Thinking about owning a Tesla Model 3 but wondering about the monthly payments? Whether you're financing or leasing, understanding the costs is essential for planning your budget. Monthly payments vary based on factors like the vehicle’s price, loan terms, down payment, and interest rates.

In this guide, we’ll break down everything you need to know about Tesla Model 3 monthly payments, including financing options, leasing programs, and tips to lower your costs. By the end, you’ll have a clear understanding of what to expect and how to choose the best option for your budget.

Understanding Tesla Model 3 monthly payments

Purchase price of the Tesla Model 3

The Tesla Model 3 comes in three variants, each with different starting prices:

• Standard Range Plus: Starts at $40,240.

• Long Range: Starts at $47,240.

• Performance: Starts at $53,240.

Optional features like Full Self-Driving (FSD), priced at $15,000, can significantly increase the cost. Other customizations like premium paint or upgraded wheels will also add to the price.

Factors affecting monthly payments

Down Payment : The more you pay upfront, the lower your monthly payment. For example:

• A $5,000 down payment could reduce your payment by $70–$100 per month compared to a $0 down payment.

Loan Term : The length of your loan impacts your monthly payments:

• 36 months: Higher monthly payments, but less interest paid overall.

• 60–72 months: Lower monthly payments, but you’ll pay more interest in the long run.

Interest Rates : Your credit score determines your interest rate:

• Excellent credit (3% APR): Lower monthly payments.

• Fair credit (6% APR): Higher monthly payments due to added interest.

Incentives : Federal and state EV incentives can reduce the purchase price and monthly costs:

• Federal Tax Credit: Up to $7,500 off your taxes.

• State Rebates: Vary by state; some offer rebates of $1,000–$5,000.

Financing a Tesla Model 3

Tesla's in-house financing program

Tesla offers a straightforward financing program directly on their website, making it easy to calculate monthly payments and apply for a loan.

Key Features:

• Loan Terms: Choose between 36, 48, 60, or 72 months.

• Interest Rates: Typically range from 3.5% to 5.5% APR, depending on your credit score.

• Down Payment: A minimum of $4,500 is generally required, though higher down payments are encouraged to reduce monthly payments.

Example calculation for a Tesla Model 3 standard range plus priced at $40,240:

• Loan Term: 72 months

• Interest Rate: 3.5% APR

• Down Payment: $4,000

• Monthly Payment: Approximately $540/month.

Tesla also allows you to customize your financing options directly on their website, where you can explore different scenarios by adjusting terms and down payments.

Third-party financing options

Banks, credit unions, and online lenders often provide competitive alternatives to Tesla’s in-house financing.

Why Consider Third-Party Financing?

• Lower Interest Rates: Depending on your credit score, you may secure an interest rate as low as 2.5%.

• Flexible Terms: Some lenders offer loan terms beyond 72 months, reducing monthly payments.

• Pre-Approval: Pre-approved loans give you more negotiating power and a clear understanding of your budget.

Comparison Example:

• Tesla Financing (3.5% APR): $540/month for 72 months.

• Credit Union Loan (2.5% APR): $500/month for the same loan amount and term.

Pro Tip: Always compare total loan costs, not just monthly payments, as longer terms with lower monthly payments can result in higher overall interest.

Leasing a Tesla Model 3

Tesla leasing program

Tesla offers an easy and flexible leasing program for the Model 3, with affordable monthly lease payments and several options for customization.

Key features:

• Monthly Payment: Leasing a Model 3 Standard Range Plus starts at $399/month.

• Down Payment: A typical $5,594 is due at signing.

• Mileage Limits: Standard leases include 10,000 miles per year, with additional miles available for an extra fee.

• End-of-Lease Options: At the end of the lease, you can return the car, extend the lease, or choose to buy it.

Leasing is a great choice for those who want lower monthly payments and the ability to upgrade to a new car every few years, but it’s not an ownership option. It’s ideal for short-term users who don’t want to deal with long-term commitments.

