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Troubles financing with Tesla's preferred third-party lender (SFCU)

It is now less than a week from my scheduled delivery appointment, and I just found out that my approved auto loan is in limbo.

When I initially ordered my Model Y, I went with the Tesla Lending option and one of their partners (JPMorgan Chase) approved my loan shortly after I filled out the form. That turned out to be a mistake as my credit offer promptly expired after 60 days - I wish I knew about this before ordering from my SA or through my own research (I should have joined the forum earlier ;)) but that's just a wasted hard pull and no big deal.

With the original financing offer expired, inspired by many folks here on the forum, I started looking into third-party lenders. Eventually, I narrowed down my options to Digital Federal Credit Union (DCU) - a very popular choice here offering probably the lowest rate starting at 1.24% APR for up to 65 months, and Stanford Federal Credit Union (SFCU) - a local credit union which I had some great experiences with (easy-to-use website/app with short wait time for online chat and call center), with a reasonable rate starting at 1.74% APR for up to 60 months.

I got qualified for DCU's loan at 1.49% (after all the discounts) and preapproved by SFCU for 1.74%, and finally decided to go with SFCU where I have the direct phone number and email address to the loan officer working on my application instead of having to wait on hold for over an hour to just to speak with someone. I was also feeling ambivalent towards DCU's requirement to direct deposit your entire payroll into their checking account (it was even suggested that I should lower my deduction for after-tax 401(k) contribution) to get the additional discount.

Everything seemingly went well since then. SFCU is Bay Area-based and has worked with many Tesla owners. My loan officer even mentioned that they are a preferred third-party lender with Tesla that they only needed the order number (RN #) and VIN before my delivery. And I just trusted that they know what they are doing. From there, I told my SA to update my third-party lender information, got insurance, and entered bank account info for the final payment of the remaining balance.

Then comes the troubles -

It was this Monday when I checked in with my SA about mud flaps (and yes, Model Ys delivered to Pittsburgh, PA do come with them) that I asked by the way if my financing had been finalized. My SA told me "third-party payments either have to be a third party check that would be collected at Delivery or a wire transfer completed 3-5 business days prior to Delivery." Out of caution, I emailed my loan officer to confirm their payment method but they got surprised by this requirement too. According to my loan officer at SFCU, since they are a preferred third-party lender, their approval, which had been already sent to Tesla, should be sufficient for me to pick up the vehicle on the day of delivery. Once I accept the delivery and sign the final purchase agreement, they will be able to then pull the finalized documents and send the payment directly to Tesla. My loan officer assumed that it was just my SA who was not familiar with this arrangement and added my SA to an email thread with [email protected] for clarification.

Four days passed and there was no update, neither from my SA nor from the [email protected] alias that was added to the thread. I got impatient today and called my regional service center. After a 30-minute wait, a customer service representative answered the call and essentially repeated what my SA said. When I asked about the treatment of preferred third-party lenders, they repeated the same answer before adding that they won't confirm with the lender and that it is my responsibility to work with the third-party lender directly. Search online, I found an old thread here from folks doing third-party financing with Bank of America running into similar situations (where they were also told that they should ask their SA to email [email protected] to verify the loan status): Delivery pending due to loan from bank has not been posted

Sensing that my service center might not be familiar with what SFCU is doing, I called my loan officer and asked if they could do a wire transfer or send out a check before delivery for the funding instead. They tried to get some special approval from their manager, but later told me that it is unfortunately not the way they work with Tesla and their hands are tied too. I was told that they would try reaching out to their contact at Tesla to clear things up, but if my delivery center insists on wire transfer or receiving a check before delivery, then I might have to find other ways to pay.

I don't know if this is a misunderstanding or a communication issue between my credit union and Tesla, or perhaps some lack of understanding internally within Tesla across different locations. SFCU mostly works with members picking up from Tesla on the West Coast (mostly in California if not the Bay Area), and I could be one of the few that kept doing business with them as I moved. But what is supposed to be a smooth experience turned nerve-racking at the last moment (which could be worse if I didn't happen to confirm with my SA or lender about it).

🤞 fingers crossed for now. I hope I will get some good news next Monday. In the meantime, I guess the takeaway of this story is to always leave ample time and double-check with your lender when doing third-party financing, even if they have a lot of experience with Tesla, and even if they are a preferred lender with Tesla.
 
Yikes. Sorry for this headache that you are going through.

