TMC is an independent, primarily volunteer organization that relies on ad revenue to cover its operating costs. Please consider whitelisting TMC on your ad blocker and becoming a Supporting Member. For more info: Support TMC

Financing at 1.49%

Discussion in 'Model S: Ordering, Production, Delivery' started by QwiksilverA4, Jun 6, 2017.

  1. QwiksilverA4

    QwiksilverA4 Member

    Joined:
    May 14, 2017
    Messages:
    40
    Location:
    san jose
    Gents, I've been working out the numbers with my wife for the last several nights as we received our sign off contracts for our new MS that's to be built and delivered in the month.

    for a 79k car, with out our details... does it seem right to be final paying (Taxes, Reg, etc) at 90k?
    I understand the 1.49 compounds as each payment is made towards the principal, however I didn't it was equate to about 3k in financing fees.
    I feel like im practicing fuzzy math here. Would anyone share there costs in CA with me?
     
  2. Dansblum

    Dansblum Member

    Joined:
    Oct 9, 2015
    Messages:
    46
    Location:
    Carmichael
    Unfortunately yes. That's not financing - if you in CA the bulk of that is sales tax. 7.25 to 8.25%, depending on country. That adds up to 5500...add in 1200 destination charge, and license and registration, and you're pretty much there.

    Now if you're paying up front financing fees that may be adding some. I financed through Alliant, no fees other than maybe 10 or 20. But the bulk of the 'extra' is probably sales tax.

    Dan
     
  3. Max*

    Max* Autopilot != Autonomous

    Joined:
    Apr 8, 2015
    Messages:
    6,019
    Location:
    NoVa
    For a $79k loan, at 1.49% APR, for 3 years you'd pay ~$1.8k, 4 years ~$2.4k, 5 years ~3k, 6 years ~$3.6k and 7 years ~$4.2k in interest over the lifetime of the loan.

    So the rest is taxes, etc.
     
  4. whttiger25

    whttiger25 Member

    Joined:
    Jun 25, 2016
    Messages:
    397
    Location:
    Oakland, CA
    I live in Cali (Alameda county) and paid 9.5% last year. For some reason it dropped to 9.25% this year. Worth it to live here though.
     
    • Like x 1
  5. whttiger25

    whttiger25 Member

    Joined:
    Jun 25, 2016
    Messages:
    397
    Location:
    Oakland, CA
    #5 whttiger25, Jun 6, 2017
    Last edited: Jun 6, 2017
    Total finance cost for $74k at 6 years at 1.49% is about $3000, so it makes sense if you are putting $13k down including the reservation fee ($87k total price including taxes and registration, $13k down to get to $74000 borrowed, $3000 in interest over 6 years will bring total cost to $90k). Looks right to me.

    I would say borrow the minimum to not be underwater at all during the loan, as 1.49% is super cheap and there's no reason to put extra down. However you don't want to be underwater and facing a shortfall if you total your car. Gap insurance helps but comes at a cost that probably better to just pay down the car to where you don't need it.

    Personally I am waiting on my $98700 ($108,500 all in) Model S, I put $25000 down, borrowing $83500 for 6 years. Will start with $15k equity, probably won't go below $12-13k in equity assuming a normal depreciation curve, as depreciation rate will slow and loan payment rate will gradually increase.

    Total finance cost will be $3440, definitely will make that on the 83500 in other investments.

    I even graphed it! x axis is months.
     

    Attached Files:

    • Informative x 3
  6. BGuz

    BGuz Member

    Joined:
    Jun 3, 2017
    Messages:
    17
    Location:
    91752
    Hi, I'm interested in how you came up with these numbers/graph. Can you please share your spreadsheet? I just placed my model s reservation and am trying to figure out how much of a down payment I should make.
     
  7. tpham07

    tpham07 Member

    Joined:
    Mar 21, 2017
    Messages:
    459
    Location:
    Baton Rouge
    i did $0 downpayment haha. i like having cash in the bank. if you wanna sell the car in a couple years then a downpayment is needed so you're not upside down on the car loan but if you wanna keep it for 7+ years i dont think a down payment is necessary.
     
    • Like x 2
  8. whttiger25

    whttiger25 Member

    Joined:
    Jun 25, 2016
    Messages:
    397
    Location:
    Oakland, CA
    Just make sure you have gap insurance then...
     
