Below is Tesla’s big announcement, which many people have eagerly been waiting for since Elon sent a tantalizing tweet last week. We’ll probably add some commentary onto this in the next day or two, but I think it’s pretty straightforward, and a big benefit for Tesla buyers. Here’s the full announcement (note that there’s also a calculator on Tesla’s website that allows you to compare this option with other options):
PALO ALTO, Calif. – April 2, 2013 – 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 surety 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.