Quick financing question...

[zamardii12]

So I received my VIN number this morning and Tesla wants me to schedule pickup... latest being Friday. I am waiting on some money that is coming my way within the next week or two that I wanted to use towards the down payment along with the rest I have saved... I'll likely finance through Tesla since none of the local credit unions' rates are that much better... In any case if I finance the car with half of the amount I originally wanted can I apply the money I wanted to originally apply to the car later on once I receive it and get the reduced monthly payment I originally wanted? I want the lower car payment, but the car's already been on hold once and supposedly if I don't take delivery this time I'll lose my $250 deposit.

Another 2 weeks would have been ideal to wait, but just wondering if applying a large sum of money towards an existing loan will lower that actual car payment after adding it?

So say a 72 month loan @ $650/month... you suddenly apply say $15,000 towards the car... will that not lower the monthly payment?

 

[chobra]

Check with the lender if they will allow you to re-amortize (aka re-cast) your loan when you apply an additional (your 15k extra) payment during your loan period. Also make sure your lender allows early pay-off (no prepayment penalty).

For example, SchoolsFirst credit union allows re-amortize and early pay-off (no penalty).

Also I live in a state that charges sales tax on the purchase price of the car regardless of down payment so I wouldn't save on reducing my sales tax amount with a large down payment, not sure if the same applies to you.

Links below are for a mortgage loan but the concept is the same:

Re-Amortizing or Refinancing Your Home

Re-amortization is a lesser known alternative to refinancing when it comes to dealing with your mortgage.

www.investopedia.com

Prepayment Penalty: What It Is And How To Avoid It

A prepayment penalty is a fee that some lenders charge when you pay all or part of your loan off early. Learn why lenders charge the fee and how to avoid it.

www.rocketmortgage.com

 

[240vPlug]

More likely allowed with a credit union. The other option if Tesla doesn't allow you to reamortize is to try and refi the loan with a credit union later on. Apply your additional funds to the loan principle with Tesla finance and then refi the remaining balance. There are credit unions with lower rates.

Try USSFCU . You will need super prime credit score to get best rates >780 FICO.

Either way it's doable. Only downside of you refi is two hard pulls on your credit report.

 

[tashtibet]

must check: No Pre Payment Penalty

 

[OlyY]

I’m curious how it is possible to get financing in only 4 days? I have a trade and they won’t give me a trade offer until my VIN is assigned, which means I won’t have an out-the-door price until all of that happens and then may be expected to take delivery in less than a week?

Also, what if I get financing and go to take delivery and I find something that needs service? Can I not give them my trade and reschedule delivery until they make it right? This is so arse backwards. I can’t imagine getting a car but not getting it and then if it’s crap with scratches I am stuck with it? Any normal car deal you can walk away (minus $250 with Tesla), but it seems you can’t?

 

[trm2]

If you are getting financing though Tesla (well, whoever they send you to) it is no issue. It took about 4 seconds to get approved after I submitted my info.

 

[OlyY]

If you are getting financing though Tesla (well, whoever they send you to) it is no issue. It took about 4 seconds to get approved after I submitted my info.

If you go through Tesla (or whomever they send you to), can you finance the whole thing with a little negative equity and no money down? That’s the question I can’t get answered. And I’m 800+ credit.

 

[chobra]

If you go through Tesla (or whomever they send you to), can you finance the whole thing with a little negative equity and no money down? That’s the question I can’t get answered. And I’m 800+ credit.

Financing through Tesla requires some money down from what I've seen, also sounds like you want to roll negative equity from your trade-in into the new loan.

You should probably discuss your financing options\details with Tesla sales\customer service @ 1 (888) 518-3752 or by visiting your local sales\service center.

I’m curious how it is possible to get financing in only 4 days?

Via Tesla financing through the Tesla app

I have a trade and they won’t give me a trade offer until my VIN is assigned

If you placed an order for a Tesla vehicle you can see the order by signing into the Tesla app, from there you can submit a trade-in and will get an offer within a given period of time within the app.

Trade offer is independent of getting a VIN assigned, as long as you submitted a vehicle order then you will eventually receive a VIN. However by not completing all steps within the Tesla app such as YES or NO to trade-in, can impact or delay your order from progressing through the order steps which include being assigned a VIN.

Can also start the trade-in process via online:

Trade-in | Tesla

www.tesla.com

VIN = trade-in, not your non-existent new Tesla VIN

 

[240vPlug]

If you go through Tesla (or whomever they send you to), can you finance the whole thing with a little negative equity and no money down? That’s the question I can’t get answered. And I’m 800+ credit.

