Polestar will raise interest rates on April 1

Polestar is gearing up to raise interest rates this weekend, creating a price hike for its electric car buyers. According to a dealer incentive bulletin, the electric vehicle maker will end its current finance deal of 0.99% APR on the Polestar 2 in favor of 2.49%. This will more than double the potential cost of a car loan.

Right now the best deal on the 2022 Polestar 2 is 0.99% APR for up to 60 months. On a $60,000 car, the rate costs just over $1,500 in interest before taxes, fees, and available plug-in rebates. However, on April 1, the interest rate will increase to 2.49%, more than doubling the cost of financing to nearly $3,900.

Renting a new Polestar 2 is also about to get more expensive. The Long Range Dual Motor currently has a lease contract priced at $449 for 36 months with $5,449 due at signing. On April 1, the price will increase to $499 with $5,499 at signing, a payment difference of $50 per month for the exact same vehicle through May 2.

If you’re about to buy, now might be the time to lock in the lowest rate. As it stands, the 0.99% rate is lower than Tesla’s best rate of 2.74%. However, that may not be the only reason to choose a new Polestar over a Tesla now that the latter has delayed some EV deliveries until 2023.

It’s also worth bearing in mind that Polestar electric vehicles are still eligible for the full federal tax credit, while Tesla is not. Polestar recently started taking orders for a lower-cost Polestar 2 called the Long Range Single Motor for $47,200 including destination charges, making it the cheapest Polestar model you can buy.

With the California Clean Fuel tax credit and reward, the cost of a Polestar 2 could drop below $39,000. Although it’s not the cheapest electric vehicle on the market (it would be the Nissan LEAF), the Polestar 2 can offer a compelling alternative to a Tesla, especially if you manage to score some running deals before they do not disappear.

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Leslie M. Gill