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How to get the best rate with Tesla financing?

Discussion in 'Model S: Ordering, Production, Delivery' started by NickM, Mar 1, 2014.

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  1. NickM

    NickM Member

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    Hi all!

    After a year+ of planning and researching, I finally pulled the trigger on my Model S order yesterday :biggrin:. I've decided I want to go with financing through Tesla so I can get the buyback guarantee (I don't expect to need it, but I'd really like to have the option just in case). Does anyone have any advice on how to get the best possible interest rate on the loan? This purchase is a non-trivial amount of money for me, so I'm willing to go through a good deal of work and hassle for even a small decrease in loan payments.

    I think my best idea so far is to apply for Tesla financing, then apply through Alliant (or USAlliance?) to get a lower rate offer, and then go back to the Tesla financing and try to get them to improve their offer based on Alliant offering a better rate. Does this sound like a good plan, and/or does anyone have any better suggestions?

    If it affects anyone's advice, I'd prefer to finance as much of the car as possible for as long as possible (aiming for 10% down and 72 months). I'm normally more of a saver than a spender, so I could actually pay for the car 100% out of pocket if I wanted/needed, but given how low interest rates are these days I'd prefer to take out a loan and keep my money invested in stocks and bonds. That said, since my ultimate goal is to save as much money as possible, I could be flexible on the down payment and term if it meant getting a much better rate :smile:

    Thanks so much! And apologies if this question has been answered before: I searched around the forum and found lots of general info about different financing options, but couldn't find if anyone had asked this specific question before.

    Nick
     
  2. Alysashley79

    Alysashley79 Member

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    The terms of the tesla buy back has changed a few times but I think right now and someone correct me if I'm wrong but you must finance a minimum of 60% of the car for the full 36 months through one of the two tesla finance sources. Us bank or Wells Fargo. I believe their rates are both around 3.99% as of last week but ask tesla or call them both when you apply. I can tell you first hand. Alliant is going to offer the best rate. Around 1.49% with minimum 5% down. However. Neither one of Teslas financiers want or need to play the game. They won't. If you want the buy back guaranty unfortunately you're going to also have to pay the higher rate for 3 years as well.
     
  3. GardenStateTSLA

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    Congrats on your order, I'm in the waiting mode too, thankfully this forum exists for great info! Anyways, I'm a geeky finance guy so I've put a fair amount of thought into this. About a month ago the two offers were: US Bank 3.50% for 72 mos and Wells Fargo 2.24% at 60 mos both with 10% down (you have to put the 10% down and then reclaim the $7500 tax credit when you file your taxes for 2014). The finance folks at Tesla are incredible, responding to emails immediately and at all hours. And to get the buyback gty you need to finance thru Tesla AND you need to have the car serviced every 12.5k miles which is $500-600 per clip depending on your service plan. The other thing people were doing is taking out the loan and paying it back in short order to get the gty so Tesla put an end to that practice. Bottom line is the gty is probably a great thing to have in your back pocket for a number of reasons (all of which are admittedly low probability): your battery pack deteriorates quickly, Tesla the company gets into trouble (hope not, I'm a shareholder), lots of competing products are introduced, the media continues to focus on some of the fires, etc, etc. But it is not free, that's for sure. I can share with you some numbers I put together (spreadsheet is in the office) but I decided to go with the lower rate & shorter duration from Wells even though the monthly payments are higher. At the end of 39 mo's the gty value should be substantially higher than the buyback amount so you have to balance those cashflows with your personal situation but thats the route I decided to go given the savings from the lower interest rate.
     
  4. apvbguy

    apvbguy Banned

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    just for he-ha's who do you think would back that guarantee if Tesla goes "down the tubes"?

    for the OP, you can make a larger than 10% down payment, or you can forsake the value guarantee and find other places to finance for a lower rate.
    FWIW: I am putting down 25% and am getting a 2.49% 60 month loan via wells fargo
     
  5. GardenStateTSLA

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    Yes agreed if it's bankrupt it's nonexistent but if it's just simply deteriorated prior to bankruptcy you still should be able to exercise the gty. And of course [sic] Elon has personally gty'ed the buyback ... what was the last report of his net worth? $12 billion (although lots of that is TSLA)
     
  6. jonbcampos

    jonbcampos Member

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    Nick, Congrats on your order. I too just went through this process. Based on contacts provided by Tesla there are too options. Alliant which will likely offer 1.5% (1.49% if you set up auto pay) and the other which will offer 4%(or maybe it was 4.5%, something roughly 3 points higher). The issue is that alliant isn't involved with the buyback program, the other is. Beyond that they are the same 70 month terms.

    I ended up going with alliant because I don't plan on getting rid of the car in 3 years. And fwtw I have a credit score in the upper 800s, I don't know how much that mattered in this as they made it sound pretty standard. I didn't shop around too much more because the terms seemed good to me. After that they were easy to work with. Hope that helps.