  9. tpham07

    tpham07 Member

    Joined:
    Mar 21, 2017
    Messages:
    459
    Location:
    Baton Rouge
    mine was like $395 #shrug
     
  10. rjcbox

    rjcbox Member

    Joined:
    Sep 4, 2013
    Messages:
    477
    Location:
    NJ, USA
    Is that $395 for the term of the loan? (Hope it's not per year)
     
  11. tpham07

    tpham07 Member

    Joined:
    Mar 21, 2017
    Messages:
    459
    Location:
    Baton Rouge
    yup!
     
  12. jddssc121

    jddssc121 Member

    Joined:
    Apr 17, 2017
    Messages:
    55
    Location:
    Las Vegas, NV
    I added it thru my auto insurance, always cheaper than buying it from dealer. It's $4/month.
     
  13. MIT_S60

    MIT_S60 Member

    Joined:
    Nov 23, 2016
    Messages:
    191
    Location:
    Orange County, CA
    Normally I do the same, but for $400 I decided to buy it from Alliant so that I could switch insurance companies whenever necessary (many only let you add gap for new cars).
     
  14. s00nr1

    s00nr1 Member

    Joined:
    Jun 16, 2017
    Messages:
    29
    Location:
    OKC
    My question for the OP would be where he found a 1.49% rate?
     
  15. jddssc121

    jddssc121 Member

    Joined:
    Apr 17, 2017
    Messages:
    55
    Location:
    Las Vegas, NV
    Tesla's website .....
     
  16. s00nr1

    s00nr1 Member

    Joined:
    Jun 16, 2017
    Messages:
    29
    Location:
    OKC
    I assume that must be a rate only available for new purchases (and not CPOs)? My advisor mentioned Tesla financing was running between 2.5 and 4% right now (even with my credit score in the 820 range).
     
  17. whttiger25

    whttiger25 Member

    Joined:
    Jun 25, 2016
    Messages:
    397
    Location:
    Oakland, CA
    Basically my graph is just three columns of data. The first is the monthly value of the car. I started with what I paid for the car ($98700) and applied an approximate monthly depreciation factor of 1.4% (I forget where I got this but I got it from somewhere, it annualizes to 15.6% a year). Each month's car value is 98.6% of the previous month's value. This is of course not very accurate to start as in the first year of car ownership there are some big factors such as the federal rebate and faster than average depreciation but this formula should be a good approximation after a few years. You can tweak the factor if you like when you get more data, like blue book values.

    Then the next column is just the monthly remaining principal of the loan. Easiest way to get this is to just use an online calculator to calculate your monthly payment, then reduce the prior month's principal by that amount, and add back the monthly interest from the prior principal.

    The third column is just the difference between the first two columns, equity (assets - liabilities, car value - loan value).

    As far as how much of a down payment you should make, if you are getting a 1.49% rate I'd minimize it. There are a few other considerations. If you are plannign on taking out a big loan, like a house loan, the bank will car about your monthly debt payments. If you are stretching on the home loan you'll want to minimize the size of your car payment.

    Also, if you don't have gap insurance from your lender or car insurance company, you want a safe margin where you can feel certain that in the event of a total loss, the value of your car as determined by your insurance company will be greater than your loan. In my case, I felt like $13k was enough of a buffer. Progressive came through for my in my total loss this year and paid above what I expected but every insurance company is different. If you have an insurance comapny that guarantees replacement value as opposed to actual cash value, you can worry about this less as well.
     
  18. BGuz

    BGuz Member

    Joined:
    Jun 3, 2017
    Messages:
    17
    Location:
    91752
    Thanks for the info! I just wanted to be sure I have enough to cover a total loss and not worry about paying out of pocket if something does happen.
     
  19. Cnasty

    Cnasty Member

    Joined:
    Jun 20, 2016
    Messages:
    451
    Location:
    Dallas
    I got 1.49% as well from Alliant Credit Union
     
  20. nexsuperne101

    nexsuperne101 Member

    Joined:
    Apr 12, 2016
    Messages:
    205
    Location:
    London, England
    Apologies for the noob question, are Tesla now financing CPO's in the UK?

    What rates and credit scoring service do they use?
    I have 932 out of 999 on my Experian credit score, but my Equifax one is only 450 out of 700.
    I have found a 2014 P85 for an affordable price at £44K
     

Share This Page