Save money buying a Tesla

Last updated 05-Jan-2023

A brief look at the Tesla website tells you that despite the Model 3 being the affordable entry level car, the headline starting price is not cheap. In the UK you don't get much change from £48k, in the US $46k plus taxes, and in Europe it depends on local taxation but €50k is not uncommon. These are the entry level prices for the M3, and whole the prices have crept up, so has the specification with heated steering wheels and longer range. A new M3 RWD now has similar range to an early M3 LR, although is also mich slower acceleratng. Previously, when you take a look at the overall ownership costs you could see some significant savings. Electricty costs were lower than petrol, taxation was less, servicing was cheaper, and depreciation was very low, the exact mix of these varying by region. The picture is not quite the same now, with electricity prices climbing, depreciation increasing and even some of the tax benefits being reduced. That all said, it can be argued that for the performance, the cars still represent great value for money.

Tesla do not negotiate on the car price, the price you see on the website is the price you pay. However, ther website price can vary and Tesla do periodically offer incentives.

Buy the car wisely

The first question to ask is do you buy new, a used/CPO from Tesla or a used car from an independent? Our article on buying a used Tesla covers the main differences with a used car if they are a consideration. We also provide a video guide to the key things to note when looking at used cars, but the underlying message of that video is to acknowledge the spec of Tesla constantly changes and can differ from country to country. The consequences of this is it can be difficult to know the true spec of the car you are buying. Does it have a heat pump, a bigger battery, the latest media screen, the heated steering wheel, the latest headlights, the raven suspension, sufficient memory to play Steam games, etc etc.? When looking at cars listed by Tesla, we reveal as much information as we can to help in this area.

Buying new

Tesla are well known for no negotiation, you simply go on-line, find the car you want and you click buy. While that is true in general, Tesla do discount cars at different times of the year. The best time for discounts is usually in the last month of any quarter (March, June, September and December) as Tesla report sales quarterly and therefore like to reduce any inventory they hold at that point. Consequently, if there is excess stock of a particular colour or model they might selectively reduce the price by a couple of thousand. We saw this in a fairly wide spread way at the end of 2022 with in excess of $4000 being offered off a number models. Sometime they ass the FSD option and discount the cost of that, which is fine if you want to buy FSD, but not if you don't as FSD has very little value on the resale market. Certain models like the MS and MX tend to have bigger discounts, but they are also a more expensive car. To see these discounts you need to look at Inventory cars and we would advise everyone to avoid custom orders in general as the lead times can be excessive.

Tesla have also been known to offer free unlimited supercharging for a period of time. At the end of 2022, buyers were offered various amounts but typically around 6000 miles free supercharging over 2 years if they took delivery before the year end. This was even extended into early January 2023 because Tesla claimed "logistical reasons". The reality is, Tesla closed 2022 with more stock than they hoped for and are increasingly offering incentives to help shift stock.

Occasionally we stumble across hidden inventory at Tesla. These cars are not easily found anywhere except on tesla-info and can offer exceptional value, we provide a link through to the Tesla website and the individual cars detail page allowing the car to be purchased. Even if Tesla decide they can not sell that particular car, we are told that Tesla often offer a similar deal on a different car.

To see all of Tesla's inventory, any discounts that are available, and how the prices compare to the 3rd party used market, check out our Tesla cars for sale listings.

Our advice is never order a custom build car without doing a little homework and checking the new inventory, especially if you are prepared to be a little flexible on specification.

Buying a demonstrator

Tesla have a clear out of demonstrator stock typically at the end of each quarter and these usually have either a decent discount and/or options such as FSD included at a reduced cost. These cars will have been registered before but they are sold with a new car warranty and typically attract the same tax incentives as if they were a new car.

Demonstrators are included in our inventory listings and it is easy to compare prices as the listings are all side by side. For any given car, we plot the whole market of cars of a similar age and model variant so you can clearly see how a car compares to the similar cars to help inform your decision making.

Referral codes

Tesla had stopped the referral codes giving incentives to both the referrer and buyer. In some countries these are coming back and are worth checking on for your area. They are not as lucrative as they once were, but they are still worth having.

Pay for your car wisely

This one varies from country to country as local taxation and incentives differ. The interest rate on any agreement, the amount of depreciation expected and who takes the risk on the depreciation amount are the key variables and each of the options available to private purchases has a different mix of these factors. In essence the car has a value today, a value at the end which is largely unknown, and the difference is the depreciation. The financing of the car also needs to be funded, so if you borrow money there is an interest on the amount to be borrowed, or if you use your own money there is the lost opportunity cost of those funds. The choice comes down to what matters to you, some prefer lower monthly payments and choose to worry about what happens at the end of the term when it comes round, some want flexibility and the ability to change the car whenever they wish, some prefer the certainty of the future value and will let someone else take the risk. Some manufacturers offer finance companies deals for buying in bulk which can be used to reduce the cost of the car compared to buying it directly akthough this tends not to be the case with Tesla. There is no right and wrong answer as to which route is correct for you other than making sure you understand the entire agreement costs and what position you will be in at the end of the term. The details can vary from country to country and you should always take advice from a qualified advisor when buying a car and/or entering a finance agreement, however we offer a layman's explanation of the key differences below to help you decide:

Which of the above is personal choice. In recent years with depreciation being relatively low, any option where the buyer takes the risk has probably done well compared to options such as leasing where the finance company has taken the risk. Things appear to be changing however and it is not as clear on what the future risks are and a lease may be the better deal if prices start to fall dramatically or Tesla price cut.

