Model 3 Financing

[voip-ninja]

Well, they only offered me secured- despite a CR above 800 and solid 6-figure assets as well as income.

When I emailed them to ask why and what I could do to change it to unsecured they never replied (and still haven't a week later)- unlike the credit union that always replied to anything I asked them within a couple of hours.

(and since secured or not is not REALLY a big deal at all to me I just went with the 2.29% credit union rate)

But this is getting pretty far afield from your original claim that in 6 months people would WISH they could get as good as 3.59% for a car loan- which is a claim the actual facts do not seem to support.

Low 2s are still doable (and the federal credit union folks are still in the mid-1s)- rates aren't going to nearly double in the next 6 months, which they would need to for your claim to stand up.

Personal loans for things like automobiles are, rule of thumb, about double the federal prime rate. Banks need enough margin to turn a profit when factoring in the people who don't cover their loans.

If the fed does a 1/2 point rate hike then auto loan rates can be expected to go up about 1%. In my area rates are already at 3.59%-4% from local credit unions AND from national banks like Citigroup, Chase, etc. on a 5 year 60 month loan.

Rates are going up and continue to go up. Maybe they won't go up as much as I anticipate but I'm pretty sure they will continue to climb.

There were plenty of people who insisted in summer of 2017 that low rates were going to stick around for the foreseeable future and we've already seen the impact of higher fed rate trickle into auto loans.

 

[CrazyCoconut]

Personal loans for things like automobiles are, rule of thumb, about double the federal prime rate. Banks need enough margin to turn a profit when factoring in the people who don't cover their loans.

If the fed does a 1/2 point rate hike then auto loan rates can be expected to go up about 1%. In my area rates are already at 3.59%-4% from local credit unions AND from national banks like Citigroup, Chase, etc. on a 5 year 60 month loan.

Rates are going up and continue to go up. Maybe they won't go up as much as I anticipate but I'm pretty sure they will continue to climb.

There were plenty of people who insisted in summer of 2017 that low rates were going to stick around for the foreseeable future and we've already seen the impact of higher fed rate trickle into auto loans.

I think we can all agree that the rate trajectory is upwards, just some minor disagreements on the rate of increase

 

[Knightshade]

Personal loans for things like automobiles are, rule of thumb, about double the federal prime rate. Banks need enough margin to turn a profit when factoring in the people who don't cover their loans.

Prime is currently 5%, so again your claim is not supported by the facts, as car loans aren't 10% right now.

United States Prime Rate

Possibly you are confusing that rate with the FUNDS rate, which is the overnight rate that banks use to lend to one another, and which is currently 1.75% - 2.00%... which also doesn't support your claim as many folks are still getting approved for loans well below "double" that

If the fed does a 1/2 point rate hike then auto loan rates can be expected to go up about 1%

Again- no. In fact you have this exactly backward

How a Federal Reserve Rate Hike Could Impact Your Auto Loan -- and One Factor That Matters More

As they note- during previous funds rate hikes actual auto loans increased by roughly half the amount the Fed bumped the rate.

So a 1/2 point rate hike would mean a 1/4 rate hike in auto loans.

. In my area rates are already at 3.59%-4% from local credit unions AND from national banks like Citigroup, Chase, etc. on a 5 year 60 month loan.

Thankfully, people even in "your area" can get loans from CUs in other areas pretty easily.

Which remain in the 1.5-2.5% range.

Rates are going up and continue to go up. Maybe they won't go up as much as I anticipate

They won't- as evidenced by all the actual data I've provided in the links in this post for example.

but I'm pretty sure they will continue to climb..

Nobody is disagreeing with that.

But the rates you suggest they'll rise to in 6 months are significantly higher than is at all likely.

based on all previous data it's likely in 6 months we'll see maybe another 0.5% hike in the funds rate, and thus another .25% hike in auto loan rates... meaning lazy people who take Teslas crappy offers will be in the high 3s, and people who take 5 minutes to check elsewhere will be in the 2-3% range depending how thoroughly they look.

Nobody except maybe the "default to whatever tesla gives me without even checking elsewhere" folks will be fondly wishing they could get 3.59% though.

 

[voip-ninja]

Prime is currently 5%, so again your claim is not supported by the facts, as car loans aren't 10% right now.

