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Are you sure the banks balked at taking Tesla's as collateral? It seems a lot more likely that Tesla simply wouldn't be eligible for the tax credit. I have not
by krschultz 14y ago
Are you sure the banks balked at taking Tesla's as collateral? It seems a lot more likely that Tesla simply wouldn't be eligible for the tax credit. I have not read anywhere that banks are not giving out car loans to finance a Tesla because they are worried about having it as collateral. Occams razor says to me it is simply a tax play.
- codex 14y agoEven if Tesla couldn't take advantage of the tax credit, they can find a bank who could. Leases are riskier than loans for banks for a few reasons: - The bank has to place a bet on the value of the car 36 months from now--a huge risk. With a loan, they only have to bet on the credit-worthiness of the borrower, and they can ask for additional collateral, if they wish. - In case of a lease default, there is no equity in the car, because lessors, by definition, only pay for depreciation. On a loan default, there is usually at least some equity in the car. - Usually the down-payment is less for a lease than for a loan (Tesla's program requires 10% down, almost unheard of for a lease). All of these factors taken together mean that the bank is much less likely to take a bath on a loan than a lease.
- jmharvey 14y ago> Tesla's program requires 10% down, almost unheard of for a lease As I understand it, the down payment is roughly offset by the tax credit, so the experience of the buyer/lessee is similar to a normal car loan.