Did most of you take Tesla financing, or your own outside bank?

Did most of you take Tesla financing, or your own outside bank?

Two things are making me want to choose my financing externally:

1) Lower rate (like 2.5% instead of 3.3% from Tesla)
2) Finding out that annual Tesla service required for buyback guarantee

If I don't expect depreciation to be my main concern, then these two conditions cost me an extra >$3000 in loan and service costs. And my logic is that if Tesla is guaranteeing buyback, should I ever need to sell it, that will already provide a floor to the resale, whether to Tesla directly or not.

I imagine there should not be too much concern about being able to sell it externally (i.e., not worrying that I will rely on Tesla to buy it as a last resort).

What do you all think -- have you gone with Tesla financing, or your own bank?


earlyretirement | 16 September, 2013

I usually pay cash for my cars but just use a credit union like Alliant Credit Union. It was like "free money" almost with 1.49% APR. Check them out. I couldn't find anything that came even close and it was simple easy to get approved if your FICO score is high.

Andy Vostatek
Alliant Credit Union
Sr. Loan Consultant
(800)328-1935 ext. 2201
Direct:(773)462-2201 Fax: (773)462-2201

howsbayou2 | 16 September, 2013

Home equity line. deductable interest only loan up to $100k. Investing what would have been the principal payment.
As to the Tesla loans...I was assured by an owner rep in Van Nuys that service from Tesla was NOT a requirement for participation in buyback. | 16 September, 2013

I used my own credit union-- prefer to do my banking business locally.

michael1800 | 16 September, 2013

I went with the buyback option just for safety. However, it was likely a wholly unnecessary precaution. The 'free' money is more than likely the better deal. As another has statement, your maintenance condition is not the case, but I still lean towards the external financing as the better deal. The buyback option will probably do more to stabilize resale value overall than actually provide a direct value by needing it. My personal opinion only.

earlyretirement | 16 September, 2013

IMHO, it doesn't make sense to go with the Tesla financing vs. lower cost credit unions. By Elon guaranteeing the resale value, all it did was provide a stop gap for the overall resale market. There shouldn't really be any reason why non-Tesla financed vehicles would be worth any less vs. Tesla's expensive financial partners.

It doesn't make sense to me to pay upwards of 100% APR vs. other players out there.

michael1800 | 16 September, 2013

I was implying it stabilizes the resale of _all_ Model S cars, not only ones financed through US Bank or Wells Fargo.

Also, I was mistaken in my agreement with Howsbayou2. I looked over my buyback guarantee paperwork and the second condition states, "The vehicle is maintained by Tesla Motors or its subsidiary according to Tesla's recommended service schedule."

While not getting service doesn't invalidate your warranty, the 12 mo., each 12.5k mile recommendation is clear. Despite what an owner rep states, the signed document clearly gives Tesla the option to 'opt out' if they so choose, even if they honor the contract through policy. Paying the higher rate for the buyback option doesn't make sense if you also give Tesla the option to void the buyback.

Anywho...external financing is extremely attractive and likely the better deal.

stussy5555 | 16 September, 2013

I was going to finance with a third party but I was able to get 1.99% through Tesla, I believe Wells Fargo but only because I am putting a hefty sum down (roughly $30k) and only financing for 48 months.

I would have bought the car in cash but I need business write offs.

GDH | 16 September, 2013

PenFed and Credit Union One also has great rates.

AmpedRealtor | 16 September, 2013

@ soma,

I don't know if what I did was smart, but it made sense. I financed 100% w/ USAlliance at 1.89%. I chose an 84 month term in order to make my minimum monthly payment as low as possible. My focus was on capital preservation and having as much liquid cash available to earn a better return than the interest I'm paying. I am making a higher monthly payment as if it were a 72 month loan, and will pay the principal down as fast as I am comfortable depending on how and where I'm using my available cash.

