Hoping to improve the affordability of the company’s new battery-electric vehicle while also addressing the concerns of EV skeptics, Tesla has announced a “revolutionary” new financing program that is designed to cut costs while also giving customers an out if they’re not happy with their new Model S sedans.
Working with Bank of America, the program combines a low interest rate, minimal down payment – and the ability to return a Model S after three years and receive a guaranteed residual – essentially a trade-in price – pegged to the value of a Mercedes-Benz S-Class. But unlike a traditional car lease, Tesla buyers who like their vehicles will simply be able to keep them and pay off the rest of their loans.
The goal of the program was to “combine the best of ownership and leasing,” said Tesla founder and CEO Elon Musk during a conference call with reporters today. “There has to be a better way,” he stressed, noting that he expects “a majority” of future Model S buyers will participate in the unusual loan program.