Tesla Loan - additional payments are not applied towards principal and only a credit for future payments due

[highhrider]

I bought a 2022 Model X Plaid in April 2022 and I got my loan directly through Tesla. This loan is not service by US Bank, Chase Etc.
My down payment was only $13k because we got an opportunity to get the car the same day and didn't have the cash available that same day (I don't want to get into how we go the car in 1 day on this thread)
Since then, I have made additional payments of $48,000.
I asked for my payoff today which can only be obtained if you call Tesla finance directly because Tesla finance said Tesla loans are new for them and they "are still working out the details on the App and Website."
My payoff doesn't include the additional $48,000 payment. The payoff quote they sent me was $140K.I have no idea where they are getting $135k from the email they sent me.
Tesla finance told me that the $48,000 is just a credit and that I still need to pay the $135k to satisfy my loan. Below is the exact email:

-----------------------
"Please see attached for the requested payoff quote for your Tesla Model X. The payment instructions are included in the payoff letter. Please not that you have a credit of $48,000.00 in the account. In order to satisfy the loan you will need to make a payment of the difference $135,481.70 by 05/27/22. If the payment is sent in a method not listed, you may be responsible for any additional charges that occur due to delayed application of said payment.

Please reach out, if your financial institution does not authorize a wire transfer and we will provide you with our address of where to send a payoff check.

Once the payment has been received, and account audit has been completed, the title will be released to you and sent to the address that we have on file. If you require the name or address to be different, please let us know and we will do our best to accommodate the request. Please note that there may be a delay in our ability to send the title depending on if we have received the title from the state."
Best Regards,

xxxxxx S
Financial Services
12832 Frontrunner Blvd. Suite 100, Draper, UT 84020
E. [email protected] T. 844.xxx.xxx
-----------------------
Cost of car = $158k
Downpayment = $13k
Additional Payments = $48k

Has anyone else had this issue where their additional payments are not applied to the principal of the balance? Technically, the additional payments are not reducing my daily accrual of interest.

 

[ATPMSD]

Sounds like the email is poorly phrased and that the payoff is $135.5K - $48K = $87.5K

 

[highhrider]

I did talk to Tesla finance today. The initial payoff was $140k and the additional payments just sit as credits in the account.

• Tesla finance said their auto loan system is very new at Tesla where they do not have the functionality to display:
  • Current balance
  • Payoff amount
  • Additional payments made towards principal
  • The monthly statement also does not display the current balance, only amounts paid
• All the above have to be requested by calling Tesla Finance and calculated manually.

Either way, I called and they said they will be able to manually calculate my payoff and send me a Payoff quote for $92k.

Tesla, why are you servicing auto loans if your systems aren't fully built out.

 

[ATPMSD]

Next time, best not to use Tesla when financing. There are other banks and credit unions who not only know what they are doing but also have better rates.

 

[highhrider]

@ATPMSD, Using Tesla finance was the easiest option because we needed to made a decision quickly, same day, on whether we were getting this car. I got denied by USBank and Chase during the application. It might of been because we only put down $13k.
We did not have a reservation for the X. Coming up with $160k in a few hours wasn't possible. If we waited another day, the car would have gone to the next person in line.
We also knew we were going to pay the car off in a month or so. Tesla gave us a 5.49% rate for 72 months.

I don't recommend using Tesla finance either, until they get their stuff together.

 

[highhrider]

So I have an update.
Tesla Finance received my payoff check on May 26th @ 9:30 AM PT.
20 days later, they still can't find the check, they are so unresponsive and they continue to deduct my monthly payment.

This will definitely be the last Tesla I own. Their cars aren't worth the customer service headache.

 

[ATPMSD]

So I have an update.
Tesla Finance received my payoff check on May 26th @ 9:30 AM PT.
20 days later, they still can't find the check, they are so unresponsive and they continue to deduct my monthly payment.

This will definitely be the last Tesla I own. Their cars aren't worth the customer service headache.

If they are drawing from your Bank, tell the Bank to stop paying.

 

[MidNJDrv]

Thanks for sharing this. It seems tesla finance not allowing early payment...that really sucks

 

[cbednarczyk]

I just googled this, I noticed on the tesla website for my solar loan the same issue. My goal was to pay an additional 5k per month until system was paid off. I didn't see how to do this on the website. They had areas that said " balance" and make payments. But nothing under the balance except apr and when the loan was set to be finished. Under additional payment it had monthly loan amount as the only option. So I emailed asking what is the current balance and how do I make additional payments. I received the bad news that they won't do principle only payments and if you want to make an additional payment it has to be done OVER THE PHONE, to call them leave a voice mail and they will call you back within a day. I was shocked in 20 years of having loans I never in my life heard of something this janky. A company worth this much money selling this expensive of products and they want to do their own financing but didn't get the system ironed out before rolling it out ?

