Tesla is a car company that has taken the world by storm. No gas, an incredible touch-screen, shockingly fast acceleration- what is there not to like? So- what salary do you need to afford a Tesla?
So my buddies and I did some research. We found that on average the salary you need to afford a tesla is around $40,000- but that’s really squeezing it. So, let’s discuss this number and a way to reduce it and get that Tesla faster.
And take it from me- I’m no millionaire or anything. I’m a broke college kid too.
What Salary Do YOU Need To Afford a Tesla? Not much, Buying A Tesla Isn’t Expensive
I think this is a huge myth across the world, and even in the United States. Buying a brand new car doesn’t necessarily put you in a ‘sea of debt’- although it’s not recommended.
I always recommend buying a $5,000 Honda Civic instead of buying a brand new car- but the truth is this: buying a car isn’t that expensive if you know what you’re doing.
I own a Ford Mustang. And truthfully, it wasn’t that expensive. I got the V6 model, which knocked nearly $10,000 off of the base price.
Paying the car off on-time and trying to negotiate for a low-interest price can also help a lot. But the truth is, my mustang really only ran me around $30,000 adjusted for inflation.
Paying that off over 6 years only ran me roughly $400 a month. Which honestly- isn’t that bad for a brand new sports car.
It’s not ideal, but cars are a HUGE part of my life. All of my friends and I go on road trips, work on our cars, and truthfully a huge chunk of my day is spent in my vehicle.
- Read: V6 Mustang Muffler Delete – Sounds Incredible!
It’s Not For Everyone
Look- not everybody needs to buy a new car. If you’re just driving 5 miles to work back and forth every day, what’s the point?
Buying a new car can be applicable in certain situations however.
Buying a new car is important for people that like working on cars, hang out in cars a lot, or drive very frequently.
Okay Tommy, Should I Buy a Tesla?
Look, the Tesla is a GREAT car. But- should you buy one? Here are guidelines that may make you interested in a tesla.
You have a LONG Commute.
- Look, I’m no stranger to this. In fact, my commute is 80 miles total. 5 days a week. Yep. I know what it’s like to be in your shoes. Not having to pay for gas makes buying a tesla an incredibly attractive option for me. That would save me close to $400 a month in gas. (because Teslas do not use gas)
You’re looking for a super reliable car.
- Teslas just have less moving parts than most cars. This means physically there is less chance for failure in the car. Also, Teslas aren’t known for ‘breaking down’. (Looking at you Chevy)
You do frequent long road trips.
- I live in Minnesota. Driving anywhere in this state is basically a road-trip. And furthermore, everybody for some reason has cabins that are hundreds of miles away. Imagine the gas you’d save every weekend!
- Teslas produce fewer emissions over time than normal gas cars.
Why Do You Think You Only Need Roughly $40,000?
What salary do you need to afford a Tesla?
Well- to be honest, I think depending on how willing you are to get this Tesla, you could probably do it on $30,000.
Ultimately, everybody is different.
You could live in a place where rent is $10/month and you barely eat- so what salary do you need to afford a Tesla? – like maybe $6000 a year if that’s the case.
I came to this number by trying to find an ‘average’ of what I assume a normal college teen would be in. (Number is based off of myself)
- I figured the average rent would be around $1500 for a city apartment. This can vary based on if you’re dorming/staying with your parents/sharing rent.
- But in Minneapolis (fairly big city) I was able to find a ton of apartments even cheaper, but I went with $1500/month to be fair.
- If you’re able to get the Tesla decently financed, you will spend roughly $500-600/month on it. This can vary depending on your credit, but if you’ve had a credit card for maybe 1-2 years paying off everything- you can probably pull it off.
- Total: $550/month
- Tesla does have its own insurance company which provides usually 20-40% cheaper rates at $3,100 annually.
- This brings that out to $250/month.
- Then just normal food/clothing/other random expense costs I figured would come out to roughly $400-600/month.
All totaled out? Roughly $2,800 per month. Yes, my numbers are generous- but I can’t expect everybody to want to eat lentils every month.
If you multiply that by 12, you’re getting at roughly $33,700 a year. But I added on a few thousand because you never know when an emergency may happen! Or other leisure costs.
What’s The Cheapest Tesla?
So Tesla is still really new, and their models change all the time.
Currently, the cheapest tesla by far is the Model 3.
The model 3 comes in shyly at $40,000. This is the upfront cash cost. The next model is the Model Y which starts at a sharp $54,000.
So yeah, the Tesla Model 3 is going to be your best bet.
What salary do you need to afford a Tesla? Well, ultimately I guess it depends on which one you want.
But don’t fear, the model 3 is a good pick.
‘Hacks’ To Save Money On Your Tesla
There are some hacks to save money on your Tesla!
Government Tax Returns
The government currently gives a lot of money back to you for buying an electric car.
