Finding a 0% APR financing deal at Tesla is hard currently as it does not offer it. However, you can get one from a third-party lender as Tesla accepts them.
Let us discuss what are Tesla’s financing options and how to qualify for this financing.
Does Tesla Offer 0% Financing?
Tesla does not offer 0% financing directly on any of its car models. However, it offers competitive interest rates on different makes and models.
You can buy or lease a vehicle at Tesla directly using its financing options. The best option for you to get a 0% APR deal on a Tesla is through a third-party lender though.
Tesla provides financing through its banking partners including the US bank, Chase bank, and Wells Fargo to name a few leading brands.
Tesla also accepts financing applications approved through third-party lenders. It means you do not need to rely on Tesla financing only to seek a 0% APR deal.
Along with the absence of 0% APR deals, Tesla does not offer prequalification. Both these points come with great disadvantages for its customers.
Financing Services at Tesla
There are a few financing options for customers at Tesla. You can buy or lease a vehicle directly by choosing your favorite Tesla vehicle and seeing if you qualify for it.
Here are the four main financing services at Tesla.
Contract Purchase
A contract purchase offers the flexibility of lower monthly installments of your favorite Tesla car and buying it at the end of the contract.
A contract purchase usually comes with a large payment by the end of the contract. Therefore, the monthly installments on this type of financing are lower as compared to other options.
Here are a few key points with contract purchases at Tesla:
- It comes with fixed financing terms ranging from 24 months to 48 months.
- This option does not often require a down payment.
- It comes with mileage limits.
- You get three options at the end of the contract:
- Return the vehicle to Tesla and pay no extra money if it’s in good condition.
- Exchange the vehicle with a new one and renew the contract with new terms.
- Buy the vehicle by making the remaining payment or finance it through a new loan offer.
The ownership of the vehicle remains with Tesla unless you buy the vehicle at the end or during the contract.
Hire Purchase
Hire purchase is your option if you want to purchase a Tesla vehicle through a loan. You can enjoy unlimited mileage during the contract without paying anything extra.
This option comes with different loan terms and down payment requirements. You can finance a Tesla through a third-party lender as well.
Here are a few key points with a Hire Purchase at Tesla:
- It comes with flexible down payment requirements from 10% to 80% of the vehicle price.
- The financing term ranges from 24 months to 60 months.
- It comes with a fixed interest rate.
- You have two choices at the end of the contract:
- Exchange the vehicle with a newer model by settling your previous outstanding loan balance.
- Purchase the vehicle outright by paying the remaining balance if any.
The ownership of the vehicle transfers to you at the end of the contract when you settle all installments.
Contract Hire
If you do not want to own a Tesla and use it for a limited time, contract hire is your best option. In simple words, it is your car lease option from Tesla.
You can lease a car through a contract hire for up to 48 months at competitive interest rates. The financing amount will be the difference between the new car price and the residual value of the leased vehicle at the end of the car.
Here are a few key points on a contract hire at Tesla:
- It comes with financing terms of up to 48 months.
- It comes with mileage limits.
- You cannot purchase a vehicle through this program.
- You can return the leased vehicle to Tesla or renew the contract for a new model at the end of the contract.
The ownership of the leased vehicle remains with the lessor in this case.
Tesla Loan
This is your loan program to buy a Tesla through a fixed-term loan. It offers you an extended loan term of up to 72 months (a minimum of 24 months).
Tesla loan program comes with a fixed interest rate offer as well. You can choose to make a down payment, finance a portion of the car value, and pay the remaining amount at the end of the loan term.
Here are a few key points on the Tesla Loan program:
- It comes with a loan term of 24- to 72- months.
- It offers a fixed interest rate.
- You can make a down payment of up to 50%.
- At the end of the loan program:
- You can either renew the term or buy the vehicle by paying the remaining balance.
The ownership of the vehicle transfers to the buyer at the end of the loan term.
How to Qualify for Tesla Financing?
Tesla does not offer a prequalification process. So, you cannot tell whether you qualify for a loan with your current credit score.
It also does not officially state the credit score and monthly income requirements. However, you can apply for a Tesla loan with a credit score of 720+ for easier qualification.
The qualification for a Tesla loan would also depend on the total value of the car including the interest amount. You can manage the credit approval by offering a larger down payment as well.
Like any other auto lender, Tesla would also offer the best deals to borrowers with excellent credit scores. Other factors like credit history, monthly income, debt-to-income ratio, and existing loans also affect your loan approval chances.
Here are a few key things you’ll need when applying for Tesla financing:
- Personal information like name, date of birth, social security number, and contact number.
- Complete the residential address with the ownership or rental confirmation.
- Financial details like your gross monthly income, employer name, and employer contact.
- Vehicle details including the make, model, and year.
Then, you can process the Tesla financing application online. There you can provide essential details like the advance payment, loan term, and the type of financing required.
Tesla’s financing process will incur at least one hard inquiry. In some cases, you may find more hard inquiries in your credit report too.
How to Get 0% Financing on a Tesla?
It’s hard to get 0% financing on a Tesla directly. Tesla may offer a 0% APR financing in the form of a special deal but it currently does not have any.
Therefore, your best option to get a 0% APR deal for a Tesla car is through a third-party lender. You can check with your bank or credit union to find a 0% APR to buy a car.
Advantages and Disadvantages of Tesla Financing
Tesla financing comes with some discrete advantages for its customers.
- Applying for Tesla financing is digital. You can easily apply for your favorite EV online in a few easy steps.
- You can choose Tesla financing or bring a third-party lender.
- The loan and lease terms are flexible with competitive interest rates from Tesla.
- There are no lender charges or loan application fees from Tesla.
- You may qualify for tax rebates and credits for qualified EV purchases at Tesla.
Tesla financing lacks a few key features which mean a few disadvantages for buyers:
- Tesla does not offer prequalification and incurs hard credit inquiries.
- It does not officially state credit scores and other qualification criteria.
- It has several lending partners meaning different loan approval terms for applicants.
- Tesla financing is not available in all US states currently.
