Affording the Tesla Model 3

Affording the Tesla Model 3

Hi everyone,

So I ordered a Tesla Model 3, on the day it was announced. I'm very excited about this car, and I'm sure that it will have huge potential. However, with that, I have one issue, and it's nothing against Tesla at all. but more personal.

So anyhow, I'm still a college student, going for Software Development, so naturally, money is tight. I still have about 2 more years left in school. I spent 4 years at a state university and struggled and am transferring to a local technical college. but I am recently thinking about quitting my job to focus more heavily on my education and get it done, because this is something that I have always struggled with.

Anyways, my worry is that I won't be able to afford the Model 3 when it reaches production and my area the state of Wisconsin. If I am unable to afford the Model 3 when it reaches production will my reservation still hold, and can I chose not to configure my car right way but rather to hold my reservation for a later date, when I can afford the car? Because I really want the car, I'm just not sure that I will be able to afford it when it reaches production.

And if I'm not working by the time the Model 3 comes out, I wouldn't be able to get a car loan.

My work that I'm at right now, the same one that I'm considering quitting, did offer me 8 hours per week during the school year, which is nice, and I am considering, but my work (call center job) is getting a bit dull/boring, so I'm not entirely sure what I am doing yet.

Thank you for you input and advice!

lilbean | July 14, 2016

Think positively. You will reach your goals. I suppose you could delay the configuration of your vehicle. You will receive an invitation to configure but I don't believe you have to configure right away.

dave.m.mcdonough | July 14, 2016

We don't even have a definitive answer on the rebate yet and that could be 20% of the price right there if we get it. I'm also a little bit worried about it. I've avoided buying a new car at all because.. Well they are just the same as the used ones and I'm not made of money. Not until the S came out was there truly a better car, but yeah that's $$$.

Currently a 5 year loan for $35k will have payments around $630. The $7500 off would drop it to $500/m which is huge.

damonmath | July 14, 2016

According to this calculator: wwwDOTmoneyunder30DOTcomSLASHcar-affordability-calculator

You would need to make roughly 73k per year to comfortably afford a 35,000 car @3% for 72 months for a payment of $535/month.

johnwscott | July 14, 2016

I'd expect to bench mark it against a comparable lease on a BMW 3 series or Audi A4 with a few extras added. If it's much more than this then sales may struggle. People may want a Tesla but at this price point money is an issue for many people unlike the Model S and X where disposable incomes are generally far higher.

Red Sage ca us | July 14, 2016

You don't have to study at the rate of the instructor's syllabus. Learn everything you need to know before you must take the courses. Then ace all the classes. Meanwhile, get a better job. Finish school early if you can, then get an even better job, or start your own business. Enjoy the Model ☰ as a reward for your hard work.

Linemanap | July 14, 2016

If i where you I'd find someone who doesn't want to wait and will let you straw buy it for them. You may make a few grand off the deal

lafgoddess | July 14, 2016

I'm in a similar situation as the OP, but I'm waiting to put down my deposit because I'm a California resident. I don't mind waiting because putting down a deposit right now is financially irresponsible in my opinion. Car insurance also goes down at the age of 25. I don't think that the OP or I will be making $70-$100k by the time the car is delivered. Waiting means more money to be saved for the down payment too.

SCCRENDO | July 14, 2016

If you wait long enough you may lose the $7500 fed rebate

lafgoddess | July 14, 2016 I understand that. Also it's not a rebate and rebate is not interchangeable for credit. In order to be eligible to get that tax credit both the OP and I have to make $50k the year delivery is taken assuming it is still available. I know no matter what I wasn't going to get the tax credit.

dave.m.mcdonough | July 15, 2016

Damon, that calc you posted doesn't seem reasonable, it says I can only afford a $15k car. I'm not sure what it means by "comfortable" but there's a lot of factors to consider.. The biggest being where you live. And it doesn't ask.

What I pay in mortgage for my house would barely cover an economy apt in CA, what the rent costs is such a huge disparity that I don't think ballparking off income is a useful goal to begin with. We all must make a budget and work from there.. What is "comfortable" will vary from person to person.

I once heard that housing cost should only be 30% of your income, that isn't true for anyone I know. It probably also assumes you put 20% into savings? Laughable. Times have changed, and has not been kind to the middle class. If you disagree with me then you probably can afford the S.

