Tesla Financing for M3

[355rockit]

I did a Home Equity Loan 2nd before the rate increase as a fixed rate loan in anticipation of the M3. This allow me to deduct interest and the plan is to pay it off in less than 5 years. The other good thing is that I will have title and not the bank for a car loan . This may not be optimal for all, but has worked for me in the past as well.

 

[ProphetM]

Down here in poor people land, we often don't have the advantage of deducting a HELOC, because itemized deductions are not large enough to beat the standard deduction. I have run the numbers both ways for years and the standard deduction has always been greater, even though I have mortgage interest. With the Model 3 costing less, I think a greater percentage of buyers will be in a situation like mine than was the case for Models S and X.

 

[smak]

All things being equal, a HELOC does give you tons of flexibility on payments.

 

[Runt8]

I did a Home Equity Loan 2nd before the rate increase as a fixed rate loan in anticipation of the M3. This allow me to deduct interest and the plan is to pay it off in less than 5 years. The other good thing is that I will have title and not the bank for a car loan . This may not be optimal for all, but has worked for me in the past as well.

All things being equal, a HELOC does give you tons of flexibility on payments.

My big issue with using a HELOC is still the difference in interest rates between a fixed rate HELOC and a normal car loan. I'm seeing car loans in the area of 2% (maybe even lower from Tesla) and fixed rate HELOCs in the high 4s. Flexible rate HELOCs are going for less but I doubt anyone would bet against interest rates going up in the near future.

And this is coming from someone with a >800 credit score and no debt other than a single mortgage.

 

[smak]

My big issue with using a HELOC is still the difference in interest rates between a fixed rate HELOC and a normal car loan. I'm seeing car loans in the area of 2% (maybe even lower from Tesla) and fixed rate HELOCs in the high 4s. Flexible rate HELOCs are going for less but I doubt anyone would bet against interest rates going up in the near future.

And this is coming from someone with a >800 credit score and no debt other than a single mortgage.

True. Car manufacturers deal on loans, because it's a way to get people to buy a car. While HELOC's can have introductory pricing, you aren't going to find a 1.99% HELOC deal.

 

[ChrgdTeCHick]

Tesla may not get that low of a rate on the 3's though once they come out since those loans won't be as high.

Have you looked at CU's near you that my offer green car incentives? The one I went with offers as low as 1.55% for shorter terms or 2.25% for 60 months (plus more/less as you see fit) but they also offer .25% to .5% less on the rate if the car is green.

I'd keep a list of back ups on case Tesla'# rate for the 3 is higher than what they get for the S/X

 

[Runt8]

Tesla may not get that low of a rate on the 3's though once they come out since those loans won't be as high.

Have you looked at CU's near you that my offer green car incentives? The one I went with offers as low as 1.55% for shorter terms or 2.25% for 60 months (plus more/less as you see fit) but they also offer .25% to .5% less on the rate if the car is green.

I'd keep a list of back ups on case Tesla'# rate for the 3 is higher than what they get for the S/X

I'll have to look around for this - thanks for the advice!

 

[smak]

I got my last car via a CU, so I will check it to see if they have something special.

Good idea!

Just expanding on what I said before, the home page of my CU says HELOC, as low as 2.49%.

When looking further, that's for 6 months, and then it jumps to over 5.

So HELOC vs auto loan is not a good deal at normal rates. Car loan at my CU is 1.99%