Money Question - Purchase Day Gut Punch

[Remonster]

Fortunately I'm not looking for a good place to get a loan, but I do have some questions about financing provided through Tesla. My Model 3 order is coming up faster than I expected and I'm trying to figure out how much money I'll need to extract from my hours of saved paid slave labor time (/s) in order to walk away this beauty. My build is $50,500. I've already provided them $3,500 for the promise ring. Base price $47000 atm.

I live in CA, in San Jose, and we looooove taxes. I'm at ~$5,650 in taxes and registration fees. Some say...Tesla charges $1000 to process the papers. I have nobody to solidly confirm or deny this accusation. I should be eligible for both the $7500 tax break from feds and $2500 from CA (taxes are weird, i pay you, you pay me, why make it all complicated?).

Trying to confirm:
1. If I finance through the Tesla mandated financing company I cannot include my taxes and fees into the loan. Taxes and fees must be paid for at the time of purchase. 100% percent only, no 125% shenanigans.
2. Tesla's financing company does not always maintain a down payment of 10% if your credit is good. Possibly even no down payment on Tesla loan.
3. Tesla's selected financing company does not have some weird mechanism of absorbing tax incentives into monthly payment. Both tax breaks would not be received until the next year of tax filing/returns.
4. The $1000 paper processing fee is due on the day of purchase. Or, it's non-existent.

Don't worry, I'm also planning to talk to my bank tomorrow to get some non-internet advice. But I figured some of you might have some purchasing experience specific to Tesla.

 

[Zaxxon]

There is no $1k paper processing fee. There's a $1k delivery fee, similar to every other manufacturer. $925 destination, $75 documentation.

 

[Remonster]

Good to know. I also learned that you apply for the CA tax break and receive it check form. It's not refunded on tax returns. The the CA Rebate Experience thread made that pretty obvious.

 

[Raechris]

I would ask them to include the taxes in the loan as I have heard other MS buyers do. They did not automatically do it but on request it was not an issue - at least last year. Not sure how they handle M3 if different

 

[e-FTW]

I would ask them to include the taxes in the loan as I have heard other MS buyers do. They did not automatically do it but on request it was not an issue - at least last year. Not sure how they handle M3 if different

Wonder if I won't just pay the taxes up front on a credit card for the travel miles.

 

[RayK]

I was told by my ISA that only cashiers check or ACH was available for Fremont delivery. The implication being that personal checks and credit cards were a no-no.

My vehicle license fee was $332 and the registration/transfer/titling fee was $356. That fee will be higher than yours, by $100, unless you are also transferring an existing license plate to your new car. At least that's what I assumed when the pro-forma figure did not match the paperwork that was waiting for me at the delivery center.

 

[TexasEV]

. Some say...Tesla charges $1000 to process the papers. I have nobody to solidly confirm or deny this accusation.

No such thing. Who is spreading this misinformation?

 

[Trevor B]

Wonder if I won't just pay the taxes up front on a credit card for the travel miles.

No need to wonder ... just RTFM, you can't

 

[outdoors]

. Some say...Tesla charges $1000 to process the papers. I have nobody to solidly confirm or deny this accusation.
Trying to confirm:

4. The $1000 paper processing fee is due on the day of purchase. Or, it's non-existent.

Don't worry, I'm also planning to talk to my bank tomorrow to get some non-internet advice. But I figured some of you might have some purchasing experience specific to Tesla.

So I assume a couple things. Tesla has moved your estimated delivery window up. You haven't spoken to an inside service rep. You may or may not have a VIN.

Whomever some is. That person either mistaken or is using the wrong item to identify what is commonly known in car purchasing world as a destination and or delivery fee. In this case it shows as a line item $1,000 on the window sticker or Monroney sticker(Destination and Regulatory Doc Fee). Not a processing fee, but basically an equalized/average delivery fee to whomever purchases the car. For example the person in Rhode Island will pay the same as the person in San Diego.

I know it is not your intention, but items like these that you have listed make their way into peoples minds and headlines unfortunately. Just wanted to clear up any thought that Tesla charges $1,000 as a paper work fee. If you look around you will find out that every auto manufacturer charges these fees for delivery or to get car to its final destination. It is not Tesla specific. Here is a piece from Autoweek that kind of explains it.

