How to finance with PenFed quickly without going insane

[rcc]

I've been having fun trying to get financing lined up with PenFed on less than a week's notice and thought I'd pass along some tips.

At some point in the future, the hassle factor should be significantly reduced. Penfed has noticed the uptick in numbers of people applying for the "exotic" (e.g. not in their 3rd-party information database) Model S. They like that. Tesla has noticed the same. I believe the two parties are talking to each other to make life easier for all. Hopefully those conversations will make this post obsolete at some point. Until that day:

Things to keep in mind with PenFed:

1) Always FAX your documents if you're in a hurry. Do NOT email. They get so much email it takes them days to process your email and get your docs into their system. Faxed documents get into PenFed's system really quickly (probably within minutes, certainly within an hour).

2) According to PenFed's phone reps, you need to get them an MVPA with the "amount due to buyer" equal to the amount you want to finance. That's what they will send you a check for. PenFed will NOT send any checks or approval letters without having an MVPA that says precisely how much you want to finance and where the rest of the money is supposed to come from. According to folks I spoke to on the phone, this is standard procedure for them, regardless of the size of the loan.

3) If you're in a hurry, they can fax a letter of approval directly to Tesla. Or if you have enough funds in your PenFed account, they can draw money from your PenFed account to cover the cost of sending you the docs/check via overnight delivery ($15, I think).

4) Tesla will honor a letter of approval (or at least, they did with me). They don't have to do this. I believe Tesla is within its legal rights to hold onto the car until you hand them the final check. So please don't whine if that policy changes at some point in the future. Tesla is being nice to us right now.

So at the moment the process looks like this:

1) You can fill out the application online. You'll have to stop when you hit the point where you need to enter a VIN and you probably don't have one. And even if you do have one, the VIN likely won't be recognized.
2) Save the application.
3) Call PenFed directly. You'll need to:
a) make sure they know you want to finance a Model S and not a Roadster (because the Roadster is in their system).
b) find out if you're conditionally approved and if so, for how much. If you're conditionally approved, it will show up on their web pages (under the "Apply Now" tab).
4) Decide how much you want to finance. It's possible you could call PenFed and do 1-4 over the phone with a loan officer.

5) Get an MVPA from Tesla and the VIN. (The MVPA should have the VIN on it.) The MVPA must show that the "Amount Due from Buyer" is equal to the amount you finance. That means the "Total Downpayment" has to cover the rest of the cost in the MVPA. That's the initial deposit plus trade-in value if any. In my case, the extra money that I need to pay Tesla was put down as "Additional amount payable at delivery". If you're in a hurry and want PenFed to fax a letter of approval to Tesla, you'll also need a fax number and "attention to:" name from Tesla.
6) FAX (do NOT email) that information to PenFed. If you want an approval letter faxed, best to tell PenFed in your fax and supply the Tesla fax # and "attention to" name that PenFed should send the fax to.
7) A loan officer will have to look at your MVPA and approve the loan.
8) Call PenFed again and confirm that you're set and they're sending/faxing what you need.

9) Thank your Tesla delivery specialist many times during this process, especially at the end! My guy (John Scalmanini) was great!!! A big thank-you to John!

 

[jomo25]

Wow, rcc, thanks for this. It should help quite a bit, until such a time they do something formally (if they even do). I'm still looking at them as my eventual financier. BUt not ready to go yet. So, will have to see their rates once I do pull the trigger.

 

[calsailor]

It should also be mentioned that PenFed needs 4 business days to get you a check. So the approval letter is a very helpful option.

 

[Sidney]

If I'm not expecting the delivery until Feb 2013, should I go ahead and apply for the PenFed loan now? From what I heard from the other thread, they'll lock in the rate for 90 days? I just don't want their 1.5% rate to change when 2013 is here.

 

[highedu]

If I'm not expecting the delivery until Feb 2013, should I go ahead and apply for the PenFed loan now? From what I heard from the other thread, they'll lock in the rate for 90 days? I just don't want their 1.5% rate to change when 2013 is here.

i have the same question

 

[shokunin]

thanks for posting this. I wondered how quickly this process was and how quickly they would turnaround a check. I'm in the pre-approved waiting for VIN and corresponding paperwork stage. Then again, I don't even have a delivery window :frown:. I guess I should call to make sure if that means that I've locked in a rate or not for 2013.