    Oh, and of course this shouldn't be considered financial advise and you should seek the help of a tax professional, blah blah blah.

    - - - Updated - - -

    1 more thing. It was nice that both of these companies were willing to fund 95% of the car. So I really didn't put anything down and just kept my savings for personal padding.
     
  7. Atebit

    Atebit Member

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    My experience is that Tesla Finance will not bargain. I decided to go with them for now, but still weighting the cost/benefits of taking this route WRT the buy-back. The banks have nothing to do with the buy back, so clearly this is Tesla attempting to funnel business to their finance partners. But it's Tesla's program so it either pay to play or the highway. :)

    Also, bear in mind to take advantage of the buy back you need to pay the loan off first. I don't think Tesla will apply any of the buy back proceeds to the remaining loan principal. Tesla seems to make you want to think this program is similar to a lease, but the facts that you're paying on the full value of the car for 36 months AND that you have to pay it off at the end make it a much different type of program.
     
  8. NickM

    NickM Member

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    Many thanks for the info everyone! Sad to hear that they likely won't bargain, but I guess I'm not terribly surprised. I also didn't realize you had to get the yearly service to qualify for the buyback, so thanks to GardenStateTSLA for pointing that out. Now I'm starting to have second thoughts...maybe I should just go with Alliant and forget about the buyback. I'd definitely like to keep the car for the long haul, so it's not like I'm planning on getting rid of it that soon anyway :cool:
     
  9. Cattledog

    Cattledog Active Member

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    Nick - I think the odds are very high the value of your car after 3 years will exceed the Tesla target of 50% of base S60 and 43% of options. If you believe that, you will have more options available for financing.
     
  10. sranger

    sranger Member

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    I went with Alliant at 1.49%. Wells Fargo was 2.24%...

    My reasons:

    1) If tesla goes under, the buy back is worthless...

    2) If Tesla does not go under the cars is most likely going to be worth MORE than the buy back...
     
  11. SeattleSid

    SeattleSid Member

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    Alliant has, within the past few days, raised its rate to 1.79% (or thereabouts). Still a great deal. I got locked in to the 1.49% a couple of days before the change.
     
  12. tomp

    tomp Member

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    As other have indicated, I think the Tesla offers are not up for much, if any, negotiation. I got the Wells Fargo 60 mo, 2.24%, and they indicated that it was getting harder to obtain that loan.
     
  13. amans232

    amans232 Member

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    the rates are now around 3.5 for the 72 month and 2.69 for 60 month...i guess the good ole days of 1.49 are gone
     
  14. EarlyAdopter

    EarlyAdopter Active Member

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    Only if simultaneously SpaceX and Solar City also go bankrupt and Elon is pennyless. I put the probability of that occurring over the next 3 years at 0.

    True, but Tesla can't force you to sell it back (it's not a lease) and if you look at the public statements and the buy back fine print it says "at least as much as 50% + 43%." If the going market price is higher I expect Tesla will pay higher, too. Otherwise they will see few cars back and have no used inventory for resale as CPO.
     
  15. devangpatel

    devangpatel Member

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    hello friends, i am getting my tesla p85 on 23rd may . they called me to pay it off before delievery which is either through their partner bank or outside credit union. i read this forum and called alliant credit union but they are saying in order to get financing through them you have to have member of qualifying companies and they have long list of that. what if you are self emloyed which i am then they dont give loan to you. i tried almost all the credit union in california(visterra,arrowhead,metropolitan) but all saying the max they finance is 85k to 90 k my total cost of financing is 112000(including tax,registration and lic and i want 110% financing) . does anyone know any bank or credit union who can help? my credit score is 790 which i got it from tesla financing. i dont want to put any money down.
     
  16. jcobb

    jcobb Member

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    Yes Alliant requires membership but if you speak to a loan officer you can make a $10 donation to the charity Foster Care to Success. This can be bundled into your Tesla loan so not really an additional step. Contact Alliant or fill out their web form and they can guide you through the process. I am having a great experience with Alliant no complaints.
     
  17. NuclearPowered

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    Sign up under association Tesla and there is no fee
     
  18. tslas

    tslas Member

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    Devangbhai, Scott Paulson at Alliant Credit Union saathe vaat karo. 110% nathi aapta, 95% aape chhe. 1.74% 72 month..
     
  19. Bobbyducati

    Bobbyducati Member

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    For those of you who are using Alliant, what are they insurance requirements? I just stumbled across this thread and their rate is lower than what i was gong to use at my credit union. very interested in going this route.

    Thanks
     
  20. tslas

    tslas Member

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    For me, There was no special car insurance requirements. I just purchased GAP insurance for $390..
     

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