Tesla Financing Declined? You’re in the same boat as thousands of others, but Tesla finance isn’t your only option. Read on for more.
What do I do if Tesla Financing Declined?
If your credit score is on the lower side, many other car finance companies will accept a guarantor on the policy, which will allow you to get the finance you’re after, without as much risk to the company. If your guarantor has a good credit score, you can often broker the interest rate lower than the initial offer too.
If a guarantor isn’t an option, let’s have a look at what else is available if Tesla financing declined.
Increase Your Down Payment
Offering a larger down payment can demonstrate financial responsibility and reduce the amount you need to finance. This may make lenders more willing to approve the loan, as it reduces their risk and increases the equity on the secured financed vehicle.
Look for Alternative Lenders
Some lenders specialize in working with individuals who have lower credit scores. While they may offer different terms or have more lenient criteria, be sure to carefully review the terms and conditions of any alternative financing offer, and beware of higher interest rates as some companies will charge you up to 20% more APR if you have bad credit.
If you do end up taking a high APR finance, note that you can re-finance with someone else later when your score is better, or even take a bank loan to clear the finance.
Consider a Different Car
If your heart is set on a specific model but financing is proving challenging, consider opting for a less expensive vehicle or a reliable used car. A smaller loan amount may increase your chances of approval.
Save for a Larger Down Payment
Delaying your purchase and saving for a larger down payment is a strategic move. This extra upfront cash can potentially lead to better loan terms and increase your chances of securing financing. An example of better loan terms would be a lower APR, meaning you pay less interest on your loan over the full term.
Explore Lease Options
Leasing a car might have different qualification criteria compared to financing a purchase. It’s worth investigating whether this alternative arrangement suits your current financial situation. Leasing also doesn’t harbor negative equity, so if your finances change and you lose your job, you’ll be charged much less if you hand the car back and can’t make any more payments.
Buy from a Private Seller
Purchasing a car from a private seller can sometimes offer more flexible payment arrangements compared to dealing with a dealership. However, be sure to exercise caution and conduct thorough due diligence, we would recommend that you always have the car checked over by a mechanic before purchasing. If you’re purchasing Electric, speak about the battery health, how many miles since the last battery was changed, how often they leave the car on charge when it’s full. These will indicate whether you’re likely to be stung with a $6000 battery shortly down the line, or if the battery is in good health.
Seek Advice from a Financial Advisor
A financial advisor or credit counselor can provide personalized advice on how to improve your creditworthiness and secure a car loan. Their expertise can be invaluable in navigating the complex world of auto financing and usually for a small fee, they can broker some deals for you.
While a declined car finance application can be discouraging, it’s not the end of the road. When thinking about Tesla financing declined, by taking these proactive steps, you can increase your chances of securing the financing you need to drive away in the vehicle of your dreams. Remember to approach the process with patience, diligence, and a commitment to improving your financial health.
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