Tesla or Alt. Financing

Tesla or Alt. Financing

would like feedback on whether it's better to finance through US Bank and Wells Fargo in order to get the guaranteed resale value after 3 years or go with PenFed or other financing to get better rate.

Brian H | May 6, 2013

Depends on your confidence/risk tolerance. If the possibility of losing value seems high and you fear you'll need to sell, the TM deal is reassurance. Otherwise, the lower rate is better.

JPPTM | May 6, 2013

Look at Alliant CU as well--many threads on this topic.

AlMc | May 6, 2013

Agree with Brian H.. Let us say you can find an interest rate that is 1% lower than the Wells Fargo/TM product and that you borrow 90K at either place. You will pay about $2,700 extra in interest rate over that 6 year period. After the first three years when you have the option to 'sell' the car back to TM you would have paid about $1,000 extra to Wells Fargo over the alternative financing.

Your question: You are paying $1,000K more to get a guaranteed buy back. Basically a $1,000 insurance policy.

Answer that and you know what you want to do.

jk2014 | May 6, 2013

Will Tesla buy back any MS regardless where it was financed? If so, what makes the Tesla banks an advantage or the rest?

Brian H | May 6, 2013

They might, but the guarantee only applies to the TM package.

jk2014 | May 6, 2013

I guess it's just establishing the peace of mind in these early years. Got to kick start the secondary market with a Tesla guarantee. Once market goes through the first MS's sold back to Tesla, the secondary market will take notice and follow suit establishing competitive residual value for themselves.

elguapo | May 6, 2013

Given the relatively small difference in payments, I'd go with TM/WF financing if I could. Low rates sound great, but a 1-1.5% difference has such a small impact in payment. I'd rather have the insurance policy, but it isn't available in MD.

AlMc | May 6, 2013

elguapo: If you do want to take advantage of the Tesla/Wells Fargo offer you might want to check out the threads debating the merits of the plan. EVPatriot posted that he does not live in one of the states where the program is allowed but got around it by flying to California, signing papers for the loan agreement there (without tax) and having it delivered to his home state where he will be responsible for applicable taxes/registration fees.

AlMc | May 6, 2013

Thread is 'Tesla Financing for all States' to see how you might be able to take advantage of the Tesla financing/guaranteed buy back.

Carefree | May 6, 2013

New Jersey seems the closest state to MD if you wanted to close the TM deal.

kback | May 6, 2013

I originally was told I couldn't do Tesla financing because I live in CT, but since I'm taking delivery in White Plains I am able to do Tesla financing after all. I was already approved for a 1.49% loan from Alliant Credit Union, which was incredibly easy to work with.

Since I was able to get a 1.99% loan through Tesla financing, I went with that. The extra 1/2% on a loan of $60K (I'm putting down about 30K) over 5 years is not that much, and I do like the security of the resale value guarantee. I feel fairly certain that I won't need it, but with the slight risk of Tesla going under, with big oil and big auto gunning for them, I think it's worth it.

Don't get me wrong, I hope and believe Tesla will continue to grow and be very successful. I am invested in the company through buying a Model S and stock. But I don't think it's a bad idea to hedge your bet a bit.

AlMc | May 6, 2013

kbackman..How did you go about arranging this? Did your Tesla person suggest it when you were discussing financing? My 'S' is in production and I would like to line up financing choices before I get the VIN and a delivery date. Thanks Al

PS Feel free to email Tesla online identity is my email address

kback | May 6, 2013

admjr - emailed you with info.

FLsportscarenth... | May 6, 2013

I honestly do not care about the buyback - I am keeping my MS for 15 - 20 years, but the big question is if the TM package is more likely to approve the loan. The higher rate is not a problem if you pay it down quickly, but if it means easier approval it is worth going through them.

Forum members who have been through the process, please share your experience... I have always bought cars cash in the past and appreciate your feedback. I do not want wait till one of my houses sell, selling off my Upstate NY houses and the real estate market there is very slow, to buy so am considering financing and even at 2.95% is ok as it will save a lot of money as the miles I drive for work is about to triple...

I am a veteran so is PenFed or other preferencial loan products available in FL?

Thank you in advance...

kback | May 6, 2013

Alliant Credit Union was very easy to work with. You apply online. I think as a veteran you can automatically become a member. For me, I just had to join an organization on their list by donating $10. 1.49% is an awesome rate.

I agree that the guaranteed resale value will likely never be necessary. But this is a new company with one product, and major safety recall could be devastating. To me, the guaranteed resale value is a type of insurance. I hope to never need it, but if Tesla did go under, who would provide software and hardware support?

Don't mean to be negative. I think Tesla is a breakthrough company that will change the way everyone thinks about cars in the future. I have every expectation to own this car for 6 or more years. Can't wait to have my own Model S very soon!

FLsportscarenth... | May 6, 2013


Thanks will check it out.

Am not saying that the buyback option is a bad thing, quite the opposite... Just that it is not important to me personally.

Finding an easy to work with lender is paramount for me at this stage, in the old days would have just gotten a stated income HELOC on one of my houses with no mortgage, but the banks have gotten very tight and the time for waiting is over as I will have to drive all over soon and do not want to go broke buying petrol and houses are not selling so quick. Am asset heavy and a lot of my income is not traditional so fretting a bit...

Any finance specialists out there welcome to comment.