Heartland launches guaranteed future value loans for Tesla buyers

Heartland Bank has launched a Guaranteed Future Value (GFV) loan for eligible Tesla customers in New Zealand, giving buyers a set figure for what their car will be worth at the end of the finance term.

Under the product, the future value is agreed at the start and written into the customer’s finance agreement with the bank.

When the term ends, customers can keep the car by paying or refinancing the final payment, trade it in towards a replacement, or return it under the GFV agreement.

“Flexible ownership matters to the people who choose Tesla, and this loan gives eligible customers a clearer way to plan for what comes next,” says Thom Drew, Tesla’s country director for Australia and New Zealand. “A guaranteed future value is agreed at the start of the term, with a clear choice at the end: keep the vehicle, trade it in, or return it.”

GFV finance is well established overseas, particularly in the UK, where it is the most common way to finance a new car. It is also a rapidly growing offer from car brands and finance companies in New Zealand.

That is particularly so with EVs, where buyers still have concerns, largely unfounded, about depreciation. A guaranteed figure at the end of the term answers that question before the car leaves the showroom.

Other brands with GFV products here include Toyota, Mazda, Nissan, Hyundai, Suzuki, Volkswagen, Volvo, MG, Mercedes-Benz and Porsche. Toyota’s programme covers the electric bZ4X, and MG’s is also provided by Heartland.

A GFV loan differs from a standard car loan, where the buyer borrows the price of the car, less any deposit, and pays off the full amount over the term.

With a GFV loan, the guaranteed figure is held back as a final payment. Regular repayments cover the rest of the amount borrowed, plus interest, so they are usually lower than on a standard loan over the same term.

The guarantee matters most if the car is handed back. If used values have fallen and the car is worth less than the figure agreed at the start, that shortfall sits with the lender, not the owner. If the car is worth more, the difference can generally go towards the next one at trade-in.

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There are conditions. Heartland says each end-of-term option is subject to the terms of the loan and GFV agreements, including eligibility, vehicle condition and usage requirements.

GFV agreements generally set a kilometre allowance and expect the car back in good order for its age, with charges if the allowance is exceeded or there is damage beyond normal wear.

Interest is also generally charged on the deferred amount for the whole term, so the total interest paid can be higher than on a loan paid down in full.

Heartland has not detailed term lengths, kilometre allowances or interest rates for the product in its announcement.

Heartland Bank chief auto officer Alistair Scott says the product is designed to give Tesla customers more flexibility and help them plan for the future.

“We are pleased to make this Heartland Bank finance option newly available to eligible Tesla customers, building on the existing relationship between Heartland Bank and Tesla,” he says.

Applications are subject to the bank’s responsible lending criteria and credit approval.

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