1. Tesla is offering a 0.99% APR financing deal on the Model Y, which is significantly lower than the federal interest rate.
2. Tesla is subsidizing the financing to attract more customers and stimulate sales of the Model Y.
3. The low interest rate could result in big potential savings for consumers, and may be a sign that Tesla is preparing to roll out an updated version of the Model Y.
Tesla is currently offering 0.99% APR financing on new Model Y vehicles, a deal that seems too good to pass up considering the federal interest rate is 5.3%. This low financing option is made possible because Tesla is subsidizing the financing, rather than banks offering such low rates. This incentive could potentially save consumers $100 a month or $6,000 over five years, making it a very appealing offer. Tesla has been using different consumer demand levers to stimulate more sales for about a year and a half as production capacity surpassed consumer demand. The company is now exploring various ways to move more vehicles, including offering low financing rates.
From a consumer’s perspective, the 0.99% financing rate on top of already low prices for the Model Y is highly attractive. This offer may also indicate that Tesla is preparing to release an updated Model Y, prompting them to sell off remaining first-gen models quickly. The bottom line is that Tesla needs to continually stimulate sales, and this financing offer is just one of the strategies being used. Overall, the combination of low prices and financing rates is likely to drive increased interest in purchasing a new Model Y.