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Tesla loans, what are they on about?

Discussion in 'Model S: Ordering, Production, Delivery' started by Tanquen, Apr 15, 2016.

  1. Tanquen

    Tanquen Member

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    Today Tesla told me they may be able to do 1.9% to match my credit union. Then they said I could only put down 40% max. I said that sounded like there would be an early payment penalty to go along with that. Then they said there would be no benefit to paying early but there was no prepayment penalty but that makes it sound like you're going to pay the full length of the loans interest whether you pay early or not. ???
     
  2. TaoJones

    TaoJones Beyond Driven

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    Recollection is that they want 36 payments' worth of interest out of you for at least 60% of the purchase price. Purchase price being undefined for the moment.

    So if you want to put down 40%, finance 60% and pay it off in a year, expect to pay or to haggle over paying 24 months of remaining interest.

    For bonus points, see if they'll include a GRV* with your financing.

    * Guaranteed Resale Value amount stated up front in writing. Typically requires financing through a Tesla lending partner and typically at a higher rate than credit unions. However, since they're willing to match the rate.... seems that a case can be made for the GRV.

    Fine print for the GRV (including but not limited to): Executable only in months 36-39. Amount resembles 50% of purchase price and 43% of options value. Aftermarket improvements negotiable. Miles over 45,000 will incur a $2,500/10,000 mile penalty. Note some owners have been approached for a buyout before 36 months.
     
  3. zambono

    zambono Member

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    Go with your credit union
     
  4. OlderThanDirt

    OlderThanDirt Member

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    + 1 on the credit union

    Alliant is excellent to work with also.
     
  5. Ryan Dodson

    Ryan Dodson Member

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    I received offers of 2.59% & 2.69% for up to 72 months with 50% down payments. I asked about the 1.99% and they sent me a link to apply through Alliant Credit Union - one of their partners who offered 1.99% if closed before June 30th. I haven't applied with Alliant.

    I decided to go with my bank, since they offered me once a year payments - works well because of 1) monthly instead of daily compounding and 2) my cash flow since I own seasonal business.
     
  6. dgpcolorado

    dgpcolorado Member

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    Definitely not, that's not how amortized loans work. If you pay early you will pay less interest. In the case of car loans what you typically do is request a payoff quote and then have a limited time to make that lump sum payment. Or you can pay extra each month with it going to the principal balance. Regardless, if you pay early the money borrowed accrues interest over less time and you end up with lower total interest owed.

    There are web amortized loan calculators that you can use to model payments and interest owed for varying loan balances and interest rates. For example, this one:

    Car Loan Calculator ~ Auto Loan Payment Calculator
     
  7. Tanquen

    Tanquen Member

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    Well, I'm not sure how to decipher this answer to the in my mind simple question are there prepayment penalties. Maybe he just misspoke but I don't know why you would reply like that.
    Here's the quote:
    "There is no penalty of pre-paying the loan off early with the bank. But there is no “benefit” or discount of paying it off early as well with us."
    They make it sound like they're going to get the full interest regardless of when you pay.
     
  8. Blue Millenium

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    Just don't use US bank, the lease partner with Tesla. They are not above board.
     
  9. emchen

    emchen Member

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    I think whoever you spoke to, wanted to make it clear that you were not expecting any additional "benefit or discount", for example, $1000 off for paying the loan off early, or an additional 1% off the principal, etc. Likely miscommunication.
     
  10. Festerfeet

    Festerfeet Member

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    I suppose it is stating the obvious but shouldn't you just ask for a copy of the finance agreement to ensure understanding. Whatever anyone says on here, you are responsible for the loan so you will need to satisfy yourself as to the terms and conditions.
     
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