Let's talk financing rates

[TankoftheNorth]

That's such a personal decision, I don't think anyone can make the choice for you without being in your personal situation. There's pros and cons for both.

I get that. I think I'm looking for a more purely mathematically based look. Neither decision affect my overall financial situation from a pain standpoint. But I think taking that extra 300 every month and applying it to an investment will outgrow taking the saved money from the .99% loan and investing. I'm just not sure I'm not making false assumptions there.

 

[rlb4]

0.99 at 36 months or 2.39 at 60 months. Assuming that neither put a strain financially....which is better? Saving 3K over the loan life, or having the extra 300 to invest every month over the loan life.

If you are actually going to invest the extra $ then get the 60 mo loan. It is fairly conservative to beat a 2.39% return over 5 yrs.

 

[rlb4]

If you are actually going to invest the extra $ then get the 60 mo loan. It is fairly conservative to beat a 2.39% return over 5 yrs.

Actually only need to beat 1.39% over the 1st 3 yrs. then 2.39% over the next 2 yrs.

 

[cc11]

Thank you for the information. You are smart saving down the screenshot of the application. I only have an email confirming application submitted (didn't provide to lightstream). I do have emails with the loan officer requesting proof of income etc and an email confirming everything is set (provided to lightstream). Rate was mentioned in the preapproval letter. I will post what they say on Monday, pass or fail. Thanks.

DP: got off the phone with Lightstream. They would not beat it. Saying they have tight up control and for some compliance reason, they can’t use preapproval anymore. You might want to think twice if it is worth the effort and one extra credit pull. Or this could also just be a Rep variance. I wonder if it will be tight to flip around final documents last minute to them. Might just stay with CU.

 

[rlb4]

DP: got off the phone with Lightstream. They would not beat it. Saying they have tight up control and for some compliance reason, they can’t use preapproval anymore. You might want to think twice if it is worth the effort and one extra credit pull. Or this could also just be a Rep variance. I wonder if it will be tight to flip around final documents last minute to them. Might just stay with CU.

As you said, you may have to wait until the last minute when they send you the final documents. LS is catching on to us.

 

[osubuckeyes88]

DP: got off the phone with Lightstream. They would not beat it. Saying they have tight up control and for some compliance reason, they can’t use preapproval anymore. You might want to think twice if it is worth the effort and one extra credit pull. Or this could also just be a Rep variance. I wonder if it will be tight to flip around final documents last minute to them. Might just stay with CU.

I got preapproved last week and was able to use that document to get the rate beat. It had the loan rate and details.

 

[sbtz]

For those of you using/planning to use Lightstream for an unsecured loan - how does it work? Do they just transfer the funds into my bank account and then I tell Tesla I'm paying cash for the car (while providing them with ACH info to pull the funds)?

 

[Glamisduner]

How long does it typically take for these loan companies to get back to you?

I have applied to Actors, Allegancy, Aspire and lightstream over the last 5 days, and only Lightstream has responded to me with a 3.69 % for a 60 month unsecured. My Delivery date is less than 2 weeks away and I'm not sure what to do. I called Aspire and it just goes to voicemail...

I guess just keep applying to more places?

I know I can get a response from navey federal but it's still pretty high at 3.29%... Hell my other credit Uniion (USE) told me 2.79% but that still seems like a poor rate? But I guess because the non local places are not responding I should just go for it?

My delivery is on Sunday the 23rd, and if tesla will only give me a vin the Friday before it's going to be very difficult to get an approval that quickly let alone have lightstream beat anything.

 

[voip-ninja]

For those of you using/planning to use Lightstream for an unsecured loan - how does it work? Do they just transfer the funds into my bank account and then I tell Tesla I'm paying cash for the car (while providing them with ACH info to pull the funds)?

That is exactly how it works.

 

[Insureit1]

GAP insurance is like 300-400 bucks. Total. Once. (at least those are the quotes several CUs gave me when I was shopping Model 3 loans recently)

Not sure why you'd pay insurance $500 a year for any sort of similar coverage.