Many dealers now offer a variety of "added extras" including full maintenance, tyres, insurance etc., although in general terms Tesla do not offer these facilities. Where offered, you simply have to work out if the monthly fees when added together are likely to be more or less than the likely cost if paid as you go. The principal benefit to all these types of arrangement is the predictability of the monthly costs but overall they are generally slightly more expensive than paying as you go.

For company car drivers the agreement is typically similar to a lease, you pay a fixed amount each month, and local tax benefits then start to come into play. In the UK, the cost of the lease comes out of income before tax which has an income tax saving, and the benefit of an electric car is rated as zero as an example.

For company owners wishing to buy the car in their company there are other potential benefits as some tax authorities allow subsidies or preferential rates. This is too big a topic for here beyond saying if you own a company and have the option to buy the car through it, then it is worth exploring that avenue. We will however add that accountants often offer advice to minimise tax in the current year and in our experience do not always offer long term tax advice. An example of this is in the UK many accountants will tell company owners that the full purchase price of the car can be offset against tax in the current year reducing the immediate tax bill. What they fail to mention is that in 2 or 3 years time when the car is sold, the full sale price of the car will be treated as profit and taxed accordingly unwinding a proportion of the tax savings this year.

Make use of any tax savings and incentives

In many countries the purchase of the car will attract a tax benefit or government contribution. Often this is done automatically for you and is reflected in the price, in other countries you need to apply or use a tax credit to offset your personal tax liabilities. As every country is different, check locally for the benefits.

There are also savings and benefits to be had in may regions. In some areas parking is free if you have an EV. There are an increasing number of environmental or congestion charges where EVs have special consideration such as the Crit'air in France, London has the Congestion and ULEZ zones. In some areas in the US the cars qualify for HOV status with just the driver. These vary from place to place and the material value to you as an owner will depend on how much you use the car in those areas. The London congestion charge is £15 per day, it is easy to see how you could save £1500 a year with just two visits per week.

There can also be benefits such as grants towards having charge points installed at your home or office. These can have restrictions tied to them and we also feel those registered to provide the services are rarely the cheapest and capitalise on the grant scheme, so it may be possible to get a charger installed without the restrictions for similar money to a charger through the scheme. Like everything, shop around and don't assume automatically that a grant will make it cheaper.

Buy only the accessories you need

We have seen endless lists of accessories that owners simply must buy for their new car ranging from Tesla air fresheners, self opening frunks and coat hooks. We don't want to be a kill joy and say a bit of light customisation and a cuddly toy on the back seat should not be done. but there are very few accessories that are absolutely essential.

The key essentials for us are mats on the M3 SR and SR+ as they do not come with any and heavy duty waterproof mats and truck protectors on any car if you simply know the inside of your car will get trashed without them. Secondly, we advocate something to deal with punctures/flat tyres. Tesla do not provide a spare wheel and the cars run on regular and not run flat tyres. The minimum we recommend is a portable air compressor to inflate a tyre if you have a slow puncture, this helps get you home if you are stuck in the middle of the night. Other than these two accessories we would wait until you own the car and decide what you really want to buy.

Our Tesla accessories page lists the types of products we recommend and more importantly explains why you may need each of them depending on your situation.

Charging sensibly

Much is said about the running costs of EVs and how cheap they are. In practice it depends on how much you pay for your electricity which depends on where you get it from.

The costs to supercharger has increased over time and generally costs much more than charging at home. Public charging car start to cost per mile a similar amount to a reasonably efficient petrol or diesel car. Home charging is also more expensive than it once was, especially in some European countries, although some off peak charging tariffs can bring the costs down considerably.

To maximise the savings, check you home electricity rate while taking into consideration the whole house consumption, and select a tariff that minimises the costs of home charging. When out and about, ensure you know the rate you are being charged especially where a fixed connection fee is added as these can add up, or if using a rapid charger. Stopping for a charge to save a few £ can also be quickly undone if you end up buying a coffee and a cake, even if it is quite enjoyable!

How the savings add up for you

Tesla often show a "after savings" price on their website, and while good in principle, is poorly done as they use it to mask the real price of the car and include elements which may not be true for everybody. They also use unrealistic assumptions at times, as an example their miles per gallon estimate for an ICE is low compared to most comparable luxury cars. It's therefore important to work out potential savings accurately for your own circumstances to check the affordability.

In our experience, owning a Tesla over a number of years is likely to be cheaper than an equivalent ICE but it still may not be cheap. We have seen very strong residual values on the Model 3 after 2 years on the market, but there is no guarantee this will stay the same and Tesla's future value predictions on the models are quite pessimistic.

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