guide to tesla financing and car loans
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Tesla Financing & Car Loans in Canada: Here's How It Works

With the cheapest model retailing at around $60,000 in Canada, it’s safe to assume that most Tesla buyers will choose to finance their EV purchase. But how does it work? What credit score do you need to finance a Tesla? Is it easy to finance a pre-owned Tesla? Here’s what you need to know about Tesla financing…

Buying a brand new Tesla vehicle is a little different to buying a car from other dealerships or automakers. If you’re trying to remember that last time you saw a Tesla dealership, it’s because there are none (although they do have smaller sales centres where customers can go to discuss options with a consultant).

Tesla succeeds with a modern sales model that cuts out the dealership in favour of a direct-to-consumer approach. However, their purchase options are similar to what you would find at a standard dealership.

If you happen to be shopping for a Tesla now, view all our used Tesla cars and SUVs here.

What are my purchase options when buying a Tesla? 

Like many dealerships, Tesla provides three options for purchasing one of its vehicles: Lease, Loan, or Cash.


If you want to purchase a Tesla with a car loan, you can finance the purchase with a Tesla financier; simply select this option during the online checkout process. However, Tesla lenders are not your only option. You can also use your own third-party financier and provide Tesla with the lender information. Both routes will require a credit application and review of your credit profile. Lending for a Tesla is also only available in six provinces at the moment – BC, AB, SK, ON, QC, and NS.


This method lets you drive the new vehicle without paying the whole price of the car. Instead, you can make monthly payments on it over an agreed-upon term (ie. 36 months). At the end of the vehicle lease, you have the option to give back the vehicle, extend the lease, trade it in, or buy it minus some of what you have paid into it. Leasing a Tesla is also only available in six provinces – BC, AB, SK, ON, QC, and NS 


This method is when you want to own the car outright and can pay cash for it. This is certainly the exception for most unless you have traded in your old car and have other savings on hand. Tesla requires a small payment upon ordering and final balance payment upon delivery. The final payment can be either bank draft, certified cheque, or wire transfer. 

How does Tesla Financing work? 

Tesla is a technology-first company focused on creating a convenient, online experience for its customers. That's why Tesla has streamlined its payment options right into the online order process. If you choose a car loan over a lease or cash purchase, here’s how it works.

    1. Submit a credit application

    By selecting Finance during the order process, then Loan, you will be given the option to finance with Tesla or with a third-party lender of your choice. By selecting Tesla as your financier, you will be asked how much you need to borrow and your preferred monthly payment schedule. After providing your personal details and employment information, your credit application will be reviewed along with a credit check. 

    2. Credit decision

    You will be notified in your Tesla Account of the credit decision within the Payment Method section. If you accept their financing offer, a Tesla Advisor will contact you with next steps and a date of when you can expect delivery of your Tesla vehicle. If your credit application is rejected, a Tesla Advisory will contact you to discuss options.

    3. Loan agreement

    All loan paperwork will be completed at the time of delivery of your new Tesla. The credit applicant must be present and ready to sign off on the financing paperwork. Proof of insurance must also be provided at the time of delivery.

    4. Make payments

    Your Loan Agreement will outline your payment schedule and you will receive a welcome pack from the lender a few weeks after delivery of the car. Your first payment is due 30 days from the delivery date. There is no penalty for paying off your loan early with Tesla financing.

What kind of credit score is required for a Tesla car loan?

Tesla does not state the required credit score when it comes to its financing. However, it is common for applicants with higher credit scores to get favorable interest rates on auto loans. An example of a better-than-average credit rating is around 720. If you don’t know your credit score, you have multiple ways to find out your credit score for free.

If you think your credit rating is on the low side (less than 600), you can still apply for a car loan with Tesla. You can see what Tesla financing offers or you can organize the auto loan separately. But keep in mind that if you apply for auto financing with Tesla, it will require a hard pull of your credit report which may impact your credit score. 

Does Tesla offer 0% financing? 

Dealerships and vehicle manufacturers love to offer 0% financing on the purchase of brand new vehicles; it is one of the most common carrots used to lure in prospective buyers, but there are some catches to 0% financing. For example, it usually only applies to inventory that is aging or proving difficult to sell. Furthermore, this promotion does not apply to pre-owned inventory. 

Tesla does not offer 0% financing on new or used models. In fact, the EV giant rarely relies on promotional tactics to sell its inventory. With over 930,000 cars sold in 2021, it’s clear that the automaker is not having difficulty finding buyers.

Is a down payment required to buy a Tesla? 

If you plan to buy a Tesla vehicle through financing, the requirement of a down payment will be subject to your lender. Tesla financing does not stipulate that you need a down payment. However, you might want a down payment to reduce monthly payments to a manageable amount. 

If you plan to use a third-party lender to finance your Tesla purchase, you might need a down payment or collateral to satisfy the lender’s terms. In any event, a down payment is not always mandatory, but advisable when it comes to managing your monthly repayment schedule.

How does a trade-in work with Tesla?

You can reduce your Tesla purchase price with a trade-in vehicle. Tesla does accept trade-ins (yes, that includes gas-powered vehicles). Tesla estimates the value of your trade-in using a trade-in calculator that factors market data, product knowledge, and more.

However, there is a big downside to trade-ins for new custom models. When the delivery timelines for custom order models are so long (up to 10 months in some cases!), the market value of your old car will be different by the time your new car is delivered. Therefore, Tesla will only provide a trade-in offer for custom models once your order is approaching delivery. 

Can I finance a used Tesla?

If you want to buy a brand new model your only option is to buy the vehicle directly from Tesla, but you have more options for purchasing a used Tesla. Tesla has its own selection of pre-owned vehicles that you can browse online—or you can purchase one from an independent used car dealership, an online vehicle retailer, or in a private sale. 

All of the options mentioned above will require you to fill out a credit application by providing details such as income, employment information, etc. However, you could have financing in place (and the vehicle in your driveway) within 24 hours depending on who you work with.

3 ways to finance a used Tesla

    1. Tesla

    Wait times will vary but Tesla does have a pre-owned inventory available in Canada, and their financing options are pretty similar to how you would purchase a brand new model. You can start the process online, or by visiting a Tesla sales centre near you. 

    2. Dealership or online retailer

    You may find a pre-owned Tesla at a used car dealership or online retailer. Your payment options will be flexible; you can apply for financing directly through the dealership or retailer’s in-house financing department or network of lending partners. Or, you will have the option of working with a lender or bank of your own choosing. 

    3. Bank

    Most used car dealerships or online retailers will give you the choice of financing your vehicle purchase with one of their finance partners or your own third-party bank. If you plan to buy a Tesla in a private sale your best option for financing is to visit your local bank or credit union.

Have your Tesla delivered today

Ordering a brand new Tesla can take many months to fulfill, but a pre-owned Tesla can be delivered as soon as today. Canada Drives is a 100% online used car retailer that, like Tesla, also cuts out the dealership in favour of a direct-to-consumer approach. Have your vehicle delivered to your home within 24 hours and get seven days to drive your electric car and make sure it’s the right fit. If it’s not, we’ll come pick it up and give you your money back. 

We offer a wide selection of certified used electric cars across Canada. Organize financing with us (or separately with your own lender) and have your Tesla delivered to your doorstep as soon as today! 

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