Tesla CEO Elon Musk said the loan program is designed to make the Model S "affordable to a much broader audience" than most people expect. The CEO is riding a wave of publicity this week after announcing the EV company will be profitable for the quarter after selling more than expected Model S EVs.
Most critically, though, the program gives people who lease a Tesla the $7,500 tax break that the government gives out for electric and hybrid cars. Until now, Tesla lease customers lost out on that rebate, which went instead to the bank that provided the lease.
Leasers (who have excellent credit) will get that rebate from US Bank and Wells Fargo, which have agreed to provide the 10 percent down payment required to lease a Model S. Monthly lease payments are based on how much the buyer leaves as a down payment, and then calculated by how much the car should be worth when the car is turned back in. So Tesla is promising the Model S will be worth the same as a Mercedes S Class. Read The Full Article On AOL Autos »
COMBINES BEST ASPECTS OF CAR LEASING AND OWNERSHIP
TUESDAY, APRIL 2, 2013
PALO ALTO, Calif.-- Tesla Motors announced today that, in partnership with Wells Fargo and US Bank, it has created a revolutionary automotive financing product that provides the best elements of ownership and leasing to Model S customers.
Most people throughout the world prefer to own their belongings, rather than rent what is essentially someone else's property via a lease. However, leases do provide some key benefits, particularly a low initial payment, tax deductions, lower risk on resale value and the convenience of returning a car without the hassle of reselling it personally.
Working with some of the largest and most respected banks in the country, Tesla has been able to create a new kind of financing product that combines the security and comfort of ownership with all the advantages of a traditional lease. Like the Model S, this product was created from the ground up to provide maximum benefit to consumers, rather than simply duplicating other financing programs that tend to favor companies at the expense of the individual.
How does it work?
• US Bank and Wells Fargo have agreed to provide 10% down financing for purchase of a Model S (on approved credit.)
• The 10% down payment is covered or more than covered by US Federal and state tax credits ranging from $7,500 to $15,000. New Jersey, Washington and DC also have no sales tax for electric vehicles. These advantages are not available when leasing.
• When considering the savings from using electricity instead of gasoline, depreciation benefits and other factors, the true net out of pocket cost to own a mid-range Model S drops to less than $500 per month.
• After 36 months, you have the right, but not the obligation to sell your Model S to Tesla for the same residual value percentage as the iconic Mercedes S Class, one of the finest premium sedans in the world, made by Daimler (also a Tesla partner and investor).
• Not only is Tesla guaranteeing that resale value, but Tesla CEO Elon Musk is personally standing behind that guarantee to give customers absolute peace of mind about the value of the asset they are purchasing.