[DanPaul]

I searched but to no avail, I've never had any finance before and just have a question.

With a loan, only 51% of people have to be given the advertised rate, is this the same with a PCP loan?

Looking at the figures on Tesla's site with the deposit I have, I can easily afford the displayed monthly payment, but could they quite easily give me a higher interest rate?

 

[reserves]

Tesla won’t.

 

[DanPaul]

Tesla won’t.

So the figures quoted by Tesla for PCP would definitely be the price I'd pay?

Thanks

 

[NeilO]

That's what happened to me. What was quoted is what I paid.

 

[DrEskimo]

As PCP is a loan secured on the car, rather than an unsecured personal loan, the APR offered is not subject to your personal credit history or circumstances. As such, the rate offered is the rate you will typically be accepted for. Not unlike a mortgage product.

Take a look at other forms of finance though, such as personal loans. Be sure to compare the actual interest cost, not just APR.

 

[DanPaul]

As PCP is a loan secured on the car, rather than an unsecured personal loan, the APR offered is not subject to your personal credit history or circumstances. As such, the rate offered is the rate you will typically be accepted for. Not unlike a mortgage product.

Take a look at other forms of finance though, such as personal loans. Be sure to compare the actual interest cost, not just APR.

The slightly longer story is I paid my mortgage off 19 months ago and since then I've not needed to borrow money or use credit. A mistake on my part as it dropped my credit score from 999 to 956 (out of the excellent bracket into the good bracket) and I was declined for a personal loan last Monday, hence why I'm looking at the PCP option, and for info I'd saved half of the cost of the car (LR) and wanted the loan to cover the other half. At this point I'm still waiting on paperwork from the lender to tell me why exactly they declined (£25000/5 years)

 

[DrEskimo]

The slightly longer story is I paid my mortgage off 19 months ago and since then I've not needed to borrow money or use credit. A mistake on my part as it dropped my credit score from 999 to 956 (out of the excellent bracket into the good bracket) and I was declined for a personal loan last Monday, hence why I'm looking at the PCP option, and for info I'd saved half of the cost of the car (LR) and wanted the loan to cover the other half. At this point I'm still waiting on paperwork from the lender to tell me why exactly they declined (£25000/5 years)

Your credit score is a meaningless number...it's just a market gimmick from companies to flog you credit agreements through their third parties...

You need to look at your credit files and see exactly what is on there and why you might have been declined. If it's the lack of credit history over the last 19months, then just get a credit card for everyday spending and clear it off each month in full. COVID obviously has obviously had an impact on tightening lender criteria, and it may be just the loan amount relative to your income and age.

You could also just go for the 'Tesla loan', which is a HP finance agreement like the PCP loan, but without the final balloon payment. This will be cheaper than the PCP.

 

[DanPaul]

Your credit score is a meaningless number...it's just a market gimmick from companies to flog you credit agreements through their third parties...

You need to look at your credit files and see exactly what is on there and why you might have been declined. If it's the lack of credit history over the last 19months, then just get a credit card for everyday spending and clear it off each month in full. COVID obviously has obviously had an impact on tightening lender criteria, and it may be just the loan amount relative to your income and age.

You could also just go for the 'Tesla loan', which is a HP finance agreement like the PCP loan, but without the final balloon payment. This will be cheaper than the PCP.

So the Tesla loan is also secured on the car?

I'm definitely considering the credit card option to build credit, I think the only genuine downside is that I really wanted to order the car now in time for March (birthday present to me!) and unfortunately I might just have to wait. The financial downsides are really not a big issue

 

[DrEskimo]

So the Tesla loan is also secured on the car?

I'm definitely considering the credit card option to build credit, I think the only genuine downside is that I really wanted to order the car now in time for March (birthday present to me!) and unfortunately I might just have to wait. The financial downsides are really not a big issue

Yup that's right. Also looks like they are offering 3.99% APR on the Tesla loan, Vs 4.9% on the PCP. You won't get much better on a personal loan, so may be a good option for you.

You will only be signing a finance proposal if ordering today. You won't formally apply for finance until the car is delivered.

