forms3.htm

Ford Credit Auto Owner Trusts

Asset Backed Notes

Ford Credit Auto

Receivables Two LLC

Depositor

Ford Motor

Credit Company LLC

Sponsor and Servicer

Before you purchase any notes, be sure you understand the structure and the risks. You should review carefully the risk factors beginning on page 7 of this prospectus and in the prospectus supplement.

The notes will be obligations of the issuing entity only and will not be obligations of or interests in the sponsor, the depositor or any of their affiliates.

This prospectus may be used to offer and sell the notes only if accompanied by the prospectus supplement for the issuing entity.

The issuing entities:

A new trust will be formed to be the issuing entity for each securitization transaction.

The assets of each trust will consist of:

•a pool of retail installment sale contracts secured by new and used cars, trucks and utility vehicles,

•collections on the receivables represented by those contracts,

•security interests in the financed vehicles,

•proceeds from claims on related insurance policies, and

•any other property identified in the prospectus supplement.

Each trust will issue asset-backed securities consisting of notes in one or more classes.

The notes:

•will be asset-backed securities payable only from the assets of the trust,

•may benefit from one or more forms of credit or payment enhancement, and

•will be debt obligations of the trust.

The amount, price and terms of each offering of notes will be determined at the time of sale and will be described in the prospectus supplement accompanying this prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined that this prospectus or the prospectus supplement is accurate or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is ______, 20__

TABLE OF CONTENTS

Reading this Prospectus and a Prospectus Supplement	3
Summary	4
Risk Factors	7
Sponsor and Servicer	12
General	12
General Securitization Experience	13
U.S. Securitization Program for Retail Installment Sale Contracts	13
Origination, Purchasing and Underwriting	13
Commercial Accounts	16
Servicing Experience	16
Servicing and Collections	17
Repossession and Charge Off	18
Bankruptcy Accounts	19
Depositor	19
Issuing Entity	20
Owner Trustee	21
Indenture Trustee	22
Receivables	24
Trust Assets	24
Additional Information About the Receivables	24
Static Pool Information — Prior Securitized Pools	25
Types of Receivables	25
Bankruptcy Considerations	25
Servicing the Receivables and the Securitization Transaction	26
Servicing Duties	26
Servicing Fees	27
Servicer Modifications and Obligation to Purchase Certain Receivables	27
Trust Bank Accounts	28
Deposit of Collections	28
Reporting Obligations of the Servicer	29
Custodial Obligations of Ford Credit	29
Delegation of Duties	29
Limitations on Liability	29
Amendments to the Sale and Servicing Agreement	29
Resignation and Termination of the Servicer	30
Use of Proceeds	31
Maturity and Prepayment Considerations	31
Description of the Notes	32
Fixed and Floating Rate Notes	32
Principal and Interest Payments on the Notes	32
Credit and Payment Enhancement	33
Events of Default and Remedies	34
Notes Owned by Transaction Parties	36
List of Noteholders	36
Satisfaction and Discharge of Indenture	37
Amendments to the Indenture	37
Residual Interest; Issuance of Additional Securities	38
Book-Entry Registration	38
Definitive Notes Only in Limited Circumstances	39
Computing the Outstanding Principal Amount of the Notes	39
Some Important Legal Issues Relating to the Receivables	39
Security Interests in Receivables and Financed Vehicles	39
Repossession; Notice of Sale and Cure Rights	40
Deficiency Judgments	41
Consumer Protection Laws	41
Bankruptcy Limitations	42
Tax Matters	42
General	42
Tax Characterization of the Trusts	43
Tax Characterization and Treatment of the Notes	43
State Tax Matters	45
ERISA Considerations	45
General Investment Considerations	45
Prohibited Transactions	46
Benefit Plans Not Subject to ERISA or the Internal Revenue Code	47
Plan of Distribution	47
Legal Opinions	48
Where You Can Find More Information	48
Incorporation of Certain Documents by Reference	48
Index of Defined Terms in the Prospectus	50

READING THIS PROSPECTUS

AND A PROSPECTUS SUPPLEMENT

This prospectus provides general information about the notes to be issued by the Ford Credit Auto Owner Trusts, some of which may not apply to notes issued by a particular trust.

You should rely only on information provided or incorporated by reference in this prospectus and the prospectus supplement and any informational and computational material filed as part of the registration statement filed with the SEC for any particular offering of notes.

This prospectus begins with the following brief introductory sections:

Summary — provides an overview of the terms of the notes.

Risk Factors — describes some of the risks of investing in the notes.

The other sections of this prospectus contain more detailed descriptions of the notes and the structure of the trust that will issue your notes. Cross-references refer you to more detailed descriptions of a particular topic or related information elsewhere in this prospectus or the prospectus supplement. The Table of Contents on the preceding page contains references to key topics.

An index of defined terms is at the end of this prospectus.

SUMMARY

This summary provides an overview of the most important terms of the notes. It does not contain all of the information that may be important to you. To understand fully the terms of the notes, you should read this prospectus, especially the "Risk Factors" beginning on page 7, and the prospectus supplement completely.

Sponsor, Servicer and Administrator of the Trust

Ford Motor Credit Company LLC, or "Ford Credit," is a Delaware limited liability company and a wholly-owned subsidiary of Ford Motor Company, or "Ford."

Depositor

Ford Credit Auto Receivables Two LLC is a Delaware limited liability company and a special purpose company wholly owned by Ford Credit.

Issuing Entity

The depositor will form a separate issuing entity, or "trust" for each securitization transaction. Each issuing entity will be a Delaware statutory trust governed by a trust agreement between the depositor and the owner trustee. Initially, the depositor will be the beneficiary of the trust.

Indenture Trustee and Owner Trustee

The prospectus supplement will identify the owner trustee of the trust and the indenture trustee for the notes.

The Notes

The trust will issue one or more classes of notes under an indenture between the trust and the indenture trustee.

The terms of the notes will be described in the prospectus supplement, including, for each class of notes, its:

·	principal amount,

·	interest rate or method of determining the interest rate, and

·	final scheduled payment date.

The notes of one class may differ from the notes of another class in certain respects, including:

·	the timing and priority of payments, and

·	whether interest and principal payments may be delayed or further subordinated upon the occurrence of certain events of default and the related consequences.

The priority of payments among the different classes of notes will be described in the prospectus supplement.

The notes will be available only in book-entry form, except in limited circumstances described in this prospectus.

For a more detailed description of the features of the notes you should read "Description of the Notes" in this prospectus and the prospectus supplement.

Trust Assets

The primary asset of the trust will be a pool of retail installment sale contracts secured by new and used cars, trucks and utility vehicles. These contracts are the "receivables" and the vehicles securing them are "financed vehicles." The purchasers of the financed vehicles who are responsible for making payments on the receivables are the "obligors."

Ford Credit regularly purchases from motor vehicle dealers retail installment sale contracts that meet its credit underwriting standards. For each securitization transaction, Ford Credit, as the sponsor, will sell a pool of receivables it has selected to the depositor and the depositor will then immediately sell those receivables to the trust. The prospectus supplement will describe the criteria used to select the receivables.

In addition to the receivables, the trust assets will include:

·	collections on the receivables applied on or after the cutoff date,

·	funds and investments held in bank accounts of the trust,

·	security interests in the financed vehicles,

·	proceeds from claims on any insurance policies covering the financed vehicles or the obligors, and

·	all of the trust's rights under the transaction documents, including any credit or payment enhancements.

For a more detailed description of the trust assets, you should read "Receivables" in this prospectus and the prospectus supplement.

Credit and Payment Enhancement

The prospectus supplement will describe the features designed to protect noteholders against losses on the receivables and consequent delays or defaults in payments on the notes. These features are called credit enhancement and may include:

·	reserve accounts,

·	excess spread,

·	overcollateralization,

·	yield supplement discount arrangements for low-APR receivables, or

·	subordination of other notes issued by the trust.

The prospectus supplement may describe features designed to ensure the timely payment of amounts owed to noteholders. These features are called payment enhancement and may include:

·	interest rate swaps, caps or floors,

·	surety bonds,

·	letters of credit, or

·	liquidity facilities.

For a more detailed description of credit and payment enhancement, you should read "Description of the Notes — Credit and Payment Enhancement" in this prospectus.

Servicing of the Receivables

Ford Credit will act as the "servicer" for the receivables. The servicer is responsible for collecting payments on the receivables, administering payoffs, defaults and delinquencies, and repossessing and liquidating financed vehicles. Ford Credit will also act as custodian and maintain custody of the receivables files. The trust will pay the servicer a monthly servicing fee specified in the prospectus supplement.

For a more detailed description of the servicing of the receivables, you should read "Servicing the Receivables and the Securitization Transaction" in this prospectus.

Optional Redemption or "Clean Up Call" Option

The servicer will have the option to redeem the notes by purchasing all the receivables owned by the trust on any payment date that the pool balance is less than an amount specified in the prospectus supplement. This option is referred to as the servicer's "clean up call" option. The prospectus supplement will describe how the clean up call option works, the purchase price for the receivables and any conditions to its exercise by the servicer.

For a more detailed description of the servicer's clean up call option, you should read "Description of the Notes — Optional Redemption or 'Clean Up Call' Option" in the prospectus supplement.

Tax Status

If you purchase a note, you agree by your purchase that you will treat your note as debt for U.S. federal, state and local income and franchise tax purposes.

The trust's tax counsel identified in the prospectus supplement will deliver its opinion that, for U.S. federal income tax purposes:

the notes will be treated as debt, and

the trust will not be classified as an association or publicly traded partnership taxable as a corporation.

For more information about the application of U.S. federal, state and local tax laws, you should read "Tax Matters" in this prospectus and the prospectus supplement.

RISK FACTORS

You should consider the following risk factors in deciding whether to purchase the notes.

The absence of a secondary market for your notes could limit your ability to resell them	The absence of a secondary market for your notes could limit your ability to resell them. This means that if you want to sell any of your notes before they mature, you may be unable to find a buyer or, if you find a buyer, the selling price may be less than it would have been if a secondary market existed. The underwriters may assist in the resale of notes, but they are not required to do so. If a secondary market does develop, it might not continue or it might not be sufficiently liquid to allow you to resell any of your notes.
The assets of the trust are limited and are the only source of payment for your notes	The trust will not have any assets or sources of funds other than the receivables and related property it owns and any external credit or payment enhancement described in the prospectus supplement. Any credit or payment enhancement is limited. Your notes will not be insured or guaranteed by Ford Credit or any of its affiliates or any other person. If these assets or sources of funds are insufficient to pay your notes in full, you will incur losses on your notes.
Performance of the receivables is uncertain	The performance of the receivables depends on a number of factors, including general economic conditions, unemployment levels, the circumstances of individual obligors, Ford Credit's underwriting standards at origination and the success of Ford Credit's servicing and collection strategies. Consequently, no accurate prediction can be made of how the receivables will perform.
The timing of principal payments on your notes is uncertain	Faster than expected rates of prepayments on the receivables will cause the trust to make payments of principal on your notes earlier than expected and will shorten the maturity of your notes. Prepayments on the receivables may occur as a result of:
	●	prepayments of receivables by obligors in whole or in part,
	●	liquidations due to default,
	●	receipts of proceeds from claims on any physical damage, credit life or other insurance policies covering the financed vehicles or the obligors,
	●	purchases by the servicer of receivables modified by the servicer or impaired by the servicer, and
	·	purchases of ineligible receivables by either the depositor or Ford Credit.

A variety of economic, social and other factors will influence the rate of prepayments on the receivables, including marketing incentives offered by vehicle manufacturers and the fact that the financed vehicle may not be sold without th

e consent of the servicer. No prediction can be made as to the actual prepayment rates that will be experienced on the receivables.

	If you receive principal payments on your notes earlier than expected due to prepayments on the receivables at a time when interest rates are lower than interest rates would otherwise have been had such prepayments not been made or had such prepayments been made at a different time, you may not be able to reinvest the principal in a comparable security with an effective interest rate equivalent to the interest rate on your notes. Similarly, if principal payments on your notes are made later than expected due to slower than expected prepayments or payments on the receivables, you may lose reinvestment opportunities. In addition, if the notes were purchased at a discount and prepayments are slower than expected, your yield may be reduced. You will bear all reinvestment risk resulting from receiving payments of principal on your notes earlier or later than expected.
	In addition your notes will be paid in full prior to maturity if the servicer exercises its clean up call option.
	For more information about the timing of repayment and other sources of prepayments, you should read "Maturity and Prepayment Considerations" in this prospectus and the prospectus supplement.
Interests of other persons in the receivables or the related financed vehicles could reduce funds available to pay your notes	If another person acquires an interest in a receivable or a related financed vehicle that is superior to the trust's interest, the collections on that receivable or the proceeds from the sale of that financed vehicle may not be available to make payments on your notes. If the trust does not have a perfected security interest in a receivable or a financed vehicle, its ability to repossess and sell the financed vehicle securing a defaulted receivable may be adversely affected. Another person could acquire an interest in a receivable or a financed vehicle that is superior to the trust's interest if:
	●	the trust does not have a perfected security interest in the receivable or the financed vehicle because Ford Credit's security interest in the receivable or in the financed vehicle was not properly perfected,
	●	the trust does not have a perfected security interest in the financed vehicle in certain states because the servicer will not amend the certificate of title to identify the trust as the new secured party,
	●	the trust's security interest in the receivable or the financed vehicle is impaired because holders of some types of liens, such as tax liens or mechanic's liens, may have priority over the trust's security interest, or a financed vehicle is confiscated by a government agency, or
	●	the trust does not have a perfected security interest in receivables that are electronic contracts because Ford Credit is not considered to have established "control" of the contract.

Subordination will cause some classes of notes to bear additional credit risk	The rights of the holders of any class of notes to receive payments of interest and principal may be subordinated to one or more other classes of notes or to the rights of others such as interest rate hedging counterparties. If you hold notes of a subordinated class, you will bear more credit risk than holders of more senior classes of notes and you will incur losses, if any, prior to holders of more senior classes of notes. Failure to pay interest on subordinated notes that are not part of the Controlling Class will not be an Event of Default.
Failure to pay principal on a note will not constitute an Event of Default until its final scheduled payment date	The trust does not have an obligation to pay a specified amount of principal on any note on any date other than its outstanding amount on its final scheduled payment date. Failure to pay principal on a note will not constitute an Event of Default until its final scheduled payment date.
You may suffer losses because you have limited control over actions of the trust and conflicts between classes of notes may occur	The trust will pledge the receivables to the indenture trustee to secure payment of the notes. The Controlling Class will be entitled to declare an event of default relating to a breach of a material covenant and accelerate the notes after an Event of Default, and waive Events of Default (other than failure to pay principal or interest). The Controlling Class may, in certain circumstances, direct the indenture trustee to sell the receivables after an acceleration of the notes even if the proceeds would not be sufficient to pay all of the notes in full. If your notes cannot be repaid in full with the proceeds of a sale of the receivables, you will suffer a loss.
	The Controlling Class may terminate the servicer following an Event of Servicing Termination and may waive Events of Servicing Termination.
	Holders of notes that are not part of the Controlling Class will have no right to take any of these actions. Only the Controlling Class will have these rights. The Controlling Class may have different interests from the holders of other classes of the notes and will not be required to consider the effect of its actions on the holders of other classes.
	For a more detailed description of the actions that the Controlling Class may direct, you should read "Description of the Notes — Events of Default — Remedies Following Acceleration" and "Servicing the Receivables and the Securitization Transaction — Resignation and Termination of the Servicer" in this prospectus.
You may suffer losses on your notes because the servicer may commingle collections with its own funds	The servicer will be required to deposit collections on the receivables in the trust's collection account within two business days of applying such amounts to the obligor's account or on a monthly basis, depending on its credit ratings. Until it deposits collections, the servicer may use them at its own risk and for its own benefit and may commingle collections on the receivables with its own funds. If the servicer does not pay these amounts to the trust by the next payment date (which could occur if the servicer becomes subject to a bankruptcy proceeding), payments on your notes could be reduced or delayed.

Delays in collecting payments could occur if Ford Credit ceases to be the servicer	If Ford Credit resigns or is terminated as servicer, the processing of payments on the receivables and information relating to collections could be delayed. This could cause payments on your notes to be delayed. Ford Credit may be removed as servicer if it defaults on its servicing obligations or becomes subject to bankruptcy proceedings as described in this prospectus in "Servicing the Receivables and the Securitization Transaction — Resignation and Termination of the Servicer."
Bankruptcy of Ford Credit could result in delays in payment or losses on your notes	If Ford Credit becomes subject to bankruptcy proceedings, you could experience losses or delays in payments on your notes. A court in a bankruptcy proceeding could conclude that Ford Credit effectively still owns the receivables because the sale of the receivables to the depositor was not a "true sale" or the assets and liabilities of the depositor should be consolidated with those of Ford Credit for bankruptcy purposes. If a court were to reach this conclusion, payments on your notes could be reduced or delayed due to:
	●	the "automatic stay" provision of the U.S. federal bankruptcy laws that prevents secured creditors from exercising remedies against a debtor in bankruptcy without permission from the bankruptcy court and other provisions of the U.S. federal bankruptcy laws that permit substitution of collateral in limited circumstances,
	●	tax or government liens on Ford Credit's property that arose prior to the transfer of the receivables to the trust having a claim on collections that are senior to your notes, or
	●	the trust not having a perfected security interest in the financed vehicles or any cash collections held by Ford Credit at the time the bankruptcy proceeding begins.
	In addition, the transfer of receivables by the depositor to the trust, although structured as a sale, may be viewed as a financing because the depositor retains the residual interest in the trust. If a court were to conclude that such transfer was not a sale or the depositor was consolidated with Ford Credit in the event of Ford Credit's bankruptcy, the notes would benefit from a security interest in the receivables but the receivables would be owned by Ford Credit and payments could be delayed, collateral substituted or other remedies imposed by the bankruptcy court that could adversely affect the amount and timing of payments on the notes.
	For more information about the effects of a bankruptcy on your notes, you should read "Some Important Legal Issues Relating to the Receivables — Bankruptcy Limitations" in this prospectus.

