Elio Buyer Financing Options Discussion

[zelio]

I got a little bit more information in an email exchange

Hey Joshua!
Thanks for getting back to us.
Elio Motors will be offering many different financing options as we come to production time next year. Financing is an extremely exciting area for us. One option that we will be taking advantage of will work as follows:
1. Elio customer determines their vehicle of choice.
2. Elio customer receives a credit card that holds the balance of the vehicle’s cost ($6800+cost of options (upgrades?)+taxes+delivery fee)+$300 room of credit card for gas charges.
3. Elio customer MUST purchase gas using this card (we are working out now how this will be monitored, penalties for not using the card, minimum monthly charge requirements etc.).
4. Each gas charge will be charged to the Elio owner at 3 times their gas purchase, i.e. a $25 gas charge = $75. The difference of $50 will go towards paying down the vehicle’s balance. This $50 (less interest charges from the credit card company) will go toward paying down the balance on the vehicle.
NOTES: card can only be used for gas, there will be a minimum amount that needs to be charged monthly (amount and the “minimum amount” have not yet been determined). Elio Motors is striving towards working with a bank that accepts a wide range of credit worthiness potential customers.

Best,
The Elio Team
=========================
So, while it appears there will be an interest rate, it seems possible that the interest rate will apply only to the gas payments and not the entire balance. I could be interpreting that wrong through.

I don't read it that way. #2 says the Elio customer receives a credit card that holds the balance of the vehicle’s cost ($6800+cost of options (upgrades?)+taxes+delivery fee)+$300 room of credit card for gas charges. If that balance is on the card then interest will be charged on it just like any other credit card. And in fact according to #4 if the credit card company charges 25% interest that $50 payment will in fact only be $37.50 toward paying down the balance on the vehicle. I do think it is good that the card can only be used for gas. I haven't had a credit card for more than 9 years but I do remember hearing about people finding their interest rates were suddenly jumping to exorbitant amounts like 25%. Even though they had made all their payemtns in a timely manner. Now if their interest rate is more in line with a regular vehicle loan then it might be worth considering. When I checked at my credit union they said an ATV, which at this time is what they would finance Elio as, interest rate loan would be around 5.99%. That means the actual payment against the loan would be $47.00.

I really feel Paul Elio's idea is brilliant but I don't have a lot of trust in banks or credit card companies. It is the type of thing I will need to study very carefully. Thank you for posting this. It is definitely the most information we have on this subject. Good Work, Jobeleca! :-) Z

 

[Cali Chris]

+2, definitely great info. I would imagine that the credit card option is for those that may not be able to secure an actual loan and don't have the cash, but need reliable transportation.


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[BlioKart]

+2, definitely great info. I would imagine that the credit card option is for those that may not be able to secure an actual loan and don't have the cash, but need reliable transportation.


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Its an interesting way to purchase I just hope they don't try to rape people @25% but I wouldn't put it past them. In a way its a secured credit card since the vehicle its self is collateral. It seems it a little less risk for the bank.

 

[Davidb1973]

How its going to work if ever implemented. U will go into a dealership. Ask for the card financing. Youwill be given a credit card with the balance of the car on the card plus an additional 300
Limit that can only be used for gas. Example the elio out the door costs 7500 with all taxes and fees..your card will have a balance of 7500 and a credit limit of 7800 of which 300 will
be avl for gas.. everytime u use the card.....which will be required you will be charged 3x the gas purchase. Example...u charge 10 in gas....your card gets charged 30. 20 dollars comes off the balance of the car and you will owe the gas portion at the end of month. There will be a minimum payment due on car. So lets say you only charge 40 dollars of gas for month.....and minimum payment for car is 130.00 you will be billed 80.00. Not sure how they will enforce it, or rates....but I betcha Bancorp will be banking partner.

 

[ecdriver711]

I think Elio is working out the specifics with financial institutions as we speak.

 

[Ty]

I believe that a conventional loan will come out much better for those who qualify... I spent $90 a week for diesel fuel. The Elio should get five times the mileage of my truck. I calculated spending $18 per week on fuel in my Elio saving me $72 a week or $288 per month... my bank says my payment would be $131. I will be coming out $157 ahead every month by driving a brand new Elio vs. driving my truck! Like a pay raise!

Thinking about it, I could buy two Elios, let one sit, and STILL spend less a month than I do now! (I didn't include insurance, tags...)

 

[Craig]

I believe that a conventional loan will come out much better for those who qualify... I spent $90 a week for diesel fuel. The Elio should get five times the mileage of my truck. I calculated spending $18 per week on fuel in my Elio saving me $72 a week or $288 per month... my bank says my payment would be $131. I will be coming out $157 ahead every month by driving a brand new Elio vs. driving my truck! Like a pay raise!

Thinking about it, I could buy two Elios, let one sit, and STILL spend less a month than I do now! (I didn't include insurance, tags...)

Getting a new job. I plan on driving my truck 50 min to job site and parking it next to the 24/7 guard shack. Will drive Elio every day to and from work. I will use the truck on the job site.

 

[SandyCWV]

I believe that a conventional loan will come out much better for those who qualify... I spent $90 a week for diesel fuel. The Elio should get five times the mileage of my truck. I calculated spending $18 per week on fuel in my Elio saving me $72 a week or $288 per month... my bank says my payment would be $131. I will be coming out $157 ahead every month by driving a brand new Elio vs. driving my truck! Like a pay raise!

Thinking about it, I could buy two Elios, let one sit, and STILL spend less a month than I do now! (I didn't include insurance, tags...)

I agree that conventional loans will work much better for those who qualify. I will pay cash.
As we come to the end of the tax season (my part time job) and I sit here contemplating the number of people in this country that are "unbanked" (do not have a bank account at all in which to deposit that EITC refund). I can tell you I expect that there will be a lot of people interested in this low cost vehicle and glad to be able to get it with ANY kind of credit.

 

[H2odog]

Something some folks might want to look at is their 401K. Interest is low, and you, your 401K are the ones to receive this interest. You are in effect borrowing the money from yourself. If you have enough vested amount in your account you could borrow 100%. Payment is usually deducted from your paycheck. Check with your HR department.

 

[H2odog]

Tucking away $150-200 a month till I get mine.

Smartest move of all! Pretty much what I am doing, too.