Tesla alters financing following criticism

After a previous announcement that, through financing and taking resale value and other savings into account, a Model S could be had for $500 a month, Tesla revises its terms and offers a new resale guarantee.

2012 Tesla Model S
Tesla announced new financing terms for the Model S. Josh Miller/CNET

Last month Tesla said a new financing arrangement would make the Model S cost a mere $500 a month. Following critique in the press of Tesla's creative accounting, CEO Elon Musk announced revisions to the financing plan, now citing a net cost of $580 per month.

The two substantive changes to Tesla financing involve a revised resale value guarantee and longer term loans from partners Wells Fargo and U.S. Bank.

With the longer term loans, Tesla says the per-month cost of a Model S will be $580, taking into account the savings gained by running the car on electricity over an equivalent car running on gasoline. Tesla also says that those purchasing the Model S for a business can run the per-month cost down to $350.

Previously, Tesla had said it would guarantee the resale value of a Model S as being equivalent to that of a Mercedes-Benz S-class. That guarantee was revised in today's announcement to a value matching that of a BMW, Audi, Mercedes, Lexus, or Jaguar.

The Tesla Motors site is currently down, but it will host a revised calculator and information on the financing plans, so individuals can determine their per-month cost of purchasing a Model S.

About the author

Wayne Cunningham reviews cars and writes about automotive technology for CNET. Prior to the Car Tech beat, he covered spyware, Web building technologies, and computer hardware. He began covering technology and the Web in 1994 as an editor of The Net magazine. He's also the author of "Vaporware," a novel that's available as a Nook e-book.

 

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