Email from Tesla About 1.99% Financing

[dgpcolorado]

Got it too. It appears on the first read through its a rate for new only. what's the CPO rate, anyone?

I got two quotes for my coming CPO: Chase, 60 months at 2.74% and TB Bank, 72 months at 3.09%. I have a very low income (retired, thrifty) but an 800 FICO score. I was surprised to get rates that low with my income.

As always, YMMV.

 

[MsElectric]

They have really messed up by low balling on trades. The best source on new sales would be to offer better upgrade programs to existing owners. I won't upgrade until there is a better deal, my current financing is better than what they are offering.

Good luck waiting for a better deal on a trade though as your car is depreciating each month and likely will only be worth less each month. If you feel Tesla's trade offer is so bad why not sell private party? There were a few accounts of some cars that were traded in at such high prices that Tesla was selling some of those cars pretty much at a loss and I'm sure you will agree that Tesla can't sell cars at a loss.

 

[AlanSqB]

I got two quotes for my coming CPO: Chase, 60 months at 2.74% and TB Bank, 72 months at 3.09%. I have a very low income (retired, thrifty) but an 800 FICO score. I was surprised to get rates that low with my income.

As always, YMMV.

DGP, are you getting your CPO from outside CO so you get the $6k state tax rebate?

 

[McMuggets]

Apparently people see something wrong with a car company passing along savings from a lender directly to the consumer? If a lender is willing to charge less, why shouldn't Tesla let people know this? Demand is there either way, but if someone is going to give you lower rates then why the heck not let your customers know this.

 

[AMPUP]

Good luck waiting for a better deal on a trade though as your car is depreciating each month and likely will only be worth less each month. If you feel Tesla's trade offer is so bad why not sell private party? There were a few accounts of some cars that were traded in at such high prices that Tesla was selling some of those cars pretty much at a loss and I'm sure you will agree that Tesla can't sell cars at a loss.

I have not asked for any trade in value. What I'm saying is the market for 100k cars isn't sustainable and the model 3 is far off. I'm happy with my P85+ and the only way to tempt more people to trade is better deals. Their current deals suck (trade in and finance).

 

[Super_Popular]

the only way to tempt more people to trade is better deals. Their current deals suck (trade in and finance).

I agree with both statements :wink:

 

[bob_p]

I agree with the comment above - Tesla would benefit from encouraging their current owners to trade in our early Model S cars for newer Model S and X.

This would get their most loyal customers - on newer cars - and extend their commitment for driving a Tesla.

And it gets more cars into the CPO pipeline, providing Tesla cars at a lower price - filling the price gap for long range EVs.

But the trade-in price for the CPO program doesn't make the trade-in very attractive. And while I could sell the car to a third party - that's not as convenient, and I suspect other owners are like us - will continue to drive our older Model S for a few more years.

Because of the simpler design of the Model S, Tesla should be able to recondition their CPO cars and provide a pretty attractive warranty to new buyers. For the two most expensive components, they should be able to recondition the battery and motor to "like new" condition - and provide the CPO owners with an additional 8 year, unlimited mile, warranty on those two major components - which would make the CPO cars even more attractive. And because the cost of doing that reconditioning should be much less than what it would likely cost any owner to do - Tesla should be able to offer higher trade-in prices for owners - because of the higher re-sale price they should be able to get.

If Tesla had a loyalty program and a more attractive price for me to trade up to a new Model S, I would strongly consider it. I have an early model P85 - and would like to get the longer range with the 90, get new features (AP, summons, autopark, TACC, auto-folding mirrors, parking sensors, ...). But based on the current CPO program, will likely stay with our original strategy and keep the P85 for a few more years.

 

[MsElectric]

I agree with the comment above - Tesla would benefit from encouraging their current owners to trade in our early Model S cars for newer Model S and X.

This would get their most loyal customers - on newer cars - and extend their commitment for driving a Tesla.

And it gets more cars into the CPO pipeline, providing Tesla cars at a lower price - filling the price gap for long range EVs.

But the trade-in price for the CPO program doesn't make the trade-in very attractive. And while I could sell the car to a third party - that's not as convenient, and I suspect other owners are like us - will continue to drive our older Model S for a few more years.

Because of the simpler design of the Model S, Tesla should be able to recondition their CPO cars and provide a pretty attractive warranty to new buyers. For the two most expensive components, they should be able to recondition the battery and motor to "like new" condition - and provide the CPO owners with an additional 8 year, unlimited mile, warranty on those two major components - which would make the CPO cars even more attractive. And because the cost of doing that reconditioning should be much less than what it would likely cost any owner to do - Tesla should be able to offer higher trade-in prices for owners - because of the higher re-sale price they should be able to get.

If Tesla had a loyalty program and a more attractive price for me to trade up to a new Model S, I would strongly consider it. I have an early model P85 - and would like to get the longer range with the 90, get new features (AP, summons, autopark, TACC, auto-folding mirrors, parking sensors, ...). But based on the current CPO program, will likely stay with our original strategy and keep the P85 for a few more years.

So what you are asking for is that Tesla subsidize the depreciation of cars?

I agree that their current finance/lease deals are not very attractive but I don't see how it is fair for Tesla to pay for used cars more than what they are worth.

 

[dgpcolorado]

DGP, are you getting your CPO from outside CO so you get the $6k state tax rebate?

Yes. The first one I was interested in was registered in Denver so I had to pass on it. The one I am buying was registered in Virginia and has never lived in Colorado.

