Ford Credit auto loan review: Range of financing options with 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, including commercial leasing Can only be used to finance Ford and Lincoln vehicles
Special financing incentives for college students and recent grads Late-payment fees
Flexible repayment plans

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
  • Red Carpet Lease
  • Loan extension with a “rewrite”
  • 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 or 2020 Ford or Lincoln vehicle.

Other incentives may include bonus cash for financing through Ford Credit and a new retail-delivery credit for taking new dealership inventory.

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 advantages

When deciding between leasing or buying a 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 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 safeguard your financial interests 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 75 months, while the lender’s Flex Buy loan term is 66 months (with two different payment schedules).
  • If you’re facing a financial burden, Ford Credit may give you the option to defer a payment or two 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.
  • Ford Credit offers a simple online prequalification application. You’ll receive a decision in minutes, but keep in mind that prequalification isn’t a guarantee that you’ll be approved for a loan.
  • 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. With this plan, you can lock in future maintenance costs.
  • Flexible repayment options include online, automatic, phone, payroll deduction, combined billing, mail, MoneyGram or Western Union payments.

Is a Ford Credit auto loan right for you?

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

If you need a lower monthly payment now but think you’ll be able to afford a higher monthly payment in the future, a Ford Credit Flex Buy loan is another option. If you’re approved for a Flex Buy loan, you’ll receive a 66-month contract with two payment schedules.

Generally, the first 36 months of your contract will have a lower fixed monthly payment than with a traditional 60-month loan. But be careful, because 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 a financial hardship. If you end up struggling to make on-time payments or you default on your loan, your credit could be negatively impacted.

Three tips if you’re facing an auto loan default

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

You can apply for a Ford Credit auto loan online or by visiting your local Ford or Lincoln dealership. Here are the steps to apply for prequalification online.

  1. Click the “To Apply Online” button on the auto financing options page.
  2. Select your financing type, car make and model, and specify whether you have a co-applicant.
  3. Enter your personal information, including your address, Social Security number and date of birth. You’ll also need to provide employment and income information, and select a nearby Ford dealership.
  4. Once you submit your prequalification application, you’ll receive a decision in less than a minute. Submitting your application will result in a soft inquiry, which won’t impact your credit scores. And your application will be shared with the dealer you selected, so it can help you explore all of your financing options.

Keep in mind that prequalification doesn’t guarantee you’ll be approved for a loan. And if you do formally apply — which triggers a hard credit inquiry that could negatively affect your credit — and are approved for a loan, it may be for a different amount and terms than what you prequalified for.

Hard and soft credit inquiries: What they are and why they matter

After you decide on a vehicle you want to buy, you can visit your local Ford dealership to discuss the next steps.

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

Ford Credit offers a wide range of financing options for Ford and Lincoln vehicles with flexible repayment plans. But limiting your vehicle and financing search may prevent you from finding the best interest rates possible.

If you’re not sure 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 Bank of America Preferred Rewards clients with good credit.
  • Wells Fargo auto loan: If you don’t want to limit your vehicle options, Wells Fargo may be a good lending solution.