Ford Credit
| Company type | Subsidiary |
|---|---|
| Industry | Financial services, Automotive finance |
| Founded | 1923 |
| Founder | Henry Ford |
| Headquarters | Dearborn, Michigan , United States |
Area served | Worldwide |
| Products | Vehicle financing, Leasing, Inventory financing, Commercial financing, Credit lines |
| Parent | Ford Motor Company |
Ford Motor Credit Company LLC, operating under the name Ford Credit, serves as the financial services division of Ford Motor Company, with its main office located in Dearborn, Michigan.
Specializing in financing for Ford and Lincoln automobiles, Ford Credit also provides critical support to Ford and Lincoln dealerships. Its primary operations encompass consumer vehicle financing, inventory financing for dealerships, and leasing services. The company distinguishes itself through superior service and competitive financing programs, including initiatives backed by Ford itself. It upholds extensive and consistent purchasing standards for retail installment sales and lease agreements, ensuring reliable dealer financing throughout various economic conditions. These standards foster strong partnerships with Ford’s dealership network, reinforcing Ford Credit’s market competitiveness. Moreover, Ford Credit extends commercial financing options and credit lines to dealerships marketing Ford products, while managing the issuance of commercial paper and other debt instruments on behalf of Ford.
Ford Credit additionally owns Lincoln Automotive Financial Services, which handles financing specifically for Lincoln vehicles.
In 2018, Ford Credit reported an EBIT of $2.63 billion, surpassing the $2.31 billion recorded in 2017—marking its highest annual earnings before tax in eight years. Nonetheless, a decline in vehicle sales coupled with a decrease in return on equity from 22% in 2017 to 14% in 2018 suggests potential difficulties ahead for this business segment.
History
Ford's involvement in automotive financing began in 1923 with the introduction of a Weekly Purchase Plan that enabled customers to save incrementally toward their car payments. To stimulate vehicle sales in Germany during 1926—where affordability was a significant barrier—Henry Ford founded Credit AG für Ford-Fahrzeuge (which later became Ford Credit AG) based in Berlin, relocating to Cologne by 1932. The inclusion of Henry and Edsel Ford on the board highlighted the importance placed on captive finance within the company’s strategy.
From 1975 through 1979, Ford Credit temporarily owned the Houston Astros baseball franchise and associated assets after the previous owner defaulted on loans extended by Ford Credit and GE Capital. Bill Odom, a senior loan officer, managed this interim ownership until the team was sold to John McMullen’s group in 1979.
In contrast to its Detroit counterparts following the 2008–10 automotive crisis—where General Motors divested GMAC (now Ally Financial) and Chrysler sold Chrysler Financial (now TD Auto Finance) to Toronto-Dominion Bank—Ford Credit remains the exclusive captive finance entity among the "Big Three" automakers. This status solidifies its role as a vital strategic component supporting both vehicle sales and customer financing solutions for Ford Motor Company.