Earlier this year, Tesla Motors [NASDAQ:TSLA] officially launched the Model S luxury sedan in the UK, handing over the keys to the first British Model S customers on July 7. Since then it has rapidly expanded its Supercharger network to include six different locations opened two Tesla Stores, and will launch its third UK store near Gatwick this Friday.
Now, the California automaker is bringing its highly-successful guaranteed resale value program to the UK too, allowing anyone who buys a Tesla Model S in the UK through its approved financing program the luxury of being able to sell their car back to Tesla after just three years for up to 50 percent of the value of a brand-new Tesla Model S 60kWh model, plus 43 per cent of all options.
The scheme, already proving highly popular in the U.S., ensures that those who buy a Tesla Model S can protect their investment in future years with the knowledge that they can simply sell their car back to Tesla for a guaranteed value, regardless of the outstanding finance remaining on their car. It mimics the scheme already offered by luxury brands like BMW and Mercedes-Benz, who already guarantee they will buy back used cars at a specific set value.
Traditionally, guaranteed resale value programs have only operated on lease programs, where customers pay a monthly lease payment for a specific number of miles per year. But in a lease program, the duration of the lease is usually fixed, customers who drive over their agreed mileage are often faced with high excess charges, and they’re forced to either give the car back to the finance company or pay a massive balloon payment at the end of the term in order to buy the car outright. When used in lease programs, a guaranteed values are used to set the value of the car being returned, with the leasing company paying customers if the difference between the value of their car and the agreed price if the car is worth more than anticipated at lease end, or the customer walking away with no financial commitment if the car is worth less than anticipated.
Hire purchase programs however, where the customer makes monthly payments over a set period and owns the car at the end of the term, do not traditionally offer a guaranteed resale value, meaning those who opt to buy a car on them shoulder a much higher financial risk.
It’s that higher risk which Tesla seeks to alleviate with the Guaranteed Retail Value program.
“We understand that many customers enjoy the simplicity of a Hire Purchase but also may seek some assurance of the future value of a Model S,” said Tesla UK Country Director Georg Ell. “We want to do the right thing for customers, so we’re delighted to be able to offer this transparent and fair financing program.”
Working alongside Alphera Financial Services — a trading name of BMW Financial Services (GB) — Tesla is offering customers who put a fifteen percent down payment on a new Tesla Model S an APR of 5.9 per cent over periods as short as 36 months and as long as 72 months. Based on an entry-level Tesla Model S 60kWh and a 72-month finance term, that equates to a finance payment of £820 per month.
If that seems like a lot, you’d be right. Apply Tesla’s fabled Teslanomics to the mix, and that figure lowers down to £645 per month after applying every conceivable pound you’ll save by driving a Tesla Model S instead of a gas-guzzling premium sedan which has to pay congestion charge, company car tax and vehicle excise duty.
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