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TESLA
RESALE VALUE GUARANTEE
Guaranteed Effective Date: 05/16/2013
Guaranteed Resale Value ($): $49,400
Vehicle Identification Number: [omitted]
Year: 2013
Make / Model: Tesla Model S
Trim: 85 kWh Performance
Color: Red
Welcome to the Tesla Family! Your vehicle identified above ("Vehicle") qualifies for our Resale Value Guarantee ("Guarantee"). We guarantee that your vehicle will have a resale value after 3 years of at least the Guaranteed Resale Value specified above. This value is equal to 50% of the base purchase price of the 60 kWhr Model S at the time of your purchase of the Vehicle, plus 43% of the original purchase price for all options including the upgrade to the 85kWhr battery pack (exclusive of taxes, fees and accessories). During the period between 36 months and 39 months from your Guarantee Effective Date, you have the option to sell your vehicle to Tesla for the Guaranteed Resale Value. This Guarantee is subject to the following terms and conditions:
TERMS AND CONDITIONS
- The Vehicle is financed through Tesla's direct vehicle financing program with U.S. Bank, N.A. or Wells Fargo Dealer Services. The Vehicle will need to continue to be financed through the program and your account must remain in good standing for a minimum of six months.
- The Vehicle is maintained by Tesla Motors or its subsidiary according to Tesla's recommended service schedule. You must not have taken any action that would void the New Vehicle Limited Warranty on the Vehicle.
- The Vehicle will be inspected by Tesla and the Guaranteed Resale Value will be adjusted for damage, excessive wear and use based on Tesla's standards for normal use and for mileage in excess of 15,000 miles per year. Excess mileage will reduce your Guaranteed Resale Value at a rate of $0.25 per mile.
- To exercise this Guarantee, you will need to contact us and deliver the Vehicle to us for inspection and purchase during the period between 36 months and 39 months from the Guarantee Effective Date. Prior to or in conjunction with our purchase of the Vehicle, you will need to provide proof of ownership and clear title for the Vehicle. To obtain clear title on the Vehicle, it is your responsibility to clear all outstanding obligations with the lender, including any principal amount, late payments, penalties, and other fees that may be due to the lender.
- This Guarantee may not be assigned or transferred to any person or entity at any time. Only the Owner(s) identified above, and no other person or entity, including any heirs or successors, has any rights under this Guarantee. This Guarantee only applies to the vehicle identified above. Tesla Motors, Inc. and any of its successors hereto, may assign or transfer this Guarantee, or any portion thereof, to any third-party without your prior consent or approval. This Guarantee automatically expires on the 39 month anniversary of the Guarantee Effective Date.
Tesla Motors, Inc. ©2013
Resale Value Guarantee (v.20130503)
I'm definitely going to finance mine with Tesla... I'm pretty sure it will be setup just like a traditional car lease in that you can just turn in the keys anytime between month 36 and 39 and walk away, provided you don't have > 15,000 miles and no major wear and tear or damage. ...
The clear title is a biggie.
It seems to be a small subset of people who are going to have financed the vehicle but will also have enough liquid in 3 years to front what could be $50k cash.
I'd love to see an option where Tesla agrees to buyback your vehicle and send that money directly to the loan company, giving you any leftover, rather than forcing you to front the cash.
It is my understanding that the max term on any loan that can be arranged through Tesla Financing (and thus be eligible for the resale) is 60 months. You can't resell until month 36. Even if you put 0% down (which isn't offered through Tesla Financing), you'd still already have paid more than half of what you owe on the vehicle.
So the resale price will always cover whatever is left on the loan. The financing team confirmed with me that if you choose to sell your car back, Tesla will pay off the remainder of the loan and give you the leftover. Owners don't have to worry about the clear title provision unless they reassign the debt, use the car as collateral for something else, etc.
Where do you see the max term of 60 months? Only thing I can find is http://www.engadget.com/2013/05/03/tesla/ which says 72 months.
Also, so you confirmed with Tesla that if you owe money on your loan, they will pay off the loan rather than require you to front the cash and then reimburse you? That's pretty significant, if true, and I may take a second look at going through Tesla.
Thank you for emailing your question to Tesla Motors. The wording is a bit confusing and I hope I can clarify the situation. If you choose to turn in your Model S from months 36-39 of ownership it will be handled exactly like a trade-in at a regular dealer. We will inspect the car and write a check for the Resale Value Guarantee. In most cases we will be sending a check to the bank to pay off the remainder of the balance on your car which will clear the title.
The Resale Value Guarantee is set up where you should not owe more money on the car than what the Resale Value will give you. The clause is protecting is from the outlier cases where for some reason a customer might owe money on the car (late payments, etc.) and in these cases the customer will have to pay off any remaining balance in order to turn the car in to Tesla Motors.
When it comes to finance terms, we offer a max term of 72 months and if you are approved for it we recommend that you take it because you will have a lower monthly payment and there is no prepayment penalty or penalty for making a higher payment than what is owed monthly. US Bank and Wells Fargo are our partners and US Bank will offer a max term of 72 month and Wells Fargo will offer 60 months both companies offer rates that average around 2.95%.
Since I just placed my order and haven't yet discussed financing with Tesla I would like to make sure my understanding of the resale guarantee is correct or not. Please help correct my assumptions where wrong.
For the sake of this example I will use a 60Kwh car that has a price of $71,070 and $14,300 in options for a total price of $85,370. 50% of $71070 (60 kWh base price) is $35,535 and 43% of $14,300 (options) is $6149. The resale value guaranteed by Tesla on this Model S is $41,684. Tax and registration are paid out of pocket and doesn't come into play, meaning we're not financing them.
Let's use a term of 72 months and a rate of 2.95%. The first option would be to go with 15% down ($12,805) and the second option would be 50% down (42,670).
What would be the credit I end up with after 36 months that I could use toward the purchase of a new Model S?