Tesla began offering customers an 84-month auto loan option after CEO Elon Musk speak automobile manufacturer based in Austin, Texas will “have to do something about raising rates.” If you’re not very good at math, 84 months is seven year. That means, if you buy a car today, you will still pay it off in 2030 when President DeSantis declare war on… I don’t know… cucks or something.
Anyway, the longest loan before Tesla offered is 72 months, or six years. Bloomberg reported that while Extending the loan term can result in lower monthly paymentsBuyers also tend to pay more interest and have a much higher risk of indebtedness relative to their car’s value. Given the pace at which electric vehicle technology is evolving, that could certainly be the case for many buyers.
According to this source, Musk has always been a hater of the Federal Reserve. Back in November of last year, the CEO tweeted (or X-ed, I guess) that a central bank interest rate hike has “massively amplified the probability of its occurrence.” severe recession.” Not surprisingly, his predictions of deflation have yet to materialize.
“When interest rates spike, we actually have to lower the price of the car, because interest payments drive up the price of the car.” Musk said during Tesla’s earnings call on July 19, according to Bloomberg. So we have to do something about that.
The outlet says that while 84-month loans have become popular, the trend is believed to have slowed in the first half of 2023. According to Experian, about 34% of new-car loans in the first quarter were longer than six years. That sounds like a lot, but it’s down from 48% during the same time last year.
Despite Musk’s worries about interest rates affecting its business, Tesla is said to have delivered a record 466,140 vehicles in the second quarter of 2023 ending in June. However, Bloomberg notes that the automaker has sold fewer vehicles than it has produced in each of the past five quarters. The company’s stock has apparently fallen after Musk said on this week’s call that the company would have to keep lowering prices if interest rates continue to rise.
