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|Ability to order your car and apply for a loan online||Limited loan options — financing not offered for all models|
|Possible federal and state electric-vehicle incentives||Narrow range of loan terms that varies by model|
|No prepayment penalty, according to a Tesla representative||Not available in every state|
What you need to know about Tesla financing
Headquartered in California, Tesla is an electric-car maker led by CEO and co-founder Elon Musk. Tesla offers auto loans for select Tesla models through financial institutions — similar to how many dealerships offer financing. Tesla also provides direct leasing on some models. But there are some limitations to keep in mind when considering Tesla Financing.
Limited loan options
Tesla offers loans and leases for select models of new vehicles only.
- Tesla finances new-car loans for Model S, Model X and Model 3 vehicles.
- Tesla offers new-car leases for Model S, Model X and Model 3 vehicles. You’ll have the option to buy a Model S or Model X after leasing it. But you won’t have the option of buying a Tesla Model 3 after leasing it, according to a company representative.
If you’re in the market for a used Tesla or you need to get a loan for a model that Tesla doesn’t finance, you’ll need to secure your own financing through a lender, like a bank or credit union.
Limited terms for loans and leases
Loan-term options are somewhat limited — and they vary by vehicle. Only 60- and 72-month loan terms are offered for the Model S and Model X, while loan terms of 36, 48, 60 or 72 months are available for the Model 3. While these are fairly common loan terms, other lenders may offer a broader range of term options.
Similarly, Tesla Financing offers lease terms of only 36 months, with 10,000, 12,000 or 15,000 annual mileage options.
Not available in every state
Whether you’d like to buy or lease a Tesla, the opportunity to finance your loan through Tesla Financing depends on where you live. These are the states where Tesla Financing is available.
- New Jersey
- New York
- North Carolina
Financing can take place from the comfort of your computer
Whether you’re interested in a leasing or buying a car through Tesla Financing, the entire process — from ordering your vehicle to applying for your loan or lease — can take place online. First, you design and order your Tesla online. To place your order, you must pay a $2,500 refundable deposit. Next, when you’re within 30 days of the expected delivery date, you can apply for financing for your Tesla.
The process is different with some other automakers’ finance companies. For some, you may be able to choose the car you want and apply for preapproval online, but you’ll have to go to the dealership to close the loan and get your car. And for finance companies that don’t offer preapproval, you may need to head to the dealership and choose your car before applying for a loan.
Possible electric-vehicle incentives
An electric car will likely cost less to fuel than a typical gas-powered car. Tesla estimates that gas savings can add up to between $4,300 and $6,400 over six years. Still, if you’re thinking of buying or leasing a Tesla, you might be interested in what other incentives are available to help you save money.
According to Tesla, individuals who purchase a new Tesla Model S, Model X or Model 3 and have the car delivered between July 1 and Dec. 31, 2019, may be eligible for a federal tax credit of $1,875 on their 2019 federal income taxes. Some states have additional incentives available for purchased or leased Teslas. Tesla’s website has a list of what state incentives may be available.
A closer look at Tesla Financing
Here are some more things to know about Tesla Financing.
- According to a Tesla Financing representative, loan amounts range from $10,000 to 100% of the car’s price.
- Tesla Financing’s rep says the company doesn’t charge a prepayment penalty, meaning you won’t be hit with a fee if you pay the loan off early.
- If you apply for a loan through Tesla and are approved, you’ll need to make a minimum down payment that covers sales tax and vehicle registration fees, according to the Tesla rep.
Is an auto loan through Tesla Financing right for you?
If you’re in the market to buy or lease a Tesla, Tesla Financing could make sense, especially if you want to order and finance your car in one place online.
But if you want to finance a Tesla Model Y or Roadster, or if you live in a state where Tesla Financing isn’t available, you’ll need to look elsewhere.
How to apply for a loan from Tesla Financing
Whether you’re looking to lease or buy a Tesla, you can apply for financing through Tesla’s website. Here’s how to apply online.
1. Create an online account through Tesla’s website.
2. Select or design your vehicle, then click the “Order” button.
3. Pay $2,500 to secure the order.
4. Once you’re within 30 days of your estimated vehicle delivery date, apply for a Tesla lease or loan through your online account.
5. Within two days of your lease or loan application, a member of Tesla’s Financial Services team will contact you with next steps.
Not sure if Tesla Financing is right for you? Consider these alternatives.
If you aren’t sure whether Tesla Financing is right for you — or you don’t live in one of the states where it’s available — here are some other options to consider.
- Carvana: Carvana could be ideal if you’re interested in financing a used Tesla. Read our review of Carvana to learn more.
- Bank of America auto loan: A Bank of America auto loan may be a good fit if you want to finance a Tesla Model Y or Roadster, or plan to buy a used Tesla from a private seller. Read our review of Bank of America auto loans to learn more.