Ford CEO Jim Farley Is Happy With 84-Month Car Loans

[Yardbird]

Ford CEO Jim Farley Is Happy With 84-Month Car Loans​

By Steven Symes


While Ford is facing plenty of uncertainty with the tariffs, CEO Jim Farley apparently isn’t too concerned about prices because shoppers will just take out 84-month car loans. That’s at least the gist of his comments during an earnings call this past week. And people wonder why automakers keep new vehicle prices so high.

“We see customers doing what they can to afford a new vehicle,” Farley said, referencing concerns tariffs will increase car prices. “I mean, we’ve seen 84-month financing increases as a share of our offers on the financing side. Natural levels are well within the bounds of the industry, but customers are doing what they need to to adjust for their payments.”

That’s right, the head of Ford thinks high vehicle prices aren’t a problem since everyone can just take out 84-month car loans. Don’t seek the guy out for personal financial advice.

Let’s do some fun math, shall we? The average new vehicle price is just below $50,000, if you can stomach that, so let’s use that figure and see what your 84-month term does. Let’s say you have good credit, so you get 7.2 percent and you put $5,000 down on the vehicle purchase, you’re looking at paying about $683 a month.

Most people who don’t know much about personal finances just look at that number. What’s really fun is to see how much interest you’ll pay over the life of the loan. In this case, it’s $12,420. That’s enough to buy a decent-ish used vehicle.

If you were to keep everything the same, but switch to a 36-month term, sure you’d be paying $1,393 a month but total interest paid would be only $5,169.

Dialing back the clock to before things went completely insane, in 2019 the average new car cost about $38,000. If you were to finance that amount, minus $5,000 for a down payment at the same interest rate for 36 months, your monthly would be $1,021 but you would only pay $3,790 in interest.

Just so you know, this is what Jim Farley thinks about Americans’ personal finances. Hey, he’s not suffering with a paycheck of $24.9 million last year, even if part of that is made by squeezing shoppers into 84-month loans so Ford can charge $40,000 for a stripped-down, base new Explorer.


https://theautowire.com/2025/05/12/ford-ceo-jim-farley-is-happy-with-84-month-car-loans/

 

[LouM]

He is a complete and utter a**.
Seven years of payments on a vehicle with a 3 year or less warrenty is completely ridiculous.

 

[tjfdesmo]

Folks are taking out 20 year loans on RVs that will be dust by the time they are paid off.

 

[MADDOG]

Of course he is happy with them. He ain't paying 7 years of interest on a loan for his cars but having that option available will just suck more buyers into extended period loans, helping to move product out of inventory at the manufacturer and dealer level.

 

[Docwagon1776]

Goofy article trying to create controversy for clicks. Nobody is holding a gun to your head to force you to borrow money. If you're taking out a loan you can't afford, that's on you. If anybody is actually wondering why vehicles (or anything) is priced the way they are: People will pay that price. Once that ceases to be true, prices go down.

 

[crazy jerry]

why you gotta bring this stuff up. i know im gettin bent over a barrel for everything. the very worst is buying a house now thats 2x-3x more than just 4yr ago. i wont blame nobody for goin postal

 

[Docwagon1776]

why you gotta bring this stuff up. i know im gettin bent over a barrel for everything. the very worst is buying a house now thats 2x-3x more than just 4yr ago. i wont blame nobody for goin postal

It's tough to be starting out for sure. Great time to be retiring, though. The guy who bought that house 4 years ago and is downsizing made bank.

There's still affordable places in the midwest, but not everyone's job is that portable.

 

[Yardbird]

The thinking is they will get you into a vehicle you are upside down on from day one.

You will be forced to keep it the majority of the loan, if not all the loan time. (if it last that long)

You will be getting it repaired those 84 months at Ford, including well after warranty is gone.

At the end of 84 months, the vehicle is worn out, no one will want it, except Ford, who will put you into a new vehicle that now has a 120 month loan, and the whole game starts over again.

 

[SvJam]

He and his ilk are completely out of touch. I shopped around and found many 1 - 2 year old trucks, I did not seek a loaded truck and most of the used trucks that were clean from the dealers had CARFAX with accident histories. Brand new with just the basics and you are looking at 65-80k for most brands. Trucks used to be for the middle class, not anymore. Even the midsize trucks are pushing 50 -60K new.

 

[Yardbird]

He and his ilk are completely out of touch. I shopped around and found many 1 - 2 year old trucks, I did not seek a loaded truck and most of the used trucks that were clean from the dealers had CARFAX with accident histories. Brand new with just the basics and you are looking at 65-80k for most brands. Trucks used to be for the middle class, not anymore. Even the midsize trucks are pushing 50 -60K new.

It took me over two years to find my truck. Prices too high, bad repair history, wrecks, from up north, too many miles, ect...ect...ect...

I hope mine last. I'm too old to go through that again.

 

[nlambert182]

It's just math, and most people didn't pay attention in their finance classes. Financial institutions know this and they leverage it by focusing on the monthly payment and not on the total amount paid at the end of the loan.

Pay more in the short term to save more long term, or vice versa.

While it's not always reasonable to expect someone to pay cash for a vehicle, they can certainly choose a loan option that allows them to pay it off the fastest. If we get an auto loan, never more than 36 months. For an RV, we might let it go 7 years depending on the RV itself (for most we either pay cash or stay under 5 years). For the house, 15. If we can't afford the monthly payment based on that criteria, we find a cheaper alternative that allows us to stay within that range.

