The all-electric Ford F-150 Lightning will land at dealerships shortly with a base price of $39,974.
Ford's new Always-On Rate financing program sets interest rates across credit tiers and aims to eliminate markups for trucks financed through one of three Ford payment plans.
Still, price gouging is taking place, with one dealership in Thousand Oaks, California, listing all three of its F-150 Lightnings at $130,000 or above.
Two weeks after its official release, the first of Ford’s all-electric F-150 Lightnings are starting to arrive at dealerships across America. With Ford beginning fulfillment of their 200,000 F-150 Lightning reservations, dealerships received notice of a new financing scheme for Ford’s premier EV models, a spokesperson for Ford Credit confirmed.
“Customers are increasingly valuing simplicity and transparency, especially in financing,” a spokesperson for Ford Credit told Autoweek. “We are offering this Always-On Rate program for the Mustang Mach-E and F-150 Lightning to provide that simplicity for all customers and contract lengths.”
Aptly named the “Always-On Rate,” Ford Credit is offering locked-in interest rates across five tiers of credit scores and three purchase plans exclusively for the Lightning or Mustang Mach-E models. The dealer bulletin isn’t precisely clear, but the words “markup not available” suggest this financing method was designed to prevent dealer gouging.
Steve Finlay, retired WardsAuto senior editor who has covered automotive retailing for 25 years, isn’t surprised by this. “It would seem that, as far as financing Ford’s hot EVs, the automaker is not-so-subtly spurring people to Ford Credit,” Finlay said to Autoweek. “I guess that’s no surprise, but the company going out of its way to say it is ‘transparent’ seems like a stretch.”
The interest rates range from 4.9% APR for customers with Tier 0-1 credit and up to 14.9% for buyers with Tier 4 credit, on financing terms up to 72 months. Rates for Tier 2 and Tier 3 credit are a linear 2% bump per tier from the starting 4.9%. Interest rates aside, the specifics of this financing incentive are somewhat complex.
The language surrounding markups relates to the financed rates customers will pay and the payout dealerships will receive. In this case, dealers will receive a typical payout for the loan of 1% and cannot markup customer rates should they use Ford Credit. It sends a message to dealers that they can’t mark up the rate another 1 or 2 percentage points and keep the rest for themselves, according to key automotive analysts.
Eligible customers will have the option of choosing Ford’s Standard Retail, Flex Buy, or Options purchasing contracts. The Standard Rate Retail is, well, just that and Flex Buy affords buyers an extended loan term with 15% or 18% discounted rates for the first three years. Ford’s Options, on the other hand, provide a lease-like contract specific to the Mach-E and Lightning with 36- or 48-month terms and a final balloon payment option. Regardless of which plan fits, prospective Ford EV buyers can now weigh their independent options with the interest rates they can expect from Ford’s Always-On Rate program.
Even with the potential of markup, shoppers should be sure to explore their own financing options. “Moreover, those tiered rates seem high from the get-go,” said Finlay. “And maybe, for legal reasons, they have to include what I assume is subprime loan percentage pricing, but do they really expect a person with a bad credit rating to buy an F-150 Lightning at 14% financing?”
It’s no surprise that Ford is encouraging in-house financing of their EV models. Even with a slow first quarter, Ford posted marginal positive sales numbers for its Mach-E and the automaker wants to build on that momentum with the Lightning and other future EVs. With a federal tax credit of $7500 for the Mach-E and E-Transit van, Ford’s electric vehicle program has consistently grown and is up 139% from month-to-month in 2022.
Part of this success can be attributed to the nominal price point for the Lightning: The MSRP on the Pro model comes in at $39,974 minus the $7500 tax credit. Of course, you can option the new Lightning above $90,000 in Platinum trim, but Ford is trying to keep this electric F-Series in line with its internal-combustion siblings.
“Ford has really shown its stuff and brain power as an automaker that puts desirable/aspirational EVs in today’s market,” Finlay said. “If someone wants an F-150 EV, they are going to pay for it, both in MSRP-plus and financing.”
Price gouging is already taking place, with one dealership in Thousand Oaks, California, listing all three of its F-150 Lightnings at $130,000 or above. The models shown at that dealer appear to be Platinum-trim models with minimal options added, indicating a maximum markup of 62% from the base price $90,874.
With customers soon taking delivery of their Lightnings, we’ll find out soon enough how willing some of them are to pay more than sticker. It’s quite possible that Ford is trying to assuage concerns about price gouging by directly targeting consumers with this information about alternative financing.
If you're shopping for a Ford F-150 Lightning, are you willing to pay more than sticker? If so, how much more? And what type of financing are you exploring? Please comment below.