I don't like putting any cash down on car purchases because that cash can be put to better use when interest rates to borrow the money are this low. The other thing to consider is, if you are pretty tight financially with the purchase of this car, having cash in the bank (instead of making a down payment) is invaluable in case of unexpected life events.

I would not finance this vehicle at 2.5% or 3.3%, those rates are too high in my opinion. If you are being quoted those higher rates, it might be a better idea to spend a few months to increase your FICO in order to qualify for a lower rate. The best way to bump your FICO by at least 30 points is to pay off your entire credit card balances 4 days before your statement is generated. This way all of your credit cards report a zero balance to the bureaus and your FICO will get a big bump if your current credit card utilization percentage is high.

tomkist | 16 September, 2013

Went with the Tesla financing @ 2.8%, but plan to pay it off shortly after the six month requirement is completed. To #michael1800's point, having the buy-back promise in place will likely buoy the resell value through improved perception of Tesla Motors.

GDH | 16 September, 2013


How did you get a loan @ 1.84% for 84 months?, their site says 2.99%

Xerogas | 16 September, 2013

+1 Alliant Credit Union @1.49%

ORWA | 16 September, 2013

Alliant 1.49% for 72 months. Also received $100 for getting the auto loan.

AmpedRealtor | 16 September, 2013

@ GDH - they had a special for qualified buyers when I bought in July and August. Their rate for a 72 month or shorter loan was actually lower at 1.49%. It was not a publishes special, either. Try contacting Jon Krumdick, he did my loan and is excellent.

Jon Krumdick
USAlliance Federal Credit Union
Senior Manager - Sales and Service
Phone: 800.431.2754 ext. 2319
Mobile: 978.833.1962

Atlantian | 16 September, 2013

I'm going through Alliant Credit Union at 1.49% for 72 months that finance 95% loan to value.

Sanjuro88 | 16 September, 2013

+1 Alliant credit union.

1.49%, 72 months auto loan. 10% down.

$100 bonus for new loan application.

Approved my loan in 24 hours, with 2 years of tax return.

Pretty good, no? | 16 September, 2013

Alliant Credit Union at 1.49% for 72 months with 95% loan to value.

soma | 16 September, 2013

Thanks, all. I believe that I am top tier credit score. How did you get 1.99% through Tesla? Anyway, Alliant may be the way to go then!

rbarry | 16 September, 2013

Another Alliant Credit Union here at 1.49%, 72 months with 10% down. Got approval in a day and the $100 bonus. Too low of a rate to pass up even though didn't need to borrow that much and/or go that long.

Saxena | 16 September, 2013

We also went with the Tesla financing and got 1.99% from Wells Fargo for four year term. We did put a sizeable amount down, so that may be part of the reason for thelow rate. We totally expect to keep our car well beyond the 3 years, but liked the idea of having the buyback option just in case.

GDH | 16 September, 2013


Thanks for the info, but I do not qualify to become a member so Alliant seems the best way to go!....or Credit Union One.

GDH | 16 September, 2013


I haven't read the buy back rules but from what I have gathered it's only after 3 years?, or will they buy it back at any time?

Saxena | 16 September, 2013

3 years, so we don't really foresee going that route, but chose the Tesla financing since the rate was good.

earlyretirement | 16 September, 2013

FYI. Alliant will take you on no matter what. In fact, I just selected one of the choices online when signing up and it just accepted it. I'm sure there are a million ways to qualify but everyone that I've steered over to them (I have several friends buying cars now) said they also just selected something and it accepted it. They aren't checking.

They also were approved almost instantly.

Renegade | 16 September, 2013

I went with Alliant, getting the 1.49% for 72mos. Approval only took 20mins. They only asked for 2 months of pay stubs, which they didn't even ask for until after they called me back and said I was approved.

Put 30% down, only financed $56k.

earlyretirement | 16 September, 2013

Yep. Approval was wicked fast! They did ask me to send in my last year's IRS taxes but I just shot over the PDF and that was it and instantly approved. $100k. I think they would have done higher but I only asked for $100k. My car with TTL was $125,000 with everything.

