(855) 4-LEMON-LAW
(855) 453-6665

News and Information


Is The New Tesla Model S Financing Program Misleading?

Tesla has issued a report on the Model S financing program and lease options that got several news agencies curious as to whether the program’s claims were factual.

According to several media outlets and consumer protection agencies, Tesla has released an official loan program that would, in theory, facilitate the purchase of the vehicle. Federal tax credits for electrical vehicle purchases have made the idea of purchasing an all-electrical car more appealing to many, however, Tesla’s leasing and financing program may not be as good as it may sound.

The reports show that the official loan program claims that consumers are able to purchase a vehicle that would otherwise cost $79,995 for $500 per month. According to the official program, however, consumers would be able to own the vehicle by accepting a 63-month plan that would have them paying either $1097 for a 60-kWh model or $1252 for the 85-hWh model per month instead.

These prices do not include fees and taxes. According to the news, the consumer would only be able to participate in the program with a 10% down payment provided by partnering banks, such as Wells Fargo or US Bank, which would give the banks the consumer’s $7500 federal income tax credit linked to the purchase of an EV. Any other state tax credits would be also transferred to the banks.

If the consumer wants to sell his or her Tesla Model S, they may only do so after 39 months.

The main issue with the program, experts say, is the fact that the company uses an interactive calculator that reportedly calculates the true cost of the vehicle’s ownership, which allows for people to add their own variables, ranging from miles the consumer is expected to drive annually, gas cost and others, which would help the drier to make a better informed decision concerning the purchase of the Model S.

This interactive feature claims that the real cost of owning a Tesla is about $500 a month if the consumer compares owning the electrical vehicle with owning a standard car. The fine print of the program, which states all fees, taxes and real costs of owning the Tesla car, could be hard to find, according to one account. Some experts have also reported that the calculator feature makes certain unreasonable price comparisons, which could be considered misleading.

The biggest complaint about this particular loan program is that the company’s website reported that the leasing of the Model S with the help of this particular arrangement would make the vehicle available for $500 per month, without posting warnings or clarification concerning the price and what the vehicle actually costs if you do not factor the comparisons provided by the program’s calculator feature.

Some accuse the company of not making it clear that the $500 per month is only the result of acrobatic math and that the true monthly payments the loan program requires in order to get this vehicle entirely financed, could cost twice as much.

Tesla also fails to mention that the buyback program that would make the consumer capable of selling this vehicle after 39 months, explicitly limits mileage to 12,000 per year, while offering a “True Cost of Ownership” calculator feature that calculates fuel costs of a motorist driving 15,000 miles per year.

Some experts believe that the many issues with Tesla’s loan program could hurt consumers, especially if they do not read the fine print. For the full article and details on what agencies and experts are saying about it, follow this link to learn more.

About the Author
The Vachon Law Firm is based in Southern California and focuses exclusively on consumer protection litigation.