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Tesla Loan — avoid. Possible breach of contract by Tesla.

twmorgan11

Member
Feb 23, 2021
19
3
Godalming
Took out a 50% Tesla Loan with new M3 2021.

Requested details of how much interest would be saved by an £8,000 overpayment. Received two different answers which didn’t make sense. After back and forth, finally agreed that the overall term length would be reduced as would the interest owed (as expected from an overpayment).

So, paid an additional £8,000 of the loan in June.

Never received written confirmation so chased for it, and got an email confirming it had been received. Chased for written confirmation of the new end date and interest owed. Tesla refused to provide.

Then, in June, I wasn’t billed my usual monthly payment. I chased it up (honest John) and the guy responded saying ‘somehow your invoice has been zero’ed but we’ll ask a developer to look into it’.
That was 3 weeks ago.

Chased again, no reply.

I am now at the point of talking to the Ombudsman, because it is my opinion that Tesla is not running a financial services operation fit for purpose under the regulator. There is always a risk with any loan agreement that any mistake on either party’s part can lead to a damaged credit rating, which would be horrendous given I have an otherwise immaculate record.

What if, for example, their system racks up 10 payments and then whacks it in one big go? Or starts accusing interest? Because I have no written confirmation anywhere of the overpayment and adjusted terms, I would be completely shafted. All because Tesla can’t run a professional outfit.

So wise forum members — thoughts please?
 

twmorgan11

Member
Feb 23, 2021
19
3
Godalming
Yes, these are the same folks I emailed to start with. Admittedly I haven’t officially stated ‘I am making a complaint in accordance with xyz’. That could be a good idea.
 

Envchem

Member
Nov 13, 2019
194
169
Liverpool, UK
Forgive my ignorance but was the Loan provided directly from Tesla? Mine was arranged through Tesla but the provider is Blackhorse and all the dealings I had were with Blackhorse directly.
 

Mrklaw

Member
Mar 5, 2020
447
234
Berkshire
I was looking at mine earlier this week and o think it says interest is added at the start so overpayment wouldn’t change total payable?
 

HenryT

Member
Jan 29, 2020
711
596
Manchester
I was looking at mine earlier this week and o think it says interest is added at the start so overpayment wouldn’t change total payable?
Overpayment should shorten the term of the loan - if it didn't, you'll have paid £8k too much. The interest should be reduced - look up 'rule of 78' which was the basis traditionally used when I worked in finance.
 

browellm

Member
Oct 4, 2019
563
513
Notts
Are you only able to pay so much extra a year? Could that have something to do with it, £8000 seems a lot to pay off.
IIRC, £8k is the maximum overpayment you can make annually before they "reserve the right" to slap you with an admin charge.

That's not to say they definitely will, but they allow themselves the option.
 
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Avendit

Member
Apr 18, 2019
850
564
EDI
Took out a 50% Tesla Loan with new M3 2021.

Requested details of how much interest would be saved by an £8,000 overpayment. Received two different answers which didn’t make sense. After back and forth, finally agreed that the overall term length would be reduced as would the interest owed (as expected from an overpayment).

So, paid an additional £8,000 of the loan in June.

Never received written confirmation so chased for it, and got an email confirming it had been received. Chased for written confirmation of the new end date and interest owed. Tesla refused to provide.

Then, in June, I wasn’t billed my usual monthly payment. I chased it up (honest John) and the guy responded saying ‘somehow your invoice has been zero’ed but we’ll ask a developer to look into it’.
That was 3 weeks ago.

Chased again, no reply.

I am now at the point of talking to the Ombudsman, because it is my opinion that Tesla is not running a financial services operation fit for purpose under the regulator. There is always a risk with any loan agreement that any mistake on either party’s part can lead to a damaged credit rating, which would be horrendous given I have an otherwise immaculate record.

What if, for example, their system racks up 10 payments and then whacks it in one big go? Or starts accusing interest? Because I have no written confirmation anywhere of the overpayment and adjusted terms, I would be completely shafted. All because Tesla can’t run a professional outfit.

So wise forum members — thoughts please?
FYI, my wife had to go through the ombudsman (bloomin student loans company), it was a pretty pleasant experience and I wouldn't shy away from doing it again, especially if you have it all well documented like it sounds like you do.

I'd just go for it, if Tesla sort it in the mean time the Ombudsman will be happy to hear and just stand down. I assume Tesla finance are regulated by the FCA etc etc etc? I don't think they can't be, but I also wouldn't put it past them...
 