He said their only requirement was putting 10% down. But I think they would have given me more if I asked as long as I put down 10%.

jonlivesay | 16 September, 2013

Did not finance, like to pay for toys up front makes me think a out it more.

djwill | 18 September, 2013

Jason Freese @ Alliant Credit Union at 1.49% for 72 months with 95% ltv.

Could not ask for better support and service. Highly recommended.

JPPTM | 19 September, 2013

You can donmate to a select Alliant charity--$10 and you're in. Easy and on line.

DCTesla | 19 September, 2013

Per the comment above, call Jason Freese. I called him this morning and in less than 15 minutes total between a couple of emails and phone calls, the deal was done. 95% LTV @ 1.95% for 6 years - can't be beat. He's very professional and efficient.

Flyshacker | 19 September, 2013

Take note that a requirement of the Tesla buyback is that your car must be free and clear. So, in 3 years if you decide to sell your Model S back to Tesla, be prepared to cough up the cash to pay off your remaining loan balance first.

michael1800 | 19 September, 2013

Not exactly. The condition is 'prior to or in conjunction with...' If the resale value is lower than the amount remaining on the loan, it is true that you pay the difference. If that's not the case, the car doesn't not have to be paid off out-of-pocket. You can search the press releases for the details...we've been through this a few times already.

Luclyluciano | 19 September, 2013

You Americans have life so easy;

In Canada...,,,,

-tesla financing 4%
- home LOC 3.5%
-loaded P85+ is $135,000 plus 13% tax

In the U.S. .....

-How exactly does a credit union make a profit at 1.49% or 1.99% financing ?

ElectricZo | 19 September, 2013

US Alliance Credit Union. 84 months @ 1.89%

Jon K was the person that helped me. He was awesome and has helped many other Tesla owners.

LV2SF99999 | 19 September, 2013

@ElectricZo - How long ago was that? I believe the rates have gone up a bit as the quote for the 'best available rate' I got as of today was 2.99%.

I do agree that Jon K. at US Alliance is pretty cool however!

madbuns | 19 September, 2013

3rd party - Alliant.

1.49% 72 months 10% down. Quite a bit of documentation was requested, but nothing out of the ordinary.

Applied on (or around) August 12th (and got contingent approval the next day). I don't know if those rates are still around, but they were far and away better than Tesla's financing (though, Tesla asked me for not a scrap of documentation, so, if you are going to have issues with the doc side...)

?Dark side?

Brad Sterns helped me out.

Loan Consultant
Alliant Credit Union
11545 W Touhy Ave
Chicago, IL 60666
773-462-2120 Direct and Fax
(800) 328-1935 ext 2120

rdalcanto | 19 September, 2013

I normally agree with you about paying for toys upfront. But in this case, I put the money I would have paid for the car into TSLA stock, got a loan at 1.5% for 90K, and have already made enough money to buy another Tesla. That being said, I'm not cashing out until my car money has grown another 8X and I can pay off my house. So I agree that I would not get a loan to buy a car I otherwise couldn't afford. But using a loan at 1.5% to grow the money I would have used to buy the car to pay for my house, that is priceless....

cj | 19 September, 2013

I used my own credit union as well.

Oh and if you are thinking of doing a trade in...don't bother AutoNation is TERRIBLE!!!!!!!!! Sell it yourself or keep it.

GDH | 19 September, 2013

Damn I want 84 months @ 1.84%. thats awesome.

inverts | 20 September, 2013

+1 Jonlivesay.
How much do you guys pay extra in financing? 1.49% 72 months, is around (back of envelope) 1.5%/a for 50% of value (50K) over 72 months = 6 years. So around $4.5K.
Searching for rates, locally it rather is 2.5-3.5% = 7.7-11K!
More accurate calculations under

@rdalcanto: I hope gambling works out for you, as long as you realize that it is not (diversified) investing. Blocking out possible losses is an infamous psychological pitfall of investing. And then there's the priceless joy of owning something outright. You should see my smile when I toss the alarmist mortgage mailings in the recycling.

