Financing Outside of Tesla is Weird - Advice on Lenders?

[RobbS]

I'm finalizing the specifics on order my P3D (Black Obsidian Pearl with EAP) and am rather befuddled with the loan process when choosing an outside lender. Below are the specifics for my particular scenario:

• Vehicle: $70,500
• Taxes: $4,230
• Delivery: $1,200
  • Sub-total: $75,930
• Reservation: -$2,500
• Down payment: -$5,000
• Total Financed: $68,430

Mo | APR | Payment
84 | 3.74% | $922
72 | 3.7% | $1034

I'd just go with Tesla, except I'm more interested in an 84 month loan instead of the 72 (Before I get berated over this, it's just my preference. I keep vehicles for long periods of time and trust in the reliability of EVs), plus the extra $112, though affordable, pushes me over what I want to comfortably spend.

I looked into Alliant, but was saddened to learn that they don't service my state (Pennsylvania) for Tesla loans.

A lot of what I'm finding is that it's difficult to find a lender to secure financing that would last the 2-4 months quoted for delivery. Most expire within 45-60 days of quote, meaning that I would have to apply later in the buying process and risk not being approved. I don't expect life to change enough to change an approval into a deny, but my store reps were unable to tell me if the $2,500 reservation would be refunded if a VIN has been issued, and that's not exactly chump change.

Recommendations on how to approach the financing aspect or recommendations on a trusted credit union (or one that works with Tesla) that finances on 84 mo terms?

(x-posted on Reddit in case you couldn't tell)

 

[tentimesodds]

What is your credit like? If you can rate beat with LightStream and get an unsecured loan then you can get the cash up front and not worry about delays.

 

[Ejl80]

What is your credit like? If you can rate beat with LightStream and get an unsecured loan then you can get the cash up front and not worry about delays.

Thats what I did. Much easier having the money ready before hand.

 

[RobbS]

LightStream

Depends what agency gets polled. Last soft pulls I checked rang up with 800+ on Equifax, 695 TransUnion, 720 FICO.

I never heard of LightStream, so I'll look into that for sure.

 

[Ejl80]

Depends what agency gets polled. Last soft pulls I checked rang up with 800+ on Equifax, 695 TransUnion, 720 FICO.

I never heard of LightStream, so I'll look into that for sure.

They use Experian and Equifax.

 

[Big Dog]

check the thread on rates, as many lenders are listed. However, not sure if any will give a 120-150 day rate lock.

Let's talk financing rates

 

[glide]

I’ve never heard of a lender that will give >60 day rate lock.

>30 is probably unusual

Why are you applying for the loan before VIN assignment?

 

[RobbS]

I’ve never heard of a lender that will give >60 day rate lock.

>30 is probably unusual

Why are you applying for the loan before VIN assignment?

I would have to apply later in the buying process and risk not being approved. I don't expect life to change enough to change an approval into a deny, but my store reps were unable to tell me if the $2,500 reservation would be refunded if a VIN has been issued, and that's not exactly chump change

 

[RobbS]

Jeez, can't find the edit on mobile. Didn't mean. For that quote to come off terribly, I just forgot some words lol.

I'm just concerned about a deny (probably overly concerned, honestly) and don't want to lose the $2,500 deposit it I couldn't secure financing in my desired range.

 

[soulstar]

Jeez, can't find the edit on mobile. Didn't mean. For that quote to come off terribly, I just forgot some words lol.

I'm just concerned about a deny (probably overly concerned, honestly) and don't want to lose the $2,500 deposit it I couldn't secure financing in my desired range.

I think you're assuming a bit too much on the loan process. At the end of the day, going through Tesla or finding your own financing isn't that much different. Going through Tesla just means that you're applying to bunch of places that Tesla partners with for loans and they give you the offer based on what those partnering banks determine through your credit. Getting your own financing is pretty much that, except you're shopping around yourself.

There aren't that many lenders (to be honest, I'd say almost nobody) that will hold your approval for 2-4 months. Interest rates change, and lenders follow the trend based on that.

Just relax and wait until you have your ISA tell you to start submitting your loan documents (or if going through Tesla, they'll handle the timing for you when its time -- but it's basically the same time either way.) Most ISAs will specifically tell you not to apply for any loans until it is near delivery time specifically because you'd have to apply all over again if you got approved too early. I doubt you'll lose your $2500 for one denial. If you do get a denial, you'd have to find a lender that will eventually give you a loan. Basically, it'll delay the process of you getting the car -- not outright deny you a car right away. Only time that would happen is if not a single lender will give you a loan.

 

[glide]

Jeez, can't find the edit on mobile. Didn't mean. For that quote to come off terribly, I just forgot some words lol.

I'm just concerned about a deny (probably overly concerned, honestly) and don't want to lose the $2,500 deposit it I couldn't secure financing in my desired range.

If you are that concerned about being denied, if it is even a remote possibility, you should not even consider buying the car.

 

[RobbS]

If you are that concerned about being denied, if it is even a remote possibility, you should not even consider buying the car.

Thanks, but I'm not asking for this portion of financial advice. I've never worked with the majority of these lenders and feel that any form of concern is reasonable.

 

[RobbS]

I think you're assuming a bit too much on the loan process. At the end of the day, going through Tesla or finding your own financing isn't that much different. Going through Tesla just means that you're applying to bunch of places that Tesla partners with for loans and they give you the offer based on what those partnering banks determine through your credit. Getting your own financing is pretty much that, except you're shopping around yourself.

There aren't that many lenders (to be honest, I'd say almost nobody) that will hold your approval for 2-4 months. Interest rates change, and lenders follow the trend based on that.

