Is your 626 credit score good enough for a Tesla loan? This is a question that many people ask themselves before they apply for financing. The answer is not as simple as a yes or no. It depends on several factors, including your income, debt-to-income ratio, and the specific lender you choose.
Here are some general guidelines to keep in mind:
- A credit score of 720 or higher is generally considered good for a Tesla loan. This will give you the best chance of getting approved for a low interest rate.
- If your credit score is below 720, you may still be able to get approved for a loan, but you will likely have to pay a higher interest rate.
- A large down payment can help to offset a lower credit score.
- Shopping around for the best loan rate is important. Different lenders have different requirements, so it is worth comparing rates before you choose a lender.
Here are some specific examples of what people with different credit scores have reported:
- One person with a credit score of 650 was able to get approved for a Tesla loan with a 5.99% interest rate. They had a down payment of 20% and a debt-to-income ratio of 35%.
- Another person with a credit score of 680 was able to get approved for a Tesla loan with a 4.99% interest rate. They had a down payment of 10% and a debt-to-income ratio of 25%.
- A third person with a credit score of 720 was able to get approved for a Tesla loan with a 3.99% interest rate. They had a down payment of 5% and a debt-to-income ratio of 15%.
As you can see, there is no one-size-fits-all answer to the question of what credit score you need for a Tesla loan. The best way to find out is to apply for a loan and see what you are offered.
Here are some more pointers for obtaining a Tesla loan even if your credit score isn’t perfect:
- Make sure your credit report is accurate. You can get a free copy of your credit report from each of the three major credit bureaus (Experian, Equifax, and TransUnion) once a year at AnnualCreditReport.com.
- Pay down your debt. The lower your debt-to-income ratio, the better your chances of getting approved for a loan.
- Get a cosigner. If you have a friend or family member with good credit, they can cosign your loan to help you get approved.
- Consider a lease. Leasing a Tesla may be a good option if you don’t have the best credit score. You will typically have a lower monthly payment with a lease, but you will not own the car at the end of the lease term.
Please note that this is just general information, and you should always consult with a financial advisor before making any decisions about your finances
Additional Resources
- Tesla Financing: https://www.tesla.com/support/car-loans
- Credit Score Requirements for Auto Loans: https://www.nerdwallet.com/article/loans/auto-loans/credit-score-for-car-loan
- How to Improve Your Credit Score: https://www.consumer.ftc.gov/articles/0044-improve-your-credit-score
Frequently Asked Questions
- What is the minimum credit score needed for a Tesla loan?
There is no minimum credit score required for a Tesla loan, but a score of 720 or higher is generally considered good.
- What is the interest rate on a Tesla loan?
The interest rate on a Tesla loan will vary depending on your credit score, debt-to-income ratio, and the specific lender you choose.
- What is the down payment required for a Tesla loan?
The down payment required for a Tesla loan will also vary depending on your credit score, debt-to-income ratio, and the specific lender you choose.
- Can I lease a Tesla with bad credit?
Yes, you can lease a Tesla with bad credit. But your monthly payment will probably be higher, and you might have to make a bigger deposit.
Although it might be more difficult, it is still possible to get a Tesla loan with a lower credit score. You can improve your chances of having a loan approved and receiving a favorable interest rate by heeding the advice provided above.
State Availability for Tesla Finance Car Leases
Tesla leasing is available in the following states:
| Alabama | Alaska | Arkansas | Arizona | California |
| Colorado | Connecticut | District of Columbia | Florida | Georgia |
| Hawaii | Idaho | Illinois | Indiana | Iowa |
| Kansas | Louisiana | Maine | Maryland | Massachusetts |
| Minnesota | Missouri | Montana | Nevada | New Jersey |
| New Mexico | New York | North Carolina | North Dakota | Ohio |
| Oregon | Pennsylvania | Rhode Island | South Carolina | South Dakota |
| Tennessee | Texas | Utah | Vermont | Virginia |
| Washington | West Virginia | Wyoming |
Compared to other lenders in the industry, Tesla has average reviews. The company’s motor division isn’t rated or accredited by the BBB. Tesla earns an average customer review score of 1. 1 out of 5. 0 stars on its BBB page.
In addition, the company has an average of 1.8 out of 5.0 stars on Trustpilot, based on over 1,000 reviews. While these ratings are low, they’re just a tiny percentage of the company’s entire business.
Our group contacted Tesla to inquire about its ratings and unfavorable reviews, but we never heard back.
Buying a Tesla With a Loan
Auto loans for Tesla’s new and used models, such as the Model S, Model 3, Model X, and Model Y, are available from the company’s lending partners. According to our research, annual percentage rates (APRs) start at 6. 34% for those with excellent credit, and loan terms range from 36 to 84 months. There are no lender or application fees when applying for an auto loan with a Tesla financier.
To assist you in estimating the payments associated with buying or leasing a Tesla vehicle, Tesla offers a financing calculator on its website. The calculator doesn’t include taxes and registration fees in its estimates. Loan approvals are valid for up to 60 days.
| Loan Amount Range | Not specified |
|---|---|
| APR | Starts at 6.34%-7.32% |
| Loan Term Length | 36 to 84 months |
| Prepayment Penalty | None |
| Application Fee | None |
*Rate range as of 9/25/23.
Leasing a Tesla allows you to drive a new vehicle without paying the price for the entire car. All Tesla models qualify for a leasing contract, though terms vary by model. Lease approvals are valid for up to 90 days.
All models have lease terms that can last up to 36 months, with an annual mileage cap of 10,000, 12,000, or 15,000 miles.
Here’s a look at the lease terms we were quoted for each Tesla model:
| Tesla Model | Lease Term | APR* |
|---|---|---|
| Model 3 | 36 months | Starts at 5.37% for those with excellent credit |
| Model Y | 36 months | Starts at 6.06% for those with excellent credit |
| Model S | 24 or 36 months | Starts at 5.92% for those with excellent credit |
| Model X | 24 or 36 months | Starts at 6.57% for those with excellent credit |
*These lease quotes assume a down payment of $4,500. Monthly payments may vary based on credit score, down payment, and lease term. Quotes accurate as of 9/25/23.
If your Tesla lease has more than 13 payments remaining, you can assign it to a credit-approved assignee. At the end of your lease, you might be able to buy your Tesla, depending on your lease agreement.
Insurance Requirements for Leasing a Tesla Unless there are state-specific requirements, you must meet the minimum coverage requirements in order to lease a Tesla. These include:
- Bodily injury liability: $100,000 per person and $300,000 per accident
- Property damage liability: $50,000 for property damage
- Physical damage insurance for the full value of the vehicle
You must also have a maximum insurance deductible of $2,500 to lease any Tesla model.