The servicing fee may be insufficient to attract a replacement servicer	If Ford Credit resigns or is terminated as servicer, the servicing fee, which is calculated as a fixed percentage of the pool balance, may be insufficient to attract a replacement servicer or cover the actual servicing costs on the receivables because the amount of the servicing fee declines each month as the pool balance declines but the servicing costs on each account remain essentially fixed. This risk is greatest toward the end of a securitization transaction when the pool balance has declined significantly. A delay or inability to find a replacement servicer would delay collection activities on the receivables and could delay payments and reports to the noteholders and the indenture trustee, have an adverse impact on amounts collected on defaulted receivables and ultimately lead to a loss of principal on the notes.
Ford Credit's failure to repurchase receivables that do not comply with consumer protection laws could result in losses on your notes	If any receivable does not comply with Federal and state consumer protection laws, the servicer may be prevented from or delayed in collecting amounts due on the receivable. Also, some of these laws may provide that the assignee of a consumer contract (such as the trust) is liable to the obligor for any failure of the contract to comply with these laws. Ford Credit must repurchase receivables that do not comply in all material respects with applicable laws. If Ford Credit fails to repurchase such receivables, payments on your notes could be reduced or delayed.
	For a more detailed description of consumer protection laws relating to the receivables, you should read "Some Important Legal Issues Relating to the Receivables — Consumer Protection Laws" in this prospectus.

SPONSOR AND SERVICER

General

Ford Credit was established in 1959 to provide financing for Ford vehicles and support Ford dealers. Ford Credit is a Delaware limited liability company and is an indirect wholly-owned subsidiary of Ford.

Ford Credit provides a wide variety of automotive financing products to and through automotive dealers throughout the world. Ford Credit's primary financing products are:

Retail financing — purchasing retail installment sale contracts and leases from dealers, and offering financing to commercial customers, primarily vehicle leasing companies and fleet purchasers, to lease or purchase vehicle fleets,

Wholesale financing — making loans to dealers to finance the purchase of vehicle inventory, also known as floorplan financing, and

Other financing — making loans to dealers for working capital, improvements to dealership facilities, and to purchase or finance dealership real estate.

Ford Credit also services the finance receivables and leases it originates and purchases, makes loans to Ford affiliates, purchases certain receivables of Ford and its subsidiaries and provides insurance services related to its financing programs.

Ford Credit earns its revenue primarily from:

payments on retail installment sale contracts and leases that it purchases,

interest supplements and other support payments from Ford and affiliated companies on special rate financing programs, and

payments on wholesale and other dealer loan financing programs.

Ford Credit will be the sponsor of the securitization transaction in which the notes will be issued. Ford Credit will be the servicer of the receivables and the securitization transaction and the administrator for the trust. Ford Credit will be responsible for structuring each securitization transaction and selecting the transaction parties. Ford Credit will be responsible for paying the costs of forming the trust, legal fees of certain transaction parties, rating agency fees for rating the notes and other transaction costs.

Ford Credit purchases retail installment sale contracts from motor vehicle dealers in the United States in the ordinary course of its business and selects the pool of receivables for each securitization transaction. The criteria used by Ford Credit to select the receivables for securitization will be described in the prospectus supplement.

Ford Credit will make representations about the characteristics of the receivables sold to the depositor and sold by the depositor to the trust. If any representation is later discovered to have been untrue when made and the breach has a material adverse effect on any receivable, Ford Credit must repurchase the receivable unless it cures the breach in all material respects by the end of any applicable grace period.

For more information about the representations and repurchase obligations, see "Transfers of the Receivables" in the prospectus supplement.

General Securitization Experience

Ford Credit has been securitizing its assets since 1988.

Ford Credit's securitization programs are diversified among asset classes and markets. Ford Credit sponsors securitization programs for retail installment sale contracts, dealer floorplan receivables and operating leases and the related vehicles. Ford Credit regularly participates in a number of international securitization markets, including the United States, Canada, Europe (including the United Kingdom, Germany, Spain, Italy and France) and Mexico and has participated in the securitization markets in Japan and Australia.

In the U.S., Ford Credit sponsors a number of securitization and structured financing programs in which it sells receivables in the public markets and in private transactions. In addition to selling receivables to trusts making registered public offerings or private placements of asset-backed securities, Ford Credit regularly sells retail installment sale contracts to a large number of multi-seller asset-backed commercial paper conduits and other purchasers and to special purpose entities that sell asset-backed securities to Ford Credit's single-seller asset-backed commercial paper program.

Ford Credit securitizes its assets because the market for securitization of financial assets provides the company with a lower cost source of funding than other alternatives, diversifies funding among different markets and investors, and provides additional liquidity. Ford Credit meets a significant portion of its funding requirements through securitizations for these reasons.

For more information about Ford Credit's securitization programs and its funding strategy, please read Ford Credit's Annual Report on Form 10-K which is available on Ford Credit's website at www.fordcredit.com.

U.S. Securitization Program for Retail Installment Sale Contracts

Ford Credit has had an active publicly registered securitization program for retail installment sale contracts since 1989 and has issued asset-backed securities in more than 50 transactions under this program. The asset-backed securities offered by the prospectus supplement accompanying this prospectus are part of this program. Ford Credit has never received a demand to repurchase or replace any of the receivables underlying the asset-backed securities offered in this program due to a breach of representations relating to such receivables. Repurchases of receivables due to Ford Credit’s discovery of a breach of representations have been immaterial in this program. None of the asset-backed securities offered in this program have experienced any losses or events of default and Ford Credit has never taken any action out of the ordinary in any transaction to prevent such an occurrence.

Origination, Purchasing and Underwriting

Ford Credit purchases retail installment sale contracts entered into between retail customers and motor vehicle dealers for the financing of purchased vehicles. When a customer purchases a vehicle from a dealer, the customer and the dealer negotiate the purchase price of the vehicle and the acquisition of any insurance, service contract or other products. The customer and the dealer also decide the contract amount, term, payment terms and interest rate to be charged on the retail installment sale contract, subject to Ford Credit's approval. Ford Credit purchases contracts with terms up to 72 months. Most contracts purchased by Ford Credit are for new vehicles and are with individuals who use the financed vehicle for personal use.

Ford Credit establishes a "dealer discount rate" that is used to calculate Ford Credit's purchase price for the contract. If the customer's interest rate exceeds the dealer discount rate by more than the limits established by Ford Credit, then Ford Credit either will not purchase the contract or will reduce the customer's interest rate to meet Ford Credit guidelines. In the case of low-APR contracts, the dealer discount rate will match the low-APR rate established by the manufacturer.

Ford Credit finances the negotiated purchase price of the vehicle, less vehicle trade-in and/or down payment plus taxes, insurance, service contracts, dealer installed accessories, prior balances on trade-in vehicles and other fees and charges. Ford Credit pays the dealer a purchase price for the contract generally equal to the amount financed on the contract plus a set fee, a percentage of the amount financed or a portion of the finance charge on the contract. The portion of the finance charge earned by the dealer is generally calculated using the difference between the dealer discount rate set by Ford Credit and the APR on the contract.

Ford Credit's purchasing decisions are made independently of Ford, and Ford cannot require Ford Credit to purchase contracts that do not satisfy Ford Credit's underwriting standards. Ford Credit's underwriting standards and purchasing criteria emphasize the applicant's ability to pay and creditworthiness. The creditworthiness of any co-applicant or guarantor is also considered. Each applicant completes a credit application. Dealers typically submit applications electronically to Ford Credit together with information about the proposed terms of the retail installment sale contract. Ford Credit generally obtains a credit report on the applicant from a national credit bureau. Ford Credit generally selects a credit bureau based upon its assessment of which credit bureau provides the most accurate and complete credit reports in the applicant's geographic area. In a limited number of cases, a credit report is not available because an applicant does not have an established credit history.

To set the dealer discount rate for standard rate contracts, Ford Credit uses scoring models to assess the creditworthiness of an applicant using the information provided on the applicant's credit application, the proposed terms of the retail installment sale contract and the applicant's credit bureau data. If an individual applicant has sufficient recent credit history, the credit bureau data includes the applicant's credit risk score, often referred to as a FICO® score, which is generated using statistical models created by Fair Isaac Corporation. FICO® is a registered trademark of Fair Isaac Corporation. Ford Credit uses FICO® scores designed specifically for automotive financing. The FICO® score measures the likelihood an applicant will repay an obligation, and it is the most significant factor in Ford Credit's consumer scoring models. The highest FICO® score used by Ford Credit is 900, and the lowest FICO® score is 250. Ford Credit frequently reviews its models to confirm the continued business significance and statistical predictability of the factors and updates its models to incorporate new factors that improve their statistical predictability.

Credit applications are automatically evaluated and some are either approved or rejected based on Ford Credit's electronic decisioning models. A credit analyst judgmentally evaluates each application that is not electronically approved or rejected. The credit analyst considers the same information used in the electronic decisioning models and also weighs other factors, such as Ford Credit's relationship with the dealer, then makes an individual credit decision based on the analyst's assessment of the strengths and weaknesses of the application. The credit analyst may condition approval of a credit application on the addition of a qualified co-obligor or guarantor or on modifications to the financing terms in order to lower the total monthly payment on the contract, such as a higher cash down payment or a less expensive vehicle. When necessary, the analyst will verify the identity, employment and other applicant data before the decision is made.

For credit applications not electronically approved or rejected, Ford Credit typically makes a credit decision within 20 minutes of receipt of an application. Higher risk applicants may require additional investigation. Over 95% of Ford Credit's credit decisions are made within one hour of receipt of an application.

Each Ford Credit analyst is assigned a specific dollar approval level for retail installment contracts. These levels are based on an applicant's total outstanding contract balances with Ford Credit. More experienced analysts are assigned higher approval levels. More senior personnel must approve any contract that exceeds the analyst's approval level. In addition, more senior personnel periodically review the purchase decisions of analysts to ensure they are consistent with Ford Credit's underwriting guidelines. More senior personnel also may have to approve any application for a contract having an APR lower than Ford Credit's dealer discount rate. These "rate concessions" generally are granted to allow dealers to offer lower APRs to qualified applicants who could obtain lower rates from other financing

providers or to resolve a discrepancy in the originally quoted dealer rate. Ford Credit also offers programs where the dealer discount rate is determined primarily on the basis of certain applicant or contract characteristics rather than exclusively on the scoring models. These programs are generally offered to attract certain types of applicants or to promote sales of certain Ford vehicles.

Dealers must submit contracts on forms approved by Ford Credit. After the dealer submits a completed contract, Ford Credit checks it for specific errors apparent in the disclosures made by the dealer, such as the calculation of APR. If the contract contains minor errors, Ford Credit may purchase the contract and send a correction notice to the obligor, or obtain a signed modification from the obligor. A contract with a more significant error is returned to the dealer for correction or a new contract. Each dealer signs an assignment agreement representing that all disclosures made by the dealer are correct. For disclosures that Ford Credit cannot review because the error would not be apparent in the contract, it relies on the representations made by the dealer in the assignment agreement. The assignment agreement requires the dealer to apply immediately for a title that includes Ford Credit's lien. Ford Credit tracks titles to determine if its lien has been noted.

Ford Credit purchases a limited number of contracts under its military sales finance plan from a company that specializes in selling vehicles to military personnel stationed on United States military bases outside the United States who purchase vehicles for delivery in the United States or abroad. Ford Credit generally underwrites these contracts in the same manner as it underwrites standard retail contracts and obtains a full guaranty on contracts for vehicles delivered abroad.

Purchased contracts and related documents are electronically imaged. For electronic contracts, a separate image of the original is created for servicing purposes. Once imaged, the documents may be viewed on a computer screen for servicing, but may not be altered or deleted. Additional documents obtained during servicing are also added to the imaged file.

The obligor agrees to maintain physical damage insurance on the financed vehicle, and typically is required to provide proof of insurance at the time the contract is signed. Since obligors may choose their own insurers to provide the required coverage, the specific terms and conditions of their policies may vary. Ford Credit does not track whether the obligor maintains the required insurance.

The obligor pays the amount financed over a specified number of months with interest at the APR. The obligor is allowed to choose the date on which the monthly payments will be due as long as the first payment is due within 45 days of the date the contract is signed. Sometimes Ford Credit offers marketing programs that allow the obligor to defer payments for a limited time before beginning to make monthly payments.

Ford Credit classifies financed vehicles into categories. The car category includes sedans, hatchbacks and coupes. The light truck category includes vans, mini-vans and light pick-up trucks. The truck category includes medium and heavy trucks with specialty bodies. The utility category includes wagons, SUVs and cross-overs.

Ford Credit purchases contracts for new vehicles and used vehicles, including certified pre-owned vehicles. A certified pre-owned vehicle must satisfy mileage limits, condition requirements and routine maintenance standards and typically is still covered by the manufacturer's warranty. Certified pre-owned vehicles are eligible for manufacturer sponsored incentive marketing programs. About half of Ford Credit's used vehicle retail contracts are for certified pre-owned vehicles.

A specific auditing group within Ford Credit performs regular audits to monitor compliance with purchasing policies and procedures and legal requirements.

Ford Credit regularly reviews and analyzes its portfolio of receivables to evaluate the effectiveness of its underwriting guidelines, scoring models and purchasing criteria. If external economic factors, credit loss or delinquency experience, market conditions, obligor characteristics or other factors change, Ford

Credit may adjust its underwriting guidelines, scoring models and purchasing criteria in order to change the quality of its portfolio or to achieve other goals and objectives.

Commercial Accounts

Some of the retail contracts purchased by Ford Credit are for obligors who are either individuals or business entities who use the financed vehicles for commercial purposes. Commercial obligors may have multiple vehicles financed with Ford Credit. Ford Credit's scoring models for commercial applicants that are business entities include factors relevant to business entities and data available through commercial credit bureaus. While credit reports from commercial credit bureaus may include credit risk scores, these scores are not FICO® scores. Commercial credit bureau scores, when available, have been used in Ford Credit's scoring models since the second quarter of 2008. Commercial applicants who are individuals are scored using the scoring models for individual customers, including the individual's FICO® score. Similar to credit decisions for personal use contracts, credit decisions for commercial contracts emphasize the applicant's ability to pay and creditworthiness, but also recognize that commercial use vehicles may have specialty bodies or equipment added and are often put to more demanding uses, which may reduce the resale value of the financed vehicle. For these reasons, underwriting standards are often different for commercial contracts, such as requiring larger down payments and shorter terms. Occasionally, Ford Credit will make a direct loan to a dealer to purchase a vehicle for dealership use, such as transporting parts or customers whose vehicles are being serviced. Although Ford Credit generally underwrites these loans in the same manner as it underwrites other commercial contracts, they are documented in a note and security agreement directly between Ford Credit and the dealer rather than a retail installment sale contract purchased from the dealer. A portion of commercial use customers have lines of credit that allow the customer to finance multiple vehicles up to the approved amount under preestablished credit terms such as APR. Credit decisions for lines of credit are performed on at least an annual basis and include review of financial statements and may require guaranties of the contracts financed under the line of credit as a condition of approval.

The most significant difference between commercial and other contracts is that commercial contracts may be included in a separate cross collateral agreement. These agreements allow Ford Credit to enforce collection and repossession rights against some or all contracts and financed vehicles with the same obligor even if payments for some contracts are current. Payments or other amounts received that relate to a specific contract generally are applied first to that contract. Excess amounts collected for one contract, such as repossession sale proceeds, may be applied to other contracts with the same obligor to reduce losses.

Servicing Experience

Ford Credit will service the receivables and the securitization transactions. Ford Credit has been the servicer for its U.S. public retail securitization program since its inception. None of the asset-backed securities in this program have experienced any losses or events of default and there have been no instances of material noncompliance with the servicing criteria in this program.

Ford Credit services all the receivables it originates, including receivables sold in securitizations, other structured financings and in whole loan sales. Ford Credit has comprehensive web-based servicing policies and procedures that ensure common servicing practices are used for all receivables. These policies and procedures are described in "— Servicing and Collections" below. Servicing personnel do not know if a receivable they are servicing has been sold in a securitization transaction or otherwise.

Ford Credit's servicing and collections systems maintain records for all receivables, track application of payments and maintain relevant information on the obligors and account status. The systems also capture communications with obligors and allow management to review collection personnel activities.

Ford Credit will be responsible for all servicing functions for the receivables. As is customary in the servicing industry, Ford Credit engages vendors, which may be affiliates, to perform certain servicing processes. These processes include processing monthly lockbox payments from customers, providing

telephonic payment systems, monitoring notation of lien on title for financed vehicles, imaging customer documents, storing paper and electronic contracts, handling certain inbound customer service calls and early stage collections support and performing data entry and administrative functions. Ford Credit requires all vendors to follow processes set by Ford Credit or agreed to between Ford Credit and the vendor and regularly monitors them for compliance. Vendors do not have the discretion to make decisions that would materially affect agreed upon processes, amounts collected or the timing for amounts applied to obligor accounts. Ford Credit believes these vendors could be easily replaced, if necessary. Some vendors perform their services from locations outside of the U.S.

Ford Credit also contracts with a network of outside contractors to repossess vehicles and to collect some deficiencies for charged off accounts. Ford Credit uses web-based auctions and auction houses engaged by Ford to prepare and sell repossessed vehicles at auction. These contractors are monitored for compliance with the contracts, but due to the nature of these relationships, these contractors do not always follow established Ford Credit procedures.

As servicer of the securitization transaction, Ford Credit will prepare monthly investor reports, provide payment instructions to the indenture trustee and prepare annual compliance reports.

Servicing and Collections

Ford Credit services the receivables from its centralized business centers and specialty servicing centers in the U.S. Ford Credit's servicing operations are divided into three areas — collections, account services and vehicle liquidations. The collections area has two main functions — account maintenance and loss prevention. The account services area has three main functions — credit re-analysis, titles and customer services — that are responsible for non-collection related customer requests such as payment reschedules, title follow-up and payment misapplications. Ford Credit has specialty service centers for contracts with bankrupt obligors and charged off accounts. Ford Credit also has a centralized customer service center for inbound customer inquiries and early stage collections support. Ford Credit uses specialty teams in its servicing operations for certain functions such as total loss insurance claims, account redemptions and vehicle skip tracing. One or more of these functions may be consolidated in a single center.

