How to Finance a Tesla
Tesla vehicles are expensive and may require financing. Additionally, these cars qualify for state and federal tax credits, incentives, and rebates that make them significantly more cost-effective than gas-guzzlers.
Financial considerations vary when considering whether to lease or finance a Tesla; some individuals prefer leasing while others enjoy having ownership over their vehicle outright.
Credit
Credit is an integral component of purchasing any vehicle, but specifically Tesla vehicles. Many factors can impact eligibility when applying for credit: make and model of car, price range, state where you reside, income level and other details can all have an effect. Qualifying can feel like it requires degrees in political science and finance while changing government requirements complicate matters even further.
Tesla provides credit applications online through the payment method section of your Tesla account, using hard credit pulls to assess your creditworthiness and impact your score. Unfortunately, preapproval isn’t an option and you must wait for a decision; other manufacturers offer incentives like customer loyalty programs or discounted rates for military members; however its financing offerings remain competitive with other lenders.
Down payment
When applying for a loan, a down payment typically equals 10% of your vehicle’s MSRP; however, this figure may change depending on your lender and credit score. Use Tesla’s loan calculator to get a sense of your monthly payments – although keep in mind they do not provide preapproval; instead you must apply and undergo a hard credit pull in order to find out whether or not you qualify for financing.
Be mindful of the length of your loan term. Although most auto loans last between 24 and 60 months, Tesla offers longer loan terms of 72, 84 or even 96 months to make its cars more affordable. Over time these long-term loans can add up quickly; make sure to shop around lenders to find one with suitable terms. LendingTree can help provide useful financial resources as well as an outstanding car loan calculator!
Loan term
Tesla recently increased their maximum loan term from 72 months to 84 months in order to ease customer financial pressures, as rising interest rates increase the strain. This decision is intended to make electric vehicles more accessible to a wider consumer base while simultaneously lowering monthly payments due to longer loan terms. But beware! Payback may take more time and your car may depreciate faster over time!
Discover if you qualify for an 84-month loan by visiting Tesla’s website during the car-buying process. Underwriting information such as your Social Security number, phone number, address and employment may be requested from you in order to be assessed as eligible.
Once approved for a loan, your lender will send a digital loan agreement that you should review thoroughly before signing. After signing, wait for your electric vehicle (EV) delivery or consider applying for traditional auto financing through banks or credit unions in your area.
Payments
For financing purposes, to secure a Tesla you must submit information regarding your financial status and employment. Furthermore, you will require valid driver’s license in the state where you will be driving as well as proof of insurance or an invoice copy for all state requirements.
Tesla recently increased their maximum loan term from 72 to 84 months in order to reduce monthly payments amid increasing interest rates, yet longer loan terms increase total cost of ownership due to accrued interest. Therefore, it’s imperative that potential buyers conduct thorough research prior to making a decision regarding an electric car purchase.
