Is Sales Tax rolled in to Tesla Financing?

[Thebrits615]

Hey everyone,

I have seen conflicting information on this online. Current monthly payment in the Tesla app for my M3 order is $770 a month with $5000 down. This looks to include taxes and fees.

I have read online though that Tesla doesn’t finance sales tax like a typical car dealership would. Which would likely mean another few thousand on top of my down payment, which could be a stretch. For those of you who financed recently, did Tesla include taxes in your loan? Or were you required to pay that upfront with your downpayment?

Thanks!

 

[ZZ118]

My understanding is whatever it says in the app is due at time of delivery is what you will need to pay

 

[BigNick]

The payment calculator on Tesla's site does not include sales tax. So if you do not add the sales tax that will be charged on your purchase to the amount of the down payment, your payment will be higher than what is shown on the calculator. In some cases, rather significantly, depending on your sales tax rate.

There are better payment calculators available, here is one: Car Loan Calculator | Members 1st Federal Credit Union

 

[BlahBlah]

Hey everyone,

I have seen conflicting information on this online. Current monthly payment in the Tesla app for my M3 order is $770 a month with $5000 down. This looks to include taxes and fees.

I have read online though that Tesla doesn’t finance sales tax like a typical car dealership would. Which would likely mean another few thousand on top of my down payment, which could be a stretch. For those of you who financed recently, did Tesla include taxes in your loan? Or were you required to pay that upfront with your downpayment?

Thanks!

This is going to be dependent upon the state you are in.

I live in Texas. My financing covered ONLY the cost of the Tesla. Tesla then mails you a packet of documents for registration, which you take to the tax office. You pay taxes (6.25%) to the state at the time of registration.

For example, my M3P cost about an additional $3,800 on top of what the website tells you/shows you.

Of course, this number may vary. If you are trading in a vehicle, your state (like Texas) may allow you to offset the trade-in value against the purchase price; lowering your tax liability.

It is also possible to request a loan that exceeds 100% of the vehicle value to assist in covering those fees. Tesla lenders will provide 105% loans, but that is typically to assist in covering negative equity.

Even if you had a 105% loan, you would be on the hook for the additional 1.25% tax liability which, for my M3P, would be a little less than $800.

That said, it’s generally a terrible financial decision to finance 100%, and even worse to exceed it. Obvious caveats apply, such as having a 0% loan, or an interest rate low enough that you can easily beat the rate elsewhere in investments.

My point in this is to say that you need to research your specific state. Call Tesla—they’ll be able to tell you. Every time that I spoke to them they gave me a canned speech about the way things work in Texas so that I was “prepared” and not “caught off guard”.

 

[Thebrits615]

This is going to be dependent upon the state you are in.

I live in Texas. My financing covered ONLY the cost of the Tesla. Tesla then mails you a packet of documents for registration, which you take to the tax office. You pay taxes (6.25%) to the state at the time of registration.

For example, my M3P cost about an additional $3,800 on top of what the website tells you/shows you.

Of course, this number may vary. If you are trading in a vehicle, your state (like Texas) may allow you to offset the trade-in value against the purchase price; lowering your tax liability.

It is also possible to request a loan that exceeds 100% of the vehicle value to assist in covering those fees. Tesla lenders will provide 105% loans, but that is typically to assist in covering negative equity.

Even if you had a 105% loan, you would be on the hook for the additional 1.25% tax liability which, for my M3P, would be a little less than $800.

That said, it’s generally a terrible financial decision to finance 100%, and even worse to exceed it. Obvious caveats apply, such as having a 0% loan, or an interest rate low enough that you can easily beat the rate elsewhere in investments.

My point in this is to say that you need to research your specific state. Call Tesla—they’ll be able to tell you. Every time that I spoke to them they gave me a canned speech about the way things work in Texas so that I was “prepared” and not “caught off guard”.

Thank you! I am in Tennessee, and I think what you shared is right for here too. State tax here is 7%. As it stands, I do have a potential trade in, but I am being offered a decent amount more to sell to Carvana versus than Teslas trade in estimate.

So when you go through financing, you apply for the value or the car, put your down payment amount into the application and then once you’re approved, the loan company finance the car value minus the down payment? Then you pay Tesla the Dow payment directly. Then you have to go to DMV to pay the remaining taxes at point of registration prior to pickup day? I’m so used to having it all done at a dealership, so trying to get my ducks in a row. Thanks so much!

 

[The Other Dan]

Thank you! I am in Tennessee, and I think what you shared is right for here too. State tax here is 7%. As it stands, I do have a potential trade in, but I am being offered a decent amount more to sell to Carvana versus than Teslas trade in estimate.

So when you go through financing, you apply for the value or the car, put your down payment amount into the application and then once you’re approved, the loan company finance the car value minus the down payment? Then you pay Tesla the Dow payment directly. Then you have to go to DMV to pay the remaining taxes at point of registration prior to pickup day? I’m so used to having it all done at a dealership, so trying to get my ducks in a row. Thanks so much!

Texas is a special case because Texas can't directly sell cars to consumers. Not including taxes into the deal is part of the workaround.

Assuming you indicated to tesla that you are doing a loan, it will be rolled into the financing costs. When they assign the Vin, you'll get a purchase agreement with all cost rolled in.