Cars and Drivers
Why Is Ford Offering Aggressive 0% (Zero?) Financing on Its Industry Leading F-150?
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Ford Motor Co.’s (NYSE: F) F-150 pickup has been the top-selling vehicle in the United States for decades. Its sales are up 10.1% through November to 807,379. So, why is the manufacturer offering an aggressive 0% financing for 72-week deal to induce people to buy the truck? No matter what the reason, it means that Ford must have problems clearing inventory, a signal of slack demand as 2017 models make way for those for 2018.
The F-150 has crushed its competition this year. Sales of GM’s Chevy Silverado, the number two pickup, are down 0.5% this year to 518,188. Sales of Fiat Chrysler’s Ram are up only 3.2% to 455,816.
The exact F-150 incentive is 0% APR financing for 72 months. It is only available on 2017 models. The Super Duty and F-150 Raptor are excluded. Customers have to take delivery by January 2, 2018. The deal, according to Ford, was “just announced.”
The 2018 version of the F-150 is already on dealer lots. It was recently named Motor Trend “Truck of the Year.” Although the model has some new features for 2018, none are a major departure from the 2017 model.
Ford relies on the F-series for a huge portion of its total sales. Ford sold 2,334,290 cars and light trucks through November, down 1.1%. The surge in the pickup’s sales are particularly important this year, as Ford struggles for market share in an industry in which total sales have stopped growing.
Incentives are particularly painful for car companies. The industry works on modest margins for most vehicles. Even incentives erode that buffer. But Ford almost certainly cannot avoid offering consumers a special deal. The 2018 F-150 models are for sale. Ford is stuck with too much inventory from last year. Too bad.
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