Ford Credit encourages obligors to make payments electronically, including through direct debit or telephonic or online payment systems. Obligors may enroll in a variety of recurring and one-time automated clearinghouse or "ACH" programs that debit funds directly from their bank accounts. Obligors who do not pay electronically are instructed to send their monthly payments to one of several lockbox locations. Most banks convert checks into ACH items, which speeds up processing time.

Ford Credit applies almost all payments that are received prior to the designated processing time on each business day to an obligor's account on the day payment is received. By the end of the next business day, Ford Credit researches, matches and applies most payments that do not include enough information to match an account. A specialized group at Ford Credit researches, matches and applies the remaining small number of payments that have not been matched to an account.

Most of the receivables are paid without any additional servicing or collection efforts. As each obligor develops a payment history, Ford Credit uses a behavior scoring model to assess the probability of payment default for all receivables and implements collection efforts based on its determination of the credit risk associated with each obligor. This model assesses a number of variables including origination characteristics, customer history, payment patterns and updated credit bureau information. Based on data from this scoring model, contracts are grouped by risk category for collection. These categories determine how soon an obligor will be contacted after a payment becomes delinquent, how often the obligor will be contacted during the delinquency and how long the account will remain in account maintenance before it is transferred to loss prevention where a more experienced customer service representative follows the account until the delinquency is resolved. Ford Credit frequently reviews its behavior scoring model and may make adjustments to improve its performance. Ford Credit's collection operations are supported by auto dialing technology and collection and workflow operating systems.

A customer service representative will attempt to contact an obligor with a delinquent account to determine the reason for the delinquency and identify the obligor's plans to resolve the delinquency. Most delinquent accounts are resolved because the obligor makes the past due payments. If the obligor cannot make the past due payments, Ford Credit frequently will extend the contract to allow an obligor to continue to make the normal monthly payment. A payment extension defers a past due payment for one or more months. The length of the payment extension is typically one month, however extensions of up to three months may be granted and multiple payment extensions may be given over the term of the contract. Following a payment extension, the account generally is no longer considered delinquent. Ford Credit guidelines for granting payment extensions generally require the customer service representative to determine that the obligor's payment problem is temporary, that the obligor has an income source for making the next payment and that the obligor has made at least one payment since contract inception and at least six payments between payment extensions. Payment extensions that do not comply with these guidelines must be approved by servicing managers and exceptions to the guidelines are reviewed regularly. When allowed by state law, Ford Credit usually collects a fee on extensions and additional interest will be earned on the receivables as a result of the extension.

Alternatively, Ford Credit may rewrite a contract if the obligor cannot make the past due payments. A rewrite is a refinancing of the obligor's outstanding balance typically with a longer contract term and sometimes a different interest rate. Ford Credit's guidelines for granting rewrites include requirements that all original parties remain on the contract and sign an amendment to the contract unless special approval is obtained and that the obligor has a stable source of income. Ford Credit may reschedule an obligor's payments if the obligor makes a large prepayment or a large insurance payment is received. A reschedule generally means a reduction of the amount of the monthly payment over the same contract term.

From time to time Ford Credit may provide a "promotional" or administrative extension to certain obligors. For example, an extension of up to 90 days may be allowed to obligors who live in an area affected by a natural disaster. These extensions are not provided to obligors whose contracts are more than 61 days delinquent.

An obligor may be allowed to change the monthly payment due date typically by not more than 30 days, if, for example, the day on which the obligor gets paid changes. Due date changes are not allowed for accounts more than 30 days delinquent.

Occasionally, a new obligor may assume the obligations under a retail installment sale contract with the original obligor either still liable or released from the terms of the contract. In rare instances, substitution of the financed vehicle is permitted.

Ford Credit uses periodic management reports on delinquencies, extensions, rewrites and other measurements and operating audits to maintain control over the use of collection actions.

Ford Credit's servicing policies and procedures may change over time. Ford Credit regularly tests new servicing procedures on controlled portions of its receivables to develop and refine its servicing procedures. Areas tested include timing and frequency of collection calls and when it is more effective for the account maintenance team or the loss prevention team to contact the obligor. If a test shows that a new procedure is an improvement over the existing procedure, the new servicing procedure is applied to the entire portfolio.

Repossession and Charge Off

Ford Credit makes reasonable efforts to collect on delinquent contracts and to keep contracts current. Repossession is considered only after other collection efforts have failed. Self-help repossession is the method used by Ford Credit in most cases and usually is accomplished by using an independent contractor to take possession of the financed vehicle. On average, Ford Credit repossesses the financed vehicle when the contract is between 60 and 70 days delinquent, but may repossess earlier or later depending on the risk of the contract or other circumstances.

The vast majority of repossessed vehicles are sold at a physical or on-line auction and the proceeds are applied to the outstanding balance of the receivable. Ford Credit works with the vehicle remarketing department of Ford to manage the disposal of repossessed vehicles and seeks to maximize net auction proceeds, which equals gross auction proceeds less auction fees and costs for reconditioning and transporting the vehicle to auction. On average, vehicles are sold at auction within 40 to 50 days of repossession. A small number of repossessed vehicles are sold through other means. For example, some heavily damaged vehicles are sold for salvage or scrap and some vehicles may be sold directly to an insurance company if a claim has been filed on the repossessed vehicle. Also, some vehicles with a limited resale market, such as some medium and heavy trucks and vehicles with specialty equipment, may be sold through a targeted bidding process to maximize proceeds from the sale.

After standard collection efforts are exhausted and all collections, including auction proceeds, refunds on cancelled service contracts and insurance products and insurance claims, are applied, Ford Credit charges off any remaining balance owed by the obligor. In a limited number of cases, an obligor or a financed vehicle cannot be located after skip tracing and the account is charged off as a skip account. Ford Credit may charge off the remaining balance on an account if the cost of collection exceeds the balance owed by the obligor and will not pursue further collection of the account.

Ford Credit continues to pursue collection of deficiency balances and skip accounts after charge off through its specialty service center for charged off accounts. Collection activities generally are continued until the contract is paid or settled in full, the contract is determined to be uncollectible due to bankruptcy of the obligor or for other reasons, the obligor dies without a collectible estate or the applicable statute of limitations expires. Ford Credit may sell charged off receivables as a final effort to realize value.

Ford Credit may release the security interest to an insurer in order to receive proceeds from insurance covering the financed vehicle or following repossession of the vehicle, discounted settlement of the receivable or abandonment of its rights in the financed vehicle, in each case in accordance with its policies and procedures.

Bankruptcy Accounts

When Ford Credit is notified that an obligor has filed for bankruptcy, the account is moved to its specialty service center for bankrupt accounts. Restrictions of the U.S. federal bankruptcy laws, including the automatic stay, prohibit Ford Credit from taking any collection action against the obligor or the financed vehicle without court approval. In a Chapter 7 bankruptcy, the most common form of bankruptcy, the obligor is generally required to reaffirm its obligations, redeem the financed vehicle for a lump sum or return the financed vehicle. If a contract is reaffirmed by the obligor, it will be returned to normal servicing. In a Chapter 13 bankruptcy, the plan of reorganization usually requires the obligor to make payments over a two to five year period. The payments required will be based on either the full contract balance or the value of the financed vehicle at the time of bankruptcy, depending on the time between the obligor's purchase of the financed vehicle and the bankruptcy filing and whether the debt was incurred for personal or other use. When the payments required under the plan of reorganization are completed, the obligor will receive a discharge from liability for any remaining balance under the contract. Ford Credit will charge off any such remaining balance.

DEPOSITOR

Ford Credit Auto Receivables Two LLC, or the "depositor," is a Delaware limited liability company created in January 2001. Ford Credit is the sole member of the depositor. The depositor was created for the limited purpose of purchasing receivables from Ford Credit and selling the receivables to trusts for securitization transactions.

The depositor will make representations about the characteristics of the receivables sold to the trust. In addition, the depositor will represent that it owns the receivables free of any liens or claims. If any of the depositor's representations proves to have been untrue when made and the breach has a material adverse effect on any receivable, the depositor must repurchase the receivable unless it cures the breach

in all material respects by the end of any applicable grace period. In addition, the depositor must enforce Ford Credit's repurchase obligation described above under "Sponsor and Servicer — General." The prospectus supplement will contain a more detailed description of the representations made by the depositor and its obligation to repurchase receivables.

The depositor will be responsible for filing any required income tax or franchise tax returns for the trust and for filing and maintaining the effectiveness of the financing statements that perfect the trust's security interest in the receivables and other trust assets.

The depositor will pay the administrator's annual fees and indemnify the underwriters against certain civil liabilities as described in this prospectus in "Plan of Distribution." If either the owner trustee or the indenture trustee resigns or is removed, the depositor will reimburse any expenses associated with its replacement.

Securities issued by a trust may be sold by the depositor in private placements or other non-registered offerings and will not be offered by this prospectus. The depositor may also retain all or a portion of any class of notes issued by a trust.

ISSUING ENTITY

The depositor will create a separate issuing entity for each securitization transaction. Each issuing entity will be a Delaware statutory trust governed by a trust agreement between the depositor and the owner trustee.

The purposes of the trust will be to:

acquire and hold the receivables and other trust assets,

issue the notes and pledge the trust assets to the indenture trustee to secure payments on the notes,

make payments on the notes,

issue additional notes or certificates in exchange for all or a portion of the residual interest of the trust, and

engage in other related activities to accomplish these purposes.

The trust may not engage in any other activities and may not invest in any other securities or make loans to any persons.

The trust agreement may be amended without the consent of the noteholders if the holder of the residual interest provides a legal opinion to the indenture trustee that the amendment will not have a material adverse effect on the notes. If no opinion is delivered, the amendment will require the consent of the holders of a majority of the principal balance of the notes.

The trust may not dissolve, merge with or sell substantially all its assets to any other entity or impair the first priority lien of the indenture trustee in the trust assets except as permitted by the transaction documents.

The servicer will indemnify the trust for liabilities and damages caused by the servicer's willful misconduct, bad faith or negligence (other than errors in judgment) in the performance of its duties as servicer.

Ford Credit will be the administrator of the trust under an administration agreement. The administrator will provide notices on behalf of the trust and perform all administrative obligations of the trust under the transaction documents. These obligations include obtaining and preserving the trust's qualification to do business where necessary, notifying the rating agencies and the indenture trustee of events of default, preparing and filing reports with the SEC, inspecting the indenture trustee's books and records, monitoring the trust's obligations for the satisfaction and discharge of the indenture, causing the servicer to comply with its duties and obligations under the sale and servicing agreement, causing the indenture trustee to notify the noteholders of the redemption of their notes, and preparing and filing the documents necessary to release property from the lien of the indenture. The depositor will pay the administrator an annual administration fee.

The administrator may resign at any time by giving 60 days' notice to the trust, the indenture trustee and the owner trustee and, in certain circumstances, the owner trustee, with the consent of the holders of a majority of the note balance of the Controlling Class, may terminate the administrator. No resignation or termination of the administrator will become effective until a successor administrator is in place.

OWNER TRUSTEE

The identity of the owner trustee and a description of its experience as an owner trustee in securitization transactions will be included in the prospectus supplement.

The owner trustee's main duties will be:

creating the trust by filing a certificate of trust with the Delaware Secretary of State,

maintaining the trust distribution account for the benefit of the holder of the residual interest in the trust, and

executing documents on behalf of the trust.

The owner trustee will not be liable for any action, omission or error in judgment unless it constitutes willful misconduct, bad faith or negligence by the owner trustee. The owner trustee will not be required to exercise any of its rights or powers under the transaction documents or to institute, conduct or defend any litigation on behalf of the trust at the direction of the depositor unless the depositor has offered reasonable security or indemnity satisfactory to the owner trustee to protect it against the costs and expenses that it may incur in complying with the direction.

The depositor and the administrator will indemnify the owner trustee for all liabilities and damages arising out of the owner trustee's performance of its duties under the trust agreement unless caused by the willful misconduct, bad faith or negligence (other than errors of judgment) of the owner trustee or as a result of any breach of representations made by the owner trustee in the trust agreement. The servicer will indemnify the owner trustee for liabilities and damages caused by the servicer's willful misconduct, bad faith or negligence (other than errors in judgment) in the performance of its duties as servicer.

The trust will pay the fees of the owner trustee, reimburse the owner trustee for expenses incurred in performing its duties, and pay any indemnities due to the owner trustee, to the extent such amounts have not been paid or reimbursed by the depositor or the administrator. The trust will pay these amounts to the owner trustee on each payment date up to the limit specified in the prospectus supplement before the trust makes any other payments. The trust will pay the owner trustee amounts in excess of the limit only after all other fees and expenses of the trust, and all required interest and principal payments on the notes on that payment date, are paid in full. Following an Event of Default, however, all owner trustee fees, expenses and indemnities will be paid first.

The owner trustee may resign at any time by notifying the depositor and the administrator. The administrator may remove the owner trustee at any time and for any reason, and must remove the owner

trustee if the owner trustee becomes legally unable to act, becomes subject to a bankruptcy or is no longer eligible to act as owner trustee under the trust agreement because of changes in its legal status, financial condition or certain rating conditions. No resignation or removal of the owner trustee will be effective until a successor owner trustee is in place. If not otherwise paid by the trust, the depositor will reimburse the owner trustee and the successor owner trustee for any expenses associated with the replacement of the owner trustee.

The trust agreement will terminate when:

the last receivable has been paid in full, settled, sold or charged off and all collections have been applied, or

the trust has paid all the notes in full and all other amounts payable by it under the transaction documents.

Upon termination of the trust agreement, any remaining trust assets will be distributed to the holder of the residual interest in the trust and the trust will be terminated.

INDENTURE TRUSTEE

The identity of the indenture trustee and a description of its experience as an indenture trustee in securitization transactions will be included in the prospectus supplement.

The indenture trustee's main duties will be:

holding the security interest in the receivables and other trust assets on behalf of the noteholders,

administering the trust bank accounts,

enforcing remedies at the direction of the Controlling Class following an Event of Default and acceleration of the notes,

acting as note registrar to maintain a record of noteholders and provide for the registration, transfer, exchange and replacement of notes,

acting as note paying agent to make payments from the trust bank accounts to the noteholders and others, and

notifying the noteholders of an Event of Default.

Except in certain limited circumstances, if the indenture trustee knows of an event that with notice or the lapse of time or both would become an Event of Default, it must provide written notice to the noteholders within 90 days. If the indenture trustee knows of an Event of Default, it must notify all noteholders within five business days. If the notes have been accelerated, the indenture trustee may, and at the direction of the holders of a majority of the note balance of the Controlling Class must, institute proceedings for the collection of amounts payable on the notes and enforce any judgment obtained, institute foreclosure proceedings and, in certain circumstances, sell the receivables.

The indenture trustee's standard of care changes depending on whether an Event of Default has occurred. Prior to an Event of Default, the indenture trustee will not be liable for any action, omission or error in judgment unless it constitutes willful misconduct, bad faith or negligence by the indenture trustee. Following an Event of Default, the indenture trustee must exercise its rights and powers under the indenture using the same degree of care and skill that a prudent person would use under the circumstances in conducting his or her own affairs. Following an Event of Default, the indenture trustee

may assert claims on behalf of the trust and the noteholders against the depositor, Ford Credit and any interest rate hedging counterparties.

For a description of the rights and duties of the indenture trustee after an Event of Default and upon acceleration of the notes you should read "Description of the Notes — Events of Default and Remedies" in this prospectus.

The indenture trustee must mail an annual report to the noteholders if certain events specified in the Trust Indenture Act have occurred during the preceding calendar year, including a change to the indenture trustee’s eligibility under the Trust Indenture Act, a conflict of interest specified in the Trust Indenture Act, a release of trust assets from the lien of the indenture and any action taken by the indenture trustee that has a material adverse effect on the notes.

The indenture trustee will not be required to exercise any of its rights or powers, expend or risk its own funds or otherwise incur financial liability in the performance of its duties if it has reasonable grounds to believe that it is not likely to be repaid or indemnified by the trust. The indenture trustee also will not be required to take action in response to requests or directions of the noteholders unless the noteholders have offered reasonable security or indemnity satisfactory to the indenture trustee to protect it against the costs and expenses that it may incur in complying with the request or direction.

The trust and the administrator will indemnify the indenture trustee for all liabilities and damages arising out of the indenture trustee's performance of its duties under the indenture unless caused by the willful misconduct, bad faith or negligence (other than errors of judgment) of the indenture trustee or as a result of any breach of representations made by the indenture trustee in the indenture. The servicer will indemnify the indenture trustee for damages caused by the servicer's willful misconduct, bad faith or negligence (other than errors in judgment) in the performance of its duties as servicer.

The trust will pay the fees of the indenture trustee, reimburse the indenture trustee for expenses incurred in performing its duties, and pay any indemnities due to the indenture trustee, to the extent such amounts are not otherwise paid or reimbursed by the depositor or administrator. The trust will pay these amounts to the indenture trustee on each payment date up to the limit specified in the prospectus supplement before the trust makes any other payments. The trust will pay the indenture trustee amounts in excess of the limit only after all other fees and expenses of the trust, and all required interest and principal payments on the notes on that payment date, are paid in full. Following an Event of Default, however, all indenture trustee fees, expenses and indemnities will be paid first.

Under the Trust Indenture Act, the indenture trustee may be deemed to have a conflict of interest and be required to resign as indenture trustee for the notes or any class of notes if a default occurs under the indenture. In these circumstances, separate successor indenture trustees will be appointed for each class of notes. Even if separate indenture trustees are appointed for different classes of notes, only the indenture trustee acting on behalf of the Controlling Class will have the right to exercise remedies and only the Controlling Class will have the right to direct or consent to any action to be taken, including a sale of the receivables.

The indenture trustee may resign at any time by notifying the trust. The holders of a majority of the note balance of the Controlling Class may remove the indenture trustee at any time and for any reason by notifying the indenture trustee and the trust. The trust must remove the indenture trustee if the indenture trustee becomes legally unable to act or becomes subject to a bankruptcy or is no longer eligible to act as indenture trustee under the indenture because of changes in its legal status, financial condition or certain rating conditions. No resignation or removal of the indenture trustee will be effective until a successor indenture trustee is in place. If not otherwise paid by the trust, the depositor will reimburse the indenture trustee and the successor indenture trustee for any expenses associated with the replacement of the indenture trustee.

