F & I Information

Automotive Gap Insurance:
Gap insurance covers the gap between what you owe on your auto or motorhome and its current market value. If you are in an accident and your insurance company decides your vehicle or motorhome is totaled (also called total loss), your collision coverage will only pay you the current market value. Gap insurance is offered by Macdonald Motors Ford & Lincoln and by most banks, credit unions and insurance companies.

Automotive Extended Warranties:
Much like the original auto warranty, extended warranties offered by a dealership cover your vehicle in the event of a mechanical breakdown and/or failure. There are several plans available ranging from a basic plan that only covers powertrain items up to a plan that covers everything except normal wear items such as wipers, belts, brakes, etc. Unfortunately, not all warranties are created equal. Typically, warranty programs issued by manufacturers are more widely accepted and provide more extensive coverage. A manufacturer's warranty is going to be accepted by anyone who sells that brand anywhere in the country, so be careful and make sure the warranty you choose will give you the coverage and flexibility you need. Cost will vary depending on the coverage chosen, but you should be able to find a plan that works for you and your budget. Macdonald Motors Ford & Lincoln offers a variety of Ford Motor Company extended warranties.

Automotive Financing:
Financing rates are determined by the lending institution and are based on the amount borrowed, the length of the loan and, most importantly, the buyer's credit history and credit score. A buyer with a strong credit history and credit score is going to get a much better rate than a buyer with little or no credit history or a poor history and, thereby, a lower credit score. This circumstance can be overcome by having a co-signer with a strong history and score, thereby giving the buyer the opportunity to build or repair their credit. In any of the above lending circumstances, having money to put down can help create good faith with a lending institution and have the added benefit of reducing monthly payments and/or loan length. Macdonald Motors Ford & Lincoln offers financing through Ford Cedit and several other banks and financial institutions.

Leasing Versus Purchasing:
Purchasing a vehicle is the more traditional approach. You choose your vehicle, work out the terms of your purchase and either pay cash, have a down payment and finance the balance, or finance the entire balance. If you finance, you pay the agreed upon payment each month for the specified term of the loan and, at the end of the loan, the vehicle is yours.

Leasing a vehicle is another way to get the vehicle you want, usually at a lower monthly payment for a term of 2 to 4 years. You also need to specify how many miles you expect to drive the vehicle through the lease term, choices are between 10,500 to 19,500 miles annually. Leases are based on the amount of the vehicle's life you are projected to use up. This is typically a much lower number than paying the purchase price to buy the vehicle, thereby making the cost of leasing less than the cost of buying in the short term. At the end of the lease, you can turn the vehicle in and lease or buy another vehicle, or you can buy the leased vehicle you have been driving.

Automotive Insurance:
Even if you live in a state that does not require automotive insurance, if you finance or lease, you are required to carry automotive collision insurance by the lending institution.

State Sales Tax:
If your state has a state sales tax, that has to be calculated into your purchase as well. You can either pay the sales tax out-of-pocket when you register the vehicle, or you can include the amount of sales tax in your automotive loan or lease.

Other Taxes/Fees:
There may be other state fees, such as an excise tax, property tax, etc. that will have to be paid when you actually register your vehicle, so it is wise to check with your town office or state motor vehicle department to ensure you are not caught off-guard by these fees.

Disclaimer:
This information is intended as a quick guide to the Finance and Insurance process only, it does not contain all the information you may need, so please ask us any questions you may have. We will be happy to assist you in any way we can.

Resources:
A good resource for helping you clarify and understand all of these options and terms is the Federal Trade Commission website. Go to consumer.ftc.gov/articles/0056-understanding-vehicle-financing

AdChoices
; ;