Tesla has opened up a new financing term option for EV customers with an 84-month term, extending the payoff period for vehicle owners that wish for more financial flexibility.
The automaker opened the 84-month financing term on Friday. Previously, Tesla offered 36, 48, 60, and 72-month financing terms for those who were planning to buy their cars.
— Sawyer Merritt (@SawyerMerritt) July 21, 2023
Auto loan terms are truly up to the buyer, and they all offer certain advantages. However, the longer the loan term, the more expensive it will be because of interest accrued over the life of the loan.
BankRate also says that a longer-term loan will lead to more depreciation, as you lose 20 percent or more in the first year and 60 percent by the fifth year.
The move by Tesla could help the automaker increase demand levels as some who are interested in the company’s vehicles but might be slightly cash-strapped. The new financing option will decrease monthly car payment amounts, making it easier to afford the vehicle, and can help Tesla at the same time buy, making the cars more affordable.
While orders for the company’s vehicles may be up moving into Q3 with moves like this, and with the Full Self-Driving transfer policy, Tesla said production will be slightly lower in the quarter due to widespread factory upgrades.
CEO Elon Musk said:
“…we expect that Q3 production will be a little bit down because we’ve got summer shutdowns to — for a lot of factory upgrades. So, just probably a slight decrease in production in Q3 for sort of global factory upgrades.”