 

[teslasguy]

My Penfed documentation said the check I got was good for 90 days, but pretty sure the rate is what is in effect at time check is cashed.


P1117 Sent from my iPhone using Tapatalk

 

[gg_got_a_tesla]

My Penfed documentation said the check I got was good for 90 days, but pretty sure the rate is what is in effect at time check is cashed.

Correct. PenFed told me the same. The current 1.49% is good only till the end of this month as of now. It may or may not be offered in 2013

Thanks, rcc, for the detailed info. I wired in the balance of my downpayment to Tesla recently (although I'm not getting my car till Jan/Feb) just so that I can get the final MVPA from Tesla with the VIN and the exact financed amount as the balance due for a quick turnaround time with PenFed.

 

[rcc]

The PenFed people tell me that they reset their rates on the first of every month. That said, the 1.49% rate has been steady for a while now.

Personally, I doubt that PenFed will approve financing without both an MVPA and a VIN. Tesla is (understandably in my opinion having worked at companies in hypergrowth mode) scrambling to get its processes working smoothly as they ramp production.

That says to me that we should expect, for some period of time to come, to get a VIN very shortly before manufacturing is ready to release the car for delivery. People farther away from CA are actually in better shape here since the shipping time will give you more time to line up the financing.

Folks closer to CA should expect to have to rush the final paperwork through pretty quickly. So you need to line up local financing so you can get the check quickly or know how to work with a remote lender to keep things moving very quickly. Or get the kind of loan where they'll give you a check that can be made out to any dealer and is good for any amount up to $XX.

My advice: if you're working with a lender that doesn't have a local office, call ahead and make sure you understand what they need from you to move the paperwork along quickly. And have a backup plan ready with a local lender in case your remote lender flakes out on you. Worst-case scenario, you walk into your local lender with all your paperwork in hand and walk out with a check.

The good thing about PenFed is they also seem to offer great rates on refi auto loans. However, if you want to refi quickly, you're better off getting financing from financing from someone else rather than paying cash for the car.

If you finance, you can get a payoff quote from your first lender at any time.

If you pay cash, PenFed won't refi until you can show that the car is titled in your name, free and clear. That typically takes a while because your state DMV needs to process the title paperwork and issue the title in your name. In CA, I'm told this can take 30 days or more. Whereas if you finance with Bank of Whatever, you can get a payoff quote from them right after the loan goes into effect.

And you're welcome. I hope this info helps but I can't guarantee the accuracy since it's only what I've learned talking/working with a few PenFed people. Your mileage may vary but hopefully not by much .

 

[EarlyAdopter]

Does anyone know if Penfed will mail the check directly to Tesla, or wire the loan proceeds to them? That would cut several days out of the whole process - no waiting for several days for PenFed to cut you a check, it to make it to you via USPS or FedEx (over Christmas), then you mailing it to Tesla.

Given the big crunch for December deliveries to get payment in to Tesla before they will ship the car and before the end of the year, cutting out steps here will be crucial.

 

[DrComputer]

I sold my Lexus to my business partner when I got my Model S and she used PenFed to finance it. For those of you thinking you can get the approval now and hold the check until you get your car in 90 days, just remember that the loan and interest start to accrue 3 days after they send you the check... NOT when you cash it.

 

[EarlyAdopter]

Does anyone know if Penfed will mail the check directly to Tesla, or wire the loan proceeds to them? That would cut several days out of the whole process - no waiting for several days for PenFed to cut you a check, it to make it to you via USPS or FedEx (over Christmas), then you mailing it to Tesla.

Given the big crunch for December deliveries to get payment in to Tesla before they will ship the car and before the end of the year, cutting out steps here will be crucial.

Ok, I called Penfed and found out the answer to my question. The check is made out to both you and Tesla, which means you have to sign the check over to Tesla. So the sequence is:

0. If your total purchase price is over $70,000, you need to have mailed/wired the amount over as a down payment to Tesla before getting the final MVPA.
1. You fax the final MVPA with VIN showing up to $70,000 "due from buyer" to Penfed.
2. Penfed sends the check to you. Overnight is available for $15, be sure to call after you fax in the MVPA to let them know.
3. You sign the check, then send it to Tesla.

