OK to still shop for loan rates after approval of loan through Tesla?

[l10l]

Background: In making unrealistic EDDs and not meeting them, Tesla cost me the 2.5% APY rate that I locked in to fit their upcoming delivery window. To prevent their EDD from pushing out further, I felt the need to proceed with a higher rate less than a week before the end of their last EDD window. True to form, Tesla assigned me a VIN the next day (over this past weekend).

Yet I hear that there is a two-week window during which one can shop for a lower rate without it adversely affecting one's credit rating. If there's going to be an additional hard hit on my credit score, I ought to make the most of it, shouldn't I ?-)

Incidentally, this post has some good leads on lower rates: Tesla loan comparison spreadsheet - auto updates hourly

Has anyone been caught in a window like this before and/or able to comment on the practicality of starting refinancing even before taking delivery?

 

[jjrandorin]

The two week (ish) window is, all auto loan applications count as one hit on your credit during that time. its the same for shoping for a mortgage (home loan) as well.

Its not "re financing" unless you have taken delivery of the car. If you havent taken delivery of the car, you are still shopping for a rate, you are not re financing your vehicle.

I am going to change your thread title to better describe what you are actually asking.

 

[l10l]

Actually, the delivery window offered when my VIN was assigned the next day makes made me doubt whether a cheaper lender can be lined up in time. Being able to complete refinancing in the days afterward would mean not jeopardizing my delivery window.

 

[jjrandorin]

Whether, and what rates you would get for re financing a car you already took delivery of would depend on the specific lender you are looking at. Much better to not do that and work on it now. You should be able to apply and get pre approved, then go into execution of the loan when you get notified of a delivery date.

You cant re finance something you dont have, nor will you be able to apply for "re financing" without the asset in question (vin number, etc).

 

[l10l]

Whether, and what rates you would get for re financing a car you already took delivery of would depend on the specific lender you are looking at. Much better to not do that and work on it now. You should be able to apply and get pre approved, then go into execution of the loan when you get notified of a delivery date.

You cant re finance something you dont have, nor will you be able to apply for "re financing" without the asset in question (vin number, etc).

I was already given a delivery date and VIN. All of this has happened in less than the past week.

 

[jjrandorin]

I was already given a delivery date and VIN. All of this has happened in less than the past week.

You cant refinance an asset that is not titled to you yet, so you can not re finance something you have not taken delivery of. You will need to contact the financial institutions you are interested in and see how they handle re financing, and what rates they offer in that situation you describe. Some may offer you the same rate, some wont. Some may make it easy, some wont.

None of them will re finance anything until you take possession of the actual asset (with proof). It would be much better for you to work on doing the original financing through whomever you are choosing vs tesla, since you have not taken delivery yet, vs re financing it shortly after delivery.

 

[l10l]

You cant refinance an asset that is not titled to you yet, so you can not re finance something you have not taken delivery of. You will need to contact the financial institutions you are interested in and see how they handle re financing, and what rates they offer in that situation you describe. Some may offer you the same rate, some wont. Some may make it easy, some wont.

None of them will re finance anything until you take possession of the actual asset (with proof). It would be much better for you to work on doing the original financing through whomever you are choosing vs tesla, since you have not taken delivery yet, vs re financing it shortly after delivery.

It that feasible with just a few days left in the 4-day delivery window Tesla gave me? What are the costs/risks of doing it after vs. original financing?

 

[jjrandorin]

It that feasible with just a few days left in the 4-day delivery window Tesla gave me? What are the costs/risks of doing it after vs. original financing?

You will need to investigate that with whomever you are choosing to try to re finance with. Not all financial institutions are interested in refinancing a car loan at the same rate as a new car purchase.

 

[l10l]

I spoke with Digital Federal Credit Union (DCU | Personal & Business Banking) last night. Their current rate is 2.25% (i.e., better than the 2.75% Tesla just pulled "a switch" on me right before delivery). Some of what DCU told me will no doubt be surprising, given the answers already provided here:

1. Starting a refinance application in the days before delivery (but after I have a VIN) is fine. Obviously they can't take over title until after the car is delivered to me (we all knew that), but this gets the paperwork in motion.
2. If refinancing right away, do not pay cash (even though it was an option for me). It is easier for them to take title from Tesla's lender than for me to wait to receive the title in the mail and assign it to DCU.
3. Proceed to finance with Tesla's lender who is already party to the transaction, particularly in this case, where Tesla didn't give me enough time to line up a new lender without jeopardizing the delivery window.

