Tesla just introduced 84-month financing for new vehicle purchases in the U.S, marking the longest loan term yet for Elon Musk’s electric car company, with the Model Y requiring only a $4,500 down payment and an annual interest rate of 6.39%, it’s easier than ever to get behind the wheel of a sleek and stylish Tesla. But jeez louise, nearly a decade of debt for a car?
This elongated auto loan points to some larger economic trends that are harshing everyone’s mellow. The ratio of income to car payment affordability has shrunk big time, meaning you’ve gotta finance rides over longer periods just to squeak out a semi-reasonable monthly number. Not just a Tesla thang – it’s a head trip about the economy at large and the major drag of inflation and stagnant wages.
Still, Teslas tend to have staying power, often cruising for 10, even 20 years. So if you’re gonna keep your sweet Model 3 or slammin’ Cybertruck for the long haul, an extended term isn’t necessarily heinous. You could take those slightly smaller payments and throw extra scratch at the principal. But financially savvy folks say shorter loans are usually smarter, avoid being underwater on your whip.
During a recent convo with Wall Street, Daddy Musk said Teslas could get cheaper soon because of the weak willed economy. But investors and analysts cried malarkey, saying there’s no way Telsa keeps profits pumped if they start chopping prices. One analyst even said Tesla’s stock is only worth $26 bucks.
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And that bad vibes has already hit Tesla’s stock price, which just ate dirt with its biggest single day drop since April. Elon’s net worth also took a $15 billion beating based on his mega shares in Tesla.
With profit per car already at a three year low, analysts think moves into A.I. and charging stations don’t make fiscal sense right now. One Morgan Stanley expert said price cuts might juice Tesla’s short term metrics, but will lead to more negative views overall. Sounds like Tesla is walking a financial tightrope that’s stressing some folks out!