Ehninger1212 | July 15, 2016

Im in the same position as you OP, I am 24 now. I just started into my Degree, Architecture. Its a 5 Year program i have 5 left. I have started to save each month roughly what i think my payments will be, as if i own the car now. When my time comes to configure ill either go ahead and purchase i wait till i am ready.

I think you just need to realize that if work is making you struggle to much in school and you don't have to work then don't.

Also the M3 for me will only me helping me out, 70 mile round trip commute for me each day. Even my little focus is costing me money now.

Plus who knows where autopilots going to be at that point, maybe i can study while i sit in houston traffic hahah!

dsvick | July 15, 2016

Everyone that mentioned the $7500 is treating it like it will be deducted from the price of the car. It won't be. The $7500 is a tax credit, you'll get it (if you qualify) when you file your taxes for the tax year that you purchased the car in. If you take delivery late next year you'll see the credit a few months later during the following spring. However, if you get the car early in 2018 you wont see the credit until you file your 2018 taxes in 2019. In both cases it has no effect on the price of the car, the loan you take out, or the payments you'll be making.

You could apply the credit, when you get it, to another debt you have to make the payments for the car easier. You could even change your withholding for the year to get more money each payday to offset the credit you'll claim. I guess you could take the $7500, refinance the car loan and apply that to it, but you'll probably get a higher interest rate if you do that.

Ehninger1212 | July 15, 2016

Yeah i'm not counting on that at all. if i get any of it i will be happy. the only thing i can count is gas savings.

dave.m.mcdonough | July 15, 2016

"gas savings" is a trap people fall into. You're looking at a car that's superior in every category to begin with, don't start comparing apples to oranges as if some extra pocket change will affect the decision.

warren_tran | July 15, 2016

I think you need to analyze why you are not doing well in school. Is it lacking time issue. Is it lack of focus. I would write down a list of what you need to do to improve your school because that is your career or figure out what you love doing. If you don't like your part time job right now then you need to figure out what type of internship or opportunity that more align to your career and degree. Pursue in that so you can earn money while doing what you love.

warren_tran | July 15, 2016

Start networking right now so by the time you get out of school, you can land a job. if you delay your configuration of your car, you can probably delay a good amount by 6 months.

warren_tran | July 15, 2016

Btw, if you are working in software development...look into getting a job with Epic.

damonmath | July 15, 2016

@dave.m.mcdonough -I agree. I thought it was interesting that it makes all these assumptions without asking for your other bills. Just some random calculator of sorts.

PhillyGal | July 15, 2016

To answer your actual question - you will probably be able to defer a bit but I would only suspect a few months.

In the mean time, try some online work at home ($5 and $10 adds up!)

johnse | July 15, 2016

For those who would not have sufficient taxes owed to take advantage of the tax credit (assuming they are able to take delivery while the credit is available) this may be a good time to consider a lease instead of purchase with a car loan. Typically the leasing company, who is able to take advantage of the credit, will apply the credit to reduce the capitalized cost, thereby reducing monthly payments.

YMMV, I am not an accountant.

Ehninger1212 | July 15, 2016

Dave.m.mcdonough. $440+ a month on gas is not pocket change.... And it does help with my decision..

grashelm | July 15, 2016

Good lord...I'm 50+ yrs old, married with no children, no debt and both my wife and I make right at 6 figure salaries (US) and I am *still* trying to rationalize to myself how buying a $35,000 car isn't a bad thing. The times they are a changing!

Coastal Cruiser. | July 15, 2016

What Red Sage and warren_tran said.

Lie about your income when applying for a loan.
Take delivery of the car and immediately sign up for Uber.
Drive the car yourself when not studying.
Listen to audio tapes of your studies with an earphone plugged into one ear (legal in most states)
Hire a healthy, recently retired baby-boomer with a clean record to drive when you must sleep/study.

SoFlaModel3 | July 16, 2016


I think the best advice that you can receive would be to take your $1,000 back and move on. I know that may be a bitter pill to swallow, but let's be real here. The next 1-2 years of your life will likely be somewhat unpredictable. Working 8 hours per week isn't going to allow you to bank enough money to support yourself and save for this car. Taking that a step further, at your age you would be better served saving for the purchase of an appreciating asset. Now to finish up, it's unlikely that fresh out of school you'll earn enough income to even qualify for the full tax credit should it still be available when your number is called.

