New financing/buy back deal for prior owners?

New financing/buy back deal for prior owners?

Is anyone out there who has purchased the car prior to the announcement interested in having the ability to sell the car back at 3 years. I am. I am the "early adopter" who took the bigger risk on this company 2 years ago, I helped them get there 2012 sales up by having my car delivered in December. While it has been frustrating to see cars being delivered with rear facing seats that I ordered months ago, I understand there is many kinks to work out when a brand new vehicle is released. They hadn't figured out how the installation for the rear seats should proceed. I can accept that they are doing their best to deliver the seats.
However after contacting Tesla regarding the new financing and learning that basically I am not eligible, I am really frustrated. How can they proceed with annoucement without considering the 4000 or so prior owners. Why not consider a grandfather clause to allow us to participate. We are the biggest advocates for the company, we are their salesman in the community. I have probably given 50 test drives, encourage at least 3 reservations.Had one friend's car already delivered. I feel as though the company has forgotten about me, the pne who dropped 115k on a car with no track record. Maybe that makes me the sucker, but I would hope they would show loyalty to us. Elon should honor his commitment to us "believers" in him, his company, and his car.

kjo | April 5, 2013

I personally think the put option is interesting but not that compelling. I certainly hope that the car will be worth much more the 43% of cost in 3 years, and if not, I'll just keep driving it. I don't have my car yet, but the program doesn't make a difference to me either way. Maybe I'm in the minority.

riceuguy | April 5, 2013

Agreed...the program will also keep the residual of the car artificially high anyway, but yeah, I'd suspect that the car will be worth well over 43% at the end of 3 years.

herkimer | April 5, 2013

Frankly, you are better off without it. You have a classic great automobile. Treasure it, and it will bring you many happy returns.

tranhv68 | April 5, 2013

I got a 60 month loan from penfed for 1.49%. That's half the financing rate offered by this new deal. It is a great gimmick to get more people who have very good cash flow but can't save a nickel. The banks are willing to accept 10% down and because the loan is structured like a lease, the lessor, ie Tesla, will apply for the 7500 tax credit which goes toward the 10% down. It is brilliant and I know of many people who can now drive a Tesla.

For the rest of us, I believe that we early adopters all have the same traits that allowed most of us to either put down a large down payment or paid for the car outright. We are all fiscally, socially and environmentally responsible.

So, although annoying that we were not grandfathered in, it is a non-issue for most of us.

mdemetri | April 5, 2013

I agree that it is very unlikely that I (or other early adopters) would take part in this program, but I think it is ridiculous that early adopters are not grandfathered in. Without early adopters, Tesla would be in a heap of trouble. Tesla needs to show more loyalty, especially when very few of the early adopters would actually take part in such a program. The car is fantastic, but continued dismal customer service may yet kill Tesla.

P85 Vin65xx

riceuguy | April 5, 2013

But how would it be structured? Re-finance with their lenders? Because the way this works the loan has to be at a certain amount at the end of three years in order for the math to work (i.e., for Tesla to pay off the remainder of the loan and have that equal exactly 43% of the original value).

mdemetri | April 5, 2013

Riceguy - It is a valid point, but I think at a minimum Tesla should guarantee that they would buy all cars back at 43% (or Mercedes S series level) at three years, regardless of original financing. I am very unlikely to take part in such a deal, but for me it is more about principal and commitment to early adopters.

mcx-sea | April 5, 2013

What Elon is really showing is that he is confident a three year old Model S will have depreciated significantly less than a three year old Mercedes S Class. He is personally guaranteeing that Tesla can use that MB depreciation percentage to buy back, refurbish, then resell Teslas at some sort of a profit. As an MB owner for fifteen years now, I have watched their depreciation history and certainly share his confidence.

To be fair, a "grandfather clause" should potentially benefit both the buyer and the seller. If the seller agrees to a buyback if the seller chooses to sell, then the buyer should agree in advance to a buyback if the seller chooses to buy.

If you maintain your warranty and give your Model S the care it deserves, you will very likely find its market value in three years to be greater than what you could expect to receive in any unilateral buyback. Your fifty test drives and enthusiastic recommendations are continuing to add long term value for your car, for all other Tesla owners, and for TMC!

DouglasR | April 5, 2013

I just can't understand this feeling of entitlement: because I am an early adopter, TM owes me! I got a great car for what I paid. Why can't the company change its product offerings without extending the same offer to all past customers? It is particularly inappropriate for this offer, which is tied to a loan (at a pretty high interest rate). Very few people will probably make use of this financing product, so TM's potential liability is limited. If TM were to offer a buy-back guarantee to all purchasers, past and present, its potential liability would be enormous. That would certainly change TM's borrowing capacity.

When Apple first released its iPhone, it also had many early adopters. It then added lots of features and improvements to that phone, some of which could be offered to the first purchasers through software updates, but most of which required those purchasers to buy a new phone.

JoeFee | April 6, 2013

The only way I would let my Sig go would be for .... a lot more than I payed for it!

Brian H | April 6, 2013


It's all moot anyway. While this program will establish a sort of floor for the anxious, the market price will almost certainly be higher, and that's what matters.

wheatcraft | April 6, 2013

I'm with those who say it is no big deal. Even if offered, I would not consider it. I have a 1.9% loan with Bank of America, maybe not the lowest rate out there, but not bad. I could have paid cash for the car, but I am doing much better that 1.9% on my money. I consider myself lucky that my car was delivered in 110 days, rather than the 10-12 months that was estimated at the time of my reservation (mid-November).

mdemetri | April 6, 2013

There is no comparison between the purchase of a $100,000 car from an in-debt non-profitable start-up that would go under without early adopters with the purchase of a $200 (subsidized by cell phone companies) phone from an established and profitable company (Apple) that was under zero risk of going under if the iPHONE was a flop (re iPOD, iMAC product sales). Many of us purchased a car that cost 2-3X more than we have ever previously spent on a car. A major reason that I (and many others, based on forum posts) bought the car was that we strongly believed in the mission of Tesla (accelerate conversion to electric cars) and wanted to help it be successful (of course, the quality of the car was also a major factor). Thus, I do believe that Tesla needs to have a special relationship with early adopters, and guaranteeing the value of the Model S at 3 years at ~43% for early adopters would be consistent with such a philosophy.