The idea behind this is that you’re causing less pollution, saving the environment, etc.
This changes all the time, and the current Republican majority doesn’t like this idea- so you have to check for yourself after reading this.
But typically you can claim nearly $3,000 back in tax credit – not bad!
Many people bring up the argument that, “Well sure the Tesla is cheaper than gas, but you’re still paying a lot in electricity!”.
Well- if you’re smart about it- maybe not!
Some places offer free charging for Tesla’s. You can take advantage of this by charging your car there. Obviously, the incentive for the business is that you’re likely spending money at their store.
But that doesn’t always mean you’re “spending more”. If you save $20 in charging costs and instead spend $20 on clothes at a mall with a free supercharger you’re saved money, helped the business out, and have a new shirt!
You can also try to convince your company to get a supercharger installed!
Really at the end of the day- even if you have to pay for charging, it’s still way cheaper than gas!
It Ultimately Depends How Frugal You Are
What salary do you need to afford a Tesla? Well, if you want to really cut costs- you can get this Tesla fast.
I recommend using an app like Mint or You Need a Budget. I personally use Mint.
Mint is a free website that you connect your bank account to. (Through an API, it’s not a scam) Mint will then tell you where you are spending money every month.
This can help you drastically! For instance, it will send you alerts like, “Tommy, you spent $250 on restaurants this week…reduce that”.
Things like that can be an eye-opener. $250 in a single week for food I could cook at home for $20? $250 is half the price of the Tesla payment monthly…
I recommend you signup for Mint, evaluate where your money is disappearing, and fix that.
Trust me, eating out really is a huge cost factor. A tub of ice-cream is like $7 at the grocery store, and 1/16th of that is $6 at Dairy Queen in the form of a ‘small blizzard’.
Consider Adding Income – Online/In-Person
You could also try adding income online or in-person!
You could pick up a shift on Saturday for an extra 8 hours. That’d be roughly 32 extra hours a month.
Assuming you get paid around $13 (this is a low ball), after taxes that would be an extra $280 or so a month.
Plus, all the money you’ll be saving from not going out Saturday night.
You could also ask your boss for a raise or find another job. Even if you’re a college student like me, some of those factory jobs can pay bank.
The local factory here takes 18-year-olds no experience, no education starting at $20/hr. Imagine an extra $160 from an 8-hour shift. (It doesn’t hurt to look around for a new job!)
This blog actually sources a lot of my income. Ezoic helped bring in way more money from my ads and helps me pay off things like car payments, rent, and more.
You could also do things like starting a YouTube channel or taking surveys.
What I recommend is joining an ‘actual’ survey panel website. And I don’t mean like those websites that pay you $0.20 to take an hour-long survey.
I mean like those survey panels that are willing to pay $300-400 a month regularly. It takes some tough digging and research to find them, but it can be invaluable.
I can’t really link any, because it is so location-specific. But I recommend checking Facebook or googling for survey opportunities in your area.
Cancel TV Subscriptions, And Fix Your Phone Plan
It’s 2020- if you’re paying $120 a month for cable, you need to get rid of it. Netflix costs like $10 a month and will have most of everything you need.
And by the way- TV isn’t that good for you. It’s a big waste of time, distracting you from buying that Tesla!
Your phone plan is also a big one. Many people just set and forget their phone plans, but it doesn’t hurt to call and get it readjusted.
I had a strange thing happen where it ended up being $120 cheaper for me to UPGRADE my plan. I went from having 1GB of data to unlimited data and saving $10 a month for it.
Why? I don’t know.
But ultimately, it never hurts to just call up and ask for more options. I also know many people upload YouTube videos monthly discussing new phone plans that are cheaper.
So it may be worthwhile to check those out.
How To Make Money With A Tesla
One way you can help pay off this Tesla, is trying to make money with it.
Since Teslas do not use gas and are more reliable than standard cars, being an Uber/Lyft driver can actually be super profitable!
In fact this guy makes $75/hour by driving for Uber/Lyft with his Tesla. That’s right. $75 an hour to cruise along all day in your awesome ride.
I actually think this is a GREAT way to pay off the car.
Because again, tesla cars don’t use gas, it makes driving for Uber/Lyft way more profitable and you can see more money going in your pocket.
Plus if you need some emergency money for an upcoming car payment because you screwed up somewhere- you can easily start driving and getting money in your bank right away.
Tesla Affordability Calculator
There is a great Tesla Affordability Calculator on their website.
Truthfully, you’re going to have to examine your sources of income and how much you are willing to spend on this car.
Tesla’s affordability calculator is specific if you’re loaning it from Tesla.
If you have a bank or credit union – use their calculator and talk with their loan officers.
Try To Refinance At a Super Low Rate (Credit Union, APR Discounts!)
What can be really interesting is asking your bank what salary do you need to afford a Tesla. Often times, your bank or credit union can give a really low APR or even have discounts for your loan.
