Tesla starts offering 84-month car loans as interest rates rise

“When interest rates rise dramatically, we actually have to reduce the price of the car, because the interest payments increase the price of the car,” Musk said during Tesla’s July 19 earnings call. “So we have to do something about that.”

While 84-month auto loans have been gaining in popularity, the trend slowed early this year, according to credit-reporting company Experian. Roughly 34 percent of new vehicles loans in the first quarter were longer than six years, down from about 38 percent a year ago.

Tesla delivered a record 466,140 vehicles during the three months that ended in June but has sold fewer cars than it’s produced each of the last five quarters. The shares plunged after Musk said on this week’s call that the company will have to keep lowering prices if interest rates continue to rise.

In Canada, Tesla is offering 96-month loans, according to its website. Terms call for a $7,500 down payment with an interest rate of 6.83 percent.

Automotive News Canada contributed to this report.