The all-new Ford Bronco and Bronco Sport are coming soon to your local Ford dealer. The automaker is likely to sell boatloads of them, Ford is already rolling out finance specials on the smaller Bronco Sport. The problem is that depending on the term you pick, it may not be a great deal.
Our friends at CarsDirect.com got the scoop on a dealer bulletin that is offering a seven-year loan on the Bronco Sport with that has a starting price of $28,155. However, unlike other brands that have offered longer loans at low or zero-percent financing, Ford is going to hit you with a 5.9 percent APR to take that long loan.
Needless to say, this is probably not a good move as Cars Direct Senior Pricing Analyst, Alex Bernstein explains -
“According to a dealer incentive bulletin, Bronco Sports offer 84-month financing at 5.9% APR through Ford Credit. That’s the exact same rate you’ll find on other Fords like the Edge and F-150. Given that the Bronco Sport starts at $28,155, the offer in question would translate to a monthly payment of just $410/month.
But is that really a good deal? Although the payment may sound attractive, the example would involve over $6,200 in interest and actually cost $34,436.”
The key danger to the 84-month loan is that when you factor the term combined with the higher interest rate, this can put buyers in a position where they would be underwater on their loan. This is especially true if they didn’t use a substantial down-payment to bring the principal balance down and establish equity at the time of purchase.
In fairness to Ford, buyers can get a zero percent finance loan, but the term is limited to only 48 months, as Cars Direct reported yesterday. Of course, very few buyers take loans at the 48-month term as the 60 or 72-month programs are more popular as that tends to be the sweet spot when it comes to keeping the monthly note budget-friendly and being able to pay the car off in a reasonable amount of time. In this case, Ford is offering a 1.9 percent APR program for the five and six-year loans.
Of course, given the hype of the new Bronco lineup, buyers probably won’t see any sort of significant discounts when these cars finally hit the showrooms, and while cheap financing is good, the overall deal may not seem all that great if you are paying full sticker price or more.