Resale Value Guarantee - The Rules Have Changed

[swisscottg]

Here's what I got from Tesla Finance today on the T&C's for the Resale Value Guarantee. When I confirmed the vehicle back in sept the T&C's were $30k, 36 month min and no penalty for prepayment after 6 months. When I asked if the terms had changed and when here's the response:

The Terms and Conditions for the Resale Value Guarantee were updated on October 1.

The Resale Value Guarantee is available to customers who finance through Tesla (through either US Bank or Wells Fargo) and adhere to the Terms and Conditions (see attached). Most notably, you must finance a minimum of 60% of your vehicle’s configuration price, and your loan must remain open and in good-standing for 36 months. Our lending partners offer 90% LTV and term lengths range from 36-72 months. Our advertised interest rate is 3.3%, however your rate may vary depending on your credit bureau, income to debt ratio, and down payment.

 

[doctrewho]

Here's what I got from Tesla Finance today on the T&C's for the Resale Value Guarantee. When I confirmed the vehicle back in sept the T&C's were $30k, 36 month min and no penalty for prepayment after 6 months. When I asked if the terms had changed and when here's the response:

The Terms and Conditions for the Resale Value Guarantee were updated on October 1.

The Resale Value Guarantee is available to customers who finance through Tesla (through either US Bank or Wells Fargo) and adhere to the Terms and Conditions (see attached). Most notably, you must finance a minimum of 60% of your vehicle’s configuration price, and your loan must remain open and in good-standing for 36 months. Our lending partners offer 90% LTV and term lengths range from 36-72 months. Our advertised interest rate is 3.3%, however your rate may vary depending on your credit bureau, income to debt ratio, and down payment.

Not only that but the rate has gone up from the 2.95% that they gave me when I inquired about the RVG. And since they only quote 30 days any application I did prior to the change wouldn't have helped.

 

[Shumdit]

This sounds like a lender term change more than a Tesla one. Tesla gets their money immediately on these deals so I bet the lenders pressured Tesla to basically make the terms into a prepayment penalty since there were too many people who were immediately just paying off the car after the first month. I am not sure if you know this but the banks typically pay the dealership (in this case Tesla) a sort of commission on the loan on the front end. If everyone is paying them off the banks do not make back that money and the interest they woud otherwise earn. Tesla is sort of a special deal in this case since most customers would not bother to finance and then just pay it right off like so many tesla buyers have been doing.

 

[PeterK]

This sounds like a lender term change more than a Tesla one. Tesla gets their money immediately on these deals so I bet the lenders pressured Tesla to basically make the terms into a prepayment penalty since there were too many people who were immediately just paying off the car after the first month. I am not sure if you know this but the banks typically pay the dealership (in this case Tesla) a sort of commission on the loan on the front end. If everyone is paying them off the banks do not make back that money and the interest they woud otherwise earn. Tesla is sort of a special deal in this case since most customers would not bother to finance and then just pay it right off like so many tesla buyers have been doing.

Why are people financing and then just paying it right off?

 

[markwj]

Why are people financing and then just paying it right off?

Presumably to get the resale value guarantee.