Autoweek Explains: Destination charges


Enjoy your new car when you get it.

 

[tashtibet]

everybody knows about this since March of 2016-why aren't people ready?????

 

[Koflach]

Fortunately I'm not looking for a good place to get a loan, but I do have some questions about financing provided through Tesla. My Model 3 order is coming up faster than I expected and I'm trying to figure out how much money I'll need to extract from my hours of saved paid slave labor time (/s) in order to walk away this beauty. My build is $50,500. I've already provided them $3,500 for the promise ring. Base price $47000 atm.

I live in CA, in San Jose, and we looooove taxes. I'm at ~$5,650 in taxes and registration fees. Some say...Tesla charges $1000 to process the papers. I have nobody to solidly confirm or deny this accusation. I should be eligible for both the $7500 tax break from feds and $2500 from CA (taxes are weird, i pay you, you pay me, why make it all complicated?).

Trying to confirm:
1. If I finance through the Tesla mandated financing company I cannot include my taxes and fees into the loan. Taxes and fees must be paid for at the time of purchase. 100% percent only, no 125% shenanigans.
2. Tesla's financing company does not always maintain a down payment of 10% if your credit is good. Possibly even no down payment on Tesla loan.
3. Tesla's selected financing company does not have some weird mechanism of absorbing tax incentives into monthly payment. Both tax breaks would not be received until the next year of tax filing/returns.
4. The $1000 paper processing fee is due on the day of purchase. Or, it's non-existent.

Don't worry, I'm also planning to talk to my bank tomorrow to get some non-internet advice. But I figured some of you might have some purchasing experience specific to Tesla.

LOL, I have to pay 15% tax on my vehicle when it arrives. This works out to $10,110...

 

[Remonster]

No such thing. Who is spreading this misinformation?

I tried search for the Tesla forum post where the guy posted it, but I think it got buried. Their forum has poor/none search functionality. I also had a bookmarked Tesla forum post return in a 404 error so it may have been deleted.

So I assume a couple things. Tesla has moved your estimated delivery window up. You haven't spoken to an inside service rep. You may or may not have a VIN.
View attachment 316846

Correct. Delivery window was moved up a month.

everybody knows about this since March of 2016-why aren't people ready?????

I did not pre-order in March of 2016. I per-ordered in January 2018. I'm sure all the answers to my questions are buried out there in a forum post, and I know a lot of "Total Price of Model 3" articles/links can be found everywhere, but tax a loan specifics are not. I think it's fair to ask if people have received no down or more than 100% from the Tesla provided financing company.

 

[JD01]

I think the OP is missing one key point:

It's just a standard auto loan.

Contact your advisor and tell them how much you plan to put down. They'll shop you around and try to get you a loan for the remaining amount. If they can't, they'll let you know the maximum amount you can borrow from the lenders they work with. You can either take the loan they found or secure your own financing.

How much you can borrow comes down to your credit. Most reputable banks won't give you a loan for more than the value of the car, which is why so many people think there's some rule about "paying taxes and fees" at delivery. That's not the case... You're simply paying whatever is left over after your loan.

The only real difference between financing a Tesla and lother cars is the silly games dealers play to make the total cost of the vehicle confusing. If you take away the dealership doubletalk and circular logic, it's the same process. With Tesla, there's no dealer markup to fudge the numbers with. No factory to dealer incentives to play with. No dealer holdback. The price is the price, so you don't have a dealer who can make it look as if you made a down payment when you didn't. That's not good if you're trying to get a car with "no money down" but the banks seem to like it which leads to some Tesla owners being pleasantly surprised with phenomenal interest rates.

Beyond that, it just "feels" different because of the timing. Dealerships like to make it seem as if they're getting your "down payment" and then paying off your balance with a loan later. The reality is that they're negotiating the price with you, getting you a loan and then having you pay off the balance. Tesla does the same thing except they don't do it all in a few hours. You figure out what you can afford when you order, they help you secure a loan a few weeks before delivery and you pay off the balance when you pick up the car.

The Tesla way of doing things is designed for clarity. Dealerships, on the other hand, are trying to get you to buy as much car as they think you can afford with no regard for how much you want to spend. If you think you can afford a $300 car note, you'll drive home in a more expensive car paying $329/ month for 7 years at a "slightly" higher interest rate.