There was some discrepancy in how many weeks of "shopping-around leeway" the credit bureaus give for multiple hard hits to be treated as just one, but it is at least two weeks.

Delivery day is still scheduled for tomorrow. Soon after, we'll see how this "changing horses after having your horse changed on you" works out !-)

P.S. DCU isn't well-represented in the spreadsheet reference I gave above, but donations to the Free Software Foundation (a worthy cause IMHO) was enough for me to qualify for membership in the DCU.

 

[ev_go123]

I spoke with Digital Federal Credit Union (DCU | Personal & Business Banking) last night. Their current rate is 2.25% (i.e., better than the 2.75% Tesla just pulled "a switch" on me right before delivery). Some of what DCU told me will no doubt be surprising, given the answers already provided here:

1. Starting a refinance application in the days before delivery (but after I have a VIN) is fine. Obviously they can't take over title until after the car is delivered to me (we all knew that), but this gets the paperwork in motion.
2. If refinancing right away, do not pay cash (even though it was an option for me). It is easier for them to take title from Tesla's lender than for me to wait to receive the title in the mail and assign it to DCU.
3. Proceed to finance with Tesla's lender who is already party to the transaction, particularly in this case, where Tesla didn't give me enough time to line up a new lender without jeopardizing the delivery window.

There was some discrepancy in how many weeks of "shopping-around leeway" the credit bureaus give for multiple hard hits to be treated as just one, but it is at least two weeks.

Delivery day is still scheduled for tomorrow. Soon after, we'll see how this "changing horses after having your horse changed on you" works out !-)

P.S. DCU isn't well-represented in the spreadsheet reference I gave above, but donations to the Free Software Foundation (a worthy cause IMHO) was enough for me to qualify for membership in the DCU.

I'm in a very similar boat hear, so thanks for posting this all!

Do you know if that 2.25% rate includes the 0.25% discount for EVs and the 0.50% discount for plus members? I thought the rate was 1.24% once you include those discounts. Or is it higher because you're refinancing?

My delivery window is ~2/27 and I was thinking of switching my tesla loan to DCU as well. However am debating if I should make the switch now and risk headaches if I have to reject a VIN or the delivery window moves. Or if I want to keep tesla financing for a smoother delivery process and refinance after I take delivery. I wouldn't want to refinance if there are fees/higher rates though, so I'm torn.

 

[l10l]

I'm in a very similar boat hear, so thanks for posting this all!

Do you know if that 2.25% rate includes the 0.25% discount for EVs and the 0.50% discount for plus members? I thought the rate was 1.24% once you include those discounts. Or is it higher because you're refinancing?

My delivery window is ~2/27 and I was thinking of switching my tesla loan to DCU as well. However am debating if I should make the switch now and risk headaches if I have to reject a VIN or the delivery window moves. Or if I want to keep tesla financing for a smoother delivery process and refinance after I take delivery. I wouldn't want to refinance if there are fees/higher rates though, so I'm torn.

The 2.25% rate is for the same terms as what I had with Tesla (i.e., 72 months). I believe the lower rate you‘re speaking of is for up to 65 months. Personally speaking, I may adjust in return for the even lower rate, but I wanted to give an apples-to-apples comparison between Tesla’s lender and DCU. It includes the EV discount, but not the “plus member” discount, which carries additional requirements that borrowers may or may not be comfortable with. The rate is not higher for refinancing, at least not at DCU!

An additional deciding factor in when to change – at least it was for me – is when Tesla made their hard inquiry on your credit report. Generally speaking, this seems to be timed around loan approval (or re-approvals after it has expired). Too many weeks past that, and the credit bureaus may not count both as a single “hit”. That could be perceived as a cost.

Other than that, at least with a high-enough credit rating, switching seems to be all up-side. Dennis in the loan origination department at DCU (800-328-8797 x7614) has been great and stated clearly that there are no extra fees. You may want to discuss your timing questions with him. They seemed happy to move at an expedited pace, but I’d say it’s still a risk I don’t want to take.

As of this moment, the only problem I’ve been having is with Plaid, who handles the ACH transfers (so it happens) for both Tesla and DCU. They’re 2 for 2 in messing up what companies like Vanguard have never given me a problem with. If you haven’t dealt with them, you may want to build in some buffer time just in case.

