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Did most of you take Tesla financing, or your own outside bank?

Two things are making me want to choose my financing externally:

1) Lower rate (like 2.5% instead of 3.3% from Tesla)
2) Finding out that annual Tesla service required for buyback guarantee

If I don't expect depreciation to be my main concern, then these two conditions cost me an extra >$3000 in loan and service costs. And my logic is that if Tesla is guaranteeing buyback, should I ever need to sell it, that will already provide a floor to the resale, whether to Tesla directly or not.

I imagine there should not be too much concern about being able to sell it externally (i.e., not worrying that I will rely on Tesla to buy it as a last resort).

What do you all think -- have you gone with Tesla financing, or your own bank?

Thanks!

Take note that a requirement of the Tesla buyback is that your car must be free and clear. So, in 3 years if you decide to sell your Model S back to Tesla, be prepared to cough up the cash to pay off your remaining loan balance first.

Not exactly. The condition is 'prior to or in conjunction with...' If the resale value is lower than the amount remaining on the loan, it is true that you pay the difference. If that's not the case, the car doesn't not have to be paid off out-of-pocket. You can search the press releases for the details...we've been through this a few times already.

You Americans have life so easy;

In Canada...,,,,

-tesla financing 4%
- home LOC 3.5%
-loaded P85+ is $135,000 plus 13% tax

In the U.S. .....

-How exactly does a credit union make a profit at 1.49% or 1.99% financing ?

US Alliance Credit Union. 84 months @ 1.89%

Jon K was the person that helped me. He was awesome and has helped many other Tesla owners.

@ElectricZo - How long ago was that? I believe the rates have gone up a bit as the quote for the 'best available rate' I got as of today was 2.99%.

I do agree that Jon K. at US Alliance is pretty cool however!

3rd party - Alliant.

1.49% 72 months 10% down. Quite a bit of documentation was requested, but nothing out of the ordinary.

Applied on (or around) August 12th (and got contingent approval the next day). I don't know if those rates are still around, but they were far and away better than Tesla's financing (though, Tesla asked me for not a scrap of documentation, so, if you are going to have issues with the doc side...)

?Dark side?

Brad Sterns helped me out.

Loan Consultant
Alliant Credit Union
11545 W Touhy Ave
Chicago, IL 60666
773-462-2120 Direct and Fax
(800) 328-1935 ext 2120

@jonlivesay
I normally agree with you about paying for toys upfront. But in this case, I put the money I would have paid for the car into TSLA stock, got a loan at 1.5% for 90K, and have already made enough money to buy another Tesla. That being said, I'm not cashing out until my car money has grown another 8X and I can pay off my house. So I agree that I would not get a loan to buy a car I otherwise couldn't afford. But using a loan at 1.5% to grow the money I would have used to buy the car to pay for my house, that is priceless....

I used my own credit union as well.

Oh and if you are thinking of doing a trade in...don't bother AutoNation is TERRIBLE!!!!!!!!! Sell it yourself or keep it.

Damn I want 84 months @ 1.84%. thats awesome.

+1 Jonlivesay.
How much do you guys pay extra in financing? 1.49% 72 months, is around (back of envelope) 1.5%/a for 50% of value (50K) over 72 months = 6 years. So around $4.5K.
Searching for rates, locally it rather is 2.5-3.5% = 7.7-11K!
More accurate calculations under
http://www.bankrate.com/calculators/managing-debt/annual-percentage-rate...

@rdalcanto: I hope gambling works out for you, as long as you realize that it is not (diversified) investing. Blocking out possible losses is an infamous psychological pitfall of investing. And then there's the priceless joy of owning something outright. You should see my smile when I toss the alarmist mortgage mailings in the recycling.

If you argue that 100K in single stock still satisfies diversified investing principles (<<1% of assets), then you have enough millions (>>10M) that you should certainly buy the MS, and not play those optimization games. And you can buy your home, and consider it part of your REIT holdings.

Never had any dept in my life, lived within my means even in grad school, served me well.

I realize that betting on Tesla is a little bit of a risk. But I think it is a small one, given how revolutionary the car and company are. Kind of like betting on cell phone technology when it first came out. Your portfolio will never have really large gains if any one stock is less than 1% of your holdings. Diversifying that much works if you don't do the research and know what you are investing in, and need to do that in order to be safe. I agree you should live within your means. But if you can't take a loan at 1.5% and beat that return, you need to fire your advisor....

I lease my P85 at Mechanic's Bank in Hercules California. Took about 2 weeks to get all the paper work in order but I was please overall. The final payment exactly equals my social security check so that will pay for the car. Leasing is great because its a total write off.

You can lease a Tesla?

"-How exactly does a credit union make a profit at 1.49% or 1.99% financing?"

In a lot of cases, they don't, especially if they are also offering higher-than-standard deposit rates. Basically, it's merely a benefit to the members with the best credit scores. This helps retain a member base and may lead those members to use the credit union for other, more profitable loan products, such as credit cards or home equity loans. In regards to financing Teslas, what you're seeing is credit unions paying attention to the market and recognizing that the majority of Tesla buyers have excellent credit and substantial incomes. It doesn't hurt that the product itself has gotten rave reviews for both performance and safety. Essentially, these are the best loans credit unions can put in their portfolios. In order to capture them, however, they need to offer rates that are extremely attractive, even if the margins are razor-thin.

