consider are your Credit Union, the dealer and your insurance carrier.

Other than special retail finance programs from the manufacturer when they want to move slow moving inventory, CUs are the best place to borrow from. You save and borrow at a credit union, and you bank at a bank.

Regarding the deposit, many ask for $1000, but are often flexible. The dealer I worked with, it didn't matter if I paid-in-full on order or a few hundred dollars. For refunds, unless it's something really unique, it's difficult to see a dealer holding you to it anyway. Always good to discuss these things.

If they demand a deposit, get it in writing that it is fully refundable with no conditions. If they won't do that, walk away.

While chatting about financing and deposits, confirm the dealer supports Price Protection. Sometimes Ford increases pricing after an order is in. Price Protection is just that: people with orders in continue to pay what was originally agreed to. The overwhelming majority of dealers support Price Protection. Some don't.

Even if they do, price protection goes away if the model year changes (order a 2024 now, order doesn't get built until after MY changes to 2025).

Once you have agreed to a car price, confirm with the dealer there will be NO add-ons (nitrogen in the tires, special brake lights, tint, fabric protection, etc.) unless you want it. Dealers add things on to pad their profits.

For sure. Always remember, you can walk away at any time.

I'd also discuss allocations (pairing your order with a slot on the assembly line), and timelines. Allocations are generally not an issue. A slot opens, your order is paired, and that's that. For dealers that sell very few of those vehicles, or, a lot of those vehicles, difficulty securing an allocation can delay things. Your salesperson can talk to you about that. And don't let them use terms like "special allocation" as an excuse to charge a premium. It's an allocation, plain and simple.

Yes.

Overall, good advice, @Skye

 

[Zig]

Yes, always good to know what your approximate risk scores are, but the scores you get from CK or even from the freebie stuff from your banks/credit cards are what we call "fake-o" (versus FICO).

although some cu’s do fico.

That said, those fake-o scores will at least let you know the general ballpark for your risk scores, but they can be wildly different.

Vantage vs fico vs various versions of said.

I could be dead wrong, but I get the impression that the OP has no issues with his credit risk, but simply wants to know what things he should do and when as he prepares to order a new vehicle.

…

For sure. Always remember, you can walk away at any time.

Yes.

Overall, good advice, @Skye

 

[roadpilot]

although some cu’s do fico.


Vantage vs fico vs various versions of said.

FICO refers back to the original scoring model developed by Fair, Isaac and Company. The term "FICO" is used to generically to refer to credit risk scoring models just like the world "Xerox" is used to refer to making a photocopy of a document, even if the machine itself wasn't produced by Xerox Corporation.

There are actually more than three dozen different flavors of "FICO" scoring models used in these parts. FICO models range from FICO 2 to FICO 10T, IIRC. TU uses FICO Score 4, Equifax Beacon - Score 5, and Experian Score 2. VantageScore was developed by the "big three" CRAs (Trans Union, Equifax, and Experian) about 20 years ago, but there are many other risk analysis models in use today.

It's a crazy, convoluted system intended to keep everyone, especially borrowers, in the dark.,

 

[Radiant]

Good news! You don't have to worry about any of that until the car is built. The dealer didn't ask me for a penny to place my order with Ford. Bad news, you won't be able to finalize the financial details for a few months.

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