At 6.25%, Tesla’s credit rate skyrockets
This page is translated from the original post "À 6,25%, le taux de crédit explose chez Tesla" in French.
- 03/12/2023 12:35
Buying a car on credit has never been more expensive than today, especially at Tesla, where the interest rate has exceeded 6%.
Lending money has always been a profitable operation. With the war in Ukraine and Israel, with the financial catch-up following the Covid crisis, the world is currently very turbulent, and this impacts the morale of the financial markets. These are no longer willing to lend money at low rates.
The real estate and automotive sectors, the two biggest expenses for individuals, are thus directly affected. Some manufacturers have their own banking institutions, like Renault, allowing them to offer fairly attractive financial terms. This is not the case for Tesla, which is therefore “victim” of the banks. And here, you should think twice before buying a Model 3, Model Y, or others, on credit.
As of December 2023, the annual percentage rate (APR) stands at 6.25%. In other words, with an initial personal contribution of 5000 euros (covered by the same amount ecological bonus), a Y Model Long Range with a list price of 45,990 euros will require 60 monthly payments of 793.98 euros, excluding optional insurance. The total cost of the loan will be 6649 euros, which is effectively an additional cost of 14.45% compared to the original price.
If you choose to extend the payments to 96 installments (the maximum possible, i.e., 8 years of repayment), then the loan cost rises to 10,876 euros, an effective increase of +23.64%.
Money has never been so expensive, but in banks, consumer loans for buying an electric car typically hover around 5%, about 1 point lower. Over time, the savings compared to Tesla’s offer are not negligible.
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