Now- pretty much any insurance is a bad idea cost/benefit wise. Otherwise the insurance company would be losing money. They have entire sections dedicated to figuring out the odds of this stuff and pricing their products so they cost more on average than they will pay out- it's kind of their entire business model.

The question is if their profit margins cost is "worth" the peace of mind the insurance delivers.

Even if a 10k loss like in example one is something you could cover in cash out of pocket, it might be "worth" $350 of for-sure lost GAP cost to not take the risk of a 10k cash loss.

Get GAP insurance form your auto insurance provider. It is much less expensive and you can easily cancel it a couple years down the road if needed or you want to. Several carriers also provide new vehicle replacement for a total loss. On my 2016 Model the coverage with Erie Insurance was $150 a year for GAP insurance and the new car replacement (it is together in one endorsement). As my log in name implies I am insurance agent and I see clients all the time purchase GAP from the dealer without ever checking with their insurance company before hand. With the length of car loans getting longer and longer GAP insurance is an absolute must especially for the first 1 to 3 years of a loan.

BTW was approved today for 1.49% for 72 months with Fed Choice FCU (mentioned elsewhere in this post). You need to be in the Washington DC area but you DO NOT need to work for the Fed Govt or a Federal contractor directly. My son works for a defense contractor and he was my "sponsor" for membership to the CU even though he is not a member. The loan approval is for 60 days. I pick up my new Model X next week and can also get the same 1.49% on my Model 3 order if delivery is within 60 days of October 6th. Pretty good deal if you can make the timing work. The 1.49% is for new members only.

 

[hotony13]

For those of you using/planning to use Lightstream for an unsecured loan - how does it work? Do they just transfer the funds into my bank account and then I tell Tesla I'm paying cash for the car (while providing them with ACH info to pull the funds)?

@voip-ninja Is this the same for a secured loan? or does the lienholder send the loan amount to the dealer and we are in charge of giving an additional check/deposit to Tesla for the remaining amt?

 

[voip-ninja]

@voip-ninja Is this the same for a secured loan? or does the lienholder send the loan amount to the dealer and we are in charge of giving an additional check/deposit to Tesla for the remaining amt?

With a secured loan the bank will wire the funds to Tesla or send you a check made out to Tesla you bring to your appointment. You would need a cashiers check or personal check to make up the difference if any.

 

[Glamisduner]

Also, telsa used to show me an estimated total owed, but now it simply has a box asking for my loan information. I can't remember what the taxes and fees were is there somewhere else that has this information? I really hate buying a car this way I have spent hours applying for loans without enough information...

Is it 72,000 + 1200 destination and doc fee x sales tax? 7.75% for me?

 

[Knightshade]

Get GAP insurance form your auto insurance provider. It is much less expensive and you can easily cancel it a couple years down the road if needed or you want to.

My insurance is USAA. They don't offer GAP insurance unless you got the loan through them (and their loan rates suck)

I can't imagine it being "much less expensive" than the $375, total, my loan provider is offering to supply it for though anyway.


Also I'd find it odd if they offer it at all for an unsecured loan- which is what some folks were asking about- since there's no tie whatsoever between the loan and the insured car.

Several carriers also provide new vehicle replacement for a total loss. On my 2016 Model the coverage with Erie Insurance was $150 a year for GAP insurance and the new car replacement (it is together in one endorsement). As my log in name implies I am insurance agent and I see clients all the time purchase GAP from the dealer without ever checking with their insurance company before hand. With the length of car loans getting longer and longer GAP insurance is an absolute must especially for the first 1 to 3 years of a loan.

Yeah- that $150/yr would end up costing me significantly more over the life of the loan than just getting it from the loan provider (if USAA even offered it- which they don't)

Also Erie only replaces a totaled car with a brand new one for the first 2 years under that endorsement (after that they do a newer used one instead)

 

[sbtz]

Get GAP insurance form your auto insurance provider. It is much less expensive and you can easily cancel it a couple years down the road if needed or you want to. Several carriers also provide new vehicle replacement for a total loss. On my 2016 Model the coverage with Erie Insurance was $150 a year for GAP insurance and the new car replacement (it is together in one endorsement). As my log in name implies I am insurance agent and I see clients all the time purchase GAP from the dealer without ever checking with their insurance company before hand. With the length of car loans getting longer and longer GAP insurance is an absolute must especially for the first 1 to 3 years of a loan.

