Tesla Financing and Lease Options

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Updated on Friday, July 31, 2020

It’s no secret that Teslas are expensive, but Tesla financing doesn’t have to be. Tesla financing rates start at 2.99% APR and the automaker offers car loans on all of its current passenger vehicles in production: models S, 3, X and Y. Terms range from 36 to 72 months depending on the model. If you’d like to do a Tesla lease, you’re a bit more constrained; only models S, 3 and X are available to lease and for a term of 24 to 36 months. But if you want a potentially lower rate or different term than what’s available through Tesla, look for your own financing from your bank, credit union or online lender.

Tesla financing and lease options

The available Tesla finance terms depend on the model you want. You could finance up to 100% of the car’s value, but you must cover the taxes and fees out of pocket. Unlike other financing options, Tesla financing does not allow you to roll these taxes and fees into the total loan. Tesla notes that taxes and additional fees can add up to 10% of the vehicle’s purchase price, which includes a nonrefundable $100 order fee and a $1,200 destination and document fee on new vehicles.

Tesla Financing and Lease Options
Model 3Model SModel XModel Y
Finance Terms48, 60, 72 months36, 48, 60, 72 months60, 72 months48, 60, 72 months
Lease Terms36 months 36 months* 36 months*Not available
Annual Lease Mileage Options10,000, 12,000, 15,00010,000, 12,000, 15,00010,000, 12,000, 15,000Not available

*A 24-month lease may be available based on where you live.

If you’d like to see what your payment would be or which Tesla you could afford based on a payment you want, use a car financing calculator.

Consider another lender

However, keep in mind that you don’t have to finance through Tesla to get a car loan for a Tesla. Don’t discount the idea of other lenders because they may in fact have discounted rates, and you could get a better deal. For example, Suncoast Credit Union in Florida offers a 2.50% starting rate for “green cars” — electric vehicles or vehicles with 28 MPG or more. Shop around! There are other potential lenders out there. Here are some of the best auto loan rates that we found.

How to finance a Tesla

1. Get a preapproval

To apply for purchase financing through Tesla, you first have to order a Tesla. This is backward compared with the typical vehicle financing process, and we recommend rate shopping and getting a car loan preapproval before ordering a Tesla. This way, you get a firm idea of your payment and can compare auto loan offers, including one from Tesla, to get your best rate.

2. Order your Tesla

You must choose a specific vehicle, either a new or used car in inventory, or configure a new vehicle from the factory, and place the order. Below is an example of a Tesla order agreement. It shows your personal information, the price of the car and any/all upgrades you choose, plus the $1,200 destination and document fee. This agreement does not include any taxes or government fees you may have to pay based on where you live. It also does not include a transportation fee if you’re buying a used Tesla and want it delivered to a location near you. (Delivery costs for new cars are covered in the destination and document fee.)

3. Apply for Tesla financing

When you’ve completed your order, the Tesla website will ask you how you would like to pay. The four options provided are cash, loan arranged through Tesla, lease arranged through Tesla and self-arranged financing.

From there, the application for Tesla financing will ask for further personal information from you and your cosigner, if you have one. You already provided your name, address and contact details when you placed the order. Now you’ll need to list your Social Security number, how much you want to put down, how much you want to borrow and for how long you want your loan term.

4. Compare offers

A member of the Tesla Financial Services team will contact you within 48 hours after you submit an application. You also have the option of contacting them via email at [email protected]. If you are approved, compare the Tesla financing offer to your preapprovals and choose your best one.

Your Tesla approval is good for 60 days. This is double the normal 30-day approval time as it’s meant to cover any potential delivery delays. But if you don’t pick up your Tesla (or have it delivered) and sign the loan documents within that 60-day window, your approval expires. You may have to apply again and your APR offer may change, depending on the market at the time.

Beware of delivery delays

If your Tesla isn’t ready within that 60-day window and you apply again, the application for credit will ding your credit score again as it would be well outside of the 14-day rate-shopping window that the credit bureaus allow. Tesla has had some pretty significant production delays in the past so it’s something to keep in mind if you decide to finance through Tesla.

5. Choose a loan and make payments

To accept an offer, contact the lender and follow through on the paperwork and set up a payment date. To dismiss an offer, do nothing. Auto loan offers expire automatically.

Whichever loan and lender you choose, follow through with the lender to finalize the loan and set up payments. We recommend setting up automatic payments so there isn’t a chance you’ll forget and miss a payment. Some lenders also provide a rate discount if you make automatic loan payments.

What about the Tesla Cybertruck financing?

Cybertruck financing is not currently available as the vehicle isn’t in production. You could place an order for one and pay the nonrefundable $100 fee, but you cannot fully configure your dual- or tri-motor Cybertruck until late 2021, which is when production will start. Single-motor Cybertruck production is expected to begin in late 2022.

How Tesla leasing works

To apply for Tesla leasing, you don’t have to order a car, but you need to register for a Tesla account and choose the model you want. A Tesla Model 3 lease is a popular option, but you could lease the Tesla Model S or X as well. No matter the model, you still have to pony up a $100 order fee and a $1,200 delivery fee for a Tesla lease. But you do not have to order a specific car before applying to lease and your lease approval is good for a full 90-day window, meaning you have about three months from the date you’re approved to receive your new car and sign the papers.

Mileage, term options

For all Tesla leases, you could choose between three mileage options: 10,000, 12,000 and 15,000 a year. But you have limited term options: in some locations you have 24 months while others only offer 36 months. Tesla does not offer longer or shorter lease terms. However, if your account is in good standing toward the end of your lease, you could request up to a six-month lease extension.

End-of-lease options

Tesla offers regular end-of-lease options: you could turn in your vehicle, buy it or turn it in and get a new Tesla. The exception is the Tesla Model 3 lease. Unlike most car leases, you cannot buy the Model 3 at any point during the lease, including at the end of the lease term.

Tesla financing and leasing are not available in all states. Leasing is available in 39 states — Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Kansas, Maine, Maryland, Massachusetts, Minnesota, Missouri, Montana, Nevada, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wyoming — and in the District of Columbia.

What about a Tesla lease takeover?

It is possible as a current Tesla lease holder to have someone else take over the lease if they do so in the first 24 months and if Tesla approves the other person based on their credit. You could read more about taking over a car lease.

What about Tesla lease insurance?

Leasing requires special levels of auto insurance as decided by the lessor. For a Tesla lease, you must have a maximum deductible of $2,500 and maintain full coverage auto insurance with at least:

  • $50,000 for property damage
  • $100,000 for bodily injuries to any one person
  • $300,000 for any one accident
  • Physical damage insurance for full value of vehicle

All Tesla leases come with guaranteed auto protection, or GAP, insurance, which covers any difference there might be between what insurance pays and what you owe if the vehicle is totaled.

Is Tesla financing worth it?

One of the best ways to answer this question is to compare a Tesla financing offer with other car loan offers you attain from lenders. If the Tesla loan offer is competitive and beats your preapproval rates, go for it. If it doesn’t beat your other car loan offer, then go with that one.

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