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Model S Top Residual Guarantee

Discussion in 'Model S: Ordering, Production, Delivery' started by TommyBoy, Jul 8, 2013.

  1. TommyBoy

    TommyBoy Member

    Jul 8, 2013
    Orange County, CA
    I just read about this on the Tesla Financing page. So if you use their financing (~2.95% over 6 years) versus Alliant (~1.49% over 6 years) the founder will personally guarantee the top residual value of any of the big luxury sedan manufacturers.

    This seems dangerous. BMW is absolutely BLOWING OUT their 2013 750Li machine right now. I was within a day of purchasing one and the residual on a car with an MSRP of $106K was 58% after 36 months! That is an astounding number and hence you could lease the big BMW for $900 a month for 36 months due to the extremely high residual.

    We talked numbers with Audi for the A8L and they were at around 47% residual for 36 months. They dealer told me that couldn't touch the BMW leasing deals and that they were a posion pill - BMW would be dead in the water in three years trying to get $60K for a three year old car with 40,000 miles on the clock.

    So if the Tesla guarantee is there that would mean they would be offering something like $60K for a $100K car after the 3 years. This would make purchasing an absolute no-brainer.

    Hopefully I'm not understanding this incorrectly.
  2. Lump

    Lump Active Member

    Mar 31, 2013
    So. Cal.
    I was going to purchase but played it safe & went with the Tesla financing as an insurance policy, if my car turns out to be a lemon or major issue show up with the Model S then they buy it back, if rates shoot higher I continue with the loan, if rates stay low & I am happy with the car I purchase it at that time (I got 60 months at 2.25%)

    Looking at the total cost of owner ship after three years should be considered, no gas, no time waisted buying gas, less brake service & other maintanence etc... Add Teslas guarantee & gas savings & you might be over 60k after 36 months.

    Leaving performance, tech, safety, appearance, CO2, Elon etc.. out of the equation.
  3. Colasec

    Colasec Member

    Jun 15, 2013
    Read the actual guarantee. It's 50% of the base 60 kWh value plus 43% of any options, including the upgrade to the 85 kWh battery pack. That blurb about "the top residual value of any high volume premium sedan brand (Audi, BMW, Mercedes or Lexus)" is derived from a study that showed that those brands retain 43% after three years. Other than that, it's not relevant to the actual guarantee.
  4. mfennell

    mfennell Member

    Jan 28, 2013
    Central NJ
    BMW has been doing it for years. They must have some way to hedge against the risk.

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