Tesla offers finance deal on Model S

Tesla Motors has joined forces with USBank and Wells Fargo Bank to create vehicle financing and leasing products that allow consumers to lease a Model S electric sedan for a net payment of about $500 a month after a 10 percent down payment and calculated savings.

The 10 percent down payment often will be covered by federal and state tax credits available on electric vehicles.

However, the $500 a month payment is an "effective" monthly payment. The actual monthly payment is $1,199 month. But once other factors, such as incentives and not having to pay for gasoline and oil changes are factored in, Tesla calculates the equivalent cost to a gasoline car would be about $543 a month for an 85-kilowatt car.

But some of those equivalent factors are a bit hazy, including items such as a potential business-tax benefit as well as the value of the owner's time saved by driving in the carpool lane and not spent pumping gas.

"When considering the savings from using electricity instead of gasoline, depreciation benefits and other factors, the true net out of pocket cost to own a mid-range Model S drops to less than $500 per month," Tesla's statement on Tuesday said.

After 36 months, the residual value will be tied to that of the Mercedes-Benz S-class sedan, which is 44 percent, according to ALG. The S-class is competitive with BMW and Audi high-end products for residual value -- the segment leader is the Lexus LS 460 at 49 percent.

The customer is technically not leasing the car. He is building equity in the car over the course of a 66-month loan, with the option to walk away after three years with a guaranteed residual value. The customer can also pay off the balance of the loan at any time.

"You do not have to worry about buying a car. You can trade it in after three years," CEO Elon Musk said during a press conference Tuesday. "[It has] all the convenience of a lease, but the value of ownership. It gives you the right to give it back to us, but not the obligation."

Musk said he is personally guaranteeing the value of his cars, on top of the assets of Tesla Motors, in case EV values fall below those of an S-class. Forbes magazine recently placed Musk's net worth at $2.7 billion.

"No matter what happens, people should feel confident that the residual value of the car will remain. Not only is Tesla standing behind that, I am personally standing behind that," Musk said.

The interest rate through Wells Fargo is 2.95 percent.

Musk explains the offer in this video:

By Mark Rechtin- Automotive News