+1 for Alliant.
+1 for waiting to increase your credit score.

I was pre-approved for financing through USAA in June but the interest rate was too high and my credit score apparently dropped just below the optimum 740 required for the best auto rates. I decided to move my delivery date to early next year and get all of my debt to 0 and put down a larger downpayment. I have since exceeded the 740 score, and I also called Alliant CU to find out how they approve loans and decide interest rates. It is clear cut:

  1. Your monthly debt-to-income ratio including the monthly payment on the loan your applying for must not exceed 45%.
  2. The rates they advertise include a 0.4% discount for automatic payments. (If you do not do automatic payments the advertised rate of 1.49% would be 1.89% for example)
  3. They use the Equifax Pinnacle 2.0 for determining your credit score. The scores are set in stone and there are no exceptions which mean a score of 739 will not qualify for the 1.49%
  • Credit Score,    New Car,     Used Car
  • 740+            ,    1.49%    ,     1.74%
  • 700 - 739     ,    1.75 %   ,     1.99%
  • 670 - 699     ,    3.74 %   ,     3.74%
  • 640 - 669     ,    4.99%    ,     4.99%

@Joe: I wonder how they handle rent. We have high household income, but if I include 100% of the joint debt (just rent in this case) towards only my take-home completely excluding the wife's, I end up at 50% utilized. Hmmm.

Star One CU in the Bay Area is offering a promo rate of 1.75% for the best credit scores. I got that rate for 84 mths

http://www.starone.org/home/promotions/carloanpromo

@Gizmotoy: I am not sure, although I split the mortgage with my wife I included it in my debt-to-income ratio and it was still well below 45%. If they do include the full mortgage then I may need to co-sign for my wife's vehicle.

I'm a Star One member and was looking at that a few weeks ago, but that promo ended last month. They should really take it off the website.

Gizmo;
rent and mortgage payments are not both "debt".

@Brian: Certainly, but there's no way you're getting a pass on including that in your monthly responsibilities just because it's rent rather than a mortgage payment.

Or maybe you do. I think it would be stupid of them not to, but I'm not the one loaning the money. That was kind of my question, though.

If anyone finds a low 84 month (under 1.95%) please post the bank.

Thanks.

@gizmotoy: As a former loan underwriter, we would often split the joint rental/mortgage payment if you were the only loan signer, providing that your spouse also has income. We had to put that caveat in after realizing that some non-signing spouses don't work (e.g. stay-at home parents) and are therefore not contributing to the rental/mortgage payment. You would just need to indicate to your lender that your spouse works and give them her income information so the loan officer can make a note explaining this to the underwriters. Hope this helps.

@Max: Thanks for the info. That seems more reasonable. My wife make quite a bit more than I do, so I guess technically it would be easier to just put it in her name, but it's my car! Sounds like I'd be OK on my own, though.

@Gizmo: If your credit is solid (740+), most lenders, for luxury car loans, will allow your debt-to-income ratio to be around 45%. I've worked for three financial institutions and every one used gross income in that calculation. This benefits the customer greatly, especially if you, like me, pay for things like health insurance, life insurance, etc. through your paycheck and not your spouse's, thereby diminishing your net income. Just be prepared to e-mail or fax over 2 of your most recent paystubs for proof of income purposes. You may be required to provide 2 years of W2s if a large portion of your total income is made up of bonuses/commissions. If you are self-employed, you will likely need to provide 2 years of tax returns.
If worse comes to worse, you can always add her to the loan application for her income, yet the car can be titled in just your name. Hopefully, her credit is as strong as yours (if not better). Sometimes, lenders take the score from the primary wage earner instead of the primary signer for exactly the same reason as I previously posted.
Sorry to be so long-winded. I just love to teach people the "behind-the-scenes" in lending.

Tesla financing. I did 60 months through wells fargo. 25% down for 1.99% on two ms.

@Max: Thanks again for all the insight. Extremely helpful.

My company pays for insurance, so that's not directly applicable, but on average about 35% of my income is from bonuses, which I wasn't including in the above calculations. I figured since bonuses aren't guaranteed, a lender wouldn't even consider them. I've only been with this company about 18 months (3 bonus cycles, only one W2), though, so I'm sure that'll factor in. Last I checked my score was 748, but that included a "95% utilized" on a card I pay off every month that ended up with atypical expenses on it. With zero balances now, I'm probably a bit higher than that.

Her credit it typically higher than mine, presumably because most of the spending goes on cards where I'm the primary, but who knows.

Sounds like one way or another it's probably not going to be a big deal, but it's nice to have good information going in. Thanks!

Went with Alliant. 1.49%, 72 months, super easy. Financed a little less than half the cost, down payment for the rest. John Yu is the guy I worked with there - very professional and efficient, highly recommended.

Seems like Alliant is now 1.74
Anyone offering lower rate?

PenFed offers 0.99 for 3 years, but they require 500 deductible for both comprehensive & collision, which may cause your insurance premium substantial jump.
Alliant has 1000/1000 policy.


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