Talking to my Tesla rep, they will take a FedEx tracking number showing the check on the way to them (step 3) as enough proof to release the car for shipping.

Again, this is just for the final December ship push if you want to ensure you've paid for and the car was released to you in 2012. Normally you'd just sign the check over upon receipt of the car in most states.

 

[Nikoli]

It's been almost a week since I (re)applied at PenFed. I sent my MVPA showing the full amount due less the $5,000 deposit, which is significantly more than $70,000. Just checked my account online and it's been approved! Phone rep said the check is going out today. It will probably be quicker to have the MVPA reflect the exact financed amount, but seems to get through either way.

 

[BCLi]

Ok, I called Penfed and found out the answer to my question. The check is made out to both you and Tesla, which means you have to sign the check over to Tesla. So the sequence is:

0. If your total purchase price is over $70,000, you need to have mailed/wired the amount over as a down payment to Tesla before getting the final MVPA.
1. You fax the final MVPA with VIN showing up to $70,000 "due from buyer" to Penfed.
2. Penfed sends the check to you. Overnight is available for $15, be sure to call after you fax in the MVPA to let them know.
3. You sign the check, then send it to Tesla.

Talking to my Tesla rep, they will take a FedEx tracking number showing the check on the way to them (step 3) as enough proof to release the car for shipping.

Again, this is just for the final December ship push if you want to ensure you've paid for and the car was released to you in 2012. Normally you'd just sign the check over upon receipt of the car in most states.

Thanks; I've had to turn this around in about 4 days because of being in California they let me know that the car was already at the service center! I have asked for a letter of loan approval to be faxed to the product specialist dealing with my case, since I did not call in time before they mailed out the check USPS. Hopefully they will release my car as noted by rcc with the letter of approval from PenFed (who were great during the rush). I am going to see if I can just deliver the check to Tesla at the service center once I receive it. Here's to hoping...

 

[meduri]

Does PenFed got any credit limit for loan approval? Like minimum credit score 750 or 700 something like that?

 

[Sidney]

Correct. PenFed told me the same. The current 1.49% is good only till the end of this month as of now. It may or may not be offered in 2013

Thanks, rcc, for the detailed info. I wired in the balance of my downpayment to Tesla recently (although I'm not getting my car till Jan/Feb) just so that I can get the final MVPA from Tesla with the VIN and the exact financed amount as the balance due for a quick turnaround time with PenFed.

Hi gg_wants_a_tesla,
Am I hearing correctly that Tesla already gave you a VIN even though yours is a 60kWh and not in production yet?

 

[gg_got_a_tesla]

Hi gg_wants_a_tesla,
Am I hearing correctly that Tesla already gave you a VIN even though yours is a 60kWh and not in production yet?

No no (although I wish that were true ).

Apologies for the bad sentence construction but, I sent in the extra payment so that, when the time comes and the VIN's actually available (sometime in January), I can get the final MVPA quickly and exactly as PenFed would want it.

 

[Sidney]

No no (although I wish that were true ).

Apologies for the bad sentence construction but, I sent in the extra payment so that, when the time comes and the VIN's actually available (sometime in January), I can get the final MVPA quickly and exactly as PenFed would want it.

Thanks for the clarification. I probably will do the same then.

 

[BCLi]

Does PenFed got any credit limit for loan approval? Like minimum credit score 750 or 700 something like that?

They didn't say that when I spoke with them. They were incredibly accomodating.

 

[BCLi]

Thanks; I've had to turn this around in about 4 days because of being in California they let me know that the car was already at the service center! I have asked for a letter of loan approval to be faxed to the product specialist dealing with my case, since I did not call in time before they mailed out the check USPS. Hopefully they will release my car as noted by rcc with the letter of approval from PenFed (who were great during the rush). I am going to see if I can just deliver the check to Tesla at the service center once I receive it. Here's to hoping...

Well, delivery went without a hitch. No problem with check delivery. Thank you Tesla and PenFed!