Welcome to Tesla Motors Club
Discuss Tesla's Model S, Model 3, Model X, Model Y, Cybertruck, Roadster and More.
Register

Final Payment before Delivery!

This site may earn commission on affiliate links.
When you order something via catalog, phone, internet etc. do you wait until the postman/UPS/FedEx driver delivers it? No. you pay for it when the supplier ships it. Just because it is a car is no different. I just paid for my car (i've never seen it) and I have a contract (MPVA) that spells out what Tesla will deliver to me. Anything else will be refused and it is up to Tesla to correct their mistake. in some locations people have been given the luxury to take delivery and pay at the same time. It seems like this is not the norm. Most people, especially in states like TX, MA, GA and here in Hi, pay before the car is shipped. I don't understand why some people think it should be any different. It is just another remote transaction and it doesn't matter if it is a $1 widget or a $100K car.
 
Why would be getting a replacement or refund be harder with a car? It might take a little longer, but shouldn't make it harder.

I would think the circumstances surrounding that increased time of replacement/fix may be burdensome on an individual. Yes, "harder" is subjective, but I can imagine it being harder to manage a $100,000 transaction covering an automobile that is in demand and takes a lot more time, effort and cost to produce than a $1 widget.
 
There are a few significant differences between purchasing a $100K car and typical items off the Internet. Internet purchases typically have refund and return policies - specifying the terms for seeking a refund of any purchase. Plus, Internet purchases are typically done by credit cards - which defer the actual payment to the vendor - and provides an additional opportunity for the customer to contest charges - if items are returned - and no refund has been issued.

Ordering a car from Tesla is very different. The pre-delivery MVPA does not provide for any opportunity to seek a refund for the purchase. In fact, it states that there is NO CANCELLATION - and that if you refuse to accept delivery of the vehicle, they can retain any cash downpayment or deposit that's been made - which could be the entire purchase price, if paid before the vehicle is delivered. And, unlike a credit-card transaction, payment is made immediately to Tesla - so there isn't even a 3rd party (i.e., credit card company) that can withhold payment until any problems are resolved.

Since I've only recently finalized, I don't have access to the final MVPA - which may have different terms - but, at least based on the pre-delivery agreement, there doesn't seem to be any real option for refusing delivery - and getting a refund.

I checked on the pre-payment issue before I finalized my order - and was told that I would not have to pay for the car until the car was delivered to me - and I had an opportunity to inspect it.

I'm going to call Tesla today - and again get confirmation about when they are going to request payment.

Is it possible that the pre-payments are a short-term issue - because they are trying to book revenue before year-end and/or helping the customers qualify for rebates on their 2012 taxes???
 
Ours is not a perfect world. When I got my BMW, they called me and told me it was in and when I got to the dealer they showed me a car with a big dent on the hood from transport. In that case, they offered to fix it (no thanks), reorder the same car (2-3 month wait), or let me select from others they had in stock. I found one that was close enough and had about $1,500 more in it than the one I ordered so I took it. If your Tesla shows up on a trailer with a half dozen other cars, and with a big dent, and you've paid for it, that would be an interesting and perhaps frustrating discussion with them.
 
Why would be getting a replacement or refund be harder with a car? It might take a little longer, but shouldn't make it harder.

Amazon emails me a return authorization that I slap on the box and drop off at the UPS store a block from my house. Is returning a $100k car easier than that?

That being said, I am also planning to fork over the $102k I owe on my car when it leaves the factory. It arrives 7-10 days later in Florida. A lot of things can happen to my car over that time and distance. I would feel much more comfortable making the final payment when the car arrives. Plus I am trading in a car and will have dip into savings temporarily until the Model S arrives to cover the amount of my trade in. Sub-optimal buying experience, but I understand the benefit to Tesla (more 4th quarter and year to date sales) and to me ($7500 tax credit this year, fiscal cliff...anyone? anyone?). I want Tesla to succeed and I am willing to go out of my comfort zone because I believe in this company.
 
Called Tesla again on this issue - and talked to the "after Finalize" team.

For Texas (and other similar states), because of the dealer laws, they must take payment prior to shipping the vehicle. I suspect they could find another solution that would allow payment after the car is inspected - but, at least for now, what they are doing is simpler (on their end) - and understandable.

