Possible Ways for People to Afford a Tesla

Federal Tax Credit

Tesla Model 3s are currently eligible for a federal tax credit of up to $7,500, which can significantly reduce the effective cost. However:
- This credit is applied when you file your taxes, not at the time of purchase.
- You need enough taxable income to benefit fully (e.g., $7,500 in federal tax liability).

State and Local Incentives

Some states (e.g., California, New York, Colorado) offer additional rebates or incentives for EV purchases, ranging from $1,000 to $5,000.
Check your state’s programs to see if you qualify for further discounts.

Electricity Savings

Tesla owners often save money compared to fueling a gas-powered car. Charging at home can cost much less than gas, especially in states with favorable electricity rates.

Maintenance Savings

Teslas require little routine maintenance (no oil changes, fewer brake repairs). Over time, this can save hundreds or even thousands of dollars compared to traditional cars.

Many Tesla buyers may prioritize their car payment over other expenses or stretch their finances to afford the car. Here’s how:

Longer Loan Terms

Tesla financing offers terms up to 72 or 84 months, which can lower monthly payments but increase overall interest paid.
Example:
- $41,129 financed for 84 months at 5.99% = ~$585/month.

Leasing Instead of Buying

Some people lease their Teslas, which can offer lower monthly payments but no ownership at the end.
Example: Tesla Model 3 lease terms:
- $399/month for 36 months, with $4,500 down (depending on location).

Low Interest Rates or Cash Discounts

Buyers with excellent credit may secure financing rates lower than 5.99%.
Some Tesla buyers take advantage of employer benefits, such as EV stipends or low-interest loans.

a. Trade-Ins

Many buyers trade in their current vehicles to reduce the cost. If someone trades in a car worth $15k, they’re only financing $26,129 instead of $41,129.

b. Using Savings or Investments

Some Tesla buyers may pull from savings or investments to make a larger down payment or purchase outright.

c. Tax Savings from Business Use

Self-employed individuals or business owners may purchase a Tesla as a business vehicle and write off a portion of the cost, reducing the effective price.

d. Lower Spec Models

The base Model 3 (Rear-Wheel Drive) is cheaper than the higher-spec versions like Long Range or Performance, making it more accessible.

Many Tesla drivers are likely using a combination of trade-ins, incentives, and longer loan terms to make the car more affordable.
Some prioritize the “cool factor” or EV benefits over other expenses, stretching their budgets to afford the car.

If you’re debating whether a Tesla is worth it for your budget:

Run the Numbers: Compare the total cost of ownership (including gas savings) against your income and other financial goals.
Consider Alternatives: There are other EVs (e.g., Chevy Bolt, Hyundai Ioniq 5) that are cheaper but still offer great EV benefits.
Stick to Your Priorities: A Tesla is a want, not a need—don’t stretch your finances if it conflicts with long-term goals like saving, investing, or paying down debt.