Ford Credit: ‘In the Fed We Trust’

Many customers who normally would pay cash are taking advantage of the low interest-rate environment and getting loans instead, said Bernard B. Silverstone, chairman and chief executive of Ford Motor Credit Co. But when interest rates inevitably increase, some of those customers will likely go back to cash, he said.

“It’s hard to predict the future but I expect when rates go up, some of those customers might revert to cash,” Silverstone said at the Deutsche Bank Global Industrials and Basic Materials Conference in Chicago yesterday. Silverstone, who rarely speaks in public, said the economy can likely bear some rate increases.

“You like to think we’re seeing strength of the economy and maybe some wage

growth,” he said. “That means people will be able to afford some high payments — that’s clearly with extended terms.”

Higher-risk credit is a relatively small portion of Ford Credit’s portfolio, Silverstone said. He expects a smooth transition into a somewhat higher rate environment for the company.

“I don’t want to get into anybody’s alternative religions, but in the Fed we trust,” he said.