A new Tesla Model 3 starts at $42,990 before incentives. Meanwhile, the average new car transaction tops $50,000.
February 23, 2023 at 12:53 PM ET
Remember when you used to read that electric vehicles are almost at price parity with gas cars, as long as you factor in a $7,500 tax credit that most people don’t qualify for, state and local incentives which are few and far between and future savings. about fuel and maintenance costs? Now, we can honestly say that without any incentives, a new Tesla Model 3 can be had for less than the average new car transaction price in the US.
The average new car transaction price is often on the rise, and the past few years have been a disaster for the auto market thanks to COVID-19 and its aftermath. In accordance with Kelley’s Blue Book – a publication that tracks and shares the average prices of new car transactions in the US each month: the average cost of new cars reached almost $50,000 this January 2023. Although it is down from previous months thanks partly at Tesla, that’s a 6% increase over January. 2022.
To be fair, EVs are part of the reason the price is going up. More people in the US are buying electric cars, so the average transaction price is rising. Electric vehicles are priced very similarly to luxury cars, but only some are classified in the luxury segment. That said, while people in the U.S. are buying fewer traditional luxury cars, the average price continues to rise thanks in part to electric vehicles. In addition, the average price of almost all new cars, including mainstream budget offerings, is rising.
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Meanwhile, the base Tesla Model 3 starts at $42,990, or, as Tesla likes to point out, $31,290 after potential incentives. However, Tesla has recently proven that it is no longer necessary to emphasize the fact that when you buy the Model 3, you could save $11,700.
However, the automaker lists the revamped $7,500 federal electric vehicle tax credit, which many people (especially those who are not at all wealthy) simply don’t have the tax obligation to qualify for. Also shown on Tesla’s site is an estimated savings of $4,200 in fuel costs over six years, though that doesn’t help buyers in the short term.
If you were to buy a Model 3 today, you’d be looking at a minimum of $44,630, including destination and order fees, but excluding other fees and taxes. If you financed it through Tesla at 5.44% for 72 months and put 10% down ($4,500), you’d be looking at a monthly payment of about $650.
Tesla also offers a lease program with the same money and a monthly payment of just $349 (recently $399), but you won’t be able to buy the car at the end of the term.
At this point, you’ll need to look at your budget and crunch the numbers to see if the leasing or financing options above can work for you. There are many ways to do better with financing through a bank or credit union.
If you’re considering a new EV, be sure to sit down and find out if you can actually get tax credits or incentives and when you’ll get the money. It would also be wise to find out how much money you are likely to save on fuel costs, as you can take the difference out of your monthly budget and use it towards your car payment.