United States Prime Rate

Possibly you are confusing that rate with the FUNDS rate, which is the overnight rate that banks use to lend to one another, and which is currently 1.75% - 2.00%... which also doesn't support your claim as many folks are still getting approved for loans well below "double" that




Again- no. In fact you have this exactly backward

How a Federal Reserve Rate Hike Could Impact Your Auto Loan -- and One Factor That Matters More

As they note- during previous funds rate hikes actual auto loans increased by roughly half the amount the Fed bumped the rate.

So a 1/2 point rate hike would mean a 1/4 rate hike in auto loans.






Thankfully, people even in "your area" can get loans from CUs in other areas pretty easily.

Which remain in the 1.5-2.5% range.



They won't- as evidenced by all the actual data I've provided in the links in this post for example.



Nobody is disagreeing with that.

But the rates you suggest they'll rise to in 6 months are significantly higher than is at all likely.

based on all previous data it's likely in 6 months we'll see maybe another 0.5% hike in the funds rate, and thus another .25% hike in auto loan rates... meaning lazy people who take Teslas crappy offers will be in the high 3s, and people who take 5 minutes to check elsewhere will be in the 2-3% range depending how thoroughly they look.

Nobody except maybe the "default to whatever tesla gives me without even checking elsewhere" folks will be fondly wishing they could get 3.59% though.

Most general consumers won't be able to join any CU that has a great rate. Typically you need to live & work in a specific community, be part of a specific work force or belong to certain member organizations. This thread is jam packed with great loan rates that are not available to 99% of people who simply don't meet the qualifications to join that CU.

So, I don't agree that anyone who shops for a few minutes can get a better rate than what is on offer from Tesla.

And yes, I was confusing the fund rate with the prime rate.

 

[Knightshade]

Most general consumers won't be able to join any CU that has a great rate. Typically you need to live & work in a specific community, be part of a specific work force or belong to certain member organizations. This thread is jam packed with great loan rates that are not available to 99% of people who simply don't meet the qualifications to join that CU.

Once again- no.

You can join the menonite one anywhere just by saying you agree with their tenants.

You can join the one I did for my 2.29% loan for a $10 membership fee- no work force or community requirements.

So, I don't agree that anyone who shops for a few minutes can get a better rate than what is on offer from Tesla.

Then you appear to, again, be factually incorrect.

This very thread lists several options that literally anyone who shops for a few minutes can use to get a better rate than what is on offer from Tesla. (and a few even better than THOSE if you ALSO happen to have more narrow qualifications)


You're welcome to keep arguing your point of course- but so far nothing you've posted has stood up to any amount of comparison to available facts or numbers- usually your claims have been directly contradicted by them in fact.

 

[voip-ninja]

Once again- no.

You can join the menonite one anywhere just by saying you agree with their tenants.

You can join the one I did for my 2.29% loan for a $10 membership fee- no work force or community requirements.

Actually that's not right. You are not paying a $10 membership when you join Allegacy, you are making a donation to a partner organization of theirs, and the fees vary, some of them are $10 donations, some of them are $20 donations.

It's an important distinction because there are specific differences between credit unions and banks.

Credit Union: By law, credit union membership is restricted to certain groups of affiliated people based on, for example, where they live, work, worship or attend school. Those who belong to a particular group, association or organization may also qualify. You can qualify if another member of your family or household belongs to the credit union, and some credit unions will qualify anyone who makes a small donation to a particular charity. And under the Federal Credit Union Act, once you become a member of a credit union, you are a member for life even if you leave your affiliated group.

Yes, you are currently able to join Everence or Allegacy with what I would call borderline loop holes. Some people simply won't join one of these credit unions because you are joining for life. Some people might be squeamish about joining a Mennonite credit union or one that has specific outreach programs as I imagine this information will become public record and maybe they don't want that association.

You are entitled to your opinion that anyone looking for a good loan rate is going to find one of these oddball credit unions that will more or less let anyone join but I don't agree. Under Federal Law Credit Unions can't just take anyone who wants to join them, there just happen to be a couple of outliers right now that will let just about anyone in and the overwhelming majority of the good rates advertised in this monster thread are at, you guessed it, credit unions that won't take just anyone who wants to join.

People like us that will scour for a good deal on financing are not the norm. That's my opinion which I'm also entitled to.

I will admit I was mistaken on relationship between federal funds rate and auto loan rates, it was the rate for mortgage/HELOC that I was thinking of, this article from Motley Fool is a pretty good primer for someone like me that doesn't dive into this stuff very often;

The Federal Funds Rate: What It Means to You

 

[Knightshade]

Actually that's not right. You are not paying a $10 membership when you join Allegacy, you are making a donation to a partner organization of theirs, and the fees vary, some of them are $10 donations, some of them are $20 donations.

