Ford Credit auto loan review: Range of financing options and college student incentives

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In a Nutshell

Ford Credit offers a range of auto financing options, flexible repayment plans, and special incentives to college students and recent graduates. But if you’re not in the market for a Ford or Lincoln vehicle, you’ll have to find another lender.

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Pros Cons
Range of financing options Can only be used to finance Ford and Lincoln vehicles
Special financing incentives for college students and recent grads Late-payment fees
Red Carpet Lease offers flexible terms  

What you need to know about Ford Credit auto loans

The Ford Motor Credit Company — also known as Ford Credit — is the financial-services division of Ford Motor Company.

If you’re thinking about financing your next Ford or Lincoln with a Ford Credit auto loan, here are some key features that stand out.

A range of loan options

Ford Credit offers a variety of auto loan options.

  • Standard purchase for new vehicles
  • Standard purchase for used and certified pre-owned vehicles
  • Flex Buy loan on new vehicles — Features a payment plan with a lower payment for the first few years and a higher payment in the final years
  • Red Carpet Lease — Includes benefits such as a range of mileage and lease term options
  • Lease buyout
  • Commercial financing

Incentives and discounts

As part of its “Ford Drives U” campaign, Ford Credit offers a $500 bonus for current college students and recent graduates who buy or lease an eligible new 2019, 2020 or 2021 Ford or Lincoln vehicle.

Keep in mind that incentives may vary by dealer and are subject to expire or change. And before you buy or lease a Ford or Lincoln vehicle, make sure to check with your local dealer to see if you qualify for any incentives and offers to ensure you’re maximizing the money you’re putting toward a vehicle.

Red Carpet Lease provides flexibility

When deciding between leasing or buying a new Ford vehicle, you might find that the lender’s Red Carpet Lease option has a few unique benefits worth considering. One advantage of the Red Carpet Lease is its Advanced Payment Program, which gives you the option of making your monthly lease payments as a lump sum. And making a lump sum payment is generally less expensive than the total monthly payments amount.

The Red Carpet Lease also comes with a guaranteed asset protection, or GAP, benefit. GAP coverage can help you avoid unnecessary expenses if your car is stolen or damaged beyond repair by covering the difference between the insurance payout and outstanding lease balance.

Note that even though the lender offers GAP protection on its leased vehicles, it may not be the best GAP coverage out there. When selecting GAP protection, shop around and get different quotes to find the most cost-effective solution for your needs.

Only for Ford and Lincoln vehicles

Though Ford Credit offers financing for personal and commercial use, you can only lease or buy vehicles from Ford or Lincoln dealerships.

And while financing with Ford Credit may be a good option if you’re in the market for a Ford or Lincoln vehicle, consider exploring other options before making a decision. Limiting your search to one dealership also limits your access to competitive interest rates and terms that you might get from other lenders.

A closer look at Ford Credit auto loans

Here are some of the finer details to know when comparing Ford Credit auto loans with other lenders.

  • Standard loan terms range from 36 months to 84 months, while the lender’s Flex Buy loan term is 66 months (with two different payment schedules).
  • The Ford Credit Flex Buy program features a 66-month contract with two payment schedules. Generally, the first 36 months of your contract will have a lower fixed monthly payment than you’d get with a traditional 60-month loan. But be careful: Your monthly payments during the second schedule will be higher than your first 36 months of the contract. If you don’t prepare for this monthly payment increase, you may find yourself facing financial hardship. If you end up struggling to make on-time payments or you default on your loan, your credit could be negatively impacted — and you risk losing your car (repossession).
  • If you’re facing a financial burden, Ford Credit may give you the option to defer a payment until a later date. Before an extension request is granted, Ford Credit will review your account for eligibility.
  • If your loan payment is deemed late, a fee may apply, based on the state laws where your loan agreement originated.
  • If you qualify for a Ford Credit auto loan, you have the option to purchase extended service plans, like the Ford Protect Premium Maintenance Plan, which covers all scheduled maintenance. This could be ideal if you’re in a position to buy a plan — you won’t have to worry about routine maintenance costs for the length of the plan.

Is a Ford Credit auto loan right for you?

A Ford Credit auto loan or lease might be a good fit if you’re searching for a Ford or Lincoln vehicle. Among its wide range of financing options, you may be able to find a loan or lease to match your needs.

For example, if you need a high-mileage lease, Ford Credit’s Red Carpet Lease may be a good option. Or if your monthly payment budget is low now, but you anticipate you’ll be able to afford a higher car payment in a few years, the Flex Buy program may fit your needs.

Ford Credit may also be ideal if you’re a college student or recent graduate who’s eligible for the company’s incentive program.

How to apply for an auto loan from Ford Motor Credit Company

You can apply for a Ford Credit auto loan or lease online or by visiting your local Ford or Lincoln dealership.

Once you submit your application online, the lender says you’ll receive a decision right away.

Before you apply for an auto loan with Ford Credit, it’s a good idea to check your credit and compare other loan offers. Understanding your credit can help set expectations — in general, lower credit scores will result in higher interest rates. And shopping around can help you find the best loan rate and terms for your needs. Read our article on how to get a car loan to learn more about the process.

Not sure if Ford Credit is right for you? Consider these alternatives.

If you’re not sure whether a Ford Credit auto loan is right for you, here are some other options to consider.

  • Bank of America auto loan: This lender is an option for those who Bank of America Preferred Rewards clients and qualify for an interest rate discount.
  • LightStream auto loans: LightStream may be ideal for someone who doesn’t want to be limited to shopping for a Ford vehicle — or who wants to buy an older Ford vehicle.

About the author: Ashley Chorpenning is a personal finance writer and content creator. In addition to being a contributing writer at Credit Karma, she writes for solo entrepreneurs and Fortune 500 compani… Read more.