I was surprised to find out Tesla offers financing (no way I could afford a MS or MX so there was no reason for me to even look). From the website it looks like the APR is very low compared to other rates I see (1.49% from Tesla, vs ~2.25% or higher from various banks and credit unions). Is that actually the case or am I missing something? And has anyone from Tesla said anything about if financing will be available on the M3?
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Derek Kessler
Active Member
Tesla financing is actually Alliant Credit Union financing. And yeah, it's lower than most.
I'd expect financing to be available for the Model 3 as well, though Tesla's said nothing about rates (which can change at any time). Of course, when the time comes you should shop around.
I'd expect financing to be available for the Model 3 as well, though Tesla's said nothing about rates (which can change at any time). Of course, when the time comes you should shop around.
Foxhound199
Member
Do they always use Alliant? I feel like with other car companies, no matter whose name is on the paperwork, somehow my loan ends up in Wells Fargo's hands. I hate Wells Fargo, and the only reason I wouldn't just use dealer financing is because I don't want to wind up with them again.
I actually don't even know if it's Alliant. They may use or recommend Alliant too but when we got our S, we weren't approved (not precisely sure why) by US Bank, and so Tesla financed the lease themselves. I haven't seen Alliant's name on any paperwork and we send our monthly payments to Tesla, so they may very well have their own financing.
After asking about the denial letter from US Bank (after we had taken delivery of the car, mind you), Tesla wrote:
After asking about the denial letter from US Bank (after we had taken delivery of the car, mind you), Tesla wrote:
In regards to the letter you received from US Bank. Although we do most of our leases through them, they sometimes underwrite in a way where we cannot get all our customers approved under their program parameters. We however at Tesla did not agree with their decision which is why we have approved your lease internally here at Tesla. The lease is the exact same parameters as US Bank but instead of US Bank being the lessor Tesla is.
N5329K
Active Member
Be sure to check with Penn Fed. Their rates are reliably the lowest around (except when a manufacturer is trying to dump an unpopular model). Requires government affiliation, but that gets waived if you join a non-profit organization that supports military families. The annual dues are small, and monthly savings are large.
Robin
Robin
timk225
Active Member
I had wondered about financing for me 3 also. How and when would I get it?
Do I order my 3 online, then go to my local Tesla Service Center, and someone there does all the finance applications and stuff?
Only time I ever got car financing was at a dealership, and they had everything in place to handle it, but can anyone at a service center do that?
Do I order my 3 online, then go to my local Tesla Service Center, and someone there does all the finance applications and stuff?
Only time I ever got car financing was at a dealership, and they had everything in place to handle it, but can anyone at a service center do that?
NeverFollow
Active Member
Why don't people do their homework and select the bank of their choice, like any Credit Union, instead to rely on Sc (or dealer)?
I've been looking at credit unions and their rates are roughly 1% higher than what Tesla is offering - hence my original question.
timk225
Active Member
What sort of credit score is at the level at which I wouldn't have to worry about getting approved or not? My credit card is nearly paid off, only a few hundred owed on it, and credit karma's vantage score 3.0 method tells me I have a 720.
I wasn't planning to put much of a down payment on it, although I could put down a few thousand if needed.
I've read that the scoring model for auto loans is different, and I think it'd score me higher, anyone know anything about it?
I wasn't planning to put much of a down payment on it, although I could put down a few thousand if needed.
I've read that the scoring model for auto loans is different, and I think it'd score me higher, anyone know anything about it?
NeverFollow
Active Member
I'm not really financially knowledgeable, but I was reading that selling leases could be more profitable than selling cars...
(At least this is my own interpretation)
GM profits: Triumph and trouble (7/27/17)
"North American operations' pretax profit jumped 31 percent in the
second quarter to $3.65 billion from the year-earlier period,
despite a drop of 5.7 percent in overall North American unit sales.
North America-heavy GM Financial joined the party, topping all
overseas operations with a pretax profit of $266 million, up 18 percent."
Today's rates only show about 1% difference.That's interesting. Though because HELOC rates are much higher, dont you still end up paying much more in the end even if you were at a maximum tax bracket? (I am not.)
If you got a 40k HELOC, and paid the interest owed + 500 a month for 72 months, not only would you get around $1400 or so back in tax savings if you're in the 25% bracket, but your last payment would be $150 less than your first and every payment would be lower than the previous.
Also, if one particular month is bad for you money wise, just pay the interest and hope to make it up later.
It's an interesting concept.
Now if Tesla is doing 1.49% financing, which is like 1/2 the average, then things get worse in comparison.
HELOC interest usually fluctuate with the market, so it's a tough thing to gauge over so many years.
Garlan Garner
Banned
That's interesting. Though because HELOC rates are much higher, dont you still end up paying much more in the end even if you were at a maximum tax bracket? (I am not.)
First of all...for everyone's sake, I don't believe one should borrow more than they should.
Anyway, regarding HELOC. Yes, the rates are higher, but who cares because they are deductible. I believe that was the point. Also....HELOCs don't require the scrutiny of a normal loan for those who are in good standing with their mortgage company.
Again..to everyone, don't live beyond your means because banks are allowing that again in order to compete with their competition. Be careful.
timk225
Active Member
I'm no financial expert, but I guess it makes sense that Tesla can offer a really low rate if they partner up with one particular bank, because they know they are going to have hundreds of thousands of car loans in a short amount of time. Give up a little percentage and make it up on the volume.
JSkrehot
Member
Last two cars we purchased, 2004 Mitsubishi Galant, zero percent financing, 2014 GMC Acadia, zero percent financing, my credit union is 1.99%.
NikeWings
Active Member
Agree GG, too easy to over borrow, if undisciplined. A couple other considerations regarding the HELOC approach....(1) they are variable rate and we are entering a rising rate environment; (2) they are secured by your home so don't even think about messing up or blowing it off. The rules for foreclosure on a 2nd lien are more aggressive than your mortgage; and (3) While mortgage interest deduction is probably safe at least to a certain income level, all other deductions including HELOC probably not so much in the long term.
Tesla already partners up with multiple Lenders to provide a variety of product, ensuring a managable decline rate that Tesla effectively self-insures. No single Lender wants hundreds of thousands of tesla car loans or leases. In fact, Tesla is working on additional Lend/Lease programs not just for sales capacity but for concentration concerns of its current Lenders. Once tesla's borrowers are seasoned and demosntrate a reliable track record of repayment, Tesla can re-package the loans and sell them into the secondary market to replenish funds. Unfortunately, not an immediate option right now.
Someday when Tesla is flush with cash, they can heavily subsidize rates which are made up elsewhere. But for now in its simlicity, Tesla is borrowing money, only to turn around and lend it to Buyers pretty much at pass thru rates. Tesla is a B- credit, so if you've got excellent credit, you should most defintely shop around.
My Model X is financed at 1.99. You guys have inspired me to evaluate the cost benefit analysis of "refinancing" through a heloc.
Two rate hikes are on deck this year however so that is something to consider.
NikeWings
Active Member
And at least 3 next year, as forecasted by many institutions. Wall Street sees 2 more Fed rate hikes in 2017, at least 3 in 2018
That's not good for the HELOC theory, because while your auto financing will lock in at the rate at the time, a HELOC most likely will go up like mine has a few times the past year.
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