#TeslaTroubles: Accidentally Locked in a 0% APR Contract
Hey there! So, I recently bought a used Tesla Model 3 and thought I lucked out with a 0% APR financing deal. But, turns out it was too good to be true! 😬
### The Oops Moment 🤦♂️
Last Friday, the dealership called me saying they made a mistake and need me to sign a new contract with a 6.89% APR. Talk about a shocker! They even gave me a deadline threatening to deactivate my Tesla app and block me from the supercharger network if I don’t comply.
### The Dilemma 🤔
I have a road trip planned, leaving Wednesday, and can’t afford to risk being stranded without a way to charge. It’s frustrating how they are handling this whole situation. I mean, a contract is a contract, right?
### Seeking Advice 🧐
I’m not a legal expert, so any advice would be a lifesaver right now. Should I consider getting a lawyer involved? Have any of you been in a similar situation before?
### Your Thoughts?
Would love to hear your insights! Thanks in advance for your help! Let’s navigate this Tesla trouble together. 🚗⚡️
Tesla has new cars with a 0.99% interest rate right now. I would probably be asking them to meet that, or it might be worth it to unwind the deal and resign a new car at that interest rate.
All car dealerships, including Tesla, use what’s called a conditional delivery agreement. You signed that, and it clearly states that if there are any errors or omissions that you agree to the new terms of the contract is void. When doing a bank contract, whether through Routeone, dealertrack, cudl, etc., it is literally one accidental keystroke away. We’ve had it where not all the info was pulled to the dms (document management system), resulting in taxes not being charged in the contract. We still had to collect the taxes from the customer and have them sign a new contract, or they had to return the vehicle. Your best bet is to play ball by the rule set that you even signed (conditional). Contract mistakes happen more often that anyone thinks in the auto industry, but wishing you the best.
NAL NLA. If you have ever bought a house, you know that you agree there could be errors in the paperwork. You also agree that it’s reasonable to correct those errors on your behalf or on the banks behalf. A lot of purchase contracts have this clause and I doubt a car is any different. Humans make mistakes and due to the size of the purchase there is usually an avenue to correct those mistakes.
>They emailed me yesterday and it sounds like I have until 6/14 to sign their revised contract (6.89% APR),
Did they tell you that would be the rate before you bought the car?
I’m sure your State regulator would like to hear about this.
Call a few of your local banks and credit unions, maybe even online banks like Ally. Go with the lowest/best rate place and get pre-approved. They should be able to give you a letter showing the pre-approval and terms. If the dealer can’t/wont match the terms, you use the alternative.
Of the 3 cars I’ve purchased, I used dealer financing once, Ally bank & BMO Harris the others.
I am a lawyer and I have time today so I’m going to explain it here. I’m not your lawyer and this is not legal advice.
For a contract to be legally binding in the United States you need the following:
– mutual asset (or “meeting of the minds”). Basically is there a mutual understanding of the terms of the agreement.
– offer. Is a valid offer made or was there not really an offer (e.g., I’ll maybe give you a Tesla if you pay me, no offer is being made here because of the uncertainty).
– acceptance. Has the offeree accepted the terms of the contract (e.g., if you didn’t sign the contract you haven’t accepted its terms).
– consideration. Is there consideration for the contract (e.g., each party has an obligation to fulfill here. Tesla is giving you a car and you are giving them money, that is the consideration here.
– capacity. Did the parties have capacity to enter into a contract (e.g., if you have a baby sign a contract it’s invalid because a baby doesn’t have capacity to understand the contract or its terms)
– legality. Is the contract legal (e.g., a hitman contract is not legal because you’re committing murder).
Based on your post, it looks like there was no mutual assent or meeting of the minds. Tesla’s understanding is that they were going to charge you interest on the loan. A scriveners error in your benefit doesn’t change that. You likely don’t have a legally binding contract despite you having signed a document.
Is it bad business? Sure. Is it sloppy? Sure.
But clerical errors happen. If people had to abide by terms of clearly erroneous contracts due to drafting errors you’d have an endless amount of litigation not to mention ridiculous outcomes (oh I missed a 0? Well now this house cost me $60k instead of $600k – too bad so sad.)
As to your hypothetical question if you did this to client and there was indeed a scriveners error with respect to the fee paid – you indeed could go back to the client and say oopsie daisy I messed up.
I mean think about it. Who in the current high interest rate environments is offering interest free loans on luxury electric vehicles?
Though someone in here mentioned Tesla is offering a 0.99% promotion rate – I’d definitely see if you could change it to that.
Google your county and “Bar association lawyer referral”.
NAL, This sounds a lot like a predatory bait and switch technique that some less than scrupulous dealerships use to get people to buy a car, then void the original contact and force the consumer to take a much worse deal. The loan cooling off period depends on your state, but 2 weeks is probably too long for the dealership to change the terms. If I recall correctly John Oliver did a deep dive detailing the scam and which regulatory body to reach out to.
They can most likely get the contract annulled by a judge because any reasonable person would assume it was a mistake and that a loan comes with interest. But the way they are going about this seems shady. It would cost them a pretty penny to get this handled by courts so I would use that as a footing for negotiation. If they turn off your services that were part of your purchase without going through a court for a contract modification then they will be in breach of contract and you can sue them. I would definitely bring this to a lawyer because if they overstep their authority its likely a judge will then side with you and you could get to keep your 0% apr. Another comment said some new teslas are 0.99%apr right now. Definitely look into that and if true dont accept more. Worst thing they can do is get the contract canceled and get their now used car back but that would suck for them.
It’s not so cut and dry as some people are making it out to be. I’m not a lawyer but I’ve worked in compliance for a bank and I’ve audited dealerships that write our loans. If they’ve given you a truth in lending document that states 0% apr they cannot just say “it’s not valid” and force you to sign another. I would consider a quick consultation with an attorney, if that’s not feasible then use this information as a bargaining tactic. Something along the lines of “I have a signed TIL that states 0% apr, I am not paying 6%, meet me in the middle of you’d like to avoid a complaint to the CFPB (consumer finance protection bureau)”
At the very least if they do manage to force you to take the 6% or you are unhappy with any part of this, report them. I’ve done a few cfpb complaints myself and it takes about 10 minutes and they always follow up eventually.
They printed a contract, you signed it and they did as well (presumably). Seems like they have to honor it
I would recommend to everyone that if you notice something you don’t expect in the contract, that does not align with the terms discussed, whether in your favor or not, you call it out. If they say, “oops that’s a mistake,” you make sure your terms are right. If they say, “no that’s correct” you ensure both parties understand the terms.
Seeing errors or unexpected numbers on contracts is never something you want to ignore.
This is an error and there is not a meeting of the minds. Not a valid contract unfortunately. Mutual mistake etc whatever you want to call it.
I feel like laymen assume that signing a piece of paper means everything else goes out the window, everything on the paper is ironclad and signed in blood. That’s simply not how contract law works.
A reasonable person would know that a 0% APR on the loan would be an error and not the intended/agreed upon terms of the deal. A valid contract documents an agreed upon understanding between two parties.
You know why a protection like this exists? It’s to protect you too. You wouldn’t want a world where you agreed upon a 5% APR loan but an error on the form listed it as 50% and the other party told you to go fuck yourself and you end up stuck with it. No, there is a process to deal with things like this, and that process is there to protect both parties.