Black Tesla steering wheel

Tesla Financing: What are the Rates?

Plug-in car sales are soaring. This year alone, so far, 10 million vehicles have been sold. And which do you figure is one of the biggest selling electric cars? Tesla’s Model Y, with an 87 percent rise in sales since 2020. It’s so popular among car buyers, that industry insiders predict it may be the first EV to make it to the top selling cars globally.

It’s clear that consumers are hot about Tesla. To own one isn’t limited to just a straight purchase; you could lease one or do a Tesla trade in, which can be done even with gas-powered cars.

But if you don’t want to lease a Tesla or have nothing to trade, you may still be able to drive one through Tesla financing.

Is Tesla Financing Hard to Get?

Financing your Tesla car is doable through the electric car manufacturer’s program. You may also secure financing through a third-party provider.

In a nutshell, it’s not hard to get Tesla financing because:

  • You can order and finance your car online
  • You don’t have to pay for lender or application fees

This is not to say that financing applications will be a cinch. You’ll still go through a credit check; Tesla has stated that it performs one hard pull of your credit report.

But in comparison to experiences from other auto makers, Tesla’s car purchasing experience is considered a lot less painless. When it comes to the waiting period, credit decisions may be made in minutes with many being available in 48 hours, according to Tesla.

What Credit Score Do You Need for Tesla’s Financing?

Although Tesla currently does not specify a minimum credit score to qualify for financing, but a decent credit is better than a low credit score.

Tesla buyers tend to have an average of 740 credit score, which has dropped to 717 owing to the increasing affordability of the automaker’s vehicles. Tesla used to be at the top spot in terms of buyer credit scores; Porsche has moved to the top spot with buyers typically having 725 in credit.

Also, a much better credit score would mean fewer requirements. Fewer requirements would mean less time waiting around to get approved for your financing application.

If you’re uncertain about your credit score and worry about getting approval, a pre-approval process may seem like a good idea. Except Tesla doesn’t have a pre-approval process; you’ll have to do that with your bank.

Once approved, how will your payments go?

What is Tesla’s Current Financing Rate?

Rectangular Tesla device
Photo by Manny Becerra

Tesla’s annual percentage rate (APR) is currently at 2.49 percent. Loan terms with the automaker go from 36 to 72 months. The 2.49 percent Tesla financing rate may apply to people with credit scores of 717 and above.

Car buyers with low credit scores, ranging from 600 and below, can expect higher interest rates of up to 14 percent.

The credit score isn’t the only factor that influences your APR on a car loan. An automaker may also look at your:

  • Credit history
  • The make and model of what you’re buying
  • Loan’s length term
  • Down payment

Tesla’s financing plan generally requires about $4,500 in down payment for a standard Model 3. It’s not the fastest Tesla in the automaker’s line, but it’s the most affordable Tesla. If you get approved for financing, you may end up paying about $549 per month with the Tesla’s APR.

But if you’re like most car buyers, you may shop around for the best rates. You don’t have to stick to Tesla’s financing if you feel you’ll get better rates from third-party providers.

In the US alone, 1.31 million Americans decided to make Tesla their next car purchase. Considering that 2.86 million cars were sold overall, Tesla is taking a decent market share with their newest Electric Vehicles. As gas prices continue to increase and more awareness of environmental change takes hold, more car buyers are turning their attention to EVs. 

Tesla continues to lead the industry in torque, stylish design, innovative tech, safety, and their large charging network. The fastest Tesla car model tops out at 200 miles per hour, and if you like to combine speed and eco-friendliness, you may be looking at your loan or lease options.

Pros and Cons of Financing a Tesla

Most of the established brands on the market already have their own in-house financing. In order to prove its worthiness as a brand, Tesla has since followed in their footsteps with their own in-house financier and can offer some of the best rates out there. 

If your options are financing or leasing a Tesla, what pros and cons are you looking at when considering financing a Tesla? Here is what you can expect.


  • Tesla’s EV status could get you up to a $7,500 federal credit, so you may want to take advantage of the opportunity to put cash back in your wallet.
  • If you are taking into account a business vehicle, you could have further tax benefits available to you as a write-off.
  • Spreading your costs out over time could allow you to choose a higher-end model. 
  • Teslas’ value is highly maintained. 
  • You’ll enjoy less maintenance on your EV.  


  • Financing a Tesla is not a cost-free option – you’ll pay interest on your car loan.
  • Other fees may be associated with the purchase, such as origination, establishment, monthly accounting, statement, and late fees.
  • Financing a car could increase your debt-to-income ratios.

How Does Tesla Financing Work?

The thrill of possessing a next-generation vehicle and fewer stops at the gas station outweigh the fiscal cost of buying a new Tesla. Tesla currently has 4 models: 

  • Model 3 rear-wheel drive, 
  • Model Y long range
  • Model S plaid 
  • Model X plaid

Are you considering the practical price and comfort of their Model 3 sedan or a family car with plenty of room, such as the model Y? If you are planning to purchase a Tesla, you have three options:

  • Cash: If you have the money on hand, cash can be a quick and easy way to finalize your transaction, and you’ll have the title free Tesla.
  • Tesla Financing: Terms are generally 36-72 months, loans will have an interest rate, and you’ll need to provide a down payment.
  • Leasing a Tesla car: leasing terms are 24-36 months. Leasing is not available to everyone but provides a low-commitment option for driving a Tesla.