By paying a $10 fee you are able to become a member. That's a fact.

You're splitting some awfully thin hairs now.

You certainly COULD donate more, but given you're not required to why would you?

Yes, you are currently able to join Everence or Allegacy with what I would call borderline loop holes.

Who would call them that? It's a nonsensical and incorrect name for them.

Loophole- "an ambiguity or inadequacy in the law or a set of rules"

They're not only explicitly allowing joining this way- the actual signup process the CU itself offers you specifically prompts you to join that way.

that's kind of the opposite of a loophole. So once again facts seem to be directly contrary to your claims.

Some people simply won't join one of these credit unions because you are joining for life. Some people might be squeamish about joining a Mennonite credit union or one that has specific outreach programs as I imagine this information will become public record and maybe they don't want that association.

Yes. My life may someday be ruined because I donated $10 to a community theater. That TOTALLY makes sense.

No...wait...the opposite of sense.

there just happen to be a couple of outliers right now that will let just about anyone in

There aren't just a few.

There's LOTS of them.

https://www.magnifymoney.com/blog/best-of/credit-unions-anyone-can-join/

That's a list of over 60 basically anyone can join EITHER by fitting a category or with a cheap donation to somebody. That's with 2 minutes of googling, so you know there's plenty more out there. For example that list doesn't even include the 2 ones most often mentioned here.

Once again facts don't support your claims.

People like us that will scour for a good deal on financing are not the norm. That's my opinion which I'm also entitled to.

Sure.

Though given the multiple threads on here where lots of folks are doing the same as we are looking for good rates- and the flood of loan requests Allegacy mentioned they've gotten lately from Tesla owners- I don't think that opinion is supported by current facts either- but you're entitled to hold it.


But back to your original claim that spawned this- that in 6 months people will be pining for 3.59% that folks are currently turning their noses up at- again this doesn't really hold up to any of the facts.

The folks who don't look at/compare rates at all, and don't go into threads like this, would have no idea they "missed out" so they're not going to pine for anything even if the Tesla offer jumps to 3.84% in 6 months (assuming the trend of auto rates going up by half the funds rate).

For everyone else, they won't be pining for 3.59 in 6 months either- because they'll still be able to get loans considerably cheaper than that... as low as 1.75% with that one federal union if they quality- or as low as 2.54-2.75 from some of the 'anyone can join" credit unions mentioned here.


And that's assuming the economy stays on its current growth path and the fed keeps doing .25 bumps regularly... if the looming trade war blows up or any of a slew of other factors otherwise slow the economy the fed might well pause those bumps making your claim even less likely to stand up to a 6-month look-back.

The fed themselves suggest exactly that type of concern in their most recent meeting minutes-
Fed minutes show outlook gets ‘dicier’ after all-but-certain September rate hike

"officials said they might have to pause from their gradual rate path if there is an escalation in international trade disputes. Fed officials were unanimous in their view that a trade war represented a major downside risk to the economy."

 

[voip-ninja]

You're right, nobody is going to accept those "crappy" rates from Tesla, when they can just get online and join a credit union to get a better rate.

Except the overwhelming majority of consumers don't do that, they take the rate they get from the dealer or manufacturer... and they do it in massive enough numbers that the average loan rate is over 5% now on a new car purchase.

U.S. Car Loan Rates Rise to Highest in Eight Years

Terms of Service Violation

Look at the chart.

8/1/2014 average auto loan rate 4.1%, then look at 2/1/2015... 5%, six months later, .9% increase.

These increases happen all the time and, per the Bloomberg article, there is correlation if not direct connection with rising federal rates;

Maybe they'll be 1% higher in six months, maybe not. I do think by the end of the year they will be around 1% higher, IF there are additional rate hikes by the fed.

“Car shoppers tend to have tunnel vision when it comes to their monthly payments,” said Jessica Caldwell, Edmunds executive director of industry analysis. “We’re starting to see a trickle-down effect from the rate increases happening at the federal level.”

You want to be right, so yeah, you're right.... Tesla's rate is crappy and only fools will take it. We'll see what rates are like in six months and if 3.59% today still looks like a crappy rate... then you can do all the gloating you want.

You think money will still be cheap then, I think we can kiss these 1.5, 1.9, 2.5% loans goodbye.

 

[voip-ninja]

All CUs listing rates at or below 2.99% were contacted by me earlier this week and insisted that their absolute best rate on a 60 month new car loan is minimum 3.49%.

