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Tesla’s Financing Scheme Finally Reflects Reality

• Damon Lavrinc via

If nothing else, Tesla Motors adapts.

The Silicon Valley automaker, citing the wave of less-than-glowing publicity that followed its outlandish leasing program, is reworking the terms of its Model S financing. The new plans could bring monthly payments down, while providing a much-needed reality check.

“When we did our first financing announcement, we didn’t get it quite right,” co-founder and CEO Elon Musk said during the announcement.

No kidding. Part of the original plan was an online payment calculator with some mighty dubious math. In pitching its admittedly awesome electric sedan, Tesla predicted how much time and money you’d save pumping gas (at more than $100 an hour) and projecting the price of premium gas (at five bucks a gallon) over three years. The company has since revamped the payment calculator to more accurately reflect the world the rest of us live in.

“Everything except gas prices are off by default on the new payment calculator on the website,” Musk said. “We’ve changed the defaults to be more conservative. [In the original calculator] we included too many non-financial elements.”

Tesla has also worked with its financing partners at U.S. Bank and Wells Fargo to offer longer term loans – up from 63 months to 72 months – to further reduce monthly payments. That has the potential to reduce monthly payments for a personal-use Model S to as low as $580 a month when taking the gasoline savings into account.

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