 

[DSLRed]

The slightly longer story is I paid my mortgage off 19 months ago and since then I've not needed to borrow money or use credit. A mistake on my part as it dropped my credit score from 999 to 956 (out of the excellent bracket into the good bracket) and I was declined for a personal loan last Monday, hence why I'm looking at the PCP option, and for info I'd saved half of the cost of the car (LR) and wanted the loan to cover the other half. At this point I'm still waiting on paperwork from the lender to tell me why exactly they declined (£25000/5 years)

This is a similar story to me last year. I applied for a personal loan to part finance my install of solar and was offered a rate akin to loan sharking. However, on reflection, it was the first time I had applied for credit in 20 years other than various mortgages. The way that they rely on credit scores is flawed in my opinion - not requiring credit in a long time should not be a sign of poor financial risk.

 

[DanPaul]

Yup that's right. Also looks like they are offering 3.99% APR on the Tesla loan, Vs 4.9% on the PCP. You won't get much better on a personal loan, so may be a good option for you.

You will only be signing a finance proposal if ordering today. You won't formally apply for finance until the car is delivered.

So there could still be a chance at point of delivery that I could still be declined for finance? I also just realised with the Tesla Loan, a possibility of paying the remainder off early if I had enough saved after maybe 3 years of a 5 year agreement

It's a kick in the sack when you know you can afford the options given...

The way that they rely on credit scores is flawed in my opinion - not requiring credit in a long time should not be a sign of poor financial risk.

I absolutely agree, As I said, my current credit score is 956, I wouldn't call that bad by any means. The issue is, I'm not a high earner, I'm just VERY good at managing the money I do earn, and at present my entire outgoings have been about 30% of my take-home pay and that's excluding any bits of overtime. 2 more years of saving I could buy the car outright, I just don't want to wait, even though that's the sensible things to do, price changes, more market competition from other brands and many other as yet unseen options (Tesla Model "2"?!)

 

[DrEskimo]

The way that they rely on credit scores is flawed in my opinion - not requiring credit in a long time should not be a sign of poor financial risk.

They don't. Lenders do not see or know your score. They look at your credit history and use a whole host of information about you to determine the rate to offer you based on what they perceive your risk is. Different lenders will have different criteria, so worth trying a couple.

So there could still be a chance at point of delivery that I could still be declined for finance? I also just realised with the Tesla Loan, a possibility of paying the remainder off early if I had enough saved after maybe 3 years of a 5 year agreement

It's a kick in the sack when you know you can afford the options given...



I absolutely agree, As I said, my current credit score is 956, I wouldn't call that bad by any means. The issue is, I'm not a high earner, I'm just VERY good at managing the money I do earn, and at present my entire outgoings have been about 30% of my take-home pay and that's excluding any bits of overtime. 2 more years of saving I could buy the car outright, I just don't want to wait, even though that's the sensible things to do, price changes, more market competition from other brands and many other as yet unseen options (Tesla Model "2"?!)

Possible, but unlikely.

I imagine income plays a big roll in whether a lender will lend to you and at what rate. If £25k was a sizeable portion of your annual income then it would be very difficult to find a lender to lend that to you unsecured at a competitive rate.

 

[DanPaul]

I'll see what I can find on my credit report. In other news, the SR+ just got a range increase to 278 miles on their site, and the dash trim now extends onto the door panels! Maybe I am better waiting a little longer!!

 

[NeilO]

I'll see what I can find on my credit report. In other news, the SR+ just got a range increase to 278 miles on their site, and the dash trim now extends onto the door panels! Maybe I am better waiting a little longer!!

Yeah I've posted about that, I was told if you see the range go up it will be a made in china SR+. Which will mean LFP battery pack. Something I wanted to avoid, and something I need to get confirmed before a place my order. Only cars I've seen with door trims inside were made in china. Could be wrong tho 🤣 no door trims on the US website

 

[Geoff_S]

I was mortgage free when I bought my last car (2 years ago). I took out a small mortgage at 1.99% to buy the car. Cheaper than any personal loan, HP or PCP or cashing in savings.

 

[reserves]

Was going to say, sounds like the best idea would be to remortgage

 

[DanPaul]

I looked at the mortgage option but I couldn't find one where the interest rate was low enough and without a product fee, Personal loans of £25000 came with 3% interest (that only 51% need to be approved for) but mortgages of the same amount at under 2% came with product fees of around £1500, wiping out (and pushing above) the savings of the lower interest rate, no matter what the term, 3-10 years, I'd be able to clear it in 3 years if I could get the equivalent of 3% interest rate, even if it was made up of a fee with a lower interest rate