I stand by my comment, lots of people will take the Tesla finance rate after looking around and won't work to save the $$.... AND rates will continue to go up.

 

[SoCalGuy]

Maybe we could move this back and forth side discussion to another thread?

 

[voip-ninja]

Maybe we could move this back and forth side discussion to another thread?

This is a natural byproduct of people waiting too long for their fancy new $50K+ automobiles.

 

[Knightshade]

All CUs listing rates at or below 2.99% were contacted by me earlier this week and insisted that their absolute best rate on a 60 month new car loan is minimum 3.49%.

That's odd given so many others, myself included, continue to get rates below 3.49 from those very credit unions, up to and including this very week.

Possibly your income or credit simply isn't good enough to qualify for the best rates? Because otherwise they'd be guilty of false advertising, wouldn't they?

I did notice the list you posted didn't include the several lower-than-2.99% CUs specifically mentioned in this thread that anyone can join though. Why?

I stand by my comment, lots of people will take the Tesla finance rate after looking around and won't work to save the $$....

If they actually look around it's easy to find lower rates. No work real work involved. 2.29 from Allegacy took about 5-10 total extra minutes to get compared to 3.59 from Tesla (via Chase).

So why would they take higher rates?

I agree those who don't bother looking at all will take whatever Tesla offers- but then they wouldn't "pine" for a 3.59% rate as you claimed because they didn't bother to see what else was out there to know if their rate is good or not.

AND rates will continue to go up.

They certainly might. But not nearly as much as you suggest they will (possibly because you both misunderstood what rate loans are actually based on, and then further misunderstood how much a fed rate increase causes a loan rate increase)

And they might not go much further up at all if the trade war becomes a thing- as I just quoted you the notes from the actual fed meeting where they set the rates also tells us.

 

[Pandamoanium]

1. I miss the Alliant CU and Tesla promos from 2016. Nothing foreseeable at this time for 2018.

2. VOIP-Ninja, are you in CO?

3. I agree the expected rates already put forth will happen. It’ll squeeze debt more. I’m already extremely bearish on that bubble.

4. VOIP-Ninja, if you’re right then everyone here should start loading up on puts and shorts.

5. To try and stay on track, anyone find a good alternative to Tesla, LS or special CUs for those of us not in CA? I’m thinking under 2.24%.

 

[Knightshade]

1. I miss the Alliant CU and Tesla promos from 2016. Nothing foreseeable at this time for 2018.

2. VOIP-Ninja, are you in CO?

3. I agree the expected rates already put forth will happen. It’ll squeeze debt more. I’m already extremely bearish on that bubble.

4. VOIP-Ninja, if you’re right then everyone here should start loading up on puts and shorts.

5. To try and stay on track, anyone find a good alternative to Tesla, LS or special CUs for those of us not in CA? I’m thinking under 2.24%.

What's your objection to special credit unions if anyone can easily join em? (Though the lowest rate I know of is 2.29% that way). Only thing I've seen lower than that is a much more restrictive CU (the federal employee one that's 1.49)

 

[Pandamoanium]

What's your objection to special credit unions if anyone can easily join em? (Though the lowest rate I know of is 2.29% that way). Only thing I've seen lower than that is a much more restrictive CU (the federal employee one that's 1.49)

I should have specified. Credit Unions that require you reside or work at a specific location.

LA financial offered some on this forum 1.99% and I remember seeing someone get 1.89% with the LS match. They required LA area or AZ I think. So I wouldn’t count for that one.

The other good one I came across was The DC federal one and I don’t qualify for them either based on location and civilian status.

 

[Knightshade]

I should have specified. Credit Unions that require you reside or work at a specific location.

LA financial offered some on this forum 1.99% and I remember seeing someone get 1.89% with the LS match. They required LA area or AZ I think. So I wouldn’t count for that one.

The other good one I came across was The DC federal one and I don’t qualify for them either based on location and civilian status.

Ah, then Allegacy at 2.29 is the best I'm aware of with no requirement to live or work a specific place- I mean, you CAN qualify based on either of those.... but you can also just donate $10 to your choice of a bunch of local (to them) organizations like art museums or local theaters and become a CU member.

The loan person was actually shocked that I was (relatively) local to them as apparently they've had a flood of out-of-state Tesla loan applications lately....wonder why

That $10 donation is funded from your new account and is part of the application process to join in fact (so you need to deposit at least $15- 10 for the donation and 5 for the minimum to fund an account).