Pros and cons of leasing vs. financing

Real-world monthly payment examples

Financing scenarios

Here are examples of monthly payments for different loan terms, interest rates, and down payments for a Tesla Model 3 Standard Range Plus priced at $40,240.

Explanation:

• Shorter terms (36 months) have higher monthly payments but less interest.

• Longer terms (72 months) have lower monthly payments but result in more interest paid over time.

Leasing scenarios

Here are some lease payment examples for a Tesla Model 3 Standard Range Plus with different mileage limits and a 3-year term:

Explanation:

• Leasing typically includes a 3-year lease term with annual mileage limits.

• The total lease cost depends on the monthly payment and mileage limit.

• Higher mileage limits result in slightly higher monthly payments and total lease costs.

Tips to lower your monthly payments

If you're looking to reduce your monthly payments when financing or leasing a Tesla Model 3, here are some simple strategies to consider:

1. Increase your down payment

• The larger your down payment, the lower your monthly payment. For example, putting down an extra $2,000 could reduce your payment by $30–$50 per month.

• Pro Tip: If you can afford a larger upfront payment, it’s worth considering to lower long-term costs.

2. Opt for a longer loan term

• Choosing a longer loan term (like 72 months instead of 36 months) can spread out the payments, reducing the amount you pay each month.

• Pro Tip: While this lowers monthly payments, it may increase the total interest paid over the life of the loan.

3. Improve your credit score

• A higher credit score can help you qualify for a lower interest rate, which can significantly reduce your monthly payments.

• Pro Tip: Paying down high-interest debts and keeping your credit utilization low can boost your credit score over time.

4. Consider leasing instead of financing

• Leasing typically offers lower monthly payments compared to financing because you're only paying for the car's depreciation during the lease term.

• Pro Tip: Leasing is great for those who prefer to drive a new car every few years, but it’s not a long-term ownership option.

5. Take advantage of incentives

• Look for federal tax credits, state rebates, or special financing offers from Tesla or other lenders.

• Pro Tip: Research current EV incentives, as they can lower the overall purchase price and reduce your monthly payments.

FAQs about Tesla Model 3 monthly payments

How much is a Tesla Model 3 per month?

The monthly payment for a Tesla Model 3 depends on whether you finance or lease. For financing, payments typically range from $500 to $1,000 per month, depending on loan terms, down payment, and interest rates. Leasing a Model 3 usually costs $399–$439 per month, with a down payment due at signing.

Is leasing a Tesla cheaper than financing?

Yes, leasing a Tesla is generally cheaper than financing because it offers lower monthly payments. However, you won’t own the car at the end of the lease term. Financing, on the other hand, leads to ownership but with higher monthly payments.

How much should I put down for a Tesla Model 3?

A typical down payment for a Tesla Model 3 is around 10-20% of the car's purchase price. For a $40,240 Model 3, this would be $4,000–$8,000. The higher your down payment, the lower your monthly payments.

What's a good down payment on a Tesla Model 3?

A good down payment for a Tesla Model 3 is at least $4,500 or more. A larger down payment can reduce your monthly payments and save you money on interest over the loan term.

How long is a Tesla Model 3 lease?

A Tesla Model 3 lease typically lasts for 36 months (3 years). You can choose different mileage limits (10,000–15,000 miles per year), which will affect your monthly lease payment.

Conclusion

Understanding Tesla Model 3 monthly payments is key to making an informed decision when buying or leasing your EV. Whether you’re opting for financing with a down payment or choosing the flexibility of leasing, there are many factors that can impact your monthly payment, including loan terms, interest rates, and down payments. By considering different options, improving your credit score, and taking advantage of available incentives, you can find a plan that fits your budget.

Remember, leasing offers lower monthly payments but doesn't build equity, while financing allows you to own the car in the long run with higher payments. No matter your choice, careful planning and understanding of your payment structure can help you enjoy the benefits of owning or leasing a Tesla Model 3 without breaking the bank.