Looking at the current offer on the Model 3, Tesla is advertising a 0% APR, which seems like a teaser to most buyers. But before getting charged for financing this electric vehicle, experts suggest checking a few critical details that could help determine if buying or leasing will suit you best. In this article, we will assist you in brainstorming the positives and negatives of both options, which in turn will aid you in arriving at an informed decision.
1. Confirm Your $7,500 EV Tax Credit Eligibility
Before you decide to buy or lease an electric vehicle (EV), the first thing to check is whether or not you qualify for the $7,500 EV tax credit. This tax credit is available to buyers who meet specific income requirements. Here’s a breakdown:
Married couples filing jointly must be making $300,000.
Heads of households must be earning $225,000.
All other filers must be making $150,000.
If your income is above these restrictions, you will unfortunately not qualify for the $7,500 EV tax credit. In this situation, it might be better for you to lease the Tesla Model 3 because leasing does not have these same income restrictions.
2. For How Long Do You Intend to Keep the Car?
The other aspect that you need to think about with the Tesla Model 3 is how long you intend to keep it. If you plan on keeping the car for 7 years or longer, and you qualify for the complete $7,500 EV tax rebate, then financing is likely your ideal option. This is beneficial because of 0% APR financing, where you do not need to pay interest on the loan, in addition to the tax credit, aiding in covering some of the initial expense.
If you don’t plan to hold on to the vehicle for longer than seven years, then leasing may make more sense in this scenario. Here’s the reasoning for it below:
Reasons Why Leasing Could Be a Better Choice
Lower Payments Each Month: When compared to financing a purchase, leasing usually comes with significantly lower monthly payments. If you are looking to reduce your monthly payment, then this will be a great advantage.
$0 Down Lease: If you lease a Tesla Model 3, it is possible to start the lease at $0. Therefore, you will not have to pay anything upfront, which is very helpful for those who may not be able to afford a down payment.
No Depreciation Risk: One of the most significant advantages of leasing is that you don’t have to think about the depreciation of the car’s value. This risk is taken on by the leasing company and not you. When purchasing a vehicle, depreciation begins the moment you drive off the lot.
EV Tax Credit for All: Unlike purchasing, leasing a Tesla Model 3 allows everyone to access the $7,500 EV tax credit. This applies even when you, as a buyer, don’t qualify because, with leasing, it is available.
Final Considerations
Flexibility: This is ideal for people who love to have a new car every few years. The same applies to those who do not plan on keeping a vehicle for a long time because leasing allows them to enjoy the latest advances in technology and other features without committing long-term.
Long-Term Ownership: If you wish to fully own the vehicle after a long time, buying is the option to consider. Although the monthly payments may be higher, after the loan period, you will own the vehicle. You won’t have to deal with any monthly payments.
Conclusion: Purchase or Lease?
If you qualify for the $7,500 EV tax credit and plan on keeping the Tesla Model 3 for 7 years or more, then the 0% APR financing could be an excellent choice. But if you don’t qualify for the tax credit or if you don’t plan on keeping the car for a long time, then leasing might make more sense. Lower monthly payments, no depreciation risk, and getting a new Tesla every few years make leasing a favorable option for many drivers.
As for the Tesla Model 3, the buying vs. leasing dilemma comes down to your personal finances and how long you plan to keep the car. Consider the above factors to select the best option for you.
Check out the latest offer on the Tesla official website.
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Hey, I’m Badal! I’m super passionate about cars—especially electric ones. Whether it’s EVs, electric trucks, bikes, or anything with a battery and wheels, I’m all in. I love writing blogs that break things down for fellow enthusiasts and curious readers alike. Hope you enjoy the ride as much as I do!
