Ford-150 pickup vans are displayed on the market at a dealership on March 24, 2025 in Austin, Texas.
Brandon Bell | Getty Photographs
DETROIT — Ford Motor is making an attempt to spice up gross sales of its essential F-150 pickup truck earlier than the top of the third quarter by providing particular financing to shoppers with less-than-perfect credit score scores.
The transfer consists of providing shoppers with subprime credit score — these with a FICO rating beneath 620 — decrease rates of interest which might be sometimes provided to these with high quality scores, the automaker’s Ford Credit score monetary arm confirmed Wednesday.
Such promotions aren’t unprecedented and are an effort to make automobiles extra reasonably priced for extra consumers and reduce stock ranges. However debtors with decrease credit score scores are thought-about extra prone to default or miss funds, particularly throughout an financial downturn.
Along with pickup vans being essential automobiles for the steadiness sheets of Detroit automakers resembling Ford, their gross sales are intently watched as an indication of demand for expert labor and small companies.
A Ford Credit score spokeswoman stated the promotional charges don’t issue into the group’s precise “credit score choices” for shoppers. She added that the precise charge will differ primarily based on the phrases of the settlement.
The Wall Avenue Journal, which first reported this system, stated Ford makes use of a proprietary scoring mannequin to evaluate a borrower’s creditworthiness that goes past a FICO credit score rating.
“We solely finance prospects we imagine are creditworthy and have the capability to pay. Now we have performed a lot of these nationwide packages up to now, extending a promotional charge to prospects who meet our credit score standards,” Ford Credit score stated in an emailed assertion to CNBC.
The typical new auto mortgage charge was about 9% as of the newest knowledge from July, in accordance with Cox Automotive’s Dealertrack. That included charges of round 18% to twenty% for subprime or “deep-subprime” shoppers.
Automakers resembling Ford have traditionally tried to restrict financing to subprime consumers via their very own monetary lending arms, which have considerably elevated in significance in recent times.
Ford Credit score studies solely 3% to 4% of its credit score arm’s financing since 2024 have been to “larger danger” shoppers. The typical FICO rating for Ford Credit score’s prospects was 748 via the primary half of the yr, down from 757, in accordance with a current public submitting.
Gross sales of Ford F-Sequence vans, which embrace the F-150, had been up 12.7% for the yr getting into September, nevertheless, had been down 3.4% for the month in August, in contrast with a yr earlier. Pricing for the 2025 F-150 ranges from round $39,000 to greater than $100,000 relying on the mannequin and choices.
Affordability within the automotive trade has been a priority for a few years, as rates of interest have remained excessive and the common automobile buy worth has elevated to round $50,000, in accordance with Cox.
Ford’s promotion comes because the Federal Reserve authorized a quarter-point charge lower final week, with the central financial institution signaling the likelihood for 2 extra rate of interest reductions in 2025.
Ford is not the one automaker providing offers on its pickup vans. Stellantis‘ Ram Vans model is presently providing 0% financing for “well-qualified consumers” on choose automobiles in its lineup, in accordance with its web site.
Basic Motors’ Chevrolet and GMC manufacturers are also providing low-interest charge financing, as little as 0%, for well-qualified consumers via the top of this month when financed with its monetary arm.