I wouldn’t worry too much if I were you. Whether 3rd party or through whoever Tesla uses - if the loan is approved, then.. the loan is approved. Easy as that. I would agree with your loan officer that your SA is just misinformed. It wouldn’t be the first time for a 22 year old $27/hr Tesla employee to be flat out wrong.

Your loan is approved and will carry its wait when it’s time to accept delivery. Try not to sweat on this too much. It’ll all work out. 👍
 
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Yikes. Sorry for this headache that you are going through.

I wouldn’t worry too much if I were you. Whether 3rd party or through whoever Tesla uses - if the loan is approved, then.. the loan is approved. Easy as that. I would agree with your loan officer that your SA is just misinformed. It wouldn’t be the first time for a 22 year old $27/hr Tesla employee to be flat out wrong.

Your loan is approved and will carry its wait when it’s time to accept delivery. Try not to sweat on this too much. It’ll all work out. 👍
Thanks for your kind words!

It would be a lot more reassuring if someone else at our regional service center could confirm the arrangement with my credit union. But based on the impression I got from chatting with the other customer service representative, it is not something they are used to (or at least are knowledgeable of) and that it was not just my SA.

I hope it will work out naturally as SFCU's contact at Tesla step in next week.
 
...

I got qualified for DCU's loan at 1.49% (after all the discounts) and preapproved by SFCU for 1.74%, and finally decided to go with SFCU where I have the direct phone number and email address to the loan officer working on my application instead of having to wait on hold for over an hour to just to speak with someone. I was also feeling ambivalent towards DCU's requirement to direct deposit your entire payroll into their checking account (it was even suggested that I should lower my deduction for after-tax 401(k) contribution) to get the additional discount.

...

Sorry to hear your financing process troubles; hope things turn out well in the end.

I had a couple of questions regarding your DCU financing experience.
1) Is the 1.49% after the DD (0.5%) discount?
2) Several DCU members seem to have gotten away with DD-ing partial pay stubs (with a monthly DD a few dollars above the monthly loan payment, for example). Has that not worked for you?

Thanks and good luck.
 
Interesting, I used SFCU to buy out my Mode S lease last August. Being local it was easy to walk in to their main branch to sign all of the loan documents and take care of everything. I’m not sure if they are a preferred lender of Tesla, but they are very familiar with them since they do a lot of Tesla loans being so close. I know when I did my lease buyout, they would not wire the money to Tesla, they would only mail them the check. They told me they will wire money to Tesla for a new purchase, but not a lease buy out. They are very wary of Tesla and do not trust them is the feeling I got.
I believe you should be able to get a check from SFCU once approved for the amount financed. You could then hand that check to Tesla when you accept delivery of the car. It’s interesting that SFCU is saying they will only wire the money to Tesla afterwards.
I wonder if it’s because you’re no longer local to the Palo Alto area?
 
Sorry to hear your financing process troubles; hope things turn out well in the end.

I had a couple of questions regarding your DCU financing experience.
1) Is the 1.49% after the DD (0.5%) discount?
2) Several DCU members seem to have gotten away with DD-ing partial pay stubs (with a monthly DD a few dollars above the monthly loan payment, for example). Has that not worked for you?

Thanks and good luck.
Yes, the 1.49% rate is after the membership discount. For 2, I have heard words that partial DD worked for some folks as well, but since it is not endorsed by DCU, I still find it quite risky.
 
Interesting, I used SFCU to buy out my Mode S lease last August. Being local it was easy to walk in to their main branch to sign all of the loan documents and take care of everything. I’m not sure if they are a preferred lender of Tesla, but they are very familiar with them since they do a lot of Tesla loans being so close. I know when I did my lease buyout, they would not wire the money to Tesla, they would only mail them the check. They told me they will wire money to Tesla for a new purchase, but not a lease buy out. They are very wary of Tesla and do not trust them is the feeling I got.
I believe you should be able to get a check from SFCU once approved for the amount financed. You could then hand that check to Tesla when you accept delivery of the car. It’s interesting that SFCU is saying they will only wire the money to Tesla afterwards.
I wonder if it’s because you’re no longer local to the Palo Alto area?
Thanks for sharing your experience with SFCU here too!

Yeah, SFCU provides pretty good service overall (and as I mentioned in the original post, much better customer service compared to DCU), but I am also getting the impression that they don't trust Tesla for whatever reason. However, I think my case is more with our regional center/local service center not familiar with the partnership.

On the day I was taking delivery, they eventually sorted it all by confirming with Fremont after an hour-long wait (I was there for over an hour and a half before I got my keys for what was supposed to take 15 minutes), and SFCU finalized the funding 3 days after.
 

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