Elio Buyer Financing Options Discussion

When I spoke with USAA the representative knew about the Elio and after talking with her manager said it would likely be insured as a compact car and for $50 less than I'm currently paying.

Hey Robert!
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

I have a question about the credit card payment plan.

A regular loan for $6,000 at, say, 6% would require a $116 monthly payment in order to pay off the loan in 5 years. Say you've elected to use the credit card method where you pay it off like Robert mentioned. You'd buy $58 worth of gas a month, and Elio would triple that to get the $116 monthly payment to pay off the car in 5 years. (I'm making an assumption that you would want to pay off the car in 5 years and not just keep paying interest forever). If you stuck to the gas for payment method and didn't make any other payments, you'd have to drive up to 84 X ($58/$3.75 gal) = 84 miles X 15.46 gallons = 1,299 miles per month. Huh, I thought it would be more. I guess that isn't that bad. It would be like having a $174/month car payment that included free gas. Still, 15,590 miles per year is more than I drive.

However, it would be a viable option for people who need it. (I used 6% because it seemed to be the lowest interest rate that made sense for a credit card... I'd expect it to be as high as 14% or so at which point, the payment per month goes up to $140 which equates to $70 of gas a month (total of $210 per month payment) or 18.66 gallons or 1567 miles per month (18,809 per year). So, even at that high of a rate, it's still doable. I wonder if they'll let you pay it off early with no penalty...

Okay, I'm editing this because I realize I didn't put my question in there and realized that I answered it in my rambling. I guess I should have just thought it through before I started typing but since I already spent the time typing, I'll leave it here and mabe someone will get some benefit.

Thank you to both of you for separating this into a new thread and running some numbers.

Unfortunately, I believe this credit card payment plan is not going to work if the balance of the vehicle is on the card. Depending on the rate, the interest charges will negate much of the payment.
At 6% like in the above example; and using 45 dollars in gas; your payment would be 135.00. Your interest for the month would be about 33 dollars, leaving you with a balance of 6880 the first month. You pay 135 and now your balance is 6743. You paid a whopping 57 dollars your first month. The interest doesn't drop much either. At a balance of 5000 your interest is still about $24.65. You will be paying for eternity. Unfortunately, 6% isn't realistic for a car loan rate for anyone with decent credit. My highest auto loan rate in the past 10 years has been 2.24%. Even with imperfect credit you should be below 6%. Without different terms, this doesn't seem like a viable option.

I suspect that the balance would have to be on a separate account with a specific rate that is proper for auto loans and your credit worthiness. You would have a higher interest rate on a zero balance credit card where all the gas money would go. You would make a 3x payment based on the gas and that amount over the gas would be applied to the other account accruing at a suitable rate. Any "other" charges on the credit card would be financed based on the card terms. Along with miles, credits and other benefits provided by the bank.

Scott Miller said:

Unfortunately, I believe this credit card payment plan is not going to work if the balance of the vehicle is on the card. Depending on the rate, the interest charges will negate much of the payment.
At 6% like in the above example; and using 45 dollars in gas; your payment would be 135.00. Your interest for the month would be about 33 dollars, leaving you with a balance of 6880 the first month. You pay 135 and now your balance is 6743. You paid a whopping 57 dollars your first month. The interest doesn't drop much either. At a balance of 5000 your interest is still about $24.65. You will be paying for eternity. Unfortunately, 6% isn't realistic for a car loan rate for anyone with decent credit. My highest auto loan rate in the past 10 years has been 2.24%. Even with imperfect credit you should be below 6%. Without different terms, this doesn't seem like a viable option.

I suspect that the balance would have to be on a separate account with a specific rate that is proper for auto loans and your credit worthiness. You would have a higher interest rate on a zero balance credit card where all the gas money would go. You would make a 3x payment based on the gas and that amount over the gas would be applied to the other account accruing at a suitable rate. Any "other" charges on the credit card would be financed based on the card terms. Along with miles, credits and other benefits provided by the bank.

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I'm going to find the email I got from Elio and paste it here again.. The card will come with the purchase price of the vehicle already on it with a limit of 300 dollars above....ie.. 6800 or the cost of the vehicle with tax and options so lets say 8000 on it , credit limit would then be 8300.. So unless they are offering 0 % interest for a few years whomever goes that route will get fried..They also said for now the plan is suspended and may not happen and they have stopped advertising it..I will locate/copy/paste it asap..I sent them a nasty email about bull shitting people into thinking it is an easy buy, Also called them them a few nasties for not answering another question..I asked them to disclose the fuel mileage of the p3 and p4 test using the Geo 3 cylinder..As I said before I think Elio really hoped to raise 200 million bucks by getting 200 thousand all in reservations for a 1k each.. I also over heard the Elio reps in Oklahoma more or less telling people what they wanted to hear instead of the truth about a few issues..So yes, I see red flags even tho they have my money for two units..,,Ok let your death threats to me begin..AGAIN

3 Card said:

..snip..They also said for now the plan is suspended and may not happen and they have stopped advertising it...snip

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It's still on the web site. I asked about its cancelation once on the official FB page and the cheerleaders tried to lynch me.

I will be paying cash for the Elio, I hope I'm not forced to take a gas card, any info on this.

paddy's wagon said:

I will be paying cash for the Elio, I hope I'm not forced to take a gas card, any info on this.

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Ditto..But I'm sure some high binder finance company or credit card con will be taking advantage of those with credit scores below 680..Believe me Elio will grab what they can out of the process..

My hope is to pay off half the vehicle with cash and finance the remainder. My only question is the final classification of the vehicle. Car or motorcycle? This makes a big difference in the interest rate charged by my bank. All my bank says is that they will have to see once they get more information on it.

This being said, thinking they will allow me to bring my financing options to the table!