 

[PoitNarf]

Why are you limiting yourself to the lenders that Tesla uses? Check out the offers from some local credit unions, there is a good chance you’ll get a better deal through them.

 

[No2DinosaurFuel]

CA taxes are ridiculous, but that is what you have to pay to live here. About the you pay them and they pay you deal, think of like your old rebates. They are hoping not enough people go through it and they don't have to dish out the cash. Also there is a clauses in the CA rebate requiring you to keep you car for at least 24 months or something like that. Otherwise, they can technically go after you for the $2500. Though I have yet to hear a case like that. As for the $7500, you can't really get around that. The point is to make sure you pay taxes before they refund you.

 

[paladinfello]

CA taxes are ridiculous, but that is what you have to pay to live here. About the you pay them and they pay you deal, think of like your old rebates. They are hoping not enough people go through it and they don't have to dish out the cash. Also there is a clauses in the CA rebate requiring you to keep you car for at least 24 months or something like that. Otherwise, they can technically go after you for the $2500. Though I have yet to hear a case like that. As for the $7500, you can't really get around that. The point is to make sure you pay taxes before they refund you.

CVRP requirement is 30 months. You need to live and own the car in CA for 30 months.

 

[RayK]

As for the $7500, you can't really get around that. The point is to make sure you pay taxes before they refund you.

I don't think that the federal tax credit works like that. You don't get a refund. You get to apply up to $7500 as a credit to your 1040 when you file your federal tax return. If you only owe the feds $5000 because of your income and/or deductions, then you only get to claim the $5K and you won't get the other $2500 in cash. I'm not a CPA or EA so consult your own tax advisor.

 

[TaoJones]

CA taxes are ridiculous, but that is what you have to pay to live here. [snip] Also there is a clauses in the CA rebate requiring you to keep you car for at least 24 months or something like that. Otherwise, they can technically go after you for the $2500. Though I have yet to hear a case like that.

Well, now you have. I had to send them a check for ~$250 before they'd send me a check for another $2500.

And evidently that's it insofar as CA rebates are concerned for me - last I checked, one is limited to 2 rebates per lifetime. Not to mention now there are income caps and probably other contrived annoyances.

So the 3rd car will get purchased through an out of state entity, which is what I should have done for the 2nd one. No rebate for me, but no heinous CA sales tax bill nor equally heinous CA registration fees either. Nor CA use tax, which is a trap the State will happily attempt to leverage for those unaware.

 

[Remonster]

I think the OP is missing one key point:

It's just a standard auto loan.

Contact your advisor and tell them how much you plan to put down. They'll shop you around and try to get you a loan for the remaining amount. If they can't, they'll let you know the maximum amount you can borrow from the lenders they work with. You can either take the loan they found or secure your own financing.

How much you can borrow comes down to your credit. Most reputable banks won't give you a loan for more than the value of the car, which is why so many people think there's some rule about "paying taxes and fees" at delivery. That's not the case... You're simply paying whatever is left over after your loan.

I definitely will be contacting my advisor to talk specifically about what I will owe on delivery. My hope is that my strong credit score will secure a no down payment or more than 100%, either will work. If neither of these can be accomplished I will pull a loan from Logix, a local credit union or my bank. Logix does 125% with no down, but that's not exactly what I'm trying to accomplish.

Why are you limiting yourself to the lenders that Tesla uses? Check out the offers from some local credit unions, there is a good chance you’ll get a better deal through them.

I won't. Upon receiving the financing results from Tesla I will either look for my own credit union or approach my bank. I've heard that Tesla has some fairly competitive rates.

I don't think that the federal tax credit works like that. You don't get a refund. You get to apply up to $7500 as a credit to your 1040 when you file your federal tax return. If you only owe the feds $5000 because of your income and/or deductions, then you only get to claim the $5K and you won't get the other $2500 in cash. I'm not a CPA or EA so consult your own tax advisor.

This is how I've understood it as well. Luckily, I pay quite a bit more than $7500 in yearly Federal taxes so I'm not worried about getting the full rebate.

 

[Big Dog]

TechCU is one of the lenders that Tesla refers to. You can contact them yourself.

Tesla Auto Financing - Tech CU