Help needed over confusion with Tesla Finance :-(

[twmorgan11]

Hello friendly forum folks,

New Tesla Model 3 Long Range ordered on Sunday -- super excited to take delivery! My question relates to finance, and specifically the way Tesla calculates interest. I've queried it with Tesla but I'm not happy with their reply, as they haven't clarified it for me at all. So, here's a breakdown of my finance agreement, as taken straight from My Account:

___

Price Details
Model 3
£38,240.00

Black and White Premium Interior

£1,000.00

Long Range All-Wheel Drive

£10,760.00

Delivery & Documentation Fee

£935.00

FirstRegistrationFee

£55.00

Plug In Grant

- £3,000.00

Car Price

£47,990.00

Additional Charges
Cash Down Payment

£25,495.00

Financing Details
Amount Financed

£22,395.00

Monthly Payment

£350.27

Term

72 months

APR

3.99 %

Total Interest

£2,824.44

Total Cost Of Credit

£53,814.44

Payments Received
Order Deposit

- £100.00

All dates and times in UTC
Amount Due
£25,495.00

_____

I just don’t understand the Total Cost Of Credit at all, as it seems to be calculated against the cost of the car excluding the grant, which doesn’t make sense, as this additional £3000 is paid for by HMRC, not Tesla or the customer. This could be a clerical error, or it could mean the interest is calculated against the higher number, which would be unreasonable (and potentially unlawful), would we agree?

Advice from people who can do maths appreciated, as it's entirely possible I'm just reading it wrong

 

[Dilly]

I put the figures you quoted into a simple online calculator
The results don’t look too far adrift.
Happy to be proved wrong

 

[twmorgan11]

Nice one. Yes that’s sensible and I think therefore it’s just a confusing line item on the breakdown.

 

[Dilly]

Nice one. Yes that’s sensible and I think therefore it’s just a confusing line item on the breakdown.

Yes it looks confusing on paper.
Try running it through one of the other calculators to confirm. The difference is probably rounding (in favour of Tesla !)

 

[Plagued]

It looks ok to me .. sort of.
It's just badly laid out.
The costs are £38240+£1000+£10760+935+55
So the car costs £50990
The payments are £3000 (government)+25495(down payment)+100(deposit)+22395(loan)
However as the loan has APR on it you are actually having to pay an extra £2824.44 on top, so
The costs really are £38240+£1000+£10760+935+55+2924.44
So the car actually costs £53814.44

The only thing that looks a bit odd is that those APR costs are nearer to 4.1% than 3.99%

 

[gangzoom]

The only thing that looks a bit odd is that those APR costs are nearer to 4.1% than 3.99%

5 year fixed additional mortgage borrowing is currently 1.5%ish. By far the cheapest way to finance any large purchases, providing you put money aside every month to clear the additional borrowing after 3-5 years.

 

[twmorgan11]

Agreed. But it shouldn’t be called Total credit cost

 

[Plagued]

Agreed. But it shouldn’t be called Total credit cost

yea the total cost of credit is 22395+2924.44

 

[Telboy]

It looks ok to me .. sort of.
It's just badly laid out.
The costs are £38240+£1000+£10760+935+55
So the car costs £50990
The payments are £3000 (government)+25495(down payment)+100(deposit)+22395(loan)
However as the loan has APR on it you are actually having to pay an extra £2824.44 on top, so
The costs really are £38240+£1000+£10760+935+55+2924.44
So the car actually costs £53814.44

The only thing that looks a bit odd is that those APR costs are nearer to 4.1% than 3.99%

Perhaps the APR by Tesla includes a 1 foot rollout,.... sorry, couldn't resist,..

 

[twmorgan11]

I've escalated it to Tesla Financial Services, because they need to be super careful about this stuff, regulated by FCA and all. It would hardly hold up in court, but their sales adviser was completely clueless on it, kept telling me he thought I was being 'unfair' by querying it!