Envchem

Member
Nov 13, 2019
194
169
Liverpool, UK
Mine is a loan too; not PCP. I took it back at December of 19. As said it was done through Tesla but the actual loan provider is Balckhorse and all the paperwork is from them. I just went on Tesla site and still refers to blackhorse as the loan provider.
 

Jason71

Active Member
May 8, 2019
3,052
3,060
Shropshire
FYI, my wife had to go through the ombudsman (bloomin student loans company), it was a pretty pleasant experience and I wouldn't shy away from doing it again, especially if you have it all well documented like it sounds like you do.

I'd just go for it, if Tesla sort it in the mean time the Ombudsman will be happy to hear and just stand down. I assume Tesla finance are regulated by the FCA etc etc etc? I don't think they can't be, but I also wouldn't put it past them...
if you go to the ombudsman they have to pay a fee even if they ultimately win. Companies hate that. I know people in complaints at financial companies and one of the metrics their dept. is judged by internally for bonus's etc is how many complaints go to the ombudsman So its always worth threatening them with that just to get their attention.
 

Mr Miserable

Supporting Member
Supporting Member
Jul 8, 2019
5,067
9,574
UK
I believe that before you go the Ombudsman you need to have exhausted the Tesla complaints procedure and have a final decision from Tesla.
 
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DJP31

Active Member
Aug 30, 2015
1,686
1,092
UK
I believe that before you go the Ombudsman you need to have exhausted the Tesla complaints procedure and have a final decision from Tesla.
The order is - complaint amde, acknowledged by provider, holding letter at 4 weeks if still investigating, further holding letter at 8 weeks if still investigating. At the 8 weeek point you can refer to Ombudsman. The provider then stops dealing with you and the ombudsman takes over. And that's not a quick process, especially at the moment.

Based on the OP I'm not sure it's being treated as a formal complaint though.
 

Irata

Member
Oct 16, 2020
510
301
UK
So, paid an additional £8,000 of the loan in June.

How did you make this payment, via the pay now option on the Tesla website? I wonder if the system takes this as the monthly payment(s) - so it now thinks you've made X monthly payments in advance and not taking the DD until those funds run out.

I know that's not correct - but I did worry about what that option actually does.

You are entitled to ask them for an outstanding balance anytime. So definitely drop the words "this is a formal complaint" into the next communication and take it from there.
 
Last edited:

curmudgeon

Member
Jul 11, 2019
260
246
Northern Ireland
I was looking at mine earlier this week and o think it says interest is added at the start so overpayment wouldn’t change total payable?

Could be this.

Are Tesla loans on a flat-rate basis? If so then the interest is calculated at the start on the principal loan amount and added as a constant to each month. It is not calculated on the reducing balance hence the quoted rate appears more attractive than it really is.

I have been offered loans on this basis from German car manufacturers (I didn't take the loan) where overpayments would not reduce the total interest and so there would be no incentive to overpay.

Has the monthly repayment gone up or down, or did Tesla simply not take it?
 
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Irata

Member
Oct 16, 2020
510
301
UK
It looks to be calculated per year on what's outstanding (they even show the APR value).

Playing just now with the calculator on the Tesla website and looking at the total interest value, the total payment it displays is less than doing the maths for an upfront flat rate.

Unless I'm missing something.
 

MrT3

Member
Jun 26, 2021
233
141
UK
This is what Which? say on the subject:

Less interest on early repayment​

If you decide to pay off all or part of a loan or other credit agreement earlier than the full term, you do not have to pay the full amount of interest stipulated in the agreement.

Instead, the total amount of interest that would have been payable is reduced by a statutory 'rebate'.

If you want to pay off some or all of a loan early, you should write to your credit provider and ask how much you must pay to clear the debt, or state how much you'd like to pay off.

The creditor must then provide you with a settlement statement within seven days of receiving your request.

The relevant regulations here are the Consumer Credit (Early Settlement) Regulations 2004 and the Consumer Credit (Settlement Information) Regulations 1983.

These set out the method of calculation of the rebate and the form and content of settlement statements respectively.

If the credit provider hasn't answered your letter stating how much you will have to pay to clear some or all of the loan , or if you believe they may be trying to charge you too much, warn them that you will refer the matter to the Financial Ombudsman Service as you are being denied your right to settle the agreement early.

You should also inform your local Trading Standards office.
 
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browellm

Member
Oct 4, 2019
563
513
Notts
Just as an aide memoir, this is the relevant text in the Tesla loan agreement.
1626428593083.png

1626428423096.png
 

Irata

Member
Oct 16, 2020
510
301
UK
Looks like the OP played it perfectly with the amount, it's up to Tesla finance to get their act together now.
 

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