BTW was approved today for 1.49% for 72 months with Fed Choice FCU (mentioned elsewhere in this post). You need to be in the Washington DC area but you DO NOT need to work for the Fed Govt or a Federal contractor directly. My son works for a defense contractor and he was my "sponsor" for membership to the CU even though he is not a member. The loan approval is for 60 days. I pick up my new Model X next week and can also get the same 1.49% on my Model 3 order if delivery is within 60 days of October 6th. Pretty good deal if you can make the timing work. The 1.49% is for new members only.

What's the math in determining when one should get GAP insurance? I assume that it's not useful/necessary when putting down a down payment that would "outpace" depreciation?

 

[Insureit1]

My insurance is USAA. They don't offer GAP insurance unless you got the loan through them (and their loan rates suck)

I can't imagine it being "much less expensive" than the $375, total, my loan provider is offering to supply it for though anyway.


Also I'd find it odd if they offer it at all for an unsecured loan- which is what some folks were asking about- since there's no tie whatsoever between the loan and the insured car.





Yeah- that $150/yr would end up costing me significantly more over the life of the loan than just getting it from the loan provider (if USAA even offered it- which they don't)

Also Erie only replaces a totaled car with a brand new one for the first 2 years under that endorsement (after that they do a newer used one instead)

Not completely true. After the first 24 months the endorsement provides for "better" car replacement. I will know the exact cost for an X100D when I endorse my policy next week. Not sure how $150 a year would cost more especially with a total loss in the 1st 24 months when a I would receive reimbursement for a replacement car. Once the loan balance cross over to less than the market value you just delete the endorsement.

 

[Insureit1]

What's the math in determining when one should get GAP insurance? I assume that it's not useful/necessary when putting down a down payment that would "outpace" depreciation?

Correct.

 

[Knightshade]

Not completely true. After the first 24 months the endorsement provides for "better" car replacement.

So... yes...exactly true. Because that's literally what I said.

new car replacement is only good for 24 months. After that they provide a better used car.

I will know the exact cost for an X100D when I endorse my policy next week. Not sure how $150 a year would cost more

We were specifically talking GAP remember?

That's $375, once, total.

So $150/yr after 3 years (you mentioned GAP is really important in years 1-3) is $450.

$450 is more than $375 you see.

Not only that- each remaining year on the loan my coverage is free- yours is still another $150 (or less I suppose if you remove part of the coverage, but still more than $0 for the GAP coverage)

 

[Glamisduner]

IMO they woulden't sell GAP unless they made money off it, so essentially your betting against yourself

 

[Glamisduner]

Get GAP insurance form your auto insurance provider. It is much less expensive and you can easily cancel it a couple years down the road if needed or you want to. Several carriers also provide new vehicle replacement for a total loss. On my 2016 Model the coverage with Erie Insurance was $150 a year for GAP insurance and the new car replacement (it is together in one endorsement). As my log in name implies I am insurance agent and I see clients all the time purchase GAP from the dealer without ever checking with their insurance company before hand. With the length of car loans getting longer and longer GAP insurance is an absolute must especially for the first 1 to 3 years of a loan.

BTW was approved today for 1.49% for 72 months with Fed Choice FCU (mentioned elsewhere in this post). You need to be in the Washington DC area but you DO NOT need to work for the Fed Govt or a Federal contractor directly. My son works for a defense contractor and he was my "sponsor" for membership to the CU even though he is not a member. The loan approval is for 60 days. I pick up my new Model X next week and can also get the same 1.49% on my Model 3 order if delivery is within 60 days of October 6th. Pretty good deal if you can make the timing work. The 1.49% is for new members only.

If I am a Federal Contractor, can I apply for Fed Choice? I thought I had to work in the DC area? Maybe I should give them a call.