 

[skates15]

Does Ford offer their own financing? If so, there's your answer.

 

[Neomoritate]

You are taking out a Bank Loan, which exists to collect interest to make profits for the bank. The bank gives you a Car as an incentive to take out the loan. Ford (as all "car" companies) is a bank that also makes cars.

 

[Docwagon1776]

It's just math, and most people didn't pay attention in their finance classes. Financial institutions know this and they leverage it by focusing on the monthly payment and not on the total amount paid at the end of the loan.

Pay more in the short term to save more long term, or vice versa.

While it's not always reasonable to expect someone to pay cash for a vehicle, they can certainly choose a loan option that allows them to pay it off the fastest. If we get an auto loan, never more than 36 months. For an RV, we might let it go 7 years depending on the RV itself (for most we either pay cash or stay under 5 years). For the house, 15. If we can't afford the monthly payment based on that criteria, we find a cheaper alternative that allows us to stay within that range.

When I did have to (or, rather, chose to) finance vehicles I always got the longest term possible before the interest rate went up. At the time, 36/48/60 were all the same from credit unions. I'd finance for 60, pay it off in 24 or less, but I had a lower mandatory payment in case of job loss or whatever so I could keep cash flow requirements low just in case.

 

[Silver21Ram]

Nobody owns anything -
BUYING IS MAKING PAYMENTS
You are buying your house.
You are buying your vehicle(s).
You are buying everything else in your life as all of that is on a number of credit cards.
You are buying your car insurance and
health insurance.
You are buying your kids education.
You finance your food, your gas,
your vacation at 24% interest.
We're All Broke
BUT WE LIVE IN THE WEALTHIEST
COUNTRY ON EARTH

 

[DILLIGAF]

Of course the ford gaybois would be ok with putting yourself in dept to your eyeballs...

Im laughing to the bank in all my paid off ****boxes And the best part of not having ******** car payments is that extra money paid off my house at 38y old.

The other plus side of owning ****boxes, Is all my vehicles only have liability insurance, so im just over 1100$ a year for all 4 of them

Anyways im heading back to the garage and building rat rods. I got to burn that extra money I have in my pockets because I choose not to keep up with the jones .....

 

[nlambert182]

Nobody owns anything -
BUYING IS MAKING PAYMENTS
You are buying your house.
You are buying your vehicle(s).
You are buying everything else in your life as all of that is on a number of credit cards.
You are buying your car insurance and
health insurance.
You are buying your kids education.
You finance your food, your gas,
your vacation at 24% interest.
We're All Broke
BUT WE LIVE IN THE WEALTHIEST
COUNTRY ON EARTH

Sorry, but this doesn't make a lot of sense.

Many people own their homes and vehicles.

Not everyone uses tons of credit cards. We don't. My kid's educations, our food, gas, and vacations are all paid for out of pocket.

 

[markabby]

Sorry, but this doesn't make a lot of sense.

Many people own their homes and vehicles.

Not everyone uses tons of credit cards. We don't. My kid's educations, our food, gas, and vacations are all paid for out of pocket.

even if you paid your home off, you still don't own it. why? Don't pay property taxes and see how fast they take your home away.

For vehicles, sure, pay them off or pay cash, then you might actually own it. Vehicles are a lenders dream....over the life of any vehicle it probably get refinanced over 3 to 4 times during it's life cycle by different buyers, until it hits the scrap yard.

You buy a truck for 80k, pay for it for maybe 3 years, sell it to another who gets a loan, they drive it for a few years, then sells it to another who gets a loan, etc etc


Now, figure out your interest totals mortgage payments on a 30 year loan...lol

 

[Docwagon1776]

Sorry, but this doesn't make a lot of sense.

Many people own their homes and vehicles.

Not everyone uses tons of credit cards. We don't. My kid's educations, our food, gas, and vacations are all paid for out of pocket.

Yeah, not sure who his "everybody" is but the only debt I have is a mortgage, and I could pay it off tomorrow if it made sense to. The last car payment I had was in 2016. We leased my wife's car because there were lease only incentives that made it cheaper to lease for a year then buy the lease out then it was to just write a check the day of purchase. I wrote a check for my Power Wagon.

I use credit cards for nearly every purchase, but I just pay them off every payday. Paying with cards gives me benefits and cash back that cash doesn't.

 

[Docwagon1776]

even if you paid your home off, you still don't own it. why? Don't pay property taxes and see how fast they take your home away.

For vehicles, sure, pay them off or pay cash, then you might actually own it. Vehicles are a lenders dream....over the life of any vehicle it probably get refinanced over 3 to 4 times during it's life cycle by different buyers, until it hits the scrap yard.

You buy a truck for 80k, pay for it for maybe 3 years, sell it to another who gets a loan, they drive it for a few years, then sells it to another who gets a loan, etc etc


Now, figure out your interest totals mortgage payments on a 30 year loan...lol

You still own your home. Even if it goes to sheriff's auction, what happens to the money from the sale that's over the amount you owe in property taxes?

Mortgage interest is going to vary quite a bit over 30 years. I make more money in interest in a HYSA than I pay in mortgage debt. Todays rates are a different story, of course, same as they were a different story in the Reagan era.