Worried About Higher Interest Rates? Tesla Now Offers Auto Loans That You Can Pay Off In 7 Years.
Portfolio Pulse from Shanthi Rexaline
Tesla Inc. has extended the duration of its auto loans from 72 months to between 36 and 84 months, in response to rising interest rates. However, this could result in customers paying more than their car's actual value. The Federal Reserve has been aggressively hiking the fed funds rates since March 2022, with interest rates now at a 16-year high of 5%-5.25%. The futures market has priced in a nearly 100% probability of a further 25-basis-point increase in rates to 5.25%-5.50%.
July 22, 2023 | 9:00 pm
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Tesla's decision to extend the duration of its auto loans could attract more customers but also risk them paying more than their car's value. The company's stock closed down 1.10% at $260.02.
Tesla's decision to extend the duration of its auto loans is a response to rising interest rates, which could make car purchases more expensive. This could attract more customers who are looking for longer-term financing options. However, it could also lead to customers paying more than their car's actual value over the long term. This news could have a mixed impact on Tesla's stock price in the short term.
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