Editors’ take: Tesla financing could be an excellent option for well-qualified borrowers with good credit in select states interested in buying a Tesla. Lending terms are not disclosed before application, and there is no prequalification. Leasing a Tesla could provide an alternative to buying a new car.
Tesla Finance at a glance
|
Starting APR |
Competitive with many lenders |
|
Loan amounts |
Not disclosed |
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Loan terms |
36 to 72 months |
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Minimum credit scores required |
Not disclosed |
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Loan fees |
None |
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Prepayment penalty |
No |
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Availability |
Available in 27 states |
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Ability to apply for prequalification or preapproval? |
No |
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How to apply |
Online |
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Other requirements |
● Must be 18 years old and have a valid Social Security number ● Must pass a credit review |
Pros
- Easy online application
- Ability to choose Tesla financing partner or third-party lender
- No lender or application fees
Cons
- Not available in all states
- No prequalification or preapproval process
- Uses multiple third-party lenders
What you need to know about Tesla financing
Ability to choose Tesla Finance partner or third-party lender
When you order your Tesla, you have three choices for how to pay for it: Cash, lease or auto loan. If you go with a loan, it may be funded by Tesla Finance or one of the automaker’s partner lenders. You also have the option to secure an auto loan from your preferred lender. In either case, the process is relatively simple. To finance with Tesla, you’ll fill out a short credit application to receive a loan offer. If you use your own lender, you’ll need to input the company’s information and the amount you want to finance. You may qualify for electric vehicle incentives from your state or local government.
No prequalification or preapproval process
The process of getting a loan offer from Tesla is relatively straightforward. You can only apply for a loan once you’ve selected, designed and ordered your new car — and paid a nonrefundable order fee of $250. There’s no ability beforehand to determine if your application will be approved or determine what interest rate you will pay on a loan. Well-qualified borrowers are likely to be offer the 3.74% APR, but people whose credit isn’t a strong may face a higher rate.
Uses multiple third-party lenders
When you finance through Tesla, you may not actually get a loan from Tesla. Instead, your application may be routed to one of the carmaker’s partners. In this case, you’ll make your payments directly to that lender. If you have any trouble making payments, you would contact the lender, which is named in your finance contract.
Can I buy a Tesla that I’ve leased?
Rather than buy a Tesla outright, you can lease a new Tesla from the manufacturer. Lease terms range from 24 to 36 months depending on the model at a sub-7% APR, and are available to customers in 43 states.
If you leased your Tesla before April 15, 2022, you may be eligible to buy it at the end of your term. For leases delivered on or after April 15, 2022, however, buying the vehicle is not an option.
If you are eligible to buy your leased Tesla, you can use the Tesla app to get an offer from the company on the purchase price. If you are not eligible to buy the car or do not wish to, you can return it — or you may be able to extend your lease for up to six months.
Financing with Tesla
To pay for your new Tesla, you can either pay cash, lease the vehicle or take out a loan. If you go through Tesla to borrow money for the vehicle purchase, your loan may be funded by Tesla Finance LLC or lenders that partner with the automaker.
Not sure if Tesla financing is right for you? Consider these alternatives.
- Bank of America auto loan: If you already have a bank account with Bank of America, you may be able to get a discount on a new auto loan.
- PenFed Credit Union auto loan: People with excellent credit may qualify for the credit union’s low-interest rates.