Save money buying a Tesla

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 £40k, in the US $38k plus taxes, Europe it depends on local taxation but 45k euro+, Australia A$75k, Canada C$52k. These are the entry level prices for the M3 SR+ that has a real-world range as low as 160 miles in winter. Now while that's not a great start when you are trying to save money, it's when you take a look at the overall ownership costs where the savings come in, not to mention some models of Tesla depreciate quite slowly.

Tesla are also known for not discounting their cars, however the headline price is not the only consideration. We think there are a number of ways to save money when buying Tesla, and we'll cover each in more detail. They are in summary:

Buy the car wisely

The first question 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. Model 3 and Model Y cars currently have very strong resale values on the used market however given the wait for a new car is not excessive we would look to buy new on those models.

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, although this is more typically achieved by adding FSD option and discounting that. If you were going to purchase FSD anyway then this is a good way to save money. 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 been known to offer free unlimited supercharging on MS and MX models to help sell stock when needed. For high mileage owners who are likely to supercharge a lot, these are worth looking out for. Tesla have been known to offer this on CPO stock too although it is usually reserved for the performance models. It is however becoming increasingly rare.

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.

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

You should also always use a referral code when buying a new, qualifying car. The benefits are now relatively minor compared to those a few years ago, but typically 1000 free supercharging miles are given which equates to approx. £80/$80. All the new cars listed on our inventory pages have a link where a referral code will be added automatically. The referral code also gives the existing owner the same benefit as the buyer and we use a variety of referral codes belonging to different people with whom we have no commercial associated but who we feel offer great support to the wider community on internet forums.

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 a 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. 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:

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.

At superchargers the rate is £0.24p in the UK, $0.26 in the US, €0.33 in Germany per kwh. At home it is usually possible to buy electricity for much less, even as low as £0.09p, and some public charging are free. Some public charger, especially rapid chargers, can cost much more, the Ionity charge points for instance can cost £0.69 kwh. The variable price of electricity can make calculating the average cost of per mile quite difficult.

How far you can travel on a kwh of electricity also varies by model, driving style and time of year as winter weather decreases efficiency. As a rough guide we would take 1/3 of the kwh price as an average per mile cost and this would also take into account vampire drain loses and inefficiency in charging. This gives a range of between 3p and 23p per mile, and as most people charge at home, the average may be as low as 5p overall. If we compare that to a high performance luxury diesel car you might expect between 35 and 45mpg [UK] (8l/100km - 6l/100km, 29 - 37 mpg [US]). With European fuel prices at around £1.15l, £5.20 gallon (UK) the equivalent costs are £0.12p to £0.15p a mile. Our crude rule of thumb is a Tesla costs approx 1/3 the cost compared to a ICE. and over a year/10k miles the total saving is about £1k. This will vary from country to country depending on local electricty and petrol rates, but the calculations are the same.

To maximise the savings, check you home electricity rate and while taking into consideration the whole house consumption, 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 include a "after savings" item on their website which we feel while a good in principle is poorly done as they use it to mask the real price of the car and include elements which are not 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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