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Ford loses big bucks!


sudden

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In todays news Ford just admitted a huge loss of billions of dollars! What happened to the re-structuring of the company? They need to get their crap together or they will be bought by the Japs. SUDDEN. :cry:

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This is very sad news for all Americans. I just bought a new 08 Escape V6 and have on my first tank of gas recorded 23.8 mpg. I know I could have gotten better fuel economy had I bought a Toyota Rav 4, but I only buy American \ Fords. It sad to see all the Toyotas on the roads each day commuting to and from work. I truly believe it will now happen in my life time, I will see another flag flying over the Whitehouse besides our stars and stripes. It's a sad day for Ford and all true Americans.

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All the auto companies are hurting, not just Ford. There will be bigger losses to be had by all. Bottom line it has little to do with Ford's cuts this time around than it does the over economic issues. When fas is crazy, housing sucks, Wall Street is rolling up the sidewalks... well how do you expect anyone to be profitable. It all has a trickle up/down effect. All I can say though is if this continues, I can see Ford and GM scrubbing some of the HO rides like the GT500 and Camero. Maybe not the complete line, but surely reductions in numbers. No reason to have them sitting on dealer lots with the SUV's. Ford claims to me revamping three more plants from truck to small car! Time will tell, but this may be good for us guys who have our cars... talk about holding value if the bottom does fall out!!

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This is very sad news for all Americans. I just bought a new 08 Escape V6 and have on my first tank of gas recorded 23.8 mpg. I know I could have gotten better fuel economy had I bought a Toyota Rav 4, but I only buy American \ Fords. It sad to see all the Toyotas on the roads each day commuting to and from work. I truly believe it will now happen in my life time, I will see another flag flying over the Whitehouse besides our stars and stripes. It's a sad day for Ford and all true Americans.

 

 

If you only buy American then how do you even know you could have gotten better gas mileage on a RAV-4???

 

News Flash! WRONG!!! The RAV-4 does NOT get better mileage. And don't even consider going by anything Toyota's window stickers say. They are so far off from reality it isn't funny. Being a Ford and Toyota dealer I know how bad their mileage is compared to what they claim.

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Most of this loss is from Ford taking HUGE write downs. They are taking huge losses on lease turn ins. All the gas guzzlers that were leased and had high residuals are so far off the money they are losing over $10K per unit because no one is buying trucks and SUV's.

 

One year old Expeditions that cost $42K new are barely bringing $14K at auction. That equates to HUGE losses to Ford on all those vehicles they leased that are now being turned in. Ford takes those vehicles to the auction to sell them back to dealers. With no one buying these dealers are not willing to pay anything for them. Dealers are already flooded with excess trucks and SUV's from customer trade-ins.

 

This is the best time ever to buy one for people in the market, but it is the worst time ever to have to sell one or trade one in because you are going to lose a ton of money!

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Most of this loss is from Ford taking HUGE write downs. They are taking huge losses on lease turn ins. All the gas guzzlers that were leased and had high residuals are so far off the money they are losing over $10K per unit because no one is buying trucks and SUV's.

 

One year old Expeditions that cost $42K new are barely bringing $14K at auction. That equates to HUGE losses to Ford on all those vehicles they leased that are now being turned in. Ford takes those vehicles to the auction to sell them back to dealers. With no one buying these dealers are not willing to pay anything for them. Dealers are already flooded with excess trucks and SUV's from customer trade-ins.

 

This is the best time ever to buy one for people in the market, but it is the worst time ever to have to sell one or trade one in because you are going to lose a ton of money!

I guess I find that confusing. The negative equity just rolls to the next vehicle purchased by the buyer so how does FORD lose money?

 

Unless you are meaning people are just parking them on the lot and walking away taking the hit to their credit?

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I guess I find that confusing. The negative equity just rolls to the next vehicle purchased by the buyer so how does FORD lose money?

 

Unless you are meaning people are just parking them on the lot and walking away taking the hit to their credit?

 

 

Not on a LEASE.

 

When you lease you have the option to buy the vehicle at the end of the lease for what the residual value is OR you can just turn the vehicle in back to Ford Credit and walk away.

 

On a lease the LENDER owns the vehicle. You are merwely leasing it, not buying it.

 

So lets take a $42K vehicle new. If the residual value is based on 54% at the end of a 12 month lease that is $21,840.

 

So at the end of the 12 month lease you have the option of buying the vehicle for the $21,840 residual value OR you have the option of just turning the vehicle in.

 

When you turn the vehicle in the LENDER gets the vehicle back and they send it to auction to get their money out of it. IN this case they would need to get $21,840 out of it to cover their residual value they based the entire lease off of.

 

Only it goes to sale and only brings $14K. The lender just lost $7,840 on that vehicle because they could not recoupe the full $21,840.

 

Now start multiplying that kind of loss by tens of thousands of vehicles that were leased and being turned in instead of customers choosing to buy it at the end of the lease?

 

So where does the money come from to pay these losses? Ford Credit ends up writing each vehicle down taking a huge loss of everyone of them. Now they are showing BILLIONS in losses! This is where most of this is coming from.

 

This isn't just individuals leasing, it includes corporate fleet vehicles that are leased as well.