As of March 2023, Tesla Financing can offer rates as low as 5.59% APR. To discover your monthly payment options, you’ll need to navigate to their ‘payment calculator.’ The terms will depend upon your credit score, down payment, and chosen model.

At the moment, Tesla does not offer pre-approval for financing. After you order your Tesla, you can start the loan approval process. 

Tesla Financing and Partners

Who does Tesla use for financing? Tesla’s financing partners are Wells Fargo, Ally Financial, and US Bank. Tesla partnered with three of the top banks in the country – Wells Fargo, Ally Financial, and US Bank – to make Tesla car financing more accessible. These banks are also known for their competitive rates and ease of use, thus helping Tesla get more eco-friendly cars on the road.

Each of these partners offers its own financing rates. These are the rates advertised as of March 2023:

  • US Bank offers a rate as low as 6.96%
  • Ally Financial advertises a rate of 3.69% 
  • Wells Fargo – Unfortunately, current rate information is not available

It is important to note that Tesla Financing credit scores should be high, and you’ll need to have a low debt-to-income ratio.

Eligibility Criteria of Tesla Financing

To be eligible for Tesla financing options, a few factors must be considered. Eligibility will depend upon the state where you are located, your monthly payment, and your credit score. Fortunately, there are no application fees to apply for Tesla Financing. A minimum credit score is not required, but a 720 will help to get the best rates and options.

Tesla’s in-house financing is available in 26 states, including California, Florida, and Texas. If you live in one of these states, you may start your financing search with Tesla Financing. For example, if you live in New Mexico, Texas, Michigan, and Iowa, Tesla requires your final payment to be completed before they deliver your new Tesla.

To purchase a Model 3 for $42,990, at Tesla’s current rate of 5.59% and a term of 72 months, you would be looking at a monthly payment of $632, whereas you would be paying $1,683 for the X Model. Tesla financing has an online payment calculator which you can use to explore all of your payment options based on your model choice, down payment, term, etc. 

Income requirements will vary depending upon other debts such as housing payments, personal loans, and other monthly expenses. The income needed for a lease may vary as the payment amounts are less. You also need to think about delivery fees, insurance, down payment, and charging costs. 

Tesla Finance Application Process

If you meet the Tesla financing credit score requirements and income, applying for Tesla financing is quite simple. 

  • Order your new Tesla
  • Apply for financing on their website
  • Provide social security number
  • Provide employment information
  • Provide phone number,
  • Provide proof of current address (submit utility bill or driver’s license). 
  • Provide proof of ID and insurance

Every loan application process will begin with a hard pull of your credit. Lenders require a pay stub for employed borrowers, and those who are self-employed will need to provide tax returns and bank statements. 

Once completed, Tesla will approve the application within a short time. Depending on the applicant, it may take minutes, 48 hours, or longer.

Should You Buy or Lease a Tesla?

If you’d rather not be bothered by the chore of owning a car, from maintenance to repairs, you may be more interested in leasing. A lease is a good way to drive around a luxury car without the hefty price tag. But before you apply for a Tesla lease, consider the computations of getting a loan versus leasing.

It turns out leasing a Tesla may end up costing you more in the long run, according to these calculations. An outright purchase of the popular automaker’s EV may be better, considering how it holds its value and the length of warranty coverage for the battery and the powertrain. All things considered, you could resell your Tesla after a few years and you’ll be far ahead than if you went with a lease.

Of course, if you’re thinking about getting a Tesla for business, a lease may be a better option. Your choice will depend on why you need to get one.

Overall, this is a car buying decision that’ll require more thought and some shopping. Check financing rates. Consider the cost of ownership for each Tesla model. And make sure your credit is on the high side.

Final Note 

While it’s clear that EVs may be the wave of the future, there are some simple steps you should take before purchasing your Tesla. Check your credit score for Tesla Financing, the prospective payment amount, and choose a model you can afford. Tesla Financing has an easy and painless process to assist you with this on its website!

If you won’t be putting a lot of miles on your Tesla and don’t want the commitment of buying, consider a lease! Leasing comes with the benefit of maintenance and lower payments. Vehicle value depreciates once they are driven off the lot. However, the Tesla trade value tends to be higher than others. Financing a Tesla is a better investment than you might think. 

FAQs About Tesla Financing

1) Who are eligible for Tesla financing?

Eligibility will depend on your credit score, income, and debt-to-income ratio.

2) Is it easy to get Tesla financing? 

The process for financing is pretty simple, but those with lower credit scores or lower income levels may not be eligible.

3) Is there any age limit to avail Tesla financing? 

Tesla financing requires you to be age 18 and over.

4) What credit score one must maintain for Tesla financing?

The Tesla credit score you are aiming for is over 720. If your scores are below 720, expect your APR to be as much as 16%.

5) Are Tesla loans applicable for all-electric vehicles(EVs)?

Yes! All four models are eligible for financing.

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