How You Can Afford a Tesla Even If You're Not Rich
Everything Elon Musk touches seems to turn to gold, and Tesla is no exception. The company has taken the idea of an eco-friendly electric car and turned it into a lust-worthy luxury vehicle.
When the first cars hit the market with hefty price tags of $100,000 or more for a brand-new Model S or Model X, Teslas were accessible only to those with deep pockets.
But today it's possible for someone with a more modest income to own a Tesla.
The Tesla Model 3 — introduced in 2017 — has a starting price of $39,990. While that still might be considered expensive, there are six simple strategies to bring down the cost of a Tesla even further.
1. Get thousands of dollars back via government incentives
Tesla Model S
Although the federal tax rebate for electric vehicles is no longer available for Tesla owners, several states and local utilities offer EV rebates that can save you thousands of dollars.
You can claim most rebates and tax credits after you’ve purchased the car, usually through your income tax return.
Many states also offer noncash incentives for electric vehicles, such as carpool lane access in California and free municipal parking.
2. Switch from gas to electric and save upwards of $700 a year
Tesla Model 3
The average car has a fuel economy of around 25 miles per gallon, according to the U.S. Environmental Protection Agency.
The Federal Highway Administration estimates the average driver covers 13,476 miles each year. If you’re paying $2.51 for a gallon of gas, which was the national average in late January 2020, that adds up to an annual fuel bill of $1,353.
But according to the Office of Energy Efficiency & Renewable Energy, the electricity equivalent of a gallon of gas (eGallon) costs $1.19, which works out to $641 per year – more than $700 less than fueling with gasoline.
3. Cut down on electricity costs by charging your car for free
Though electricity is cheaper than gasoline, Tesla offers a few perks that make its cars even more affordable to drive, such as its Supercharger Stations.
Tesla's growing number of Supercharger Stations popping up across the U.S. will charge your battery in just 30 minutes. At one time, Tesla vehicles came with free unlimited supercharging for life, but the company has been phasing out that perk since 2017.
The newer, cheaper Tesla Model 3 is going to cost you an average 26 cents per kilowatt-hour to charge — but that's about 43% less than the cost of gasoline, Tesla estimates.
Although the upfront cost of buying a Tesla may be high, the savings on fuel could be worth it, depending on how much you drive.
4. Slash your monthly car payment using this service
Tesla Model X with rear spoiler
Even so, the sticker price of a Tesla might be a shocker: A Model S currently costs $1,225 a month to lease in California with $0 down.
And though rear-wheel drive Tesla Model 3 has a base price that costs just $459 a month, you’ll need to pay a hefty minimum $2,500 down payment.
You can cut the cost of a Tesla with the help of a company called Turo.
Turo is the world’s largest car-sharing marketplace. You can rent out your Tesla for nine days or more each month and make over $1,000 – enough to cover most, if not all, of your monthly car payment.
Turo is easy to use: You list your car for free, check-in your guests through the Turo app, and then get paid via PayPal within three days of each trip. Your car is fully insured for up to $2 million when a renter takes the wheel, so you don’t have to worry about your beautiful ride getting banged up.
Teslas are considered luxury vehicles on Turo, so you’ll make even more money than you would with a regular sedan.
5. Pay a lot less by buying used
Tesla Model S
There are some things you definitely don’t want to buy used — a toothbrush, for example. But when it comes to cars, getting one used is a smart way to go.
According to Kelley Blue Book, new cars lose 20% or more of their original value within one year. The “new car smell” is great, sure, but you know what’s even better? Saving a ton of money.
Tesla offers certified pre-owned cars at a huge discount, and the Tesla website even has an affordability calculator to help you figure out what your monthly payment will be.
You also want to make sure you’re getting the best auto loan rate. Since most sellers’ interest rates are less-than-stellar, you should compare rates from multiple lenders using a service like LendingTree, so you can lock in a loan at the lowest interest. It’s fast, easy, and best of all, free.
6. Get cheaper car insurance by comparing rates
Tesla Model S
Car insurance can be expensive, and if you forget to factor it into your annual car ownership costs you may be in for a nasty surprise.
A recent study by LendingTree's ValuePenguin site found that the average annual cost of car insurance was $2,390. When you're spending over $2,000 on anything, it's important to be sure you have the lowest possible price.
To find the best rate on your vehicle policy, you should be shopping around every six months. It sounds like a lot of work, we know, but the savings are worth it.
And luckily, there are companies such as Assurance which, in just minutes, will show you multiple quotes and put you in touch with insurers that can save you a bundle.
