Tesla partners with major banks to make Model S more accessible

By Shawn Knight
Apr 3, 2013
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  1. Tesla Motors recently announced a partnership with two major banks that will allow customers to finance the company’s Model S electric cars. CEO Elon Musk said the deal combines the surety and comfort of owning a car with all of...

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  2. Skidmarksdeluxe

    Skidmarksdeluxe TechSpot Evangelist Posts: 2,794   +702

    It's a step in the right direction for some but I'd rather purchase it outright than tie myself into a lease. Problems being I don't live in the USA or have that kind of money lying around just for a vehicle. I'll just have to make do with what I have now or buy something cheaper that still relies on fossil fuels. Maybe next lifetime?
  3. cmbjive

    cmbjive TechSpot Enthusiast Posts: 447   +75

    Sorry but even after the tax credit a $62,400 car with a 5% interest rate over a 60 month term is about $1177. That's a mortgage for most people. And if it's a three year lease then the payment is going to be even higher. I think the $500 total cost of ownership is BS. It's like telling a college student that they'll make more money - eventually - after racking up $100,000 in student loan debt.

    I hope people will do their homework before falling for this snake oil sale, err, lease.
  4. Renrew

    Renrew TechSpot Enthusiast Posts: 235   +17

    ^ You're not financing the whole amount, but have the option of:

    "Once the three year mark rolls around, buyers will have the option to sell their Model S back to Tesla for the same residual value percentage as a Mercedes S Class. The sell-back value is being guaranteed, too, both by Tesla and Musk himself."

    You forgot to deduct the residual value which may amount to half the initial cost. In addition you forgot to deduct the Gasoline savings.
  5. cmbjive

    cmbjive TechSpot Enthusiast Posts: 447   +75

    I didn't forget to deduct those things; I mentioned then dismissed them. Those things are known as variables and are not uniform across all potential buyers or lessors of any car, let alone a Tesla S. On top of that, at least when it comes to the so-called "gasoline" savings, Tesla owners are simply exchanging gasoline for electricity, which still costs them.

    Residual value is also an unknown variable, but I assume it will be determined by Wells Fargo and the other financing company. Of course residual value heavily relies on the quality of the car as well its mileage. Speaking of mileage there will of course be a mileage penalty if lessors drive beyond a certain annual allotment and the penalties per mile can be substantial. I'm willing to bet that because of the range of the Tesla the annual allotment will be lower than a traditional gas car.
  6. Ranger12

    Ranger12 TechSpot Guru Posts: 629   +115

    I think financing generally gives the illusion of affordability. Unfortunately it's become the norm nowadays to finance your whole life. I'd say if you couldn't afford this car before then you're probably better off not jumping for this trick.
  7. Renrew

    Renrew TechSpot Enthusiast Posts: 235   +17

    If, as stated Tesla and Musk guarantee the sell back value it can't be dismissed it needs to be seen how much they actually guarantee. You based your $1100 per month payment on paying the car off in 3 years, that's simply not accurate. While energy is still used to produce electricity, the consumer pays much less per mile than he would using gasoline, so that can't be dismissed either.
  8. Renrew

    Renrew TechSpot Enthusiast Posts: 235   +17

  9. cmbjive

    cmbjive TechSpot Enthusiast Posts: 447   +75

    That will be a big "if". And on top of that it remains to be seen how much Tesla will pay for a car that will rapidly depreciate the minute it leaves the lot. It is still a variable until Tesla gives a hard number. Scratch that: Chances are Tesla will add the words "up to" before that hard number to allow themselves wiggle room so it still would a variable.

    I based the payment on a purchase of the car, not a lease payment. In addition my payment assumed a 60 month term. That's why I also stated that a lease price at 36 months would likely be higher. I'm pretty sure that there will be people who can afford a car payment that will be north of $1700 (assuming the lease rate also was 5%) but that is not accessible for everyday people regardless of how much Tesla promises to buy back.

    Again, electricity cost is a variable cost. It may be less than gasoline; it may be more. But I highly doubt that the savings will be anywhere near a number to bring the effective cost of ownership down to $500 a month.
  10. cmbjive

    cmbjive TechSpot Enthusiast Posts: 447   +75

    One other thing to consider when charging by electric is the opportunity cost you lose to use your time doing something else. It takes me no more than five minutes to fill up my car to the brim; even using a Tesla supercharge station costs you an hour of time.

    And here are two links disputing the math Tesla used to arrive at that $500 a month figure. To put it succinctly, Tesla overestimates how much people value their personal time and relies on states that give really generous tax credits for owning an electric car:

    http://qz.com/70237/how-elon-musks-...he-tesla-model-s-turns-1199-a-month-into-500/

    http://www.businessinsider.com/teslas-big-announcement-2013-4

    http://www.businessinsider.com/can-...odel-s-for-under-500-dollars-per-month-2013-4
  11. When you say "Electric" cars you should actually write "Coal-Powered" cars, at least for the vast majority of locations.

    I'm paying enough goddamn taxes, thank you very much. If our state and federal taxes and local utility bills had footnotes on there specifying that some of it is buying "Electric" cars for rich people then this crap would end quickly.

    There should be no tax breaks for this tech, ever. I love how we're expected to offset the crazy prices of these things but never get to drive it.

    P.S. There are no adequate words to describe the loathing I have for the captcha thing on this page for anonymous posting. Waterboarding would be too good for the developer of this insanity.
     
  12. Fbarnett

    Fbarnett TechSpot Enthusiast Posts: 183   +24

    $70k for unproven battery powered crap . I will pass anybody that buys this crap doesn't need to finance anyways why is this news?


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