Financing Tesla vehicles in Canada

[anandoc]

I'm not making an argument! I'm just saying how I read the document.

Sorry, 'argument' as in your point of view/understanding, not a heated discussion

TOTAL BALANCE YOU MUST PAY (in big caps) its a bit misleading then.

I am not sure I agree. The document assumes a 72 month payback period and it states that clearly and all the interest charges etc are based on that assumption. I am sure it also states that you can pay back the entirety of the balance without any penalties etc. in a different section.

Either way, you can (and should) call the bank directly to verify the claims of an internet stranger

 

[canadianeh]

There was discussion a few pages back about someone calling Scotia and learning 80% of the interest is front-loaded. After I read the agreement, It seemed that was more likely true than not, but I will try and find out for sure.

 

[kevchan]

@canadianeh

Great job on the downpayment!

• The interest is front loaded key term amortization in the finance documentation.
  • The MAX cost of financing is identified, you will never pay the bank more than this amount. If you pay out earlier or make lump sum payments into the principal the cost of financing will be reduced. Essentially it's there to say if you don't do anything else over 72 months you will have paid/owe this.
  • If you pay out the car two weeks after purchase you will incur two weeks of interest. Since interest is front loaded, the actual interest cost will be a little be higher than the 2.15% Average. Probably closer to 2.5-3% around $140-200 total which is pretty bad a for a two week loan.
  • Principal and interest are two separate entities even though you pay one monthly bill. When the bank amortizes the total cost, you're giving the bank control over the payment schedule and of course they prioritize the interest portion first.
    • You will pay 80% of the interest when you're around 60% through the entire term.
    • Check out any amortization calculator to roughly see the payment schedule works
• Open Loans - the use of the term "Open" seems to be confusing people. These are not lines of credits, the interest does not behave like them. Banks are using this term to obfuscate the fact you're paying most of the loan up front. Being able to pay off the loan without penalty should be requirement for any car loan and should not be championed as an awesome feature.
  
• Enjoy the car, it's awesome.

 

[canadianeh]

@canadianeh

Great job on the downpayment!

• The interest is front loaded key term amortization in the finance documentation.
  • The MAX cost of financing is identified, you will never pay the bank more than this amount. If you pay out earlier or make lump sum payments into the principal the cost of financing will be reduced. Essentially it's there to say if you don't do anything else over 72 months you will have paid/owe this.
  • If you pay out the car two weeks after purchase you will incur two weeks of interest. Since interest is front loaded, the actual interest cost will be a little be higher than the 2.15% Average. Probably closer to 2.5-3% around $140-200 total which is pretty bad a for a two week loan.
  • Principal and interest are two separate entities even though you pay one monthly bill. When the bank amortizes the total cost, you're giving the bank control over the payment schedule and of course they prioritize the interest portion first.
    • You will pay 80% of the interest when you're around 60% through the entire term.
    • Check out any amortization calculator to roughly see the payment schedule works
• Open Loans - the use of the term "Open" seems to be confusing people. These are not lines of credits, the interest does not behave like them. Banks are using this term to obfuscate the fact you're paying most of the loan up front. Being able to pay off the loan without penalty should be requirement for any car loan and should not be championed as an awesome feature.
  
• Enjoy the car, it's awesome.

Thanks for the explanation. That makes a lot of sense and helps me understand the "front loading."

 

[BHouse]

Hi everyone, I just ordered my M3 and in the "payment method" under loan through Tesla it's stating that 3.5% is the best-available APR for well qualified applicants. Can I assume based on what I've read here that the APR will most likely be lower than that once I actually apply for financing? Thank you.

 

[gauravk17]

Hi everyone, I just ordered my M3 and in the "payment method" under loan through Tesla it's stating that 3.5% is the best-available APR for well qualified applicants. Can I assume based on what I've read here that the APR will most likely be lower than that once I actually apply for financing? Thank you.

yes, once you fill out the credit application, you will get the actual APR.

 

[atkar83]

Hi everyone, I just ordered my M3 and in the "payment method" under loan through Tesla it's stating that 3.5% is the best-available APR for well qualified applicants. Can I assume based on what I've read here that the APR will most likely be lower than that once I actually apply for financing? Thank you.

I just purchased an M3 last week, I saw the same thing, but was offered 2.15% by Royal Bank. And note, their loan calculator may be incorrect after purchase (mine had it showing a much, much higher premium than it ended up being)

 

[vancouvernew]

I got approved for a loan yesterday, 2.6% 96 months Scotiabank

 

[canadianeh]

I got approved for a loan yesterday, 2.6% 96 months Scotiabank

You will get 2.15 if you go to 72 months or less FWIW.