 

[ev_go123]

Thanks for all the info, it's very helpful.

I think I'm going to to use DCU as a 3rd party lender from the start, I think I have enough time to get it all sorted out before my delivery window date options (2/27, 2/28/, 3/1).

Yeah I've heard Plaid is not good, I think there was even a sandal with them loosing customer data. Regarding avoiding them on the DCU side, I was able to set up an ACH transfer from my regular bank side and just push money directly into DCU. That should also avoid any fees that DCU would charge.

 

[Hiline]

I spoke with Digital Federal Credit Union (DCU | Personal & Business Banking) last night. Their current rate is 2.25% (i.e., better than the 2.75% Tesla just pulled "a switch" on me right before delivery). Some of what DCU told me will no doubt be surprising, given the answers already provided here:

1. Starting a refinance application in the days before delivery (but after I have a VIN) is fine. Obviously they can't take over title until after the car is delivered to me (we all knew that), but this gets the paperwork in motion.
2. If refinancing right away, do not pay cash (even though it was an option for me). It is easier for them to take title from Tesla's lender than for me to wait to receive the title in the mail and assign it to DCU.
3. Proceed to finance with Tesla's lender who is already party to the transaction, particularly in this case, where Tesla didn't give me enough time to line up a new lender without jeopardizing the delivery window.

There was some discrepancy in how many weeks of "shopping-around leeway" the credit bureaus give for multiple hard hits to be treated as just one, but it is at least two weeks.

Delivery day is still scheduled for tomorrow. Soon after, we'll see how this "changing horses after having your horse changed on you" works out !-)

P.S. DCU isn't well-represented in the spreadsheet reference I gave above, but donations to the Free Software Foundation (a worthy cause IMHO) was enough for me to qualify for membership in the DCU.

This is super helpful thank you. I may need to go the early re-financing route with my vehicle if the turnaround is too short to arrange outside financing.

 

[Not That M3]

I'm in a very similar boat hear, so thanks for posting this all!

Do you know if that 2.25% rate includes the 0.25% discount for EVs and the 0.50% discount for plus members? I thought the rate was 1.24% once you include those discounts. Or is it higher because you're refinancing?

My delivery window is ~2/27 and I was thinking of switching my tesla loan to DCU as well. However am debating if I should make the switch now and risk headaches if I have to reject a VIN or the delivery window moves. Or if I want to keep tesla financing for a smoother delivery process and refinance after I take delivery. I wouldn't want to refinance if there are fees/higher rates though, so I'm torn.

No, it includes the direct deposit\plus member .50% discount but not the EV discount.

 

[BigNick]

Tesla has raised the loan rate on their site (USA) to 3.24%. Expected it to be 3.49% after the 0.50% rate hike from the Fed yesterday.

 

[Not That M3]

Tesla has raised the loan rate on their site (USA) to 3.24%. Expected it to be 3.49% after the 0.50% rate hike from the Fed yesterday.

If that is their current rate, it has not changed. I texted them 2 days ago (on Tuesday) and the SA told me 3.24% is the current rate for qualified applicants. The application is good for 60 days.

 

[BigNick]

If that is their current rate, it has not changed. I texted them 2 days ago (on Tuesday) and the SA told me 3.24% is the current rate for qualified applicants. The application is good for 60 days.

The last time I looked, it was 2.99%. I got lucky and bought my M3P at 2.49% in December, and my wife's ICE at 0.0% in March (GM is still offering 0.0% on some models through the end of May.)

 

[Not That M3]

The last time I looked, it was 2.99%. I got lucky and bought my M3P at 2.49% in December, and my wife's ICE at 0.0% in March (GM is still offering 0.0% on some models through the end of May.)

It definitely recently changed as when I called the same day they told me it was 2.99%. The text told me it was the new rate. Regardless, it was before the fed increase. We'll see if it changes in the next few days. It's possible.

 

[Hiline]

If that is their current rate, it has not changed. I texted them 2 days ago (on Tuesday) and the SA told me 3.24% is the current rate for qualified applicants. The application is good for 60 days.

So my credit application approval page states that loan approvals are valid for up to 60 days and rates are valid for 30 days. If I take delivery during the 30-60 day window, will I get the rate I was approved for or is the lender, in my case US Bank, going to adjust the rate to the current market?