However, technically, you own the car once they've accepted payment - and if anything does go wrong in shipment - you aren't a party to the transport agreement - and in a worst case scenario, things could get pretty ugly.

I've been assured that Tesla has worked this out - and that the final paperwork that would be signed at purchase would provide protections for delivery of the vehicle to me, and that if I found anything seriously wrong with the vehicle, I could refuse delivery, and they would make arrangements to ship me another one - which is what happened to me at Lexus and with cattledog with the BMW.

So I'm going to reserve judgment on this until I see the final paperwork - and can see for myself that they are providing reasonable protections for my purchase.

Has anyone else pre-paid, outside of California? If so, what paperwork were you given - before or when you made the final payment - and before they put you car on the transport?
 
Like everyone said, it varies state by state.

However, FOB is something you need to pay special attention to...

I once had my staff take possession of a $1M+ of Sun gear back in the day via FOB. It fell off a truck lift at some point and since it was FOB it was our responsibility - that made for some interesting conversations up the food chain.
 
Last edited:
Called Tesla again on this issue - and talked to the "after Finalize" team.

For Texas (and other similar states), because of the dealer laws, they must take payment prior to shipping the vehicle. I suspect they could find another solution that would allow payment after the car is inspected - but, at least for now, what they are doing is simpler (on their end) - and understandable.

However, technically, you own the car once they've accepted payment - and if anything does go wrong in shipment - you aren't a party to the transport agreement - and in a worst case scenario, things could get pretty ugly.

I've been assured that Tesla has worked this out - and that the final paperwork that would be signed at purchase would provide protections for delivery of the vehicle to me, and that if I found anything seriously wrong with the vehicle, I could refuse delivery, and they would make arrangements to ship me another one - which is what happened to me at Lexus and with cattledog with the BMW.

I've been wondering how this situation will play out.

On one hand, the buyer wants to obtain the $7,500 federal tax credit AND Tesla wants to recognize revenue for the sale of the Model S in 2012.

Tesla's revenue recognition policy states:

delivery has occurred and there are no uncertainties regarding customer acceptance

So, under Tesla's revenue recognition policy, the customer has to 'accept' the vehicle. If the customer hasn't seen the vehicle until after delivery (when it was loaded on a third party carrier), has the customer accepted the delivery when it is put on the truck in Fremont (third party carrier), especially when the customer hasn't engaged the third party carrier?

I don't know.

Let's see how many Model S vehicles are loaded on trucks at 12/31/12 ...
 
I've been assured by Tesla that out-of-state customers will have an opportunity to refuse delivery, if the car has been damaged or has a major defect, even if we've prepaid prior to shipment. I've also been assured that prior to making my final payment, I will be provided documentation of this policy.

But, then again, they told me before I signed the pre-delivery MVPA that payment would only be made - in Texas - after I had received the car and had an opportunity to inspect it - before making the payment (which they can't easily do - because they are not an authorized dealer in Texas).

Can anyone who has already gone through this - and received their car - comment on the process - and what policy Tesla provided about owner refusal and inspection - after the payment had been made?
 
The paperwork/contract only states you agree to arbitration and Tesla can keep some amount of your funds if you refuse delivery. Now, Tesla may very well be more amenable than the contract, but by the letter you are basically forced to accept delivery or face the possibility of some level of forfeiture.

I'm crossing my fingers and hoping things go well...
I've been assured by Tesla that out-of-state customers will have an opportunity to refuse delivery, if the car has been damaged or has a major defect, even if we've prepaid prior to shipment. I've also been assured that prior to making my final payment, I will be provided documentation of this policy.

But, then again, they told me before I signed the pre-delivery MVPA that payment would only be made - in Texas - after I had received the car and had an opportunity to inspect it - before making the payment (which they can't easily do - because they are not an authorized dealer in Texas).

Can anyone who has already gone through this - and received their car - comment on the process - and what policy Tesla provided about owner refusal and inspection - after the payment had been made?
 
Like everyone said, it varies state by state.

However, FOB is something you need to pay special attention to...

I once had my staff take possession of a $1M+ of Sun gear back in the day via FOB. It fell off a truck lift at some point and since it was FOB it was our responsibility - that made for some interesting conversations up the food chain.

This is why I've asked that my insurance broker start my policy on the Model S tomorrow. That's when the final wire transfer is taking place and that's when (I hope) they'll be putting it on the truck.

Thanks for the cautionary tale!