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Tesla deposits: interest free loan ramblings

Discussion in 'Reserving, Ordering, Production, Delivery' started by sreams, Sep 20, 2017.

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  1. sreams

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    If you really see your deposit as an "interest free loan", you should not have placed you reservation in the first place.
     
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    • Stolz25

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      Don’t really understand this response. The deposit was in fact an interest free loan. It’s not a matter of how you see it.
       
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      • BigBri

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        It's not a loan as Tesla can't spend it. They've got the money set aside and give quarterly updates how much is in reserve. It's how we've been able to roughly estimate how many preorders for the Model3 there are. It's a $1000 deposit to show serious intentions of taking delivery of the vehicle.
         
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        • TrevP

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          How much interest is one getting on $1K sitting in a bank account these days?? :D

          But I digress. Everyone wants updates and info on the progress but newcomers might not understand that Tesla is a very secretive company. Some of us long timers know how they operate and this isn’t anything new. Radio silence is their middle name.

          We just have to trust they’re working as hard and fast as possible on the ramp up and when they have something to say they will. Sure it’s disappointing that cars are being delivered but not to some of us who stood in line but they did make it clear they were going to employees first and current owners who reserved first. General public will be last. Personally I think initial deliveries to the public will be a mix of both but it’s becoming clearer to me each passing day that pretty much all first year production is slated for the US because of the federal tax credit situation and Tesla would like to do the right thing.

          For the rest of us it’s going to be either a game of patience, resignation or action. I’m either first or last of those statements ;)
           
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          • Mark C

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            I agree that the deposit was an interest free loan. It is too easy to think of that statement in a negative connotation, though. I choose not to talk about it as an interest free loan.

            I have never before been so interested in the health and prosperity of any business, that I would put a $1,000.00 dollar down where there is an extended wait time and no guarantee in the outcome. I felt, and still feel good about giving Tesla the money to show my good intentions and my desire to buy their product. Many of us have been waiting a long time to be able to buy a compelling EV that will satisfy most of our needs at a price we can manage to pay. I tend to believe that early reservation holders (mine was 4/5/16), particularly the line waiter crowd are mostly in this category and I believe that all of us are having our patience tested as we enjoy the wait.
             
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            • garsh

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              I remember back in 2011, when I gave Nissan a $100 interest free loan. :p
               
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              • Rick59

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                Sorry but you're wrong. Our deposits were spent a long time ago. The liability (customer deposit) is on the books but the cash has gone into the production. Tesla is not required in law to keep the money in a separate, untouchable account. If companies couldn't use deposits, nothing new would ever get built.
                 
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                • Stolz25

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                  Are they earning interest on it or am I?
                   
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                  • Tyler Nelson

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                    Elon has said multiple times on earnings calls that they are not spending that money.
                     
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                    • Sandy

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                      So far Tesla doesn't really earn interest. With the huge debt load (totally understandable at this point in the production ramp) they pay interest or at least owe it and not to us but to debt holders.
                       
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                      • Model34mePlease

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                        I think we are playing games here with terminology. Tesla has way more than the total deposits in cash. What Elon calls the various cash accounts is just funny-money. If Tesla ever got down to just 400M in cash accounts, an enterprise of that size and growing at that rate would be in mucho trouble. I also think if it came to that, and Elon had a choice of spending that last 400M or closing the company, he'd spend the money.

                        In terms whether it is an interest-free loan (an unsecured loan, at that), did you think it was anything else when you put your $1000 in?
                         
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                        • Stolz25

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                          It’s becoming more clear to me how some are able to justify spending so much on a car. I’ve been wondering now for a while reading these threads how there are so many people who can legitimately afford it. If you are capable of these mental gymnastics it probably looks reasonable.
                           
                        • John Slaby

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                          Seems a rather large leap to go from a lively discussion on a bunch of threads to a judgement on whether or not people can afford the car. if the price doesn't make financial sense for someone's budget, he/she will opt out and get the deposit returned. They don't need to make the decision until they commit to the order. In the mean time, they can have fun with a bunch of other people arguing the fine points of every possible topic related to the car. Pretty simple in my mind.
                           
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                          • sreams

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                            #14 sreams, Sep 20, 2017
                            Last edited: Sep 20, 2017
                            No. If it were an interest free loan, you wouldn't get anything in return. You secured a place in line. If a bank, on the other hand, loans you $1000 at 0% interest, all they get at the end of the day is their money back.

                            Let me put it another way... since an interest-free loan provides absolutely nothing at all to the entity loaning the money, what was your motivation for handing $1000 to Tesla? Your answer is the reason it isn't an interest-free loan.
                             
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                            • Stolz25

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                              Well if you want to get technical, it isn’t a loan at all. That doesn’t change the fact that it’s a two (or 3 for some) between the payment and the actual goods from Tesla. During that time, you’ve paid and received nothing in return but a promise from Tesla.

                              Now, I’m not saying that it’s not worth it. Clearly I thought it was. It doesn’t change the fact they, and not you, are holding that money for two years.
                               
                            • Michael Russo

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                              Coming late to this exchange plus it's literally late here so not sure I get the point.
                              As the simple guy that I am (or claim to be... ;)), I look at it this way:
                              • I forked out a grand almost a year ago to get in line to get my dream car... at no point since then have I worried about whether or not T≡SLA would use it or not (hence whether it was an interest-free loan)..
                              • Always trusted T≡SLA would reimburse me if I cancelled my reservation
                              • however, for me the money is so 'sunk' that I keep on saying to my 'domestic CEO' I will adhere to my €45k budget -ok, more or less, @SoFlaModel3 ;) - outside of that advance of 1k and the €6k French incentives... In other words, I start getting in trouble if the final invoice price is (notably...) more than €52k...
                              Keeping my fingers so crossed it hurts to type! :D
                               
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                              • sreams

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                                And of course, that's all it ever was. At the end of the day, even if it takes longer to get your Model 3 than you had initially hoped, you'll still get it at least a year before your neighbor who didn't make a deposit at all. That's well worth it to me.
                                 
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                                • Stolz25

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                                  I don’t disagree with that statement. Doesn’t change the fact you made an interest free loan to Tesla without knowing when or what you were really getting at the time.
                                   
                                • sreams

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                                  You have always known that you would be able to buy a Model 3 well before someone who was in the same shoes as you who made no deposit. That's all I ever expected. If you wanted more than that, you were hoping for something Tesla never offered.
                                   
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                                  • Stolz25

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                                    Im not judging whether any single person in here can afford the car. Its the numbers that seem to be screwed up. I know my financial situation is well above what is average and I am having a very hard time justifying it. And yet, the average car price is 35k. There are many people making remarkably poor financial decisions. I can’t say who that is, but it’s definitely happening here, and I would suspect, on most car forums.
                                     

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