I am 32 now with a wife and 2 kids. Believe me, life only gets more expensive and you don't want to be car poor. Like I said I know that's hard to hear. You should make sure you're established in life with a career (not a "job"), before spending what amounts to $700+ a month on a car.

Just my $0.02.

Ccarmac1 | July 16, 2016

Ok here is what you can do.

Get a 9 year car loan with should go down to $36ish but try not to pay that, maybe a bit more

Put your car for rent (toro

Ccarmac1 | July 16, 2016

What you can do

Get a car loan of 9 year which should go to $360 a month

Of course try to pay more if you can

Put your car for rent (turoDOTcom) it's like a uber but you rent out your car for about $200 a day(or what ever you choose to rent it). You'll be surprised how many people actually rent these cars, specially tesla. Just one weekend and it cover your expensive

Hope this help :)

Ccarmac1 | July 16, 2016

Sorry for the double post, computer froze and auto submitted my last one

zephyr12 | July 16, 2016


I'd focus on finishing school first, software development from what I've heard can be a very good field. As for financing, I'm already starting to save for my Model 3 because I'd like a bunch of the bells and whistles. I'm just parking money in a savings account and not touching it so I have a large down payment ready when it is time to buy.

I also had a question that I was going to post but it seems relevant here. How long do you have once your reservation comes available to buy and build the car?

dave.m.mcdonough | July 16, 2016

@Ehninger1212 what is that, 160 miles per day? Or 260mi per workday?That's quite a bit higher than the average commute. It's possible I mathed wrong but you're hitting at about 3x my gas budget.

I see your point, it's not insignificant, but 99% of the time when people boil it down to "gas savings cost" they inevitably compare it to a cheap economy car which compares terribly in every other category.

Lonestar10_1999 | July 16, 2016

I'm in a similar life position as Grashelm. A $35k car is difficult for most household budgets. For me, the $7.5k tax incentive brings the M3 down to a price point similar to a modestly configured Ford Fusion or Toyota Camry. If the tax incentive is eliminated, it makes the M3 much more difficult to rationalize from a purely economic viewpoint. Hopefully the coolness factor is enough to bridge the gap. If the M3 drives like the S that I test drove, I'll go ahead and purchase it regardless of the tax incentive.

Ehninger1212 | July 16, 2016

@Dave.m.mcdonough yeah its not so much that my commute is long, about 75mile per day plus weekend travel and trips to store, shopping ect. Its the fact that i am in an 05 land rover LR3. getting about 12mpg running premium. its paid off, and more reliable then you think.

I plan to keep it when i get my Tesla, and i am comparing the M3 features and build quality to my land rover, and wife's Porsche cayenne. I will not be cross shopping the M3 to a kia or corolla. I will also go and test drive a few comparable ICE vehicles, to compare apples to apples but i fully intend on purchasing the Tesla. Even still, i doubt any car can exceed the Tesla. Even with the minor quality control problems they are making a beautiful quality built machine. That's the draw for me, its about the entire experience.

So in the end what i am saying is my decision is not about the gas savings, but keeping that money in my pocket sure helps!

warren_tran | July 16, 2016

Land Rover and reliable in one sentence. Wow, not something I would hear often.

Red Sage ca us | July 17, 2016

Also, the mere peace of mind I would enjoy for never having to purchase gasoline, ever again, would be on the verge of pure giddiness that would absolutely be worth it when it comes to smiles per mile.

Ehninger1212 | July 17, 2016

@Warren_tran: Yeah i know, i did not purchase it for that, and maybe i just got lucky, i have 170k+ and regular maintenance items except for the front lower control arms. Anyways this isn't Land Rover forum and i could go on for days.

@Red Sage: Avoiding gas stations all together would put a huge smile on my face!

firetree_99 | July 17, 2016

@tyler unfortunately, i have to agree with Michaelrbodner. When u dont have a lot of disposable income, putting it on a new car is probably the worst idea. I know, i affordable Telsa, who doesnt want it. If you want it that bad, i suggest u to cancel the reservation, wait couple more years, save up some money,by that time there will be lots of ppl who cant keep up with the payment and have no choice but to sell their Telsas.