If you argue that 100K in single stock still satisfies diversified investing principles (<<1% of assets), then you have enough millions (>>10M) that you should certainly buy the MS, and not play those optimization games. And you can buy your home, and consider it part of your REIT holdings.

Never had any dept in my life, lived within my means even in grad school, served me well.

rdalcanto | 20 September, 2013

I realize that betting on Tesla is a little bit of a risk. But I think it is a small one, given how revolutionary the car and company are. Kind of like betting on cell phone technology when it first came out. Your portfolio will never have really large gains if any one stock is less than 1% of your holdings. Diversifying that much works if you don't do the research and know what you are investing in, and need to do that in order to be safe. I agree you should live within your means. But if you can't take a loan at 1.5% and beat that return, you need to fire your advisor....

Mitchell Waite | 20 September, 2013

I lease my P85 at Mechanic's Bank in Hercules California. Took about 2 weeks to get all the paper work in order but I was please overall. The final payment exactly equals my social security check so that will pay for the car. Leasing is great because its a total write off.

GDH | 20 September, 2013

You can lease a Tesla?

MaxEntropy | 25 September, 2013

"-How exactly does a credit union make a profit at 1.49% or 1.99% financing?"

In a lot of cases, they don't, especially if they are also offering higher-than-standard deposit rates. Basically, it's merely a benefit to the members with the best credit scores. This helps retain a member base and may lead those members to use the credit union for other, more profitable loan products, such as credit cards or home equity loans. In regards to financing Teslas, what you're seeing is credit unions paying attention to the market and recognizing that the majority of Tesla buyers have excellent credit and substantial incomes. It doesn't hurt that the product itself has gotten rave reviews for both performance and safety. Essentially, these are the best loans credit unions can put in their portfolios. In order to capture them, however, they need to offer rates that are extremely attractive, even if the margins are razor-thin.

Joe H. | 25 September, 2013

+1 for Alliant.
+1 for waiting to increase your credit score.

I was pre-approved for financing through USAA in June but the interest rate was too high and my credit score apparently dropped just below the optimum 740 required for the best auto rates. I decided to move my delivery date to early next year and get all of my debt to 0 and put down a larger downpayment. I have since exceeded the 740 score, and I also called Alliant CU to find out how they approve loans and decide interest rates. It is clear cut:

  1. Your monthly debt-to-income ratio including the monthly payment on the loan your applying for must not exceed 45%.
  2. The rates they advertise include a 0.4% discount for automatic payments. (If you do not do automatic payments the advertised rate of 1.49% would be 1.89% for example)
  3. They use the Equifax Pinnacle 2.0 for determining your credit score. The scores are set in stone and there are no exceptions which mean a score of 739 will not qualify for the 1.49%
  • Credit Score,    New Car,     Used Car
  • 740+            ,    1.49%    ,     1.74%
  • 700 - 739     ,    1.75 %   ,     1.99%
  • 670 - 699     ,    3.74 %   ,     3.74%
  • 640 - 669     ,    4.99%    ,     4.99%
Gizmotoy | 25 September, 2013

@Joe: I wonder how they handle rent. We have high household income, but if I include 100% of the joint debt (just rent in this case) towards only my take-home completely excluding the wife's, I end up at 50% utilized. Hmmm.

dharne | 25 September, 2013

Star One CU in the Bay Area is offering a promo rate of 1.75% for the best credit scores. I got that rate for 84 mths

Joe H. | 25 September, 2013

@Gizmotoy: I am not sure, although I split the mortgage with my wife I included it in my debt-to-income ratio and it was still well below 45%. If they do include the full mortgage then I may need to co-sign for my wife's vehicle.

Gizmotoy | 25 September, 2013

I'm a Star One member and was looking at that a few weeks ago, but that promo ended last month. They should really take it off the website.

Brian H | 26 September, 2013

rent and mortgage payments are not both "debt".