Tesla is producing its vehicles at record rates. Despite maintaining high delivery numbers too, Tesla is beginning to sit on a lot of inventory. For the past several years, Tesla did not have many in-inventory vehicles, especially considering the Model 3 and Y. But now, delivery centers have a multitude of entries to select from.
To keep these vehicles moving, the Austin-based automaker has recently been employing a variety of incentives and discounts to get customers behind the wheel. For the more costly Model S and X vehicles, Tesla has been offering up to $7,500 off MSRP depending on the configuration. At specific locations, Model S sedans and X crossovers are as low as $82,000 and $92,000, respectively.
Model 3s have seen discounts too. Some delivery centers are offering inventory models for as low as $37,490. But not all of its incentives are price reductions. Recently, Tesla started a new financing term to capture more prospective customers to the brand with lower monthly rates.
Tesla’s new financing term is for 84 months. Now, customers can take a seven-year loan to purchase a Tesla. Along with the extended term, buyers will see APRs of around 6.39%. The 6.39% is likely for well-qualified customers, as Tesla’s website states, “Your payments and rates may be higher.” Given this acknowledgment, buyers could see rates higher than the already steep 6.39% figure.
Considering the estimated rate, taking out a loan on a Tesla for this extended period will not be a financially advantageous stratagem. The popular $50,490 Model Y Dual Motor AWD is an excellent example for the loan calculation.
If the buyer puts down Tesla’s preselected $4,500 initial payment, the financed amount would be $47,380. At 6.39% interest, the monthly loan payment will be $703, not considering any potential incentives. After 84 months, the owner will have paid $59,052 in monthly payments, plus the $4,500 paid initially.
In total, the vehicle will cost a staggering $63,552. This is the downside of high-interest, long-term loans on any car. Nevertheless, for automakers, it does help to lower the monthly price for customers. The expense of long-term loans is owing significant interest and the possibility that one can become upside-down on their loans.
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