 

Now a customer that BUYS a vehicle where they are trading it in, then any negative equity is rolled to their new loan. But on a lease the lender gets stuck with all that negative equity. They estimated the vehicle would sell for 54% of what it cost new after 12 months. But now the market is only bringing 33% of what it cost new. The lender is losing 21% of the value they estimated it would be worth after 12 months.

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WOW, so a Vehicle LOOSES 46% Value of what you Paid for it with in 12 Months.................... No wander the Manufacturers are hurting. So if everyone just bought a 1 Year old Vehicle at that Rate, we would all save 46% off the Top.

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About the Auctions: Only Dealers are allowed to Bid on the Cars. Maybe if Ford would sell them on Ebay they could do a whole lot better, or even open up their own "Off Lease Car Sales" devision on line. They have all those Plants that they are closing that they can use for a Car Lot.

 

David.

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Not on a LEASE.

 

When you lease you have the option to buy the vehicle at the end of the lease for what the residual value is OR you can just turn the vehicle in back to Ford Credit and walk away.

 

On a lease the LENDER owns the vehicle. You are merwely leasing it, not buying it.

 

So lets take a $42K vehicle new. If the residual value is based on 54% at the end of a 12 month lease that is $21,840.

 

So at the end of the 12 month lease you have the option of buying the vehicle for the $21,840 residual value OR you have the option of just turning the vehicle in.

 

When you turn the vehicle in the LENDER gets the vehicle back and they send it to auction to get their money out of it. IN this case they would need to get $21,840 out of it to cover their residual value they based the entire lease off of.

 

Only it goes to sale and only brings $14K. The lender just lost $7,840 on that vehicle because they could not recoupe the full $21,840.

 

Now start multiplying that kind of loss by tens of thousands of vehicles that were leased and being turned in instead of customers choosing to buy it at the end of the lease?

 

So where does the money come from to pay these losses? Ford Credit ends up writing each vehicle down taking a huge loss of everyone of them. Now they are showing BILLIONS in losses! This is where most of this is coming from.

 

This isn't just individuals leasing, it includes corporate fleet vehicles that are leased as well.

 

Now a customer that BUYS a vehicle where they are trading it in, then any negative equity is rolled to their new loan. But on a lease the lender gets stuck with all that negative equity. They estimated the vehicle would sell for 54% of what it cost new after 12 months. But now the market is only bringing 33% of what it cost new. The lender is losing 21% of the value they estimated it would be worth after 12 months.

 

Ahhh you're right. I was confused because I've never made it to the end of a lease! :hysterical:

I've had 3. Refinanced 2 within 30 days to a buy (took the lease for the cash back incentives) and a GM Smart Buy that I took a big hit on.

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If you only buy American then how do you even know you could have gotten better gas mileage on a RAV-4???

 

News Flash! WRONG!!! The RAV-4 does NOT get better mileage. And don't even consider going by anything Toyota's window stickers say. They are so far off from reality it isn't funny. Being a Ford and Toyota dealer I know how bad their mileage is compared to what they claim.

 

 

SD I based my earlier statement based on the fuel numbers I searched for on the www.fueleconomy.gov web site. They list a 2008 Rav 4 3.5 4x4 automatic as 19\26\21 mpg vs Fords Escape 3.0 4x4 automatic 17\22\19 mpg. If these numbers are not based on the national averages I appologize. The web site claims it to be national averages, but I don't believe everything I read on the web sites. Where you sell these vehicles I'm sure you know exactly what the Rav 4's are getting. After having 500 miles on my new Escape I am way above the listed 19 mpg overall running close to 22\23 mpg overall.

 

I know how some window stickers are on foreign vehicles. Years ago I took a Dodge Raider for a test ride. I was comparing it to the Bronco 2 and it's base list price was several thousands of dollars lower than Ford. When I sat down with the dealer and found out that after I included for the back seat, heater, radio, etc it was the same cost as the Bronco 2.

 

When it comes to buying any vehicle it usually is not much of a choice for me. Ford has made me a very happy customer for years and I plan to stick with them for as long as they're in buisness. My blood in my veins must be blue I guess. :hysterical:

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  • 2 weeks later...

I know it sounds bad for Ford but I think there ahead of the game some of the sales numbers are off do to the sale of PAG group which account for a good chunk of there sales and now with the inpending sale of volvo we will not see a stable Ford till 2010. Ford has to become a leaen mean fighting machine to compete in todays market. I really feel that the are on the right road,and by bringing some of the foreign cars that they sell in the UK and other countries will help. I hate to say it but Toyota has a great Pr firm and Ford needs to hire them you always hear about Ford and how bad there doing but when Toyota has all kinds of problems with cams in the new great tundra and the tailgates that bend in half and the transmission that don't shift and the taco with the rusted out frames, one problem with Ford and there on the nightly news its all PR and crap. Autoblog.com has posted the numbers and as bad as it is for Ford the other two did way worse,"Chrysler 34%,GM 32.4%,Ford 21.5% and the great Toyota 18.7% wow nobody ever mention this was Toyota worst quart in history!!!!!!!!!!!!! :censored All the major brands took a hit Chrysler is stopping there lease program and BMW is changing there lease program it is one big mess!! But there is some light in the tunnel I think :cry: I can see it now its getting closer yep there it is a Sgt ripping up the road Thanks again Mr. Shelby and Ford that's on thing toyota cant do a SGT :happy feet: :hysterical::shift:

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