 

[SeBas42]

I just googled this, I noticed on the tesla website for my solar loan the same issue. My goal was to pay an additional 5k per month until system was paid off. I didn't see how to do this on the website. They had areas that said " balance" and make payments. But nothing under the balance except apr and when the loan was set to be finished. Under additional payment it had monthly loan amount as the only option. So I emailed asking what is the current balance and how do I make additional payments. I received the bad news that they won't do principle only payments and if you want to make an additional payment it has to be done OVER THE PHONE, to call them leave a voice mail and they will call you back within a day. I was shocked in 20 years of having loans I never in my life heard of something this janky. A company worth this much money selling this expensive of products and they want to do their own financing but didn't get the system ironed out before rolling it out ?

@cbednarczyk I just got my first payment notice for solar as well and was planning to make extra payments. Can you please clarify if you were able to make an extra principal only payment after you called them? I was planning to pay extra each month and then a big payment when I get my tax credit in 2023. However, I want to make sure they apply it toward principal and not just have it sitting there as a credit. Thanks.

 

[Happy Hippo]

So I have an update.
Tesla Finance received my payoff check on May 26th @ 9:30 AM PT.
20 days later, they still can't find the check, they are so unresponsive and they continue to deduct my monthly payment.

This will definitely be the last Tesla I own. Their cars aren't worth the customer service headache.

May people are aware that Tesla customer service is not great but still proceed with buying the car anyway. In addition many people in your situation take the Tesla financing then immediately refinance with someone else to avoid the very high interest rate you received.

 

[cbednarczyk]

@cbednarczyk I just got my first payment notice for solar as well and was planning to make extra payments. Can you please clarify if you were able to make an extra principal only payment after you called them? I was planning to pay extra each month and then a big payment when I get my tax credit in 2023. However, I want to make sure they apply it toward principal and not just have it sitting there as a credit. Thanks.

this is the email I got from them today, so doesn't seem to be any change to their system months later. I can't believe they are allowed to do this seems against the law or something. Forcing you to pay your loan off or pay full interest over the next 10 years? I pay more in interest per year at 3 percent then the solar panels save me in electricity bills. So really regretting the decision to finance through them. Just rediculous.

If  you wish to make an extra payment you may call us at  844-837-5285 to leave a voicemail for us to get back to you within 24 hours to remit a one-time payment over the phone. We are looking to add this feature to your Tesla account in the future.

Please be advised, extra payments do not currently contribute to the principle of the loan. Essentially they are set in a suspense account to be drawn from monthly. The only option to have a payment go to principle only is to request a payoff of the entire loan amount.



Best,



Shiek H | Tesla Financial Services

12832 Frontrunner Blvd Draper, Utah 84020

E. [email protected] T. 844.837.5285

 

[cbednarczyk]

When I bought my Tesla model 3 Tesla financed it through wells fargo. Tesla didn't do the loan themselves like with the solar panels. I didn't even see an option so I finance through them for the solar thinking it would be the same deal ( went to a bank). Now you find out you can't even make additional principle only payments, so I guess they are trying to milk you for the finance charges for 10 years guaranteed know 99 percent of people can't pay it all over at once?

 

[brancky3]

When I bought my Tesla model 3 Tesla financed it through wells fargo. Tesla didn't do the loan themselves like with the solar panels. I didn't even see an option so I finance through them for the solar thinking it would be the same deal ( went to a bank). Now you find out you can't even make additional principle only payments, so I guess they are trying to milk you for the finance charges for 10 years guaranteed know 99 percent of people can't pay it all over at once?

Easy, just refinance through a real financial institution. It's on the consumer to know whether or not additional payments go to principal, interest, or a holding account. I have avoided certain lenders in the past with comparatively lower interest rates because they don't apply additional payments to principal (they front-load interest).

 

[Kokukenji]

Next time, best not to use Tesla when financing. There are other banks and credit unions who not only know what they are doing but also have better rates.

I agree with you and it's crazy to say this but other banks and CUs (Old school brick/mortar) actually got their stuff together when it comes down to this kind of stuff. Sometimes the classic is still the best way to go, lol.

 

[Happy Hippo]

So I have an update.
Tesla Finance received my payoff check on May 26th @ 9:30 AM PT.
20 days later, they still can't find the check, they are so unresponsive and they continue to deduct my monthly payment.

This will definitely be the last Tesla I own. Their cars aren't worth the customer service headache.

 

[Happy Hippo]

Can you refinance to another credit union since they do things the proper way. Tesla customer service is not the same as a Lexus. I knew that before I was moving forward with it. not the same level of service. it is unfortunate since the cars are so pricey!