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Tesla Financing Question - Down Payment

I just watched the Tesla Financing video again, and it left me perplexed. The website seems to suggest that with financing, you need to put a down payment in the range of 10% to 15%. However, in the Tesla Financing video, Elon says that the financing allows the down payment to be covered by the tax credit. This isn't compatible with what the website suggests. Even a lower 10% down payment will be more than the $7500 provided by the tax credit. Also, it's not clear if this is just a play on words, or if the bank taking the tax credit in lieu of an actual down payment is actually part of the deal.

Can anyone clarify?

Nevermind. I found some other financing threads that basically answered my question. As I first expected, the tax credit is not part of the financing deal in any way. Likewise, the federal tax credit will only cover about half of the down payment.

What Elon said in the financing video I would say was a little dishonest in the same way that controversial Tesla review by John Broder was a little dishonest: it gives a false impression of the real product. I'm surprised Elon was willing to say what he did in the video.

I started to get a little excited that maybe I didn't need $25K set aside to buy the car, but no, I do. Back to saving...

Depends on the model you buy. A base 60kWh is not going to exceed $75K, making the tax credit 10% or more.

You are right. If you go base 60 kWh Model S and add almost no options, the $7500 does roughly equal a 10% down payment on a 60 month term.

Still, the video made it sound a heck of a lot rosier than it is, and needs about 4 additional disclaimers at the bottom:

1) If you buy the 60 kWh Model S
2) And you add almost no options
3) And you use the 60 month term to limit down payment to 10%
4) And you have to pay the down payment up front and reimburse yourself from the tax credit after the next tax cycle

They should have reworded it a bit, as they really made it sound like this special financing deal included a way to surrender your tax credit as the down payment, which is not in any way true.

Not trying to be negative here. It's really my only complaint about anything Tesla has done to date. But at the same time, I really appreciate that Tesla has come up with some financing options so that coming up with financing doesn't fall entirely on the buyer. I would have liked to have seen their cars come in closer to the original price points, but I give them a pass on that as I know they are doing their best and generally doing a great job.

I really like Tesla's approach to financing. Its an important part of auto
finance these days. However, I would advise my clients that if they can't afford
to pony up a significant down payment for an auto ($10K) without blinking, then
they probably should look at less expensive options for now.

the Gen III is not that far off.....at least to me...

Yes, I really wish Tesla would change the marketing around their financing product. The product itself is not bad, but the way it's marketed is not honest enough.

@jamesd567

Agreed. That's why they shouldn't be advertising the financing as if you can get the car with no down payment for only $500 a month. It's insanely far from reality. Heck, taxes alone will probably be in the neighborhood of $8000, something a buyer needs to be prepared for in addition to whatever the down payment will be.

After 3 years with the buy back program is there a limit on miles travelled

once you 'look under the hood' the true economics of buying an S is quite different from Ellon's video and what the website says - I highly suggest you look into all the details before placing an order as you will most likely be shocked at the true total out of pocket and monthly payments...I love Tesla, the product and what they have done to the industry - however thumbs down on the marketing spin with regards to the true price and out of pocket cost...not cool

My purchase will be finalizing next week. I was given a terrible option financing through Wells Fargo from Tesla. They wanted $45,000 down. I went to my local credit union and they offered financing 115% of the car price to handle any sales tax and other expenditures for the car. It pays to shop around. Also it was a lower rate than offered by a bank. You'll have a higher payment but no need for a down payment

The WF financing is parcelled with the guaranteed 3-yr. buy-back.

I have ordered a Tesla that is scheduled to be delivered at the end of August. I have applied for financing and am getting terrible results both with Tesla financing and outside financing. I have a credit score in the 700s, have a six figure salary, zero credit card debt, no mortgage payments, and virtually no debt. The one thing they keep harping about is that Tesla will be my very first auto loan. Well, the reason it's my first auto loan is because the last car I purchased I paid 100% in cash, so duh, I never had an auto loan. You would think that banks would totally want to lend to someone with no debt and someone who's not always borrowing money. Yet, they're saying I need my fiance to co-sign the deal, and even after he has, there's no guarantee (I'm still waiting for approval). I have set aside 15% in cash for the down payment and was ready to go with financing the rest. Now, it looks like I may have to cancel the order altogether if they request a significantly higher down payment.

I would like to warn people that a 10% down payment may not be realistic even with good credit. I think it's false advertising to say only a 10% down payment is required without a disclaimer or providing information that a 10% down payment may come with a high risk of being rejected for financing the other 90%.

Did you try Tesla, Alliant, etc.? They are very familiar with TM purchases. Many threads on this, like http://www.teslamotors.com/forum/forums/financing-question .

@iam, yeah, the Big Box banking industry has been dumbed down so much it's kind of pathetic. Most of them just look at the credit score as the one and only factor, or in your case, "No one else has approved you for a car loan yet, so we don't want to be the first. Follow the herd--moo!" As Brian mentioned, credit unions are usually a much better way to go, because they usually have actual people trained to use their brains to evaluate people's overall financial situations, income, assets, etc. to make lending decisions. Alliant is a great suggestion. They had some good criteria that included proof of income level, which would work well for you. I contacted them to get their offer, but then I took that to my credit union where I have my other accounts to see if I could keep it together to be more simple. They couldn't quite match the rate, but it was very close, so I took it.

It's a TRAP!!!

Unfortunately, the definition of 'good credit' has morphed from being, 'trusted to pay off debt in a timely fashion', to instead being 'proven to be willing to remain in debt for all time'. As a result, paying debts off early, paying for things with cash up front, and choosing not to carry debt at all, makes one a 'poor risk' for financial institutions. Someone who is always in debt at least gives banks the benefit of being someone whose debt can be sold to someone else at a profit, while their property can be seized via lien, and sold to another sucker, on yet another loan, rolling over the debt into even more profits.

@Red Sage, yes, the FICO score isn't a measure of winning financially; it's an "I love debt" score.


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