 

[steeze]

With a Tesla finance do you pay the sales tax up front, or is it built into the monthly payment? I read somewhere that it was paid up front, but not sure if this information was correct or not, any other finance or lease I have done it has always been built into the monthly payment.

 

[atkar83]

With a Tesla finance do you pay the sales tax up front, or is it built into the monthly payment? I read somewhere that it was paid up front, but not sure if this information was correct or not, any other finance or lease I have done it has always been built into the monthly payment.

It's built into the monthly payment from what I can tell. I mean I did have a down payment, but no where on the paperwork did it say the tax was outstanding. They even use your deposit and the incentives to be the down payment for the financing, you'd think it would go towards the tax otherwise.

 

[steeze]

It's built into the monthly payment from what I can tell. I mean I did have a down payment, but no where on the paperwork did it say the tax was outstanding. They even use your deposit and the incentives to be the down payment for the financing, you'd think it would go towards the tax otherwise.

Great, thank you!

 

[Widget69]

Can anyone post what a straight up biweekly or monthly payment is for a 96 month @ 2.6 is? I mean I can calculate but I’m curious as to what it ends up being.

 

[steeze]

For anyone interested.

After placing an order I did not have the Tesla Financing option, after talking to a SA they told me that as of today the only way to get Tesla Financing is if you are able to physically pick the vehicle up, in my case I was told the closest location is in Ontario ( I am in Nova Scotia ).

 

[TheRFMan]

For anyone interested.

After placing an order I did not have the Tesla Financing option, after talking to a SA they told me that as of today the only way to get Tesla Financing is if you are able to physically pick the vehicle up, in my case I was told the closest location is in Ontario ( I am in Nova Scotia ).

I find that surprising. The fact that they couldn't even get the closest delivery centre correctly (Quebec City and Montreal are both closer to you than Ontario) makes me doubt the competence of the SA.

How would the online ordering system have known that you were not picking up the car in person? Clearly something is up if the financing option wasn't available after ordering however, but there may be other reasons (and probably only temporary)

 

[steeze]

I find that surprising. The fact that they couldn't even get the closest delivery centre correctly (Quebec City and Montreal are both closer to you than Ontario) makes me doubt the competence of the SA.

How would the online ordering system have known that you were not picking up the car in person? Clearly something is up if the financing option wasn't available after ordering however, but there may be other reasons (and probably only temporary)

To be honest, I was thinking the same thing when he said Ontario was the closes, rather than Quebec, but it was also 10 minutes before he was meant to be off for the weekend so maybe was just a brain fart. With the COVID-19 situation you would think they would be pushing more contact-less rather than having people come to the dealers.

 

[Soey22]

That’s the going rate right now. 72 months and below is 2.15%. 84 & 96 months are at 2.6%.

Doesn’t look like there will be a rate change for September.

important to note that car loans are front loaded so a lump sum payment may not gave the impact you want it to have.

Based on my situation, I’m strongly thinking about leveraging both the revolving and fixed portion of my HELOC. Will lock in a fixed amount on a term portion (sub 2%) over 5 years, and handle the rest via the revolving portion so I can take better advantage of both temporary and permanent lump sum situations (e.g. have a bit of CAD sitting after clearing out some stock. Better it sits in my HELOC until I’m ready for it vs. my cash account)

Just a quick question. I took delivery in Aug 2019, financed with Scotia at 3.86% $0 down 96 months. Do auto loans allow for refinancing the rate?
Thanks

 

[gforce2002]

Just a quick question. I took delivery in Aug 2019, financed with Scotia at 3.86% $0 down 96 months. Do auto loans allow for refinancing the rate?
Thanks

It's been ages since I've done such a thing, but I believe it is possible. If there are any penalties, etc. will depend on your loan terms. When I did it many years ago, it effectively was like taking out another loan for the payout amount on the old loan, but with the new interest rate.

 

[TheRFMan]

Just a quick question. I took delivery in Aug 2019, financed with Scotia at 3.86% $0 down 96 months. Do auto loans allow for refinancing the rate?
Thanks

Tesla won't do anything for you, but you are allowed to pay out the loan at any time. If your bank can get you a loan for the remaining principal at a better rate, there is nothing stopping you from using that to pay out the loan Tesla arranged through Scotia. I don't think a financial institution would do an auto loan without a purchase agreement however; I think your most likely option is to use a HELOC if you have one and the rate is better. If you don't already have a HELOC (and have enough equity in a property to get one), make sure you take the fees to set it up into account. For a Model X at 0 down, it's probably worth it if you can save even 0.5% APR.

 

[Kappatown35]

October rates change ?