Tesla Offers 11.25% Auto Loan Financing

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Financing for cars runs from “promotion offers” which include 0% over 72 months. Subaru has done this with its 2024 EV Solterra, which means it probably is not selling well. Ford offers the same low financing for 2023 versions of its EV Mustang Mach-E

And, financing can be extremely expensive. New car loans from Chase are well over 7%.

High Loan Rates

Tesla current financing for people with “excellent credit” is 5.99% for 72 months. For people with “fair credit” that rises to 11.25%

What does Tesla’s credit interest say about demand? Perhaps, demand for its cars is not as poor as some analysts have said. Tesla, alternatively, has a cost of borrowing below the interest rates on its loans. Perhaps it is using the loan rates to make money.

Tesla Not A Bank

Tesla is not in the banking business. It is in the EV business. Its market share in the US has fallen slightly, and now is ust under 50% of the EV market. However, it has not gone the route of Subaru and Ford, which are losing money on the Mach-E and Solterra. These two companies must have an excess inventory problem. Its cars get extremely high quality ratings.

There are stories, perhaps not true, that Tesla lots are filled with unsold vehicles. If so, the high interest rates on their car loans does not show it. Tesla’s used cars have created a large market.