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Does the extra $2,500 deposit precede the Tesla financing approval?

Discussion in 'Model 3' started by internalaudit, Jul 30, 2017.

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  1. internalaudit

    internalaudit Member

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    So I perused the online configuration preview available now thread and noticed that Tesla will request an additional $2,500, on top of the $1,000 reservation deposit we had placed.

    Our credit are good to excellent but I am a little wary to carry on with finalizing a configuration when I may not qualify for the 4-8 year 2.5% financing through Tesla Financing (partnership with two of our five big banks) because here in Canada, our banks know they are an oligopoly and most car loans will start at 5% and I don't have any interest in borrowing at that high an interest rate.

    Is the approval for Tesla Financing prior to placing that extra $2,500 deposit?

    Of course in the US, banking is more competitive and car loans from financial institutions may even beat the "in-house" Tesla rates.
     
  2. SoCalLawyer

    SoCalLawyer Member

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    Financing is done after the $2,500 configuration order as Tesla does not want you to secure a loan until 30 days before delivery.
     
    • Helpful x 1
  3. timk225

    timk225 Member

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    What's this about $2500? I have to lay out $2500 more when I configure my car even before I know if my financing is approved? It should get approved, but let's say it doesn't, for whatever reason. What about my $2500 then? And the $1000 reservation deposit?
     
  4. internalaudit

    internalaudit Member

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    Thanks. Sounds risky for those with less than stellar credit ratings, at least in Canada where car loans rates are going to be at least double the "in-house" rates.
     
  5. internalaudit

    internalaudit Member

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    #5 internalaudit, Jul 30, 2017
    Last edited: Jul 30, 2017
    That is precisely my question. I don't want to lose $3,500 nor do I want to pay 5% or more if I don't get the sweeter Tesla financing rate which is current at 2.5% for eight years.

    We are paying MSRP but financing is not through a Tesla subsidiary but through its partnerships with financial institutions so less incentive for FI's to be aggressively approving loans for even those with good credit when their regular car loans may be a few percentages higher.
     
    • Disagree x 1
  6. SoCalLawyer

    SoCalLawyer Member

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    Tesla will NOT give you a refund if you can't secure a loan. However, it appears you have answered your own question. If financing is a concern in your country, I would obtain a loan prior to submitting your order and risking $3,500 USD.
     
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  7. internalaudit

    internalaudit Member

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    Good to know. One more thing for me to be wary of.

    With typical car makers, we apply for credit through their financing/leasing arm and then negotiate with the dealerships.

    With Tesla, although there are not a lot to customize for now (so not hard to sell to another customer), it will have customers by their [email protected] with the $3,500 deposit with no indication whether they will be approved for the car loan.

    Tesla will likely have to fix these misteps especially with a broader target market because it makes so much more sense to get approved for credit first before committing to a car purchase.

    We will see how this thing unfolds. :)
     
  8. brkaus

    brkaus Active Member

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    When there is a many month lead time, they have to wait on financing. The customers financial situation could change. Interest rates may change.

    When someone prequalifies for a mortgage, they don't lock the interest rate (in most cases anyway).
     
    • Helpful x 1
  9. Az_Rael

    Az_Rael Supporting Member

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    Maybe you should post a question on the Canada board since this issue seems a bit unique to your locale.

    Financing Tesla vehicles in Canada

    Normally, you can't apply through Tesla until you have put down the deposit, but that is here in the states. If folks have concerns, they apply from a third party and take the risk of the 2nd hard credit pull after the 30 days is up.
     
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  10. zer0cool

    zer0cool Member

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    The 2500 is the order deposit and you lose that if you end up cancelling the order or just decide not to take delivery. I don't know if the original 1k would be refunded under such case or not...

    Don't know about Canada but in the US loan approvals are only good for 30 days and for Tesla, at least when I bought back in 2015, the third party bank would overnight a cashier's check to me and then I forward that check to Tesla, after signing all the purchase documents. Then they release the car to me. You really can't secure a loan months in advance... You need a vin number and the car must be actually ready as collateral before the bank would issue you the check...
     
    • Informative x 1
  11. Runt8

    Runt8 Member

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    Eight years seems like a very long term for a car loan. I’m used to seeing 5-6 years. Is this a new thing?
     
  12. brkaus

    brkaus Active Member

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    I financed our S at 7 years. The rate was the same for 5, 6, 0r 7 years... so what the heck.

    Already paying extra, but it leaves a bit of safety in monthly payments if necessary.

    Planning on cash for adding the 3 to the garage.
     
    • Informative x 1

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