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Guaranteed buy back vs 1.49 APR

Discussion in 'Model S: Ordering, Production, Delivery' started by Soarteeth, Sep 28, 2013.

  1. Soarteeth

    Soarteeth Member

    Sep 22, 2013
    The OC
    What do you do??

    If your in a state that is serviced by Wells Fargo or US Bank do you opt for the guaranteed minimum 50% buy back after 3 years and a 3.3% APR or go for 1.49% outside financing and save over $5,000 for the life of the loan and bet that your Tesla won't depreciate more than 50% in three years.

    I can't imagine giving up on the Tesla and selling it after three years for any reason other than the company tanking and I doubt that there's much chance of that.
  2. Odenator

    Odenator P2607

    May 2, 2011
    Olympia, WA
    A sales associate told me (whatever that is worth) that the buy back guarantee requires a 6 month enrollment and that afterwards you could refinance with your preferred bank and maintain the guarantee. I would ask ownership to confirm.
  3. purplewalt

    purplewalt Active Member

    Jun 9, 2013
    Dallas, Texas
    Nothing in life has ZERO risk.
    If you simply remember Sept. 2008 "derivatives", mortgage and real estate bubbles, Fannie Mae, Lehman Bros., AIG, GM, Chrysler and collapse both domestically and internationally.
    There is a "Y" in the road, yet you DO have an opportunity to choose your path and understand that there may be consequences.

    Your Tesla may depreciate more than 50% in three years, the "bet" is it will not depreciate more than a comparable vehicle (S Class MB, 7 series BMW, etc.)
    The reality is Luxury vehicles lose value rapidly.
    Model S is a Luxury vehicle.
    That is how the entire market is structured, Elon just added his own wrinkle to salve some (anxious) potential owner's nerves (or their accountants or their wives).

    I took the 1.49% interest for almost 100% of the loan.
    Wells Fargo would not quote me a rate in Texas.
    My primary bank could not come close to the 1.49% interest, nor the amount.
    They had their chance, weren't interested in further developing/retaining my business, so I took it somewhere else.
    (If I needed to, I could have paid cash, but why move money around that is already earning MORE than 1.49%?)

    Such is Life.
  4. laalan

    laalan Member

    Sep 16, 2012
    Orange, CA
    I went with the low rate. Intention is to keep it 8 years.
  5. jerry33

    jerry33 S85 - VIN:P05130 - 3/2/13

    Mar 8, 2012
    Low rate for me as well.
  6. JohnQ

    JohnQ Active Member

    Jan 1, 2012
    Redding, CT
    I had planned to pay mostly cash, saw the 1.49% rate and decided to mostly finance. No brainer at that rate.

    The guarantee allows two things to happen. 1) If you're the type to trade in your car regularly, then you have a floor on the price. 2) If the Model S turns out to be incredibly unreliable (or a "better" version comes out that's extremely compelling) then you have the opportunity to unload it at a specific price. If i were concerned about #2 then I wouldn't buy the care in the first place--at least the unreliable part. What is the likelihood that you'll want to get a new car in 3 years? If very high, then the guarantee may be worth the extra $5k. Remember, you don't have to trade it in, you can still sell it on the open market, so the guarantee costs you exactly $5k.

    As someone else noted, you can finance for 6 months then pay off the loan via cash or a refinance. Will cost you much less then $5k for the guarantee though I don't know what kind of rate you'd get on the refi.
  7. TSLA Pilot

    TSLA Pilot Member

    Mar 12, 2013
    United States
    Went with my credit union's 1.49% APR car loan, but for 5 long years; much better APR than that offered by Tesla's "partners" in the buy back deal.

    Still ends up being about $3k in finance charges though. Ouch!
  8. andrewket

    andrewket 2014 S P85DL, 2016 X P90DL (soon 100)

    Dec 20, 2012
    Financed 100% at 1.49%. Even if you don't personally participate in the buy back program, the program will have an affect on the used Model S market in 3 years. In theory this will establish the floor for all used Model S's, not just those owned by people in the program.
  9. guellis

    guellis Member

    Aug 26, 2013
    Seattle, WA
    I went with the higher rate and buy back, although I intend to only carry the financing for the required six months and then pay it off (or refinance).
  10. Mario Kadastik

    Mario Kadastik Active Member

    Sep 5, 2013
    Rae, Harjumaa, Estonia
    heh, again lucky bastards. Here the best rate I got was 6 month euribor + 3.2% i.e. 3.8% right now. And I'll have to buy the car outright from Tesla, bring it to Estonia and then refinance it getting majority of the money back.
  11. Atlantian

    Atlantian Member

    Sep 23, 2013
    Orange County, CA
    I decided to go with Alliant Credit Union at the 1.49% interest and lower down payment.

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