Ballon Auto Loans

I was looking to buy a model 3 standard range plus for $33k after the $5k ev rebate. I estimated conservatively that after three years the market value would be 20-23k.
I want to do some sort of balloon financing to create a lease like payment structure for the first 36 months and then sell it at the end of the three years.
I think the value could be as high as 28k which would cut the monthly cost to around 170 a month. Either way it’s a risk I’m willing to take on.

The problem I’ve run into is finding a suitable balloon payment type loan. I’ve called multiple credit unions most either didn’t offer any or had crazy high rates.

The best I got was 2.99% from Penfed on a 36 month balloon loan. I had read that they don’t offer these loans on electric vehicles and was pleased to hear from the phone rep that do actually do them. After a few minutes of back and forth she clarified that while they do offer balloon loans for most ev’s, Teslas specifically are excluded.

Does anyone have any experience or knowledge of a credit union or bank that offers balloon auto loans at a decent rate?

I don’t think you’ll find anything at a good rate. I know a few banks that will do business leases where you set the residual, but the rates are high.

That being said, I think you’re playing with fire (or electricity :laughing:). I highly doubt that a base model 3 will be worth $28k in 3 years if you can get a new one for $33k. It’s my opinion that Tesla’s will street depreciating more heavily once electric cars become more mainstream and the newer ones are better/cheaper, etc. Tesla is also significantly increasing production.

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It’s $38k not $33k. Right now there’s a 5k nj rebate. My calculation was based on it being worth anywhere from $23k to $28k.

These loans often go by names like Payment Saver… google variations of “federal credit union payment saver” as well as dropping federal for your state or county

I don’t think @RVguy likes these products, nonetheless he might have some insight on how to find them.

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There aren’t any lenders that will write balloon loans on EVs. AFG is the company that does balloon loans and they use residual value insurance to protect their risk on the catastrophic side. The residual value insurance providers that exist won’t write policies that cover EVs because of how bad the losses were on the Leaf and Focus Electric.

It’ll probably be another 5 years before their memory fades and they let lenders step in that pool again.

I don’t dislike balloon loan products but they don’t make much sense as a lender because we don’t get the depreciation tax benefits that leasing provides. The risk modeling is the same as with leasing but it’s not a widely known lending product so you have to educate dealers how to sell it to their customers or do it direct to consumers like PenFed does.


does AFG do direct to consumer? It seems like its an option through the dealer only.

No AFG isn’t a lender but they facilitate a balloon lending program to several credit unions. Some of their CUs do direct lending.

Their RVs are always very low so their payments are usually much higher than the competitive lease payments available on the same vehicles.

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