Just relax and wait until you have your ISA tell you to start submitting your loan documents (or if going through Tesla, they'll handle the timing for you when its time -- but it's basically the same time either way.) Most ISAs will specifically tell you not to apply for any loans until it is near delivery time specifically because you'd have to apply all over again if you got approved too early. I doubt you'll lose your $2500 for one denial. If you do get a denial, you'd have to find a lender that will eventually give you a loan. Basically, it'll delay the process of you getting the car -- not outright deny you a car right away. Only time that would happen is if not a single lender will give you a loan.

You're probably right on this. The gentlemen in the showroom were just so unsure with every question I had about the lending process and unable to give me concrete answers on what happened with the deposit (if I didn't see a number I liked in terms of APR, etc) since I've read horror stories on the subject.

And yes, I specifically agree with the holding approval. Tesla's approach to buying a vehicle is just different that what I've dealt with in the past, so the little bit of learning curve is foreign to me.

Thanks for the thought out response!

 

[Padresfreak01]

San Diego Metropolitan Credit Union 2.99% 84 months.

Thank is what I got.

 

[97Monty]

I was quoted 2.99% for 72-months from Everence with a 3-month rate hold. Still planning on going through Lightstream rate match in hopes of simplifying the process.

 

[Jedi2155]

San Diego Metropolitan Credit Union 2.99% 84 months.

Thank is what I got.

I went with them as well working with Grady. I did a 1.74% at 48 months. Was originally planning on doing a $15k down payment but decided to take a bigger loan, 0.25% discount, and take the $450 hit on gap insurance. This provides me more protection in case I do get in an accident (especially with all this FSD/EAP hardware....)

Monthly is going to hurt at $1200+ but I'm aiming to pay it off in a 2 year time frame anyways. I had a chance to go at it again, I probably would've went P-AWD since that damn test drive got me hooked but seeing that I've never spent more than $17k on a single vehicle prior to this Model 3, paying $80k (after taxes) is still kinda crazy to me. On the flip side........$15k more than my current configuration...lol....

 

[hercesq71]

I have a pretty low score. Depending on where you look 580-680. I have never made a late car payment. In the past three years, I had an Audi, a Mercedes AMG, and a BMW M2. All purchased new and all financed (I go through cars quickly). Never a late payment and always paid more. I have an old bankruptcy on there and a ton of inquiries, which bring my score down. But mortgage, car loans, etc. never an issue. I just sold my MS P85D and ordered a new MS Performance. Tesla denied me for the loan. Question is who can I go though to get financing for the Tesla. The companies I had for the other cars (Santander, Ally Bank) said the dealer has to arrange it through them. But my understanding is Tesla does not deal with any other finance companies other than their own. So how do I finance this car? I can buy it cash and do something after, but I would prefer not to have to do that, in case financing does not work out. I really don't want to tie up $100k in a car.

Any suggestions?

 

[jjrandorin]

I have a pretty low score. Depending on where you look 580-680. I have never made a late car payment. In the past three years, I had an Audi, a Mercedes AMG, and a BMW M2. All purchased new and all financed (I go through cars quickly). Never a late payment and always paid more. I have an old bankruptcy on there and a ton of inquiries, which bring my score down. But mortgage, car loans, etc. never an issue. I just sold my MS P85D and ordered a new MS Performance. Tesla denied me for the loan. Question is who can I go though to get financing for the Tesla. The companies I had for the other cars (Santander, Ally Bank) said the dealer has to arrange it through them. But my understanding is Tesla does not deal with any other finance companies other than their own. So how do I finance this car? I can buy it cash and do something after, but I would prefer not to have to do that, in case financing does not work out. I really don't want to tie up $100k in a car.

Any suggestions?

Your credit score and your description of what you do with your payments dont match up. Before you or anyone else berates me for saying that, someone who pays everything on time wont have a 580 credit score.

With that being said, plenty of banks and credit unions will finance teslas. The thing is, if tesla denied you, they dont have their own finance, they farm it out to another company. Whoever else you try to go through is going to see the same thing teslas third party finance company saw on your credit (whatever that is).

My suggestion would be to consider upping your down payment. You put enough money down, tesla would likely finance you (and so would anyone else). If you put 50% down you would likely get financed, and per your post you have the money to buy the car outright.

Other than that, your only choice is to keep applying, and if you have a lot of inquiries on there already (which is another red flag for finance companies... they really dont like that for reasons that are not worth going into in this post), its going to lower your score more unless you just applied to tesla within the last 2-3 weeks. All inquires for a car loan in a 2-3 week period get lumped together in one "hit" even though they will all show separately.

 

[hercesq71]

I was going off of those free sites. I just paid for an actual credit bureau. 630, 667 and 687. I am happy to up the down payment to whatever they need. The issue is most of these places just tell you to apply online, where it gives an automatic decision. When you have a dealership talking to them and asking how much down do you need to write this loan, etc., it is usually no problem. But Tesla doesn't talk to any other finance companies to "massage" the deal in that fashion. That is what I am up against. As far as inquiries, yeah I am terrible, because I switch out cars every 8-12 mos and then have a slew of them. That is my #1 worst area on the report.

 

[hercesq71]

I was going off of those free sites. I just paid for an actual credit bureau. 630, 667 and 687. I am happy to up the down payment to whatever they need. The issue is most of these places just tell you to apply online, where it gives an automatic decision. When you have a dealership talking to them and asking how much down do you need to write this loan, etc., it is usually no problem. But Tesla doesn't talk to any other finance companies to "massage" the deal in that fashion. That is what I am up against. As far as inquiries, yeah I am terrible, because I switch out cars every 8-12 mos and then have a slew of them. That is my #1 worst area on the report.

PS thank you for the quick response and offer of assistance.