Tesla Arranges Special Financing on Model S
Tesla CEO Elon Musk wisely waited until after 'April Fools Day' to make his BIG announcement. For nothing down and $500 a month you can own a Model S, is the deal in a nut shell.
And to further alleviate buyer anxiety about resale value, Tesla will buy back the car after three years at the same residual value of a Mercedes S-Class luxury sedan. Musk also added his personal guarantee.
The no-down payment aspect of the deal is made possible by Wells Fargo and US Bank financing it, using the $7,500 federal tax credit and any applicable state incentives as the collateral.
Here's the official company statement on how the program will work:
- US Bank and Wells Fargo have agreed to provide 10% down financing for purchase of a Model S (on approved credit.)
The 10% down payment is covered or more than covered by US Federal and state tax credits ranging from $7,500 to $15,000. New Jersey, Washington and DC also have no sales tax for electric vehicles. These advantages are not available when leasing.
- When considering the savings from using electricity instead of gasoline, depreciation benefits and other factors, the true net out of pocket cost to own a mid-range Model S drops to less than $500 per month.
- After 36 months, you have the right, but not the obligation to sell your Model S to Tesla for the same residual value percentage as the iconic Mercedes S Class, one of the finest premium sedans in the world, made by Daimler (also a Tesla partner and investor).
- Not only is Tesla guaranteeing that resale value, but Tesla CEO Elon Musk is personally standing behind that guarantee to give customers absolute peace of mind about the value of the asset they are purchasing.
The company sees this as an entirely new financing model, noting...
Most people throughout the world prefer to own their belongings, rather than rent what is essentially someone else’s property via a lease. However, leases do provide some key benefits, particularly a low initial payment, tax deductions, lower risk on resale value and the convenience of returning a car without the hassle of reselling it personally.
Like the Model S, this product was created from the ground up to provide maximum benefit to consumers, rather than simply duplicating other financing programs that tend to favor companies at the expense of the individual.
This arrangement, Tesla states, offers the best of both ownership and leasing. Presumably it will become available immediately.
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