RECEIVABLES

Trust Assets

The primary assets of the trust will be a pool of receivables consisting of retail installment sale contracts secured by new and used cars, trucks and utility vehicles. On the closing date for a securitization transaction, Ford Credit will sell the receivables and other related assets to the depositor, and the depositor will sell the receivables and other related assets to the trust. The trust assets will be pledged by the trust to the indenture trustee for the benefit of the noteholders and any interest rate hedging counterparties.

The trust assets will be:

the receivables and collections on the receivables applied on or after the cutoff date,

funds and investments in bank accounts of the trust,

security interests in the financed vehicles,

proceeds from claims on any insurance policies covering the financed vehicles or the obligors,

rights under the transaction documents, including rights to any credit or payment enhancements described in the prospectus supplement,

any rebates of costs or premiums on cancelled extended warranty protection plans, physical damage, credit life or disability insurance policies or similar products included in the amount financed, and

all proceeds of the above.

Additional Information About the Receivables

The prospectus supplement will contain additional information about the receivables, including:

the number, aggregate principal balance and average principal balance of the receivables,

the weighted average APR, original and remaining terms,

the scheduled weighted average life, and

the geographic distribution, credit score distribution, make, model and vehicle type distribution, interest rate distribution and other composition characteristics for the receivables.

The "initial pool balance" for each trust will be the aggregate principal balance of the receivables on the cutoff date. The "pool balance" as of the last day of any month will be the aggregate principal balance of the receivables on such day excluding purchased receivables. The "principal balance" of a receivable as of the cutoff date or the last day of any month means the amount financed, less:

collections applied to reduce the principal balance of the receivable, and

any amounts charged off on the receivable.

Static Pool Information — Prior Securitized Pools

Ford Credit will provide static pool information about its prior securitized pools of retail installment sale contracts in an appendix to the prospectus supplement.

Types of Receivables

All of the receivables will be simple interest receivables. A "simple interest receivable" amortizes the amount financed or principal of the receivable over a series of payments. Payments under a simple interest receivable are applied first to interest accrued to the date of payment and then to reduce the principal balance. Each payment consists of interest and a portion of the principal. The interest amount of any payment is calculated by multiplying the unpaid principal balance of the receivable by its APR and by the period elapsed (as a fraction of a calendar year) since the preceding payment was paid. The principal amount of any payment will be equal to the remainder of the payment. A simple interest receivable may be prepaid without penalty. The obligor will be required to pay interest on the receivable only to the date of prepayment.

If an obligor pays an payment before its scheduled due date, the portion of the payment allocable to interest will be less than it would have been had the payment been made as scheduled because less interest will have accrued, and the portion of the payment applied to reduce the unpaid principal balance will be correspondingly greater. Conversely, if an obligor pays an payment after its scheduled due date, the portion of the payment allocable to interest will be greater than it would have been had the payment been made as scheduled because more interest will have accrued, and the portion of the payment applied to reduce the principal balance will be correspondingly less.

All of the receivables will require equal monthly payments. The obligor pays a fixed monthly payment until the final scheduled payment date, at which time the amount of the final payment is increased or decreased as necessary to repay the then unpaid principal balance due to the timing of payments made over the term of the contract, payment extensions or partial prepayments.

Bankruptcy Considerations

Sale of Receivables by Ford Credit to the Depositor. The sale of the receivables by Ford Credit to the depositor will be structured to minimize the possibility that a bankruptcy proceeding of Ford Credit will adversely affect the trust's rights in the receivables. Ford Credit and the depositor intend that the sale of the receivables by Ford Credit to the depositor will constitute a "true sale." The depositor will have no recourse to Ford Credit other than the limited obligation to repurchase receivables for breaches of representations.

On the closing date for the notes, Ford Credit and the depositor will receive a reasoned legal opinion that in a bankruptcy of Ford Credit:

the receivables and the collections on the receivables would not be property of Ford Credit's bankruptcy estate under U.S. federal bankruptcy laws, and

the automatic stay under U.S. federal bankruptcy laws would not apply to prevent payment of the collections on the receivables to the depositor or the trust.

This opinion will be subject to certain assumptions and qualifications and a court in a Ford Credit bankruptcy proceeding may not reach the same conclusion.

Structure of Depositor; Risk of Substantive Consolidation. The depositor is organized as a special purpose entity and is restricted by its limited liability company agreement to activities designed to make it "bankruptcy-remote." These restrictions limit the nature of its activities, prohibit the incurrence of additional indebtedness and make it unlikely that the depositor will have any creditors. This agreement

also restricts the depositor from commencing a voluntary case or proceeding under U.S. bankruptcy laws or any similar state law without the unanimous consent of its board of managers, including independent managers who are specifically instructed to take into account the interests of creditors of the depositor and the trusts created by the depositor, as well as the interests of the depositor, in any vote to allow the depositor to file for bankruptcy. The limited liability company agreement also contains covenants meant to preserve the separate identity of the depositor from Ford Credit and to avoid substantive consolidation of Ford Credit and the depositor. The most important of these covenants require each company to maintain its separate existence, maintain separate books and bank accounts, prepare separate financial statements and not hold itself as liable for debts of the other and not commingle the depositor's assets with the assets of Ford Credit or its affiliates.

In addition, in the transaction documents, the owner trustee, the indenture trustee and the noteholders will agree not to institute a bankruptcy proceeding against the depositor in connection with any obligations under the notes or the transaction documents.

On the closing date for the notes, Ford Credit and the depositor will obtain a reasoned legal opinion that in a bankruptcy of Ford Credit, a creditor or bankruptcy trustee of Ford Credit (or Ford Credit as debtor in possession) would not have valid grounds to request a court to disregard the separate legal existence of the depositor so as to cause substantive consolidation of the assets and liabilities of the depositor with the assets and liabilities of Ford Credit in a manner prejudicial to the noteholders. This opinion will be subject to certain assumptions and qualifications, including an assumption that the depositor and Ford Credit comply with its limited liability company agreement. A court in a Ford Credit bankruptcy proceeding may not reach the same conclusion. If the separate legal existence of Ford Credit and the depositor were disregarded and the assets and liabilities of Ford Credit and the depositor were consolidated, assets of the depositor could be used to satisfy Ford Credit's creditors instead of the noteholders or the trust. This consolidation of assets and liabilities generally is referred to as "substantive consolidation."

Sale of Receivables by the Depositor to the Trust; Perfection of Security Interests. The transfer of the receivables by the depositor to the trust will also be structured as a sale. Unlike the sale by Ford Credit to the depositor, the depositor initially will retain an interest in the receivables it sells in the form of a residual interest in the trust. Because of this retained interest, this sale may not constitute a "true sale" that removes the receivables from the bankruptcy estate of the depositor. The depositor will grant a back-up security interest in the receivables to the trust and will file Uniform Commercial Code financing statements to perfect the trust's ownership interest and security interest in the receivables. The trust agreement contains provisions similar to those in the depositor's limited liability company agreement designed to make it "bankruptcy-remote" by limiting the trust's activities and requiring creditors to agree not to institute a bankruptcy proceeding against the trust.

Assuming that the sale of the receivables by Ford Credit to the depositor is a "true sale," the depositor is not consolidated with Ford Credit in a bankruptcy of Ford Credit and the depositor is not in bankruptcy, the trust's perfected security interest in the receivables generally will provide the trust with uninterrupted access to collections on the receivables (other than any collections held by Ford Credit as servicer at the time a bankruptcy proceeding is commenced). The trust will grant a security interest in the receivables and other trust assets to the indenture trustee for the benefit of the noteholders, and the administrator will file Uniform Commercial Code financing statements to perfect and maintain the perfection of the security interest.

SERVICING THE RECEIVABLES AND THE SECURITIZATION TRANSACTION

Servicing Duties

Under the sale and servicing agreement, the servicer's main duties will be:

collecting and applying all payments made on the receivables,

investigating delinquencies,

sending invoices and responding to inquiries of obligors,

processing requests for extensions and modifications,

administering payoffs, defaults and delinquencies,

repossessing and then selling financed vehicles,

maintaining accurate and complete accounts and computer systems for the servicing of the receivables,

furnishing monthly investor reports and instructions to the indenture trustee, and

providing the custodian with updated records for the receivable files.

Servicing Fees

The servicer will earn a servicing fee each month equal to 1% of the pool balance as of the first day of such month, unless another percentage is specified in the prospectus supplement. In addition, the servicer will retain any late fees, extension fees and other administrative fees received from obligors and receive investment earnings on funds in the trust bank accounts. If specified in the prospectus supplement, the servicer may receive a separate servicing fee from recoveries collected on charged off receivables. The servicer will be entitled to reimbursement for fees and expenses paid to third parties related to the repossession and disposition of financed vehicles as well as for continued collection activities on charged off accounts. The servicer may net these fees and expenses from collections deposited to the collection account.

Servicer Modifications and Obligation to Purchase Certain Receivables

The servicer will follow its policies and procedures in servicing the receivables. As part of its normal collection efforts, the servicer may waive or modify the terms of any receivable, including granting payment extensions and rewriting, rescheduling or amending any contract or waiving late fees, extension fees or other administrative fees. The servicer will purchase a receivable from the trust if it makes certain modifications including if it grants payment extensions that extend the final payment date of the receivable beyond six months past the last scheduled payment date of any receivable in the securitized pool. The servicer will also purchase a receivable if it modifies the amount financed or the APR of the receivable or rewrites or reschedules the contract to increase the number of originally scheduled due dates of the receivable. However, the servicer will not be obligated to replace any modified receivables, and the servicer will not be required to purchase any modified receivable if such modification was required by law or court order, including by a bankruptcy court. Ford Credit's servicing systems identify these types of modifications and will automatically repurchase the modified receivable at the end of the month in which the modification is made. The purchase price for such repurchase will be equal to the principal balance of the receivable plus 30 days of interest at the applicable APR prior to the modification, which will be deposited by the servicer to the collection account. For modifications or waivers that do not result in a purchase of the receivable, Ford Credit does not expect that these changes or waivers will affect materially the cash flows on the receivables as a whole.

For more information about the servicer's policies and procedures for servicing the receivables, including extensions and rewrites, you should read "Sponsor and Servicer — Servicing and Collections" in this prospectus.

The servicer must maintain perfection of the trust's security interest in each receivable and Ford Credit's security interest in the related financed vehicle until the receivable is paid in full or repurchased,

except in certain limited circumstances. For a charged off receivable, the servicer may release the security interest in a sale of charged off receivables and as permitted by the servicer's policies and procedures. If the servicer fails to maintain perfection of the trust's security interest in the financed vehicle or otherwise impairs the rights of the trust or the noteholders in the receivable (other than in accordance with its policies and procedures) and the servicer does not correct the failure or impairment in all material respects by the end of the second month following the month that an employee of the servicer who is responsible for the securitization transaction, or a "responsible person," obtained actual knowledge or was notified of the impairment, the servicer must purchase the receivable from the trust. The purchase price will generally be the principal balance of the receivable plus 30 days of interest at the applicable APR, which will be deposited by the servicer to the collection account.

For more information about the servicer's policies and procedures for releasing the security interest in the receivable, you should read "Sponsor and Servicer — Repossession and Charge Off" in this prospectus.

Trust Bank Accounts

For each trust, the servicer will establish a collection account and will deposit all collections on the receivables and the purchase price for any receivable purchased by the servicer in the collection account. The servicer may also establish additional bank accounts, including a reserve account or accounts from which payments to the noteholders will be made. All trust bank accounts will be pledged to the indenture trustee to secure the notes.

Funds in the collection account will be invested in highly rated short-term investments that mature on or before the payment date on which such collections are to be distributed. Funds in a reserve account will be invested in these highly rated short-term investments. Investment earnings on funds deposited in the trust bank accounts will be paid to the servicer each month as a supplement to the servicing fee. The servicer will direct the investments unless the indenture trustee instructs the bank holding the account otherwise after an Event of Default. The trust may invest the funds in the trust bank accounts in obligations issued by the underwriters or their affiliates or the servicer or its affiliates.

The servicer will have no access to the funds in the trust bank accounts. Only the indenture trustee may withdraw funds from these accounts to make payments, including payments to the noteholders or to pay investment earnings to the servicer. The indenture trustee will make payments from the collection account to the noteholders and others based on information provided by the servicer.

Deposit of Collections

On or before each payment date, the servicer will deposit all collections on the receivables for the preceding month in the collection account. In general, Ford Credit will deposit all collections in the collection account within two business days of applying such collections to the obligors' accounts, except that net recoveries on charged off accounts will generally be deposited on a monthly basis. If Ford Credit's short-term unsecured debt is rated at least "P-1" by Moody's and "F1" by Fitch, and provided that no Event of Servicing Termination has occurred, Ford Credit may deposit collections in the collection account on the business day preceding each payment date. For each month, "collections" will consist of (a) all principal and interest collected on the receivables and applied by the servicer during the month, (b) all amounts received under physical damage, credit life and disability insurance policies relating to the financed vehicles or obligors, (c) rebates of cancelled service contracts, insurance and similar products, (d) net auction proceeds from the sale of repossessed vehicles and other amounts received on defaulted accounts, and (e) net recoveries on charged off accounts.

If Ford Credit is not the servicer, the servicer must deposit collections within two business days of receiving and applying the collections. Until deposited in the collection account, collections may be used by the servicer for its own benefit and will not be segregated from its own funds.

As an administrative convenience, the servicer may deposit collections and other amounts in the collection account each month net of the servicing fee payable to the servicer for the month, but must account for all transactions individually. If amounts are deposited in error, they will be returned to the servicer or netted from subsequent deposits.

Reporting Obligations of the Servicer

Monthly Investor Report. The servicer will prepare a monthly investor report containing information about payments to be made on the notes and the performance of the receivables, as described in the prospectus supplement.

Annual Compliance Reports. The servicer will prepare a number of reports, statements or certificates for each trust as described in the prospectus supplement.

Custodial Obligations of Ford Credit

Ford Credit will act as custodian for the trust and the indenture trustee and will maintain possession of a receivable file for each receivable. A receivable file will consist of originals or copies of the retail installment sale contract, credit application, certificate of title and other documents relating to the receivable, obligor and financed vehicle. Copies typically will be electronically imaged copies. The custodian will hold these documents in safekeeping with originals maintained in secured areas or facilities with limited access. Imaged copies of the documents will be accessible as "read only." Each receivable file is maintained separately, but will not be physically segregated from other similar receivable files that are in Ford Credit's possession or stamped or marked to reflect the sale to the trust so long as Ford Credit is servicing the receivables.

Delegation of Duties

As long as Ford Credit acts as servicer or custodian, it may delegate any or all of its duties to Ford or certain affiliates of Ford. The servicer or custodian may perform any of its duties through subcontractors. No such delegation or subcontracting will relieve Ford Credit of its responsibilities regarding its duties and Ford Credit will remain responsible for such duties. Ford Credit will be responsible for paying the fees of any subcontractors it employs except for fees and expenses charged to obligor accounts or netted from collections.

Limitations on Liability

The servicer will not be liable to the trust or the noteholders for any action or omission or for any error in judgment, unless it constitutes willful misconduct, bad faith or negligence in the performance of its duties. The servicer will be under no obligation to appear in, prosecute or defend any legal action that is not incidental to the servicer's servicing responsibilities and that may cause it to incur any expense or liability. The servicer, will indemnify the trust, the owner trustee and the indenture trustee for damages caused by the servicer's willful misconduct, bad faith or negligence in the performance of its duties as servicer.

Amendments to the Sale and Servicing Agreement

The sale and servicing agreement may be amended without the consent of the noteholders if the depositor, the servicer or the issuing entity (a) certifies that the amendment will not materially and adversely affect the notes and (b) delivers a legal opinion that for federal income tax purposes, the amendment will not cause any note to be deemed sold or exchanged, cause the trust to be treated as an association or publicly traded partnership taxable as a corporation, or adversely affect the treatment of the notes as debt for federal income tax purposes. The sale and servicing agreement may also be amended with the consent of a majority of each class of notes outstanding (with each class voting separately).

No amendment to the sale and servicing agreement may, without the consent of all affected noteholders,

change the amount, timing, or priority of distributions required to be made to the noteholders,

reduce the percentage of noteholders that are required to consent to an amendment, or

change the amount required to be held in the reserve account.

Resignation and Termination of the Servicer

Ford Credit may not resign as servicer for the trust that will issue the notes unless it is no longer permitted to perform its duties under law. No resignation will become effective until a successor servicer has assumed Ford Credit's servicing obligations.

Each of the following events will be an "Event of Servicing Termination" under the sale and servicing agreement:

failure by the servicer to deposit any collections, payments or other amounts that continues for five business days after it receives notice of the failure from the owner trustee or the indenture trustee or a responsible person of the servicer learns of the failure, unless:

—

the failure was caused by an event outside the control of the servicer and does not continue for more than ten business days, and the servicer uses all commercially reasonable efforts to perform its obligations and promptly notifies the owner trustee, the indenture trustee and the depositor of the failure and the steps being taken by the servicer to remedy it, or

—

the failure relates to an amount no greater than 0.05% of the outstanding amount of notes issued by the trust and does not continue for more than (a) if the servicer's long-term debt is rated investment grade by all rating agencies rating the notes, 90 days after a responsible person of the servicer learns of such failure or (b) if the servicer's long-term debt is not so rated, 90 days after the collections, payments or other amounts were required to be deposited.

failure by the servicer to fulfill its duties under the transaction documents that has a material adverse effect on the notes and continues for 90 days after it receives notice of such failure from the owner trustee, the indenture trustee or the holders of at least 25% of the note balance of the Controlling Class,

bankruptcy of the servicer, and

any other event described in the prospectus supplement.

The holders of a majority of the note balance of the Controlling Class may waive any Event of Servicing Termination.