For instance, my credit union lets me get loans around 5-6% as an 18-year-old. Many banks take advantage of 18-year-olds and make them pay 20-25% APR.
In the case of buying a Tesla, that would save me nearly $5700 a year! That can save nearly $20,000 after 4 years.
Do NOT get sucked into high-interest loans.
See what options you have! Many places offer discounts or lower rates for students, military, people with proven good credit records, etc.
Tesla Financing Credit Score
If you’re looking for a good tesla financing credit score, I would recommend having 600 minimum to get a tesla.
While this depends on everybody, 600 is fairly industry average.
If you need to get this credit score up, here’s my advice (been in the loan business a long time):
Start by paying off all of your loans or payments you have now ON TIME. DO NOT MISS A SINGLE PAYMENT FROM HERE ON OUT!
Next, try and reduce any loans if you can. Pay them off/whatever. Just reduce the total number, this becomes important for the next step.
The ‘Mock’ Credit Card To Get Your Credit Score Up
So this isn’t so much a ‘secret’- just rarely talked about. If you really want to get your credit score up, this is advice from any loan institution.
You start a new credit card, and buy enough on it every month you can ALWAYS pay it off. If the limit is $500, put your normal purchases on the credit card.
The trick is YOU HAVE TO PAY IT OFF. EVERY MONTH. No hesitations, no delays, NOTHING.
Every month as you pay this off, your credit score is going to rise tremendously.
Paying off your other debts and lowering your total loans will help as well.
Not only that- but you’re going to find yourself having more money.
Hopefully, at this point, you can loan that Tesla, and start using it to make money for you. This can be through Uber/Lyft, or saving gas money on long road-trips or commuting to work every day.
Either way- be financially smart and make sure that Tesla is earning your money back.
This entire time I’ve been talking about what salary do you need to afford a tesla, it’s been about a NEW TESLA.
Now for the record – I’ve never been one to buy used cars.
Personally, it’s because I like working on cars so I don’t really like working on cars that are already damaged or anything. It makes it way harder to do modifications like turboing the car or building the engine.
However- that doesn’t mean it’s a bad option. And for Teslas, considering the incredible reliability and how the car is built- there seems to be tiny downsides to buying one new.
I mean look at it- these cars barely have any moving parts. That means there is a smaller chance things will break. So no matter who was driving it before, ultimately, the car cannot get that damaged.
Teslas aren’t like a Ford F150 with a standard engine that after 300,000 miles or so is really testing its’ luck. Teslas don’t operate like that.
The problem is – buying a used tesla doesn’t save you much money.
Across any and all websites I’ve scoured, it just seems hard to find a Tesla that’s even a good deal for being ‘used’.
While it’s better than buying brand new, and you’ll probably save $5,000, you will need to dig deep and look hard if you want a deal.
Use “OnlyUsedTesla” To Find an Incredible Tesla Deal
After looking on cars.com, edmunds, etc. I was just done. I mean seriously-what was the point of even trying? Some of the Teslas listed were higher than the actual base price of the car!
That was until I found ‘OnlyUsedTesla.com‘, a website dedicated to selling used teslas. It lets anybody list their used tesla, and anybody can look.
And here was where I FINALLY started to find some deals.
Wow! A tesla at about $22,000. The only catch? 150,000 miles.
But remember, high mileage doesn’t really matter on Teslas. Sure, it has its effects on the car, like mileage does on any.
But comparatively, it’s way smaller. Teslas don’t rust as easily, they have less parts that break down,
And as many users have pointed out on Tesla forums high mileage Teslas aren’t bad, and Teslas are said to even last to 1 million miles!
The Truth in Buying a Used Tesla
The truth behind buying a used tesla is simple. It’s like any other car- you need to wait until you get a good deal.
Sure, when you’re looking at what salary do you need to afford a tesla and you see the used options you might see it as a lower cost overall.
But it’s like buying a used honda civic for $45,000. It’s not a great deal all-in-all.
There are likely some insurance benefits and state registration benefits for buying the older car. But you probably want to wait for a good deal that’s closer to $12,000 instead of $22,000.
Teslas are still relatively new cars. Sure, the company has been around for a while, but they haven’t really gained traction (see what I did there) until the past few years.
Give it more time and more people will be selling their teslas, meaning you will get inevitably better and cheaper deals as the years come by.
Conclusion – So, what salary do you need to afford a tesla?
Ultimately, the answer depends on everybody. But- I’d recommend for the average person to be earning at least $40,000 a year to purchase this beast of a car.
But- you can always do a lot now to help save for that tesla! Picking up an extra 2 shifts a month can bring $2500 in a year that can go towards saving for it.
Even then, cutting down interest rates and current debts, saving money and not going out for food every month are great ways to get closer to that tesla.