 

[bob_p]

So what you are asking for is that Tesla subsidize the depreciation of cars?

I agree that their current finance/lease deals are not very attractive but I don't see how it is fair for Tesla to pay for used cars more than what they are worth.

What I recommended was that Tesla increase the value of the CPO cars by refurbishing the motors and battery packs - which they can do at a fraction of the cost of a new motor or battery pack, and then increase the cost of what they are charging for the CPO cars by providing both refreshed motor/battery packs, coupled with an additional 8 year, unlimited mile, motor and battery pack warranty, starting from the purchase of the CPO vehicle.

And it's likely they could charge a premium for this value large enough that they could pass some of those savings along to their current customers by increasing the price they are paying for cars going into the CPO program - when the owner is trading up to a new Model S or Model X.

Telsa's struggling to get to cash flow positive - so they can't afford to subsidize - but if they can add more value to their resales - that could benefit everyone. Tesla could get more revenue from the CPO sales. Current owners would get more for their trade ins. And the new CPO owners would have assurance their battery packs and motors would last for 8 years after they buy the used Tesla.

 

[MsElectric]

What I recommended was that Tesla increase the value of the CPO cars by refurbishing the motors and battery packs - which they can do at a fraction of the cost of a new motor or battery pack, and then increase the cost of what they are charging for the CPO cars by providing both refreshed motor/battery packs, coupled with an additional 8 year, unlimited mile, motor and battery pack warranty, starting from the purchase of the CPO vehicle.

And it's likely they could charge a premium for this value large enough that they could pass some of those savings along to their current customers by increasing the price they are paying for cars going into the CPO program - when the owner is trading up to a new Model S or Model X.

Telsa's struggling to get to cash flow positive - so they can't afford to subsidize - but if they can add more value to their resales - that could benefit everyone. Tesla could get more revenue from the CPO sales. Current owners would get more for their trade ins. And the new CPO owners would have assurance their battery packs and motors would last for 8 years after they buy the used Tesla.

There is no such thing as increasing the value of CPO cars beyond what the market is willing to pay. We are in the market for a P85D and we are not buying because we consider the current pricing to be too high. No amount of refurbishment is going to get us to buy a CPO car at these prices and the fact that Tesla refuses to sell an Extended Warranty for CPO cars does not help. If we were to buy a P85D or P90D, we would just buy brand new than pay current CPO/Inventory prices.

Therein you find the situation with regards to the depreciation of premium cars. They depreciate significantly the first 2-3 years. Few will buy a used car in this price range for an inconsequential discount. The moment you drive the car off the lot the car instantly lost about $10K in value just due to the rebates that the next buyer will not qualify for and likely about another $5-10K because the car is now "used." Months in use and mileage further adds to the depreciation.

In the past Tesla has lost money on several trade in cars that were tracked where Tesla ended up selling those cars as CPO for less than what they paid to the original owner. This is not sustainable for Tesla to pay for someone else's depreciation and Tesla can't control the value of these cars used as it is set and determined by the market. Any attempt by Tesla to control the value of used cars is horrible policy as they will end up wasting money paying for the depreciation incurred by someone else.

To generate more revenue Tesla should increase production, come out with better financing and lease terms, and IMHO offer better warranty options for those who would like to buy and hold onto a car for a longer duration. At some point lowering the cost of the car or packages would also help and Tesla has already done this to some extent with most of the Tech Package now being included and the price point of the S70 RWD.

It is never a good idea to try and control the market as someone else always ends up paying the bill for that and it is unreasonable to expect Tesla to pick up that bill.

 

[jmsurpri]

Got an email back from my loan specialist. He says the 1.99% rate from Alliant does not include the resale guarantee.

 

[MsElectric]

Got an email back from my loan specialist. He says the 1.99% rate from Alliant does not include the resale guarantee.

Just realize the "resale value guarantee" really means very little. It just means you can trade your Model S in for about the trade in value of a comparable S Class or similar vehicle. The Model S trade in values are higher than any comparable car in this price segment so you are fine on your own without any residual value guarantee.

 

[Super_Popular]

Just realize the "resale value guarantee" really means very little. It just means you can trade your Model S in for about the trade in value of a comparable S Class or similar vehicle. The Model S trade in values are higher than any comparable car in this price segment so you are fine on your own without any residual value guarantee.

And you have to pay off the car first, right?

 

[ahurst]

And you have to pay off the car first, right?

Correct

 

[Tellotes]

Why not go with a credit union. 1.99 for 84 months!!!! Who cares what tesla is offering. Unless you need the guarantee buy back from them.

 

[MsElectric]

And you have to pay off the car first, right?

Yup. All those hoops and for what? The Tesla resale values are very strong and I see little point in invoking the resale value guarantee.

Let's hope they don't t mess up the resale values by taking away extended warranty options as they seem to be doing for subsequent buyers.

 

[ahurst]

Why not go with a credit union. 1.99 for 84 months!!!! Who cares what tesla is offering. Unless you need the guarantee buy back from them.

Who is offering that?

 

[Tellotes]

Who is offering that?

I live in Atl, GA and I just went to my local credit union. Georgia United Credit Union is offering 1.99% for 84 months. With a 740 and above credit score of course.

 

[Jammyfofo]

I live in Atl, GA and I just went to my local credit union. Georgia United Credit Union is offering 1.99% for 84 months. With a 740 and above credit score of course.

I didn't realize I had rates this good in town, but honestly haven't checked around a lot yet. I was looking at Alliant, DCU, and Georgia's own.