As long as an Event of Servicing Termination remains unremedied, the indenture trustee or the holders of a majority of the note balance of the Controlling Class may terminate the servicer for the trust. If a successor servicer is not appointed by the date indicated in the notice of termination, the indenture trustee automatically will become the successor servicer and will be entitled to the original servicer's compensation arrangements. If the indenture trustee is unwilling or legally unable to act as servicer, it may appoint, or petition a court to appoint, a successor servicer having a net worth of at least $50 million and whose regular business includes the servicing of motor vehicle receivables. The compensation paid to the successor servicer may not exceed the servicing compensation paid to the servicer under the sale and servicing agreement.

If a bankruptcy trustee or similar official is appointed for the servicer and no other Event of Servicing Termination has occurred, the bankruptcy trustee or official may have the power to prevent the indenture trustee or the noteholders from replacing the servicer.

The servicer will agree to cooperate to effect a servicing transfer and make available its records on payments on the receivables and the receivable files. The servicer will not be required to make available or license its proprietary servicing procedures, processes, models, software or other applications. The predecessor servicer will reimburse the successor servicer for reasonable expenses associated with the transition of servicing duties.

USE OF PROCEEDS

The net proceeds from the sale of the notes issued on any closing date will be used by the depositor to purchase the receivables from Ford Credit and for any other purpose described in the prospectus supplement. The use of the net proceeds from the sale of any notes issued by the trust after the original closing date will be described in the prospectus supplement.

MATURITY AND PREPAYMENT CONSIDERATIONS

The weighted average life of the notes generally will be determined by the rate at which the principal balances of the receivables are paid. An increase in prepayments on the receivables will decrease the weighted average life of the notes. "Prepayments" on the receivables will occur in the following circumstances:

Prepayments on receivables — obligors may prepay their retail installment sale contracts in full or in part at any time without penalty,

Rebates for cancelled items — rebates on cancelled service contracts, insurance and similar products included in the amount financed of the receivable may be received,

Defaults — liquidation proceeds on defaulted receivables may be received,

Insurance proceeds — proceeds from claims on any insurance policies covering the financed vehicles or the obligors may be received,

Repurchases of receivables by Ford Credit and the depositor — Ford Credit and the depositor may be required to repurchase ineligible receivables from the trust upon breaches of representations as described in the prospectus supplement in "Transfers of the Receivables — Obligation to Repurchase Ineligible Receivables Upon Breach,"

Purchases of receivables by the servicer — the servicer may be required to purchase receivables if the servicer fails to maintain the security interest of the trust in the financed vehicles or otherwise impairs the rights of the trust or the noteholders in the receivables or if the servicer makes certain modifications to the receivables as described in the prospectus supplement in "Servicing the Receivables and the Securitization Transaction — Servicer Modifications and Obligation to Purchase Certain Receivables," and

Clean up call option — the servicer will have the option to purchase the receivables from the trust on any payment date on which the pool balance has declined to the amount specified in the prospectus supplement.

No assurance can be made of the amount of principal payments that will be made on the notes on each payment date because that amount will depend primarily on the amount of principal payments, including prepayments, on the receivables during the preceding month.

In Ford Credit's experience, prepayments on retail installment sale contracts occur primarily when obligors decide to purchase new vehicles, defaulted contracts are liquidated or insurance proceeds are received after the financed vehicle is damaged beyond repair. Unlike certain other asset classes, such as residential mortgage loans, retail installment sale contracts for the purchase of cars, trucks and utility vehicles do not experience significant voluntary prepayments as interest rates decline. The short-term nature and smaller principal amount of retail installment sale contracts makes the benefit of refinancing smaller. In addition, the use of low APR financing to increase sales of new cars, trucks and utility vehicles limits the situations in which an obligor could take advantage of lower rates by refinancing.

Any reinvestment risk resulting from a faster or slower rate of prepayment of receivables will be borne entirely by the noteholders. For more information about reinvestment risk, you should read "Risk Factors – The timing of principal payments on your notes is uncertain" in this prospectus.

DESCRIPTION OF THE NOTES

The following summary describes certain terms of the notes and the indenture. The trust will issue one or more classes of notes pursuant to the indenture between the trust and the indenture trustee specified in the prospectus supplement. A form of the indenture is included as an exhibit to the registration statement filed with the U.S. Securities Exchange Commission, the "SEC," that includes this prospectus.

Fixed and Floating Rate Notes

Each class of fixed rate notes will bear interest at the interest rate specified in the prospectus supplement. Interest on fixed rate notes typically will be computed on the basis of a 360-day year of twelve 30-day months but the prospectus supplement may specify a different day count basis.

Each class of floating rate notes will bear interest determined by reference to the London Inter-Bank Offering Rate or "LIBOR," plus a spread specified in the prospectus supplement. The trust will appoint a calculation agent identified in the prospectus supplement to determine LIBOR for each interest period and each class of floating rate notes. The calculation agent will determine LIBOR for each interest period on the second London business day preceding such interest period but the prospectus supplement may specify a different LIBOR determination date. All determinations of LIBOR by the calculation agent, in the absence of manifest error, will be conclusive for all purposes and binding on the noteholders. Interest on floating rate notes typically will be computed on the basis of a 360-day year and the actual number of days in a period but the prospectus supplement may specify a different day count basis.

If the trust issues floating rate notes, it may enter into interest rate swaps, caps and/or floors with counterparties to hedge the potential mismatch between the fixed interest rates on the receivables and the floating interest rates on the floating rate notes. The material terms of these hedging arrangements and information about the counterparties will be described in the prospectus supplement.

Principal and Interest Payments on the Notes

Each class of notes will have a stated principal amount and will bear interest at the interest rate specified in the prospectus supplement. The timing and priority of payment, seniority, interest rate and amount of or method of determining payments of principal and interest on each class of notes will be described in the prospectus supplement. Some classes of notes may have senior or subordinate rights to receive payments of interest and principal compared to other classes of notes. Payments of interest on subordinate notes may be made prior to payments of principal on more senior notes.

Principal of and interest on any class of notes will be paid on a pro rata basis among all the noteholders of that class. One or more classes of notes may be prepaid in whole as a result of the servicer exercising its clean up call option to purchase the receivables.

The trust will make interest and principal payments on each payment date to the holders of record of the notes on the day before the payment date (or, if definitive notes are issued, the last day of the preceding month).

Credit and Payment Enhancement

Credit and payment enhancements are intended to enhance the likelihood of receipt by the noteholders of the full amount of interest and principal due on their notes.

Credit and payment enhancements may not provide protection against all risks of loss and do not guarantee payment of interest and repayment of the entire principal amount of the notes. If losses on receivables exceed the credit enhancement available, noteholders will bear their allocable share of the loss. The amount and the type of credit and payment enhancements for each class of notes will be described in the prospectus supplement.

"Credit enhancements" may include:

A reserve account available to cover trustee fees and expenses, servicing fees, interest payments on the notes, priority principal payments and final principal payments if collections on the receivables were insufficient. Any amounts remaining on deposit after payment of all fees and expenses owing by the trust and amounts owing on the notes and on any other securities issued by the trust will be released to the depositor.

"Excess spread," which is generally equal to the amount of interest collections and principal collections relating to the yield supplement discount remaining after paying trustee fees and expenses, servicing fees, senior amounts owing to any hedge counterparty, interest on the notes and any required deposits in any reserve account. The amount of excess spread will depend on factors such as APRs, interest rates on the notes, prepayments, yield supplement overcollateralization amounts and losses.

"Overcollateralization," which is the amount by which the pool balance exceeds the principal balance of the notes.

Yield supplement discount arrangements for low APR receivables where the payments due under certain low APR receivables are discounted at both the contractual APR and at a higher rate and the aggregate difference of the discounted payments in each month is subtracted from the pool balance in order to increase the amount of principal required to be paid on each payment date.

Subordination of classes that causes more junior classes of securities to absorb losses before more senior classes.

"Turbo" payments for a class of notes, where excess spread is used in addition to principal collections from the receivables to repay the principal of such class and no amounts are released to the holder of the residual interest until such class is paid.

"Payment enhancements" include:

Interest rate swaps where the trust makes fixed payments on a monthly or other basis to a hedge counterparty and receives a payment based on LIBOR and/or interest rate caps or floors where the trust makes an upfront payment to a hedge counterparty and receives a payment on a monthly or other basis to the extent LIBOR or another referenced rate specified in the cap or floor exceeds a stated cap rate or is less than a stated floor rate, as applicable.

Third party payments, guarantees, surety bonds or letters of credit that would pay amounts specified in the prospectus supplement if other assets of the trust were insufficient to make

required payments or would pay if assets of the trust were unavailable, such as collections held by servicer at the time of a bankruptcy proceeding.

Events of Default and Remedies

Events of Default. Each of the following events will be an "Event of Default" under the indenture:

failure to pay interest due on notes of the Controlling Class within the time period specified in the prospectus supplement,

failure to pay the principal amount of any class of notes in full by its final scheduled payment date,

failure by the trust to observe or perform any material covenant or agreement made in the indenture or any representation of the trust made in the indenture is later determined to have been incorrect in any material respect and, in either case, is not cured for a period of 60 days after notice was given to the trust by the indenture trustee or to the trust and the indenture trustee by the holders of at least 25% of the note balance of the Controlling Class, or

bankruptcy or dissolution of the trust.

If the trust knows of an event that with notice or the lapse of time, or both, would become an Event of Default of the type described in the third item above, it must notify the indenture trustee within five business days. Except in certain limited circumstances, if the indenture trustee knows of an event that with notice or the lapse of time, or both, would become an Event of Default, it must notify the noteholders within 90 days.

The trust must notify the indenture trustee, the servicer and the rating agencies no more than five business days after a responsible person of the issuer knows of an Event of Default. If the indenture trustee knows of an Event of Default, it must notify all noteholders within five business days.

The "Controlling Class" for a securitization transaction will be all outstanding classes voting as a single class, unless otherwise specified in the prospectus supplement.

The holders of a majority of the note balance of the Controlling Class may waive any Event of Default and its consequences except an Event of Default (a) in the payment of principal of or interest on any of the notes (other than an Event of Default relating to failure to pay principal due only because of the acceleration of the notes) or (b) in respect of a covenant or provision of the Indenture that cannot be amended, supplemented or modified without the consent of all noteholders.

Acceleration of the Notes. If an Event of Default occurs, other than because of a bankruptcy or dissolution of the trust, the indenture trustee or the holders of a majority of the note balance of the Controlling Class may accelerate the notes and declare the notes to be immediately due and payable. If an Event of Default occurs because of bankruptcy or dissolution of the trust, the notes will be accelerated automatically.

The holders of a majority of the note balance of the Controlling Class may rescind any declaration of acceleration if:

notice of the rescission is given before a judgment for payment of the amount due is obtained by the indenture trustee,

the trust has deposited with the indenture trustee an amount sufficient to make all payments of interest and principal due on the notes (other than amounts due only because of the acceleration of the notes) and all other outstanding fees and expenses of the trust, and

all Events of Default (other than the nonpayment of amounts only because of the acceleration of the notes) are cured or waived by the holders of a majority of the note balance of the Controlling Class.

Any rescission of acceleration could be treated, for federal income tax purposes, as a constructive exchange of the notes by the noteholders for deemed new notes and gain or loss could be recognized.

Remedies Following Acceleration. If the notes have been accelerated and the acceleration has not been rescinded, the indenture trustee, at the direction of the holders of a majority of the note balance of the Controlling Class, may:

file a lawsuit for the collection of the notes and enforce any judgment obtained,

institute foreclosure proceedings on the receivables, and

take any other appropriate action to protect and enforce the rights and remedies of the indenture trustee, the noteholders and any interest rate hedging counterparties.

However, the indenture trustee is only permitted to sell the receivables if the following conditions are met, which depend on which Event of Default has occurred:

If an Event of Default occurs due to the late payment of interest or principal of any note, the indenture trustee may sell the receivables without obtaining the consent of the noteholders or may elect to have the trust maintain possession of the receivables and apply collections as they are received, except that the indenture trustee will sell the receivables if directed by the holders of a majority of the note balance of the Controlling Class.

If an Event of Default occurs because of the bankruptcy or dissolution of the trust, the indenture trustee may not sell the receivables unless:

—

all of the noteholders of the Controlling Class consent to the sale,

—

the proceeds of the sale are expected to be sufficient to pay all amounts owed by the trust, including payments on the notes and any amounts due to interest rate hedging counterparties, or

—

the indenture trustee determines that the assets of the trust would not be sufficient on an ongoing basis to pay all amounts owed by the trust, including payments on the notes and any amounts due to any interest rate hedging counterparties as those payments would have become due if the obligations had not been accelerated, and the indenture trustee obtains the consent of the holders of 66-2/3% of the note balance of the Controlling Class.

If an Event of Default occurs because of a breach of a representation or covenant of the trust, the indenture trustee may not sell the receivables unless:

—

all of the noteholders consent to the sale, or

—

the proceeds of the sale are expected to be sufficient to pay all amounts owed by the trust, including payments on the notes and any amounts due to any interest rate hedging counterparties.

The indenture trustee will notify the noteholders at least 15 days before any sale of the receivables. Any noteholder, the depositor, the servicer and any interest rate hedging counterparty may submit a bid to purchase the receivables and may purchase the receivables at any sale proceeding.

Payments Following Certain Accelerations and Any Sale of the Receivables. Following an acceleration of the notes or any sale of the receivables, any amounts collected by the indenture trustee will be paid in accordance with the "post-acceleration" priority of payments described in the prospectus supplement.

Standard of Care of the Indenture Trustee Following an Event of Default. If an Event of Default has occurred and is continuing, the indenture trustee must exercise its rights and powers under the indenture using the same degree of care and skill that a prudent person would use under the circumstances in conducting his or her own affairs. The holders of a majority of the note balance of the Controlling Class generally will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the indenture trustee following an Event of Default and acceleration of the notes.

Limitation on Suits. No noteholder will have the right to institute any legal proceeding for any remedy under the indenture unless:

the noteholder gives notice to the indenture trustee of a continuing Event of Default,

the holders of at least 25% of the note balance of the Controlling Class request the indenture trustee to institute such legal proceeding,

the requesting noteholders offer reasonable security or indemnity satisfactory to the indenture trustee against any liabilities that the indenture trustee may incur in complying with the request,

the indenture trustee fails to institute the legal proceeding within 60 days after its receipt of the notice, request and offer of indemnity, and

the holders of a majority of the note balance of the Controlling Class do not give the indenture trustee any inconsistent direction during the 60-day period.

A noteholder, however, has the absolute right to institute at any time a proceeding to enforce its right to receive all amounts of principal and interest due and owing to it under its note, and such right may not be impaired without the consent of such noteholder.

The indenture trustee and the noteholders will agree not to institute a bankruptcy proceeding against the trust.

Notes Owned by Transaction Parties

Notes owned by the depositor, the servicer or any of their affiliates will not be included for purposes of determining whether a specified percentage of any class of notes have taken any action under the indenture or any other transaction document.

List of Noteholders

Three or more noteholders may request a list of all noteholders of the trust maintained by the indenture trustee for the purpose of communicating with other noteholders about their rights under the indenture or under the notes. Any request must be accompanied by a copy of the communication that the requesting noteholders propose to send.

Satisfaction and Discharge of Indenture

The indenture will not be discharged until:

the indenture trustee receives all notes for cancellation or, with certain limitations, funds sufficient to pay all notes in full,

the trust pays all other amounts payable by it under the transaction documents, and

the trust delivers an officer's certificate and a legal opinion each stating that all conditions to the satisfaction and discharge of the indenture have been satisfied.

Amendments to the Indenture

The indenture trustee and the trust may amend the indenture without the consent of the noteholders for limited purposes, including to:

further protect the indenture trustee's interest in the receivables and other trust assets subject to the lien of the indenture,

add to the covenants of the trust for the benefit of the noteholders,

transfer or pledge any trust assets to the indenture trustee,

cure any ambiguity, correct any mistake or add any provision that is not inconsistent with any other provision of the indenture, so long as such action will not materially adversely affect the notes or the rights of any hedge counterparty, and

modify, eliminate or add provisions required by or necessary to qualify the indenture under the Trust Indenture Act.

Except as provided below, the indenture trustee and the trust may amend the indenture to add, change or eliminate any provision or modify the noteholders' rights under the indenture (1) without the consent of the noteholders if (a) the administrator certifies that the amendment will not have a material adverse effect on the notes and (b) each rating agency (i) confirms that the amendment will not result in a reduction or withdrawal of the then-current ratings of the notes, or (ii) within ten business days of receiving notice of the amendment, does not provide notice that the amendment will result in a reduction or withdrawal of the then-current ratings of the notes or (2) with the consent of the holders of a majority of the note balance of the Controlling Class. In each case, the indenture trustee must receive a legal opinion that for federal income tax purposes, the amendment will not cause any note to be deemed sold or exchanged or cause the trust to be treated as an association or publicly traded partnership taxable as a corporation.

The prior consent of all adversely affected noteholders will be required for any amendment that:

changes the provisions for amending the indenture or voting or consent under the indenture,

changes the principal amount of or interest rate on any note, the final scheduled payment date of any class of notes, the price at which notes may be redeemed following exercise of the clean up call option by the servicer or the percentage of the initial pool balance at which such option may be exercised or the priority of payments or how principal or interest payments are calculated or made on the notes,

impairs the right of noteholders to institute suits to enforce the indenture,

changes the definition of Controlling Class, or

permits the creation of any lien ranking prior or equal to, or otherwise impair, the lien of the indenture trustee in the trust assets.

Residual Interest; Issuance of Additional Securities

The depositor initially will hold the residual interest in the trust and will be entitled to any amounts not needed on any payment date to make payments on the notes, or to make any other required payments or deposits in accordance with the priority of payments described in the prospectus supplement.

The depositor may exchange all or a portion of its residual interest for additional notes or certificates issued by the trust only if the following conditions are satisfied:

the depositor delivers an officer's certificate that the issuance of the additional notes or certificates will not adversely affect in any material respect the interest of any noteholder, and

the depositor delivers a legal opinion to the indenture trustee, the owner trustee and the rating agencies that the issuance of the additional notes or certificates will not (1) cause any outstanding note to be deemed sold or exchanged, (2) cause the trust to be treated as an association or publicly traded partnership taxable as a corporation, or (3) adversely affect the treatment of the outstanding notes as debt, in each case, for federal income tax purposes.

