How To Afford A Tesla

‍Cost savings from the Federal government and local utilities

We'll start with one of the biggest and best incentives: The federal government could give you up to a $7500 tax incentive for buying a new Tesla. Note that there are only so many of these per year, and at this point, the tax incentive may not be available for the current year. You'll also have to wait until tax time to receive the incentive – which is a discount or refund on your current tax bill.

Still, this is one of the biggest incentives available. The form is IRS 8936 – you'll want to consult with a tax professional on information regarding how to fill it out. We aren't quite tax experts here.

Just like with switching to a smart thermostat, you'll often have smaller rebates available from your local utilities. These can be credited to your bill or help you with taxes.

Please watch for news about federal tax incentives regularly. These do run out, and can run out quickly. Whether or not tax incentives become available, or are increased, is a matter of legislature but you'll definitely want to move quickly once money is available.

Gas to electric switch

One of the bigger long term – and almost always available savings with a Tesla comes from not using gas. While electricity prices also fluctuate, the price to fully charge a Tesla is around $14.00. Compared to a vehicle that gets 25 miles per gallon (also, good luck finding a 25 miles per gallon that can move like a Tesla!) that's cheap. With current gas prices over $4 per gallon (the price will probably change once you get to the end of this article) , an average 16 gallon tank will cost you about $64. I think we would prefer the $14 for charging our vehicle, thanks.

Electric prices could fluctuate too, depending on your state and the hour at which you charge. Call your utility company and learn what non-peak hours are so you pay less for charging at home.

Use public chargers

If you live near a Tesla Supercharger station, charging your Tesla is free or very cheap. Superchargers pump your Tesla full of juice and get you full in 30 minutes. Note that Tesla does have changing policies regarding how much and when they charge for using Superchargers.

If you are on the road, using pay chargers can also be more cost effective than charging at home in some cases – and you can get things done on the road, too. You can also reach out to hotels or find hotels that offer both free Tesla or other EV parking as well as free charging as a perk for staying there. They can have plug in ports near the front of the hotel that aren't necessarily high speed, but will juice your Tesla up while you rest.

Get Referrals

This program might still exist when you read this: Tesla offers a referral system in which you get 1,000 free Supercharging miles when you refer someone to buy a Tesla. Got a big social network and people who need cars? You can take advantage of this and get free charging!

Rent it out

If you don't need your vehicle every day and are good at keeping it clean, you can rent out your Tesla. Most drivers will end up more than paying the monthly lease or buy price by renting their Tesla out to a person who would like to try a cool electric car.

Rental companies will take a cut, sure, but this is better than having your vehicle sit in your driveway doing nothing.

Be sure to discuss this with your insurance company. Otherwise, figure out what the market will pay for a day or two with your Tesla, especially if you don't drive that much and want to potentially make a few dollars with your Tesla investment.

Buy used

Even in the most competitive of car markets, buying used is generally a good value. Consider buying a used Tesla instead of a new one. Vehicle values tend to drop right after signing the papers anyway.

Note that in a tight used car market, you might spend a little more than you wanted to, but keep others savings in mind.

Maintenance

Drivers are so ingrained with the idea of needing to pay for oil changes and regular maintenance a couple of times per year, they overlook the fact that Tesla needs little maintenance by comparison. You'll pay for electric, tires, brakes – and that's pretty much it.

Down payment

A dealer will often ask if you have a down payment to make – and in the case of a Tesla, you'll probably need to put some money. Putting more money down reduces your monthly payment and can help make the monthly payment easier.

How much do Teslas cost?

With all these questions circulating about how to afford a Tesla, we should consider how much a new Tesla costs up front. We assume that someone asking how to afford a Tesla is unlikely to be paying all cash for a vehicle too.

The average monthly payment for a new Tesla starts at around $713 per month on a 6 year loan with $4,500 down. This is for a very basic Tesla – though a basic Tesla is still cooler than most cars. If you wish to have a set number of miles available and lease, the price goes down by about $200 per month though you'll either have to give the vehicle back or buy it out.

We'll be honest – the price does sound high up front – but the average new car payment isn't much lower than this for a gas powered vehicle, which will eventually cost more than the Tesla per month to fill up with fuel.

Go barebones

As with many other makes and models of vehicle – your actual dream vehicle with heated and cooled seats, navigation, and extended range battery might be just out of reach. Our advice is to start with the smallest Tesla you can afford. This advice is true of most any vehicle – the larger the vehicle gets, whether its a sedan, suv, or truck, the more it costs. While an All Wheel Drive Tesla with performance enhancements and all the features may sound awesome, question whether or not you are going to use all those gizmos.

How much money do I need to make to afford a basic Tesla?

Assuming you are going with a fairly standard debt to income ratio for a car, the average Tesla owner who buys a basic Model 3 would need to earn about $111,000 per year or $6,562 per month after taxes to be able to readily afford a Tesla. This also assumes your interest rate is in the 2.74% range and you put at least $4,500 down. Sound like a lot? The pricing here just slightly exceeds a new Ford Mustang Mach-E which is considered a sports car.

Note that these costs are based on living in New York where rent, food, and other essentials are fairly high.