Possibly. It will depend on other factors. With the current financial situation they may want some money down but I just don't know. A big factor will be your DTI. Generally the lender will want you to have some "skin in the game" meaning a LTV ratio <100. A 100%+ finance is a higher risk to the lender.

Bigger banks are more likely than small credit unions to do that.

 

[OlyY]

Financing through Tesla requires some money down from what I've seen, also sounds like you want to roll negative equity from your trade-in into the new loan.

You should probably discuss your financing options\details with Tesla sales\customer service @ 1 (888) 518-3752 or by visiting your local sales\service center.


Via Tesla financing through the Tesla app


If you placed an order for a Tesla vehicle you can see the order by signing into the Tesla app, from there you can submit a trade-in and will get an offer within a given period of time within the app.

Trade offer is independent of getting a VIN assigned, as long as you submitted a vehicle order then you will eventually receive a VIN. However by not completing all steps within the Tesla app such as YES or NO to trade-in, can impact or delay your order from progressing through the order steps which include being assigned a VIN.

Can also start the trade-in process via online:

Trade-in | Tesla

www.tesla.com

VIN = trade-in, not your non-existent new Tesla VIN

View attachment 927301

Yep, did all that and called Tesla and they couldn’t answer because they didn’t know. One person said you can finance whole thing without money down and when I told him the finance part of the app would not let me reduce the down payment to zero (right now minimum down required in app is over $6K because it’s making you cover the taxes and anything over car cost and destination), he said that’s because you have to wait to get your trade offer since I selected I had a trade. Then I texted an adviser who told me they can’t give a trade offer until I get the VIN. It’s not as straightforward or as intuitive as the actual process of buying a car should be.

 

[OlyY]

Possibly. It will depend on other factors. With the current financial situation they may want some money down but I just don't know. A big factor will be your DTI. Generally the lender will want you to have some "skin in the game" meaning a LTV ratio <100. A 100%+ finance is a higher risk to the lender.

Bigger banks are more likely than small credit unions to do that.

With almost 3 million Tesla’s out there, I can’t imagine everyone has skin in the game. But I know what you mean. However my DTI and credit worthiness is “excellent” using bank ratings.

 

[Woggon]

If you are getting financing though Tesla (well, whoever they send you to) it is no issue. It took about 4 seconds to get approved after I submitted my info.

Just make sure to unlock your credit first if you locked it for any reason.

My wife and I both had ours locked (and forgot) and multiple Tesla banks declined us with no explanation (which shocked me, because our credit scores are north of 800). Finally US Bank called and told us to unlock our scores. It deleted us picking up the car by several days - using Tesla financing.

Obviously shame on us for not unlocking our credit - but I’m surprised the first three banks didn’t bother to tell us.

 

[240vPlug]

With almost 3 million Tesla’s out there, I can’t imagine everyone has skin in the game. But I know what you mean. However my DTI and credit worthiness is “excellent” using bank ratings.

Your probably right but in the last six months or so banks have tightened their lending standards significantly.

It sounds like it may be possible for you. DTI below 30 and FICO above 780 should get the best terms....but many banks are different.

If you have already gotten the approval, and it won't let you reduce the DP below $6,000 then that may be a condition of the approval. Honestly I'm not sure how the Tesla finance process works. I did lease from them a few years ago. Anytime we finance though we use credit unions.

I have found credit unions give us the best rates, have the most flexible policies, and we can get better service.

PS..someone said to check about penalties for paying early. If US bank is financing it I have been told they charge fees. Now that the waits aren't quite as long (compared to this time last year) I would say most are safe to get a 60 day pre approval that way when Tesla wants their money your ready to go with your best rate and terms.

 

[jjrandorin]

can I apply the money I wanted to originally apply to the car later on once I receive it and get the reduced monthly payment I originally wanted?

So say a 72 month loan @ $650/month... you suddenly apply say $15,000 towards the car... will that not lower the monthly payment?

I think others answered this, but in normal circumstances, the answer to this question is a resounding "NO, applying additional principle payments after loan inception doesnt change the monthly payment".

@chobra gave you the answer, but I wanted to be clear that in normal circumstances a principle payment deduction does not change your monthly payment, it just applies to the principle of the loan, and means you will pay off the loan sooner.

 

[father_of_6]

@zamardii12 - it won't actually lower your payment, but in a way it does. If your payment is $700 and you make a $15k payment, your monthly statements are going to say $0 due for 21ish months... and during that time you can still continue making $600 payments, which will keep you ahead of your actual target payoff.

The downside to this approach is that you won't know the actual reduced payment amount... but you can just keep throwing money at it until it's paid.

Reamortizing *might* cost something. I second others - make sure there's no prepayment / early payment penalty.

@OlyY - it's better to start a new thread, even if you have related questions. This way the OP still has their questions answered.