The depositor may register the additional notes or certificates and sell them publicly or may sell them in a private placement. Because any additional securities will be subordinated to the notes and paid only from amounts otherwise payable to the depositor, no approval of the noteholders will be required and no notice of the issuance will be provided to the noteholders.

Book-Entry Registration

The notes will be available only in book-entry form except in the limited circumstances described under "— Definitive Notes Only in Limited Circumstances" in this prospectus. All notes will be held in book-entry form by The Depository Trust Company, or "DTC," in the name of Cede & Co., as nominee of DTC. Investors' interests in the notes will be represented through financial institutions acting on their behalf as direct and indirect participants in DTC. Investors may hold their notes through DTC, Clearstream Banking Luxembourg S.A., or Euroclear Bank S.A./N.V., which will hold positions on behalf of their customers or participants through their respective depositories, which in turn will hold such positions in accounts as DTC participants. The notes will be traded as home market instruments in both the U.S. domestic and European markets. Initial settlement and all secondary trades will settle in same-day funds.

Investors who hold their notes through DTC will follow the settlement practices applicable to U.S. corporate debt obligations. Investors who hold global notes through Clearstream or Euroclear accounts will follow the settlement procedures applicable to conventional eurobonds, except that there will be no temporary global notes and no "lock-up" or restricted period.

Actions of noteholders under the indenture will be taken by DTC upon instructions from its participants and all payments, notices, reports and statements to be delivered to noteholders will be delivered to DTC or its nominee as the registered holder of the book-entry notes for distribution to holders of book-entry notes in accordance with DTC's procedures.

Investors should review the procedures of DTC, Clearstream and Euroclear for clearing, settlement and withholding tax procedures applicable to their purchase of the notes.

Definitive Notes Only in Limited Circumstances

Notes will be issued in physical form to noteholders only if:

the administrator determines that DTC is no longer willing or able to discharge properly its responsibilities as depository for the notes and the administrator or the depositor cannot appoint a qualified successor,

the administrator terminates the book-entry system through DTC, or

after the occurrence of an Event of Default or an Event of Servicing Termination, the holders of a majority of the note balance of the Controlling Class notify the indenture trustee and DTC to terminate the book-entry system through DTC (or a successor to DTC).

Payments of principal and interest on definitive notes will be made by the indenture trustee on each payment date to registered holders of definitive notes as of the end of the preceding month. The payments will be made by check mailed to the address of the holder as it appears on the register maintained by the indenture trustee. The final payment on any definitive notes will be made only upon presentation and surrender of the definitive note at the address specified in the notice of final payment to the noteholders.

Definitive notes will be transferable and exchangeable at the offices of the indenture trustee or a note registrar. No service charge will be imposed for any registration of transfer or exchange, but the indenture trustee may require payment of an amount sufficient to cover any tax or other governmental charge imposed in connection with any transfer or exchange.

Computing the Outstanding Principal Amount of the Notes

The monthly investor report described in the prospectus supplement will include a note factor for each class of notes that can be used to compute the portion of the principal amount outstanding on that class of notes each month. The factor for each class of notes will be a seven-digit decimal indicating the remaining outstanding principal amount of that class of notes as of the applicable payment date as a percentage of its original principal amount, after giving effect to payments to be made on the payment date.

The factors for each class of notes will initially be 1.0000000 and will decline as the outstanding principal amount of the class declines. For each note, the portion of the principal amount outstanding on that class of notes can be determined by multiplying the original denomination of that note by the note factor for that class of notes.

SOME IMPORTANT LEGAL ISSUES RELATING TO THE RECEIVABLES

Security Interests in Receivables and Financed Vehicles

The transfer of the receivables to the trust, the perfection of the security interest in the receivables and the enforcement of rights to realize on the financed vehicles as collateral for the receivables will be subject to a number of federal and state laws, including the Uniform Commercial Code in effect in each state.

All retail installment sale contracts acquired by Ford Credit are assigned to Ford Credit by the dealer under the terms of an assignment agreement. Each retail installment sale contract includes a grant by the obligor of a security interest in the financed vehicle. Ford Credit either takes physical possession, in the case of paper contracts, or takes and maintains control, in the case of electronic contracts, to obtain a perfected security interest in the contract against the dealer. The assignment of the receivables evidenced by the contract from Ford Credit to the depositor and from the depositor to the trust and the

pledge of the receivables from the trust to the indenture trustee, is perfected, at each stage, by filing under the Uniform Commercial Code, and Ford Credit will mark its accounting records and computer systems to reflect such assignments and pledge.

Ford Credit follows procedures to perfect its security interest in the financed vehicle usually by notation of its lien on the certificate of title for the financed vehicle. Generally, these procedures require the dealer to apply for a title that includes Ford Credit's lien immediately after Ford Credit's purchase of a contract. The vehicle titling laws of most states also allow Ford Credit to retain possession of the certificate of title until the contract is paid in full. The procedures to perfect Ford Credit's lien on the financed vehicle depend on the actions of third parties, including dealers, vehicle owners and state and local motor vehicle registration authorities. If Ford Credit obtains a validly perfected security interest in the financed vehicle on a timely basis, the trust, as assignee of the receivable, will also have the benefits of this security interest in most states. To avoid the administrative burden and costs, no financed vehicles are re-registered to identify the trust as the new secured party on the certificate of title and the obligors will not be notified that their contracts have been sold. If Ford Credit does not obtain a perfected security interest in the financed vehicle due to fraud, forgery, negligence or administrative error of any third party, its security interest and, therefore, that of the trust, could be subordinated to subsequent purchasers of the financed vehicle and subsequent lenders with a perfected security interest. If the trust does not have a perfected security interest in a financed vehicle, its ability to realize on the financed vehicle following an obligor default would be adversely affected. Under the sale and servicing agreement, the servicer must take appropriate steps to maintain perfection of the security interest in the financed vehicles and must purchase the receivable if it fails to do so and the receivable is materially and adversely affected.

In most states, a perfected security interest in a financed vehicle continues for four months after the vehicle is moved to a new state from the state where it is registered and thereafter until the vehicle owner re-registers the vehicle in the new state. Ford Credit, as secured party, must surrender possession if it holds the certificate of title to the financed vehicle, or would receive notice of surrender if its security interest is noted on the certificate of title. In either case, Ford Credit would have the opportunity to continue its security interest in the financed vehicle in the new state. Similarly, when an obligor sells a financed vehicle, Ford Credit must surrender possession of the certificate of title or will receive notice as a lienholder and will have an opportunity to require repayment of the receivable before release of the lien. Under the sale and servicing agreement, the servicer must take appropriate steps to maintain perfection of the security interests in the financed vehicles and must purchase the receivable if it fails to do so and the receivable is materially and adversely affected.

In certain circumstances, the trust's security interest in the receivable or the financed vehicle may be subordinated because federal or state law gives the holders of some types of liens, such as tax liens or mechanic's liens, priority over even the properly perfected lien of other secured parties. In addition, if a financed vehicle is confiscated by a government agency, Ford Credit may not be able to obtain possession of the vehicle and enforce the security interest unless it completes documentation required by the agency, including a "hold harmless" agreement. Unless Ford Credit has failed to follow its policies and procedures, Ford Credit will not be required to purchase any receivable in these circumstances.

Repossession; Notice of Sale and Cure Rights

If an obligor defaults on its retail installment sale contract, the trust will have all the remedies of a secured party under the Uniform Commercial Code, except where specifically limited by other state laws. These remedies include the right to perform self-help repossession unless it would constitute a breach of the peace or unless prohibited by state law. Self-help repossession is the method used by Ford Credit in most cases and usually is accomplished by using an independent contractor to take possession of the financed vehicle. In cases where the obligor objects or raises a defense to repossession, or if otherwise required by state law, Ford Credit may have to obtain a court order before repossessing the vehicle.

If an obligor is in default on its contract, some states require that the secured party notify the obligor of the default and give the obligor a time period to cure the default prior to repossession. In Ford Credit's experience, this right to cure is exercised by only a limited number of defaulted obligors.

Upon repossession of a vehicle, the Uniform Commercial Code and other state laws require the secured party to provide the obligor with reasonable notice of the date, time, and place of any public sale and/or the date after which any private sale of the vehicle may be held. The obligor has the right to redeem the vehicle prior to sale by paying the secured party the unpaid balance of the contract plus reasonable expenses for repossessing, holding, and preparing the vehicle for disposition and arranging for the sale, including attorney's fees when allowed by law. In some states, the obligor has the right to reinstate the contract by payment of past due amounts and other specified amounts instead of all amounts due under the contract.

Deficiency Judgments

Ford Credit generally is required to apply the proceeds of sale of the repossessed vehicles to the expenses of resale and repossession and then to the satisfaction of the indebtedness of the obligor on the receivable. If the net proceeds from sale do not cover the full amount of the obligation, Ford Credit may seek a deficiency judgment in some states, but other states prohibit or limit such judgments. Because a deficiency judgment is an unsecured personal judgment against the obligor for the shortfall, in many cases it is not useful to seek a deficiency judgment. If a deficiency judgment is obtained, it may be settled at a significant discount.

Consumer Protection Laws

Numerous federal and state consumer protection laws impose substantial requirements upon dealers, finance companies, lenders and servicers involved in consumer finance, including Ford Credit, and impose statutory liabilities on those who fail to comply with their provisions. The most significant consumer protection laws regulating the receivables include the federal Truth-in-Lending Act and state motor vehicle retail installment sales acts that mandate financing disclosures that must be made to consumers; the federal Equal Credit Opportunity Act that prohibits creditors from discriminating on the basis of specific factors, such as race, color, sex, age and marital status in all aspects of a credit transaction, including the application process and the development and use of scoring models; the federal Fair Credit Reporting Act that regulates consumer credit reports and includes requirements on when and how creditors may obtain and use these reports and actions creditors must take to prevent identity theft; and the Gramm Leach Bliley Act and state privacy laws that require protection of certain consumer data and communication of privacy rights with consumers. State motor vehicle retail installment sales acts and other state laws regulate fees, finance charges, collection processes and licensing requirements. In some cases, these laws could affect the trust's ability to enforce the receivables or subject the trust to claims and defenses of the obligor including claims the obligor may assert against the motor vehicle dealer who sold the financed vehicle. In addition, courts have imposed general equitable principles on secured parties pursuing repossession of collateral or litigation involving deficiency balances. These equitable principles may relieve an obligor from some or all of the legal consequences of a default.

Ford Credit and the depositor will represent that each receivable complies in all material respects with applicable requirements of law and that each receivable is not subject to claims or defenses of the obligor. This representation is based on Ford Credit's review of form contract terms, its review of completed contracts for errors apparent in the contract, and dealer representations of contract disclosure accuracy in agreements between Ford Credit and the dealer. If an obligor has a claim against the trust for any violation of law with respect to a receivable, such violation would constitute a breach by Ford Credit and the depositor and if such breach has a material adverse effect on any receivable, Ford Credit and the depositor would have to repurchase the receivable unless the breach is cured in all material respects by the end of any applicable grace period.

Under the terms of the Servicemembers Civil Relief Act and similar state laws, an obligor who enters military service after the origination of a retail installment sale contract may be entitled to relief on finance charges in excess of 6%, and Ford Credit must suspend any attempts to self-help repossess the vehicle. Application of this law would affect adversely the ability of the servicer to collect the full finance charge on affected receivables and to repossess the related financed vehicle during the obligor's active military duty and sometimes even after active duty has ended. If a receivable subject to these laws goes into default,

there may be delays in pursuing remedies for default and losses on the receivable. Receivables with obligors who are in the military or who subsequently enter the military may be included in the receivables owned by the trust and neither the depositor nor Ford Credit will be required to repurchase a receivable that becomes subject to these laws.

Bankruptcy Limitations

U.S. bankruptcy laws affect the ability of the trust to realize upon collateral or enforce a deficiency judgment. For example, in a Chapter 13 proceeding under the U.S. federal bankruptcy law, a court may prevent a creditor from repossessing a vehicle and, as part of the plan of reorganization may, in limited circumstances, reduce the amount of the secured indebtedness to the market value of the financed vehicle at the time of bankruptcy leaving the creditor as a general unsecured creditor for the remainder of the indebtedness. A bankruptcy court may also reduce the monthly payments due under a contract or change the rate of interest and time of repayment of the indebtedness. Neither the depositor nor Ford Credit will be required to repurchase a receivable that becomes subject to a bankruptcy proceeding after the cutoff date.

TAX MATTERS

General

Set forth below is a discussion of the anticipated material U.S. federal income tax consequences of the purchase, ownership and disposition of the notes offered by this prospectus. This discussion is based upon current provisions of the Internal Revenue Code, existing and proposed Treasury regulations, current administrative rulings, judicial decisions and other applicable authorities all of which are subject to change, perhaps with retroactive effect. There are no cases or Internal Revenue Service, or "IRS," rulings on similar transactions involving debt issued by a trust with terms similar to those of the notes. We cannot assure you that the IRS will not challenge the conclusions reached in this discussion, and no ruling from the IRS has been or will be sought on any of the issues discussed below. Furthermore, legislative, judicial or administrative changes may occur, perhaps with retroactive effect, which could affect the accuracy of the statements and conclusions set forth in this prospectus.

This discussion does not deal with all aspects of U.S. federal income taxation that may be relevant to the holders of notes in light of their personal investment circumstances nor, except for specific limited discussions of particular topics, to noteholders subject to special treatment under the U.S. federal income tax laws, such as insurance companies, tax-exempt organizations, financial institutions or broker dealers, taxpayers subject to the alternative minimum tax, holders that will hold the notes as part of a hedge, straddle, appreciated financial position or conversion transaction and holders that will hold the notes as other than capital assets. This information is directed only to prospective investors who:

purchase notes in the initial distribution of the notes,

are citizens or residents of the United States, including domestic corporations, limited liability companies and partnerships, and

hold the notes as "capital assets" within the meaning of Section 1221 of the Internal Revenue Code.

As used in this discussion, the term "U.S. noteholder" means a beneficial owner of a note that is for U.S. federal income tax purposes:

a citizen or resident of the United States,

a corporation created or organized in or under the laws of the United States, any state thereof or the District of Columbia,

an estate whose income is subject to U.S. federal income tax regardless of its source, or

a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or that has made a valid election under applicable Treasury Regulations to be treated as a U.S. person.

The term "U.S. noteholder" also includes any noteholder whose income or gain in respect to its investment in a note is effectively connected with the conduct of a U.S. trade or business. As used in this discussion, the term "non-U.S. noteholder" means a beneficial owner of a note other than a U.S. noteholder and other than a partnership.

If a partnership (including any entity treated as a partnership for U.S. federal income tax purposes) owns notes, the tax treatment of a partner in such a partnership will depend upon the status of the partner and the activities of the partnership. Partners in such a partnership are encouraged to consult their tax advisors as to the particular U.S. federal income tax consequences applicable to them.

Prospective investors are encouraged to consult with their tax advisors as to the U.S. federal, state and local, foreign and any other tax consequences to them of the purchase, ownership and disposition of notes.

Tax Characterization of the Trusts

At the time that one or more classes of notes are issued by a trust, tax counsel to the depositor identified in the prospectus supplement will opine that, assuming compliance with the terms of the applicable trust agreement and related documents, the trust will not be an association or publicly traded partnership taxable as a corporation for U.S. federal income tax purposes.

Except as specified in the related prospectus supplement, tax counsel will also opine that the notes will be treated as debt for U.S. federal income tax purposes. If, contrary to the opinion of tax counsel, the IRS successfully asserted that one or more classes of notes did not represent debt for U.S. federal income tax purposes, such class or classes of notes might be treated as equity interests in the trust. If so treated, the trust might be treated as a publicly traded partnership taxable as a corporation with potentially adverse tax consequences, including by not being able to reduce its taxable income by deductions for interest expense on notes recharacterized as equity. Alternatively, the trust could be treated as a publicly traded partnership that would not be taxable as a corporation because it would meet an applicable safe harbor. Nonetheless, treatment of notes as equity interests in such a partnership could have adverse tax consequences to certain noteholders. For example, income to certain tax-exempt entities (including pension funds) would be "unrelated business taxable income," income to non-U.S. noteholders may be subject to U.S. withholding tax and U.S. tax return filing requirements, and individual holders might be subject to certain limitations on their ability to deduct their share of trust expenses.

Tax Characterization and Treatment of the Notes

Characterization as Debt. For class or classes of notes, except for any class or classes which are specifically identified as receiving different tax treatment in the related prospectus supplement, tax counsel will deliver its opinion that the class or classes of notes will be treated as debt for U.S. federal income tax purposes. The depositor, the servicer and each noteholder, by acquiring an interest in a note, will agree to treat the notes as debt for U.S. federal, state and local income and franchise tax purposes.

For a discussion of the potential U.S. federal income tax consequences to noteholders if the IRS were successful in challenging the characterization of the notes for U.S. federal income tax purposes, you should read "— Tax Characterization of the Trusts" above.

Treatment of Stated Interest. Based on tax counsel's opinion that the notes will be treated as debt for U.S. federal income tax purposes, and assuming the notes are not issued with original issue discount or "OID," the stated interest on a note will be taxable to a noteholder as ordinary income when received or accrued in accordance with each noteholder's method of tax accounting.

Original Issue Discount. If the prospectus supplement states that a class of notes is to be treated as issued with OID, a holder of any such notes must include OID in its gross income as ordinary interest income as it accrues, regardless of the holder's regular method of accounting, under a constant yield method.

Disposition of Notes. If a noteholder sells or otherwise disposes of a note, the holder will recognize gain or loss in an amount equal to the difference between the amount realized on the sale or disposition and the holder's adjusted tax basis in the note. The holder's adjusted tax basis will equal the holder's cost for the note, increased by any OID and market discount previously included by such noteholder in income with respect to the note and decreased by any bond premium previously amortized and any payments of principal and OID previously received by such noteholder with respect to such note. Any gain or loss on sale or disposition will be capital gain or loss if the note was held as a capital asset, except for gain representing accrued interest or accrued market discount not previously included in income. Capital gain or loss will be long-term if the note was held by the holder for more than one year and otherwise will be short-term.