 

[127.0.0.0]

Ah, then Allegacy at 2.29 is the best I'm aware of with no requirement to live or work a specific place- I mean, you CAN qualify based on either of those.... but you can also just donate $10 to your choice of a bunch of local (to them) organizations like art museums or local theaters and become a CU member.

The loan person was actually shocked that I was (relatively) local to them as apparently they've had a flood of out-of-state Tesla loan applications lately....wonder why

That $10 donation is funded from your new account and is part of the application process to join in fact (so you need to deposit at least $15- 10 for the donation and 5 for the minimum to fund an account).

So I am going to bookmark Allegacy since you guys are saying they giving 2.29 % Quick question so I understand this right Now you are saying we have to donate about $10 to become a member Correct ?

IF, yes how do we do that Go on there website and do thru a link or exactly how to ?

2nd After we become a member do we get a member ID or something and we call them to apply the loan ? Also I am in CA so that should be fine right ?

Now that 2.29 % is for 72 months ? or 60 ? and do we have to give certain Percentage as down payment ?

 

[Knightshade]

So I am going to bookmark Allegacy since you guys are saying they giving 2.29 % Quick question so I understand this right Now you are saying we have to donate about $10 to become a member Correct ?

IF, yes how do we do that Go on there website and do thru a link or exactly how to ?

2nd After we become a member do we get a member ID or something and we call them to apply the loan ? Also I am in CA so that should be fine right ?

Now that 2.29 % is for 72 months ? or 60 ? and do we have to give certain Percentage as down payment ?

The $10 donation is part of the joining online process- you pick which thing you want to donate to- and then when you fund the account (also during the process) you simply add that $10 to your funding and it goes from you->account->donation target automatically.

Join Allegacy | Allegacy Federal Credit Union

Just join there. Where you live doesn't appear to matter (though I think they did ask if I was a US citizen)

You get your account number on screen once you've been approved for membership (this was instantly for me after submitting the application) and then get an email with your member number.

You can apply for the loan without the member number if the email is slow or something, you'll just need to provide it to them eventually.

New Car Loans | Allegacy Federal Credit Union

Hit apply now to apply for it.


The best rate (2.29%) is for loans up to 66 months- the website does say they'll do 100% finance but I had "10% down" on my app since I was expecting $ from a trade in going toward the purchase.

The 2.29% rate also requires auto-draft of payments, but you do not have to autodraft it from an Allegacy account, you can give them the account # for an account with any bank and they'll draft it from there.

 

[127.0.0.0]

The $10 donation is part of the joining online process- you pick which thing you want to donate to- and then when you fund the account (also during the process) you simply add that $10 to your funding and it goes from you->account->donation target automatically.

Join Allegacy | Allegacy Federal Credit Union

Just join there. Where you live doesn't appear to matter (though I think they did ask if I was a US citizen)

You get your account number on screen once you've been approved for membership (this was instantly for me after submitting the application) and then get an email with your member number.

You can apply for the loan without the member number if the email is slow or something, you'll just need to provide it to them eventually.

New Car Loans | Allegacy Federal Credit Union

Hit apply now to apply for it.


The best rate (2.29%) is for loans up to 66 months- the website does say they'll do 100% finance but I had "10% down" on my app since I was expecting $ from a trade in going toward the purchase.

The 2.29% rate also requires auto-draft of payments, but you do not have to autodraft it from an Allegacy account, you can give them the account # for an account with any bank and they'll draft it from there.

Amazing Thank you so much for your step by step guide This is really helpful I am going to apply it soon, I did place my order about 20 days ago with a reservation from March of this year and I did order the P3D so hopefully I get my car by Oct So How soon you think we should get credit approval ? and If I get this right we can do the join Allegacy federal credit union first ? and then wait a month say when my vin number comes for the Credit/loan application or do everything at the same time ?

 

[Knightshade]

Amazing Thank you so much for your step by step guide This is really helpful I am going to apply it soon, I did place my order about 20 days ago with a reservation from March of this year and I did order the P3D so hopefully I get my car by Oct So How soon you think we should get credit approval ? and If I get this right we can do the join Allegacy federal credit union first ? and then wait a month say when my vin number comes for the Credit/loan application or do everything at the same time ?

Yup, you can join now if you want and then apply for loan later.

It was about 48 hours from the time I applied for loan till approval... all they really asked for was a couple of pay stubs (though they mention if you have income from other sources they'd need something showing those- might be relevant if you have rental income or you get bonuses not reflected on a normal paystub, etc)