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 the advantages of a traditional lease program.
Here’s how it works. Wells Fargo and US Bank are both on board, agreeing to put down 10 percent towards financing for credit-approved buyers. This amount should be covered by US federal and state tax credits for purchasing an electric vehicle – credits that aren’t accessible through a traditional lease program.
When factoring in the savings from using electricity versus gasoline, depreciation and all of the above listed benefits, the total cost of ownership per month comes out to less than $500.
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.
If you decide you want to keep your Model S after the initial three years, you’d simply keep making payments on it for another two years until it is yours outright. Musk said this type of arrangement guarantees that you’re never locked into something like a lease and that buyers are building equity in the car as time passes.
Tesla’s Model S starts at $62,400 after a $7,500 federal tax credit. The partnership is designed specifically to help make the expensive sedan accessible to more people.