Information Reporting and Backup Withholding. The indenture trustee will be required to report annually to the IRS, and to each noteholder of record, the amount of interest paid on the notes, and any amount of interest withheld for U.S. federal income taxes, except as to exempt holders (generally, corporations, tax-exempt organizations, qualified pension and profit-sharing trusts, individual retirement accounts, or nonresident aliens who provide certification as to their status). Each holder who is not an exempt holder will be required to provide to the indenture trustee, under penalties of perjury, a certificate containing the holder's name, address, correct federal taxpayer identification number and a statement that the holder is not subject to backup withholding. Should such a holder fail to provide the required certification, the indenture trustee will be required to withhold the tax from interest otherwise payable to the holder and pay the withheld amount to the IRS.

Tax Consequences to Non-U.S. Noteholders. A non-U.S. noteholder who is an individual or corporation (or a person treated as a corporation for U.S. federal income tax purposes) holding the notes on its own behalf will not be subject to U.S. federal income taxes on payments of principal, premium, interest or OID on a note, unless such non-U.S. noteholder is a direct or indirect 10% or greater shareholder of the trust or a controlled foreign corporation related to the trust. To qualify for the exemption from taxation, the withholding agent must have received a statement from the individual or corporation that:

is signed under penalties of perjury by the beneficial owner of the note,

certifies that such owner is not a U.S. noteholder, and

provides the beneficial owner's name and address.

A "withholding agent" is the last U.S. payor (or a non-U.S. payor who is a qualified intermediary, U.S. branch of a foreign person, or withholding foreign partnership) in the chain of payment prior to payment to a non-U.S. noteholder (which itself is not a withholding agent). Generally, this statement is made on an IRS Form W-8BEN, which is effective for the remainder of the year of signature plus three full calendar years unless a change in circumstances makes any information on the form incorrect. Notwithstanding the preceding sentence, an IRS Form W-8BEN with a U.S. taxpayer identification number will remain effective until a change in circumstances makes any information on the form incorrect, provided that the withholding agent reports at least annually to the beneficial owner on IRS Form 1042-S. The beneficial

owner must inform the withholding agent within 30 days of such change and furnish a new IRS Form W-8BEN.

A non-U.S. noteholder who is not an individual or corporation (or a person treated as a corporation for U.S. federal income tax purposes) holding the notes on its own behalf may have substantially increased reporting requirements and is encouraged to consult its tax advisor.

A non-U.S. noteholder whose income with respect to its investment in a note is effectively connected with the conduct of a U.S. trade or business would generally be taxed as if the holder was a U.S. noteholder provided the holder files IRS Form W-8ECI.

Certain securities clearing organizations, and other entities who are not beneficial owners, may be able to provide a signed statement to the withholding agent. However, in such case, the signed statement may require a copy of the beneficial owner's IRS Form W-8BEN (or the substitute form).

Any capital gain realized on the sale, redemption, retirement or other taxable disposition of a note by a non-U.S. noteholder will be exempt from U.S. federal income and withholding tax so long as:

the gain is not effectively connected with the conduct of a trade or business in the United States by the non-U.S. noteholder, and

in the case of a foreign individual, the non-U.S. noteholder is not present in the United States for 183 days or more in the taxable year.

If the interest, gain or income on a note held by a non-U.S. noteholder is effectively connected with the conduct of a trade or business in the United States by the non-U.S. noteholder, such holder, although exempt from the withholding tax previously discussed if an appropriate statement is furnished, will generally be subject to U.S. federal income tax on the interest, gain or income at regular federal income tax rates. In addition, if the non-U.S. noteholder is a foreign corporation, it may be subject to a branch profits tax equal to 30 percent of its "effectively connected earnings and profits" within the meaning of the Internal Revenue Code for the taxable year, unless it qualifies for a lower rate under an applicable tax treaty.

State Tax Matters

Because of the variation in the tax laws of each state and locality, it is impossible to predict the tax classification of the trust or the tax consequences to the trust or to holders of notes in all of the state and local taxing jurisdictions in which they may be subject to tax. Prospective investors are encouraged to consult their tax advisors with respect to state and local taxation of the trust and state and local tax consequences of the purchase, ownership and disposition of notes.

ERISA CONSIDERATIONS

General Investment Considerations

The Employee Retirement Income Security Act of 1974, or "ERISA," and the Internal Revenue Code impose certain duties and requirements on employee benefit plans and other retirement plans and arrangements (such as individual retirement accounts and Keogh plans) that are subject to Title I of ERISA and/or Section 4975 of the Internal Revenue Code, referred to as "plans," and certain entities (including insurance company general accounts) whose assets are deemed to include assets of plans, and on persons who are fiduciaries of plans. Any person who exercises any authority or control over the management or disposition of a plan's assets is considered to be a fiduciary of that plan. In accordance with ERISA's general fiduciary standards, before investing in the notes, a plan fiduciary should determine, among other factors:

whether the investment is permitted under the plan's governing documents,

whether the fiduciary has the authority to make the investment,

whether the investment is consistent with the plan's funding objectives,

the tax effects of the investment,

whether under the general fiduciary standards of investment prudence and diversification an investment in any notes of a trust is appropriate for the plan, taking into account the overall investment policy of the plan and the composition of the plan's investment portfolio, and

whether the investment is prudent considering the factors discussed in this prospectus and the prospectus supplement.

In addition, ERISA and Section 4975 of the Internal Revenue Code prohibit a broad range of transactions involving assets of a plan and persons who are "parties in interest" under ERISA or "disqualified persons" under Section 4975 of the Internal Revenue Code. A violation of these rules may result in the imposition of significant excise taxes and other liabilities.

A fiduciary of any plan should carefully review with its legal and other advisors whether the purchase or holding of any notes could give rise to a transaction prohibited or otherwise impermissible under ERISA or Section 4975 of the Internal Revenue Code, and should read "ERISA Considerations" in both this prospectus and the prospectus supplement regarding any restrictions on the purchase and/or holding of the notes offered by this prospectus and the prospectus supplement.

Prohibited Transactions

Whether or not an investment in the notes will give rise to a transaction prohibited or otherwise impermissible under ERISA or Section 4975 of the Internal Revenue Code will depend on the structure of the trust and whether the assets of the trust will be deemed to be "plan assets" of a plan investing in notes issued by the trust. Pursuant to a regulation issued by the U.S. Department of Labor, or the "plan assets regulation," a plan's assets may be deemed to include an interest in the underlying assets of the trust if the plan acquires an "equity interest" in the trust and none of the exceptions contained in the plan assets regulation are applicable. In general, an "equity interest" is defined under the plan assets regulation as any interest in an entity other than an instrument which is treated as indebtedness under applicable local law and which has no substantial equity features.

The depositor believes that the notes will be treated as indebtedness without substantial equity features for purposes of the plan assets regulation. However, without regard to whether the notes are treated as debt for ERISA purposes, the purchase and holding of the notes by or on behalf of a plan could be considered to give rise to a direct or indirect prohibited transaction under ERISA or Section 4975 of the Internal Revenue Code if the trust, the owner trustee, the indenture trustee, any underwriter or any of their respective affiliates, including Ford Credit, is or becomes a "party in interest" under ERISA or a "disqualified person" under Section 4975 of the Internal Revenue Code with respect to the plan. In such case, exemptions from the prohibited transaction rules could be applicable to the purchase and holding of notes by a plan depending on the type and circumstances of the plan fiduciary making the decision to purchase a note. Included among these exceptions are:

prohibited transaction class exemption, or "PTCE," 84-14, regarding transactions effected by qualified professional asset managers,

PTCE 90-1, regarding transactions entered into by insurance company pooled separate accounts,

PTCE 91-38, regarding transactions entered into by bank collective investment funds,

PTCE 95-60, regarding transactions entered into by insurance company general accounts, and

PCTE 96-23, regarding transactions effected by in-house asset managers.

In addition, Section 408(b)(17) of ERISA and Section 4975(d)(20) of the Internal Revenue Code provide an exemption for certain transactions between a plan and a person that is a party in interest or disqualified person with respect to a plan solely by reason of providing services to the plan or a relationship with such a service provider (other than a party in interest or a disqualified person that is, or is an affiliate of, a fiduciary with respect to the assets of the plan involved in the transaction), provided the plan pays no more than, and receives no less than, adequate consideration in connection with the transaction. However, even if the conditions specified in one or more of the foregoing exemptions are met, the scope of relief provided by these exemptions may not necessarily cover all acts that might be construed as prohibited transactions.

Any plan that purchases and holds notes of any class will be deemed to have represented that its purchase and holding of the notes does not constitute and will not result in a non-exempt prohibited transaction under ERISA or Section 4975 of the Internal Revenue Code due to the applicability of a statutory or administrative exemption from the prohibited transaction rules.

Benefit Plans Not Subject to ERISA or the Internal Revenue Code

Certain employee benefit plans, such as governmental plans, foreign plans and certain church plans (each as defined or described in ERISA) are not subject to the prohibited transaction provisions of ERISA and Section 4975 of the Internal Revenue Code. However, such plans may be subject to provisions of other federal, state, local or non-U.S. laws or regulations that are substantially similar to Title I of ERISA or Section 4975 of the Internal Revenue Code. In addition, any such plan that is qualified and exempt from taxation under Sections 401(a) and 501(a) of the Internal Revenue Code is subject to the prohibited transaction rules set forth in Section 503 of the Internal Revenue Code. Each plan that is subject to any laws or regulations substantially similar to Title I of ERISA or Section 4975 of the Internal Revenue Code that purchases and holds notes will be deemed to have represented that its purchase and holding of the notes does not constitute and will not result in a violation of such similar laws or regulations.

PLAN OF DISTRIBUTION

The trust will issue the notes to the depositor and the depositor will sell the notes to the underwriters named in the prospectus supplement. In the underwriting agreement the depositor will agree to sell, and each of the underwriters will agree to purchase, a specified principal amount of one or more classes of notes, as set forth in the prospectus supplement.

The prospectus supplement (or supplemental prospectus supplement, as described below) will specify the price at which each class of notes will be offered to the public and any concessions that may be offered to certain dealers participating in the offering of the notes or specify that the notes are to be resold by the underwriters in negotiated transactions at varying prices to be determined at the time of such sale. After the initial public offering of the notes, the public offering prices and the concessions may be changed.

The prospectus supplement, together with a supplemental prospectus supplement, also may be used by Ford Credit or its affiliates for the sale of a class of notes originally purchased from the depositor by Ford Credit or its affiliates on or after the closing date.

The depositor and Ford Credit will indemnify the underwriters against certain liabilities, including liabilities under the federal securities laws, or contribute to payments the underwriters may be required to make for those liabilities.

The trust may invest the funds in its trust bank accounts in obligations issued by the underwriters or their affiliates.

In connection with the sale of the notes, the underwriters may, to the extent permitted by Regulation M under the Securities Exchange Act of 1934, engage in:

over-allotments, in which members of the selling syndicate sell more notes than the seller actually sold to the syndicate, creating a syndicate short position,

stabilizing transactions, in which purchases and sales of the notes may be made by the members of the selling syndicate at prices that do not exceed a specified maximum,

syndicate covering transactions, in which members of the selling syndicate purchase the notes in the open market after the distribution is completed in order to cover syndicate short positions, and

penalty bids, by which underwriters reclaim a selling concession from a syndicate member when any of the notes originally sold by that syndicate member are purchased in a syndicate covering transaction to cover syndicate short positions.

These stabilizing transactions, syndicate covering transactions and penalty bids may cause the prices of the notes to be higher than they would otherwise be. These transactions, if commenced, may be discontinued at any time.

LEGAL OPINIONS

Counsel identified in the prospectus supplement will review or provide legal opinions on certain legal matters relating to the notes of the trust for the trust, the depositor and the servicer including an opinion that the notes will be legally issued, fully paid and non-assessable and will be binding obligations of the trust, subject to customary exceptions as to enforceability. Counsel identified in the prospectus supplement will review or provide legal opinions on certain legal matters for the underwriters.

WHERE YOU CAN FIND MORE INFORMATION

The depositor, as originator of each trust, filed with the SEC a registration statement, Registration No. 333-143316 under the Securities Act of 1933, for the notes offered by this prospectus. You may read and copy the registration statement and any notices, reports, statements or other materials filed by the trust, Ford Credit or the depositor at the SEC’s Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C., 20549.

You may obtain more information about the operation of the Public Reference Room and copying costs by calling the SEC at 1-800-SEC-0330. The SEC maintains a website at where you can find reports, information statements and other information for registrants that file electronically with the SEC. You may obtain more information about Ford and Ford Credit at and .

For the time period that each trust is required to report under the Securities Exchange Act of 1934, the servicer will file for each trust annual reports on Form 10-K and distribution reports on Form 10-D, any current reports on Form 8-K, and amendments to those reports with the SEC. A copy of any reports may be obtained by any noteholder by request to the indenture trustee or the depositor.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The trust "incorporates by reference" certain information it files with the SEC, which means that the trust can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus. Information that the trust files later

with the SEC will automatically update the information in this prospectus. In all cases, you should rely on the later information over different information included in this prospectus or the accompanying prospectus supplement. The trust incorporates by reference any monthly reports on Form 10-D and current reports on Form 8-K subsequently filed by or on behalf of the trust prior to the termination of the offering of the notes (including any market-making transactions with respect to such notes unless exempt from the registration requirements of the Securities Act).

The depositor will provide without charge to each person, including any beneficial owner of the notes, to whom a copy of this prospectus is delivered, on request of any such person, a copy of any of the documents incorporated in this prospectus or in any prospectus supplement by reference.

Requests for such copies should be directed to:

Ford Credit Auto Receivables Two LLC

c/o Ford Motor Credit Company LLC

c/o Ford Motor Company

World Headquarters, Suite 801-C1

One American Road

Dearborn, Michigan 48126

Attention: Ford Credit SPE Management Office

Telephone number: (313) 594-3495

Fax number: (313) 390-4133

INDEX OF DEFINED TERMS IN THE PROSPECTUS

clean up call	5
collections	28
Controlling Class	34
credit enhancement	33
depositor	19
DTC	38
ERISA	46
Event of Default	34
Event of Servicing Termination	30
excess spread	33
financed vehicles	4
Ford	4
Ford Credit	4
initial pool balance	24
IRS	42
LIBOR	32
obligors	4
OID	44
overcollateralization	33
payment enhancement	34
plans	46
pool balance	24
Prepayments	31
principal balance	24
PTCE	47
receivables	4
responsible person	28
servicer	5
simple interest receivable	25
trust	4

Title of Securities to be Registered(1)(2)	Amount to be Registered(1)	Proposed Maximum Aggregate Price Per Unit(3)	Proposed Maximum Aggregate Offering Price(3)	Amount of Registration Fee
Asset Backed Securities	$1,000,000	100%	$1,000,000	$71.30(4)

Principal Amount	Interest Rate	Final Scheduled Payment Date
Class A-1 notes(1)	$	%
Class A-2a notes		%
[Class A-2b notes		one-month LIBOR + ___%]
Class A-3a notes		%
[Class A-3b notes		one-month LIBOR + ___%]
Class A-4a notes		%
[Class A-4b notes		one-month LIBOR + ___%]
Class B notes		%
Class C notes		%
Class D notes		%
Total	$

	Price to Public	Underwriting Discount	Proceeds to the Depositor(1)
Class A-2a notes	%	%	%
[Class A-2b notes	%	%	%]
Class A-3a notes	%	%	%
[Class A-3b notes	%	%	%]
Class A-4a notes	%	%	%
[Class A-4b notes	%	%	%]
Class B notes	%	%	%
Class C notes	%	%	%
Class D notes	%	%	%
Total	$	$	$

Reading this Prospectus Supplement and the Prospectus	S-3
Forward-Looking Statements	S-3
Transaction Structure Diagram	S-4
Transaction Parties and Documents Diagram	S-6
Summary	S-7
Risk Factors	S-14
Transaction Parties	S-18
Depositor	S-18
Issuing Entity	S-18
Indenture Trustee	S-18
Owner Trustee	S-18
Sponsor	S-19
Material Changes to Origination, Purchasing and Underwriting Policies and Procedures	S-19
Static Pool Information—Prior Securitized Pools	S-22
Servicer	S-22
Material Changes to Servicing Policies and Procedures	S-24
Ratings of the Servicer	S-24
Administrator	S-24
Receivables	S-24
Criteria for Selecting the Receivables	S-25
Composition of the Receivables	S-26
Maturity and Prepayment Considerations	S-29
General	S-29
Weighted Average Life of the Notes	S-29
Description of the Notes	S-35
Available Funds	S-35
Payments of Interest	S-35
Payments of Principal	S-36
Priority of Payments	S-38
Events of Default and Acceleration	S-41
Post-Acceleration Priority of Payments	S-41
Residual Interest; Issuance of Additional Securities	S-42
Optional Redemption or "Clean Up Call" Option	S-42
Credit Enhancement	S-43
Reserve Account	S-43
Subordination	S-43
Overcollateralization	S-44
Excess Spread	S-46
[Description of the Interest Rate Hedges and the Hedge Counterparty	S-46
General	S-46
Net Payments	S-46
Early Termination of the Interest Rate Hedges	S-47
Description of the Hedge Counterparty]	S-48
Transaction Fees and Expenses	S-48
Monthly Investor Reports	S-49
Annual Compliance Reports	S-50
Transfers of the Receivables	S-50
Representations About the Receivables	S-50
Obligation to Repurchase Ineligible Receivables Upon Breach	S-51
Affiliations and Certain Relationships and Related Transactions	S-51
Tax Matters	S-51
ERISA Considerations	S-52
Underwriting	S-53
Legal Opinions	S-54
Index of Defined Terms in the Prospectus Supplement	S-55
Annex A: Static Pool Information —
Prior Securitized Pools	A-1

	Principal Amount	Interest Rate
Class A-1 notes(1)	$	%
Class A-2a notes	$	%
[Class A-2b notes	$	one-month LIBOR + ___%]
Class A-3a notes	$	%
[Class A-3b notes	$	one-month LIBOR + ___%]
Class A-4a notes	$	%
[Class A-4b notes	$	one-month LIBOR + ___%]
Class B notes	$	%
Class C notes	$	%
Class D notes	$	%

	Final Scheduled Payment Date
Class A-1 notes
Class A-2 notes
Class A-3 notes
Class A-4 notes
Class B notes
Class C notes
Class D notes

Number of receivables
Average principal balance	$
Weighted average(1) APR	%
Weighted average(1) FICO® score
Weighted average(1) remaining term	months
Weighted average(1) original term	months
Original term over 60 months(2)	%
Remaining term over 60 months(2)	%
Percentage new vehicle(2)	%
Percentage car(2)	%
Percentage light truck(2)	%
Percentage utility(2)	%
Percentage other(2)(3)	%

	[S&P] [Moody’s] [Fitch] [DBRS]
Class A-1 notes
Class A-2 notes
Class A-3 notes
Class A-4 notes
Class B notes
Class C notes
Class D notes

	CUSIP
Class A-2a notes
[Class A-2b notes]
Class A-3a notes
[Class A-3b notes]
Class A-4a notes
[Class A-4b notes]
Class B notes
Class C notes
Class D notes

The Class B, Class C and Class D notes will be subject to greater risk because of subordination	The Class B notes will bear greater risk than the Class A notes because no payment of interest will be made on the Class B notes until all interest on the Class A notes [and all payments due to the hedge counterparty (other than certain subordinated hedge termination payments)] are paid in full, and no payment of principal will be made on the Class B notes until the principal amount of the Class A notes is paid in full. The Class C and Class D notes bear even greater risk because of similar subordination to all more senior classes of notes.
An event of default and acceleration of the notes may result in earlier than expected payment of your notes or losses on your notes	An event of default may result in an acceleration of payments on your notes. You will suffer losses if collections on the receivables and the proceeds of any sale of receivables are insufficient to pay the amounts owed on your notes [and any payments due to the hedge counterparty]. If your notes are paid earlier than expected, you may not be able to reinvest the principal at a rate of return that is equal to or greater than the rate of return on your notes. If the notes are accelerated after an event of default, the trust will not pay interest or principal on any notes that are not part of the Controlling Class until all interest and principal on the notes of the Controlling Class [and any payments due to the hedge counterparty for the Controlling Class (other than certain subordinated hedge termination payments)] are paid in full.
	For a more detailed description of events of default and acceleration of the notes, you should read "Description of the Notes — Events of Default and Acceleration" in this prospectus supplement and "Description of the Notes — Events of Default and Remedies" in the prospectus. For a more detailed description of the change in the priority of payments following certain events of default and acceleration of the notes, you should read "Description of the Notes — Priority of Payments" and "— Post-Acceleration Priority of Payments" in this prospectus supplement.
Overcollateralization may not increase as expected	The overcollateralization is expected to increase to the targeted overcollateralization amount as excess spread is used to pay principal of the notes in an amount greater than the decrease in the pool balance from the amortization of the receivables. There can be no assurance that the targeted overcollateralization amount will be reached or maintained, or that the receivables will generate sufficient collections to pay your notes in full.
	For a more detailed description of overcollateralization as a form of credit enhancement for your notes, you should read "Credit Enhancement — Overcollateralization" in this prospectus supplement.

The Class D notes will be undercollateralized on the closing date	The initial principal balance of the Class D notes will be approximately 2.00% of the adjusted pool balance on the cutoff date. On the closing date, the aggregate principal balance of the Class A, Class B and Class C notes was approximately 100% of the adjusted pool balance. Thus, because the Class D notes are subordinate to the other classes of notes, on an adjusted pool balance basis there will be no receivables supporting the Class D notes on the closing date. Although overcollateralization is expected to increase to the targeted overcollateralization amount, there can be no assurance as to when or whether such targeted level of overcollateralization will be achieved or maintained.
Excessive prepayments and defaults on the higher APR receivables may adversely impact your notes	Some of the receivables will have APRs that are less than the interest rate on your notes plus various fees. Payments on receivables with higher APRs help compensate for the reduced payments made on receivables with lower APRs. Excessive prepayments and defaults on the higher APR receivables may adversely impact your notes by reducing the amounts available to make interest and principal payments on your notes.
Geographic concentration may result in more risk to you	As of the cutoff date, the billing addresses of the obligors of the receivables were concentrated in ______ (___%), ______ (___%), ______ (___%) and ______ (___%). No other state constituted more than 5% of the initial pool balance. Economic conditions or other factors affecting these states in particular could adversely impact the delinquency, credit loss or repossession experience of the trust and could result in delays in payments or losses on your notes.
[Risks associated with the interest rate hedges	The trust will enter into an interest rate swap with a hedge counterparty to hedge the interest rate risk relating to the floating rate notes because the receivables owned by the trust bear interest at fixed rates while the floating rate notes will bear interest at a floating rate.
	If the floating rate payable by the hedge counterparty under an interest rate swap is substantially greater than the fixed rate payable by the trust, the trust will be more dependent on receiving payments from the hedge counterparty in order to make interest payments on the notes without using amounts that would otherwise be used to pay principal on the notes.
	If the floating rate payable by the hedge counterparty under an interest rate swap is less than the fixed rate payable by the trust, the trust will be obligated to make payments to the hedge counterparty. The amount payable to the hedge counterparty may rank higher in priority than payments on your notes.
	If the hedge counterparty fails to make any payments required under an interest rate hedge when due, payments on your notes may be reduced or delayed.

	An interest rate hedge generally may not be terminated except upon the failure of either party to make payments when due, the insolvency of either party, illegality, an occurrence of an Event of Default that result in acceleration of the notes and liquidation of the pool of receivables, the making of an amendment to the transaction documents that adversely affects the hedge counterparty without its consent, or the failure of the hedge counterparty to post collateral, assign the interest rate hedge to an eligible substitute counterparty or take other remedial action if the hedge counterparty's credit ratings drop below the levels set forth in the rating agency's criteria sufficient, in each case, to maintain the then-current ratings of the classes of notes. Upon termination of an interest rate swap, a termination payment may be due to the trust or due to the hedge counterparty. Any such termination payment could be substantial if market interest rates and other conditions have changed materially. To the extent not paid by a replacement hedge counterparty, any termination payments will be paid by the trust from funds available for such purpose, and payments on your notes may be reduced or delayed.
	If a hedge counterparty's credit rating drops below the levels set forth in a rating agency's criteria and a termination event occurs under the interest rate hedges because the hedge counterparty fails to take one of the required corrective actions, that rating agency may place its ratings on the notes on watch or reduce or withdraw its ratings if the trust does not declare a termination event and replace the hedge counterparty. In these circumstances, ratings on both fixed rate notes and floating rate notes could be affected.
	If the hedge counterparty fails to make a termination payment owed to the trust, the trust may not be able to enter into a replacement interest rate hedge. If the trust has floating rate notes outstanding and does not have an interest rate hedge in place for that floating rate exposure, the amount available to pay principal and interest on your notes may be reduced or delayed.]
A reduction, withdrawal or qualification of the ratings on your notes could adversely affect the market value of your notes and/or limit your ability to resell your notes	It is a condition to issuance of the notes that the notes receive at least the minimum ratings described in this prospectus supplement from the specified rating agencies. However, a rating is not a recommendation to purchase, hold or sell securities and does not address market value or investor suitability, but rather merely reflects the related rating agency's assessment of the creditworthiness of the receivables, the credit enhancement on the notes and the likelihood of repayment of the notes. There can be no assurance that the receivables and/or the notes will perform as expected or that the ratings will not be reduced, withdrawn or qualified in the future as a result of a change of circumstances, deterioration in the performance of the receivables, errors in analysis or otherwise.
	Potential investors in the notes are urged to make their own evaluation of the creditworthiness of the receivables and the credit enhancement on the notes, and not to rely solely on the ratings on the notes.

	S&P	Moody's	Fitch	DBRS
Short-term debt ratings
Long-term debt ratings
Outlook

Number of Receivables
Initial Pool Balance	$
Principal Balance:
Average	$
Highest	$
Lowest	$
Original Amount Financed:
Average	$
Highest	$
Lowest	$
Annual Percentage Rate (APR):
Weighted average(1)	%
Highest	%
Lowest	%
Original Term:
Weighted average(1)	months
Original term greater than 60 months (by principal balance)	%
Longest	months
Shortest	months
Remaining Term:
Weighted average(1)	months
Remaining term greater than 60 months (by principal balance)	%
Longest	months
Shortest	month
Scheduled Weighted Average Life(2)	years
Weighted Average Months After Origination (Seasoning)	months
Financed Vehicle — New:
Aggregate principal balance	$
Percentage of initial pool balance	%
Financed Vehicle — Used:
Aggregate principal balance	$
Percentage of initial pool balance	%
Financed Vehicle — Car:
Aggregate principal balance	$
Percentage of initial pool balance	%
Financed Vehicle — Light Truck:
Aggregate principal balance	$
Percentage of initial pool balance	%
Financed Vehicle — Utility:
Aggregate principal balance	$
Percentage of initial pool balance	%
Financed Vehicle — Other(3):
Aggregate principal balance	$
Percentage of initial pool balance	%
Credit Score:
Weighted average(1) FICO® score (4) at origination
Weighted average(1) FICO® score(4) at origination for receivables with original term greater than 60 months

Make	Model	Vehicle Type	Number of Receivables	Aggregate Principal Balance	Percentage of Initial Pool Balance
				$	%
















Other
Total				$	%

State	Number of Receivables	Aggregate Principal Balance	Percentage of Initial Pool Balance
		$	%










Total		$	%

FICO® Score(2) Range	Number of Receivables	Aggregate Principal Balance	Percentage of Initial Pool Balance
Greater than 749		$	%
700 – 749
650 – 699
600 – 649
250 – 599
Commercial(3)
No FICO score(4)
Total		$	%

APR Range	Number of Receivables	Aggregate Principal Balance	Percentage of Initial Pool Balance
0.00 – 0.99%		$	%
1.00 – 1.99
2.00 – 2.99
3.00 – 3.99
4.00 – 4.99
5.00 – 5.99
6.00 – 6.99
7.00 – 7.99
8.00 – 8.99
9.00 – 9.99
10.00 – 10.99
11.00 – 11.99
12.00 – 12.99
13.00 – 13.99
14.00 – 14.99
15.00 – 15.99
16.00 – 16.99
17.00 – 17.99
18.00 – 18.99
19.00 – 19.99
20.00 – 24.99
25.00 – 29.99
Total		$	%

Pool	Aggregate Principal Balance	Weighted Average APR	Weighted Average Original Term (In Months)	Weighted Average Remaining Term (In Months)
1	$	%
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Total	$

	Class A-1						Class A-2a[/Class A-2b]
Payment Date	0.00%	0.50%	1.00%	1.30%	1.50%	1.80%	0.00%	0.50%	1.00%	1.30%	1.50%	1.80%
Closing Date




















































Weighted Average Life to Call (years)(2)
Weighted Average Life to Maturity (years)

	Class A-3a[/Class A-3b]						Class A-4a[/Class A-4b]
Payment Date	0.00%	0.50%	1.00%	1.30%	1.50%	1.80%	0.00%	0.50%	1.00%	1.30%	1.50%	1.80%
Closing Date




















































Weighted Average Life to Call (years)(2)
Weighted Average Life to Maturity (years)

	Class B						Class C
Payment Date	0.00%	0.50%	1.00%	1.30%	1.50%	1.80%	0.00%	0.50%	1.00%	1.30%	1.50%	1.80%
Closing Date




















































Weighted Average Life to Call (years)(2)
Weighted Average Life to Maturity (years)

	Class D
Payment Date	0.00%	0.50%	1.00%	1.30%	1.50%	1.80%
Closing Date




















































Weighted Average Life to Call (years)(2)
Weighted Average Life to Maturity (years)

	Percentage of Initial Pool Balance	Percentage of Adjusted Pool Balance
Class A notes	%		95.00	%
Class B notes			3.00
Class C notes			2.00
Class D notes			2.00
Total	%		102.00	%

Applicable Class of Notes	Rate Payable to Hedge Counterparty	Rate Payable to Trust
Class A-2b notes	%	one-month LIBOR + ____%
Class A-3b notes	%	one-month LIBOR + ____%
Class A-4b notes	%	one-month LIBOR + ____%

Fee	Monthly Amount
Indenture trustee fee	1/12 of $7,500
Owner trustee fee	1/12 of $3,500
Servicing fee	1/12 of 1.00% of the pool balance

Underwriters	Class A-2a Notes	[Class A-2b Notes]	Class A-3a Notes	[Class A-3b Notes]	Class A-4a Notes	[Class A-4b Notes]	Class B Notes	Class C Notes	Class D Notes
	$	$	$	$	$	$	$	$	$





Total	$	$	$	$	$	$	$	$	$

	Selling Concessions not to exceed	Reallowances not to exceed
Class A-2a notes	%	%
[Class A-2b notes	%	%]
Class A-3a notes	%	%
[Class A-3b notes	%	%]
Class A-4a notes	%	%
[Class A-4b notes	%	%]
Class B notes	%	%
Class C notes	%	%
Class D notes	%	%

ABS	S-29
adjusted pool balance	S-11
APR	S-11
Available Funds	S-35
calculation agent	S-8
clean up call	S-8, S-42
closing date	S-7
collections	S-35
Controlling Class	S-12
cutoff date	S-7
Event of Default	S-41
First Priority Principal Payment	S-37
floating rate notes	S-7
Ford Credit	S-7
indenture trustee	S-18
initial pool balance	S-8
liquidation proceeds	S-35
owner trustee	S-18
payment dates	S-8
priority principal payments	S-37
rating agencies	S-13
receivables	S-7
Regular Principal Payment	S-37
responsible person	S-51
Second Priority Principal Payment	S-37
Targeted Overcollateralization Amount	S-44
Third Priority Principal Payment	S-37
turbo	S-36
Yield Supplement Overcollateralization Amount	S-45

Closing Date		Scheduled Weighted Average Life(3)	years
Cutoff Date		Weighted Average Months After Origination (Seasoning)	months
Number of Receivables		Percentage New Vehicle(2)	%
Initial Pool Balance	$	Percentage Car(2)(4)	%
Principal Balance		Percentage Light Truck(2)(4)	%
Average	$	Percentage Utility(2)(4)	%
Highest	$	Percentage Other(2)(4)	%
Lowest	$	Percentage of Top 10 Makes/Models(2)	%
Original Amount Financed		[Make/Model]	%
Average	$	[Make/Model]	%
Highest	$	[Make/Model]	%
Lowest	$	[Make/Model]	%
Annual Percentage Rate (APR)		[Make/Model]	%
Weighted average(1)	%	[Make/Model]	%
Highest	%	[Make/Model]	%
Lowest	%	[Make/Model]	%
APR greater than or equal to 20 percent(2)	%	[Make/Model]	%
Original Term		[Make/Model]	%
Weighted average(1)	months	Percentage in Top 5 States(2)(5)	%
Original term greater than 60 months(2)	%	[State]	%
Longest	months	[State]	%
Shortest	months	[State]	%
Remaining Term		[State]	%
Weighted average(1)	months	[State]	%
Remaining term greater than 60 months(2)	%	Weighted Average(1) FICO® Score(6) at
Longest	months	Origination
Shortest	months	Weighted Average(1) FICO® Score(6) at Origination
		for Original Term Greater than 60 Months

Month	Date	End-of-Month Pool Balance(7)	Cumulative Net Losses(8)	Prepayments(9)	Delinquencies(10)
Month	Date	End-of-Month Pool Balance(7)	Cumulative Net Losses(8)	Prepayments(9)	31-60 Days	61-90 Days	91-120 Days	121+ Days
1		$	$	$	$	$	$	$
2
3
4
5

	Securities and Exchange Commission(1)	$ *
	Rating agency fees	$ *
	Printing	$ *
	Legal fees and expenses	$ *
	Accountants' fees	$ *
	Fees and expenses of Indenture Trustee	$ *
	Fees and expenses of Owner Trustee	$ *
	Miscellaneous expenses	$ *
	Total	$ *

Exhibits	Description
1.1	— Form of Underwriting Agreement for the Notes.**
3.1	— Amended Certificate of Formation of Ford Credit Auto Receivables Two LLC.*
3.2	— Amended and Restated Limited Liability Company Agreement of Ford Credit Auto Receivables Two LLC. *
4.1	— Form of Indenture between the Trust and the Indenture Trustee (including forms of Notes.)**
4.2	— Form of Trust Agreement between the Depositor and the Owner Trustee.**
5.1	— Opinion of Dewey & LeBoeuf LLP with respect to legality.***
8.1	— Opinion of Dewey & LeBoeuf LLP with respect to federal income tax matters.***
10.1	— Form of Interest Rate Hedge between the Trust and the Hedge Counterparty.**
23.1	— Consent of Dewey & LeBoeuf LLP (included as part of Exhibit 5.1).***
23.2	— Consent of Dewey & LeBoeuf LLP (included as part of Exhibit 8.1). ***
24.1	— Powers of Attorney.
25.1	— Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939.**
99.1	— Form of Sale and Servicing Agreement among the Depositor, the Servicer and the Trust.**
99.2	— Form of Administration Agreement among the Trust, the Administrator and the Indenture Trustee.**
99.3	— Form of Purchase Agreement between Ford Credit and the Depositor.**
99.4	— Form of Account Control Agreement among the Depositor, the Indenture Trustee and the Securities Intermediary.**

	FORD CREDIT AUTO RECEIVABLES TWO LLC (Registrant)

	By:	/s/ Scott D. Krohn
		(Scott D. Krohn, Chairman of the Board of Managers of Ford Credit Auto Receivables Two LLC)

Signature	Title	Date

/s/ Scott D. Krohn (Scott D. Krohn)	Chairman of the Board of Managers and President and Treasurer (principal executive officer and principal financial officer)	June 11, 2010

/s/ Jane L. Carnarvon (Jane L. Carnarvon)	Manager and Controller (principal accounting officer)	June 11, 2010

/s/ Susan J. Thomas (Susan J. Thomas)	Manager	June 11, 2010