First, you’ll need to find out if you qualify for financing of any kind. Tesla doesn’t publish its minimum credit score requirements for financing, so the best way to determine if you qualify for a lease or loan is simply to apply.

Keep in mind:

Tesla Financing

only offers leasing and loans in the following states:

Arizona

But, don’t worry! You can always apply for a third-party car loan if Tesla Lending doesn’t operate in your state.

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Tesla cost to lease vs. cost to finance

Leasing a Tesla

will cost less but you’ll have paid half the car’s purchase price by the end of your lease. Meanwhile, buying your Tesla with a car loan allows you to enjoy your Tesla for as long as it lasts—so long as you can justify the higher total cost.

To get an idea of how the costs of these financing options compare, use the table below to see how pricing breaks down for each trim of a brand-new

Tesla Model 3

Model 3 w/ $4,500 down payment	RWD standard range (36-month, 10,000-mile lease)	RWD (loan)	Long Range (36-month, 10,000-mile lease)	Long Range (loan)	Performance (36-month, 10,000-mile lease)	Performance (loan)
Vehicle subtotal	$48,490	$48,490	$59,490	$59,490	$62,990	$62,990
Upfront payment	$5,714	$4,500	$5,884	$4,500	$5,974	$4,500
Monthly payment	$691	$713	$689	$887	$779	$942
Total payments	$24,876	$51,336	$24,804	$63,864	$28,044	$67,824

Key takeaway: While a lease will allow you to save money on costs paid into a Tesla, buying a Tesla with a car loan is more worth it when it comes to potential return on your long-term investment.

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Tesla lease and loan terms

The table below details the lease and loan term lengths available for different Tesla models:

Tesla model	Available lease lengths	Available loan lengths
Tesla Model 3	36-month lease	36-, 48-, 60-, and 72-month terms
Tesla Model Y	36-month lease	36-, 48-, 60-, and 72-month terms
Tesla Model X	24- and 36-month lease	36-, 48-, 60-, and 72-month terms
Tesla model S	24- and 36-month lease	36-, 48-, 60-, and 72-month terms

Shorter loan or lease terms will result in:

Higher monthly payments, but

Lower total payments

For example: If you chose a 36-month loan for a base Tesla Model X, your monthly loan payment would increase from $1,897 to $3,568, but your total payments would decrease by almost $8,200 since you’re paying for a shorter time.

Similarly, if you decrease your lease term on the same Model X from 36 to 24 months, your monthly payment will increase from $1,817 to $2,209, but your total payments will decrease by over $12,000.

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Tesla depreciation rates are low

Tesla is a safe car brand to buy rather than lease because they

depreciate more slowly

than other electric vehicles. A Tesla Model 3, for example, averages only about 10% depreciation over three years.

Key takeaway: While other new EVs tend to depreciate more quickly than standard-combustion cars, a financed Tesla is more likely to return a good amount of your investment if you ever want to trade-in or sell.

Financing could earn you an electric car tax credit

You’re more likely to qualify for electric vehicle incentives at the state level when you purchase or finance your Tesla EV as opposed to leasing it.

Teslas are no longer eligible for federal

electric vehicle tax credits

, but you could still be eligible for perks at the state level depending on where you live

To make things easy, Tesla has compiled a list of

all states offering EV incentives and the associated values

Leasing comes with annual mileage restrictions

If you plan to put a lot of miles on your new Tesla, buying is certainly the better option:

When you purchase your Tesla: You get to decide when, where, and how often to drive it

When you lease a Tesla: You choose whether you get 10,000, 12,000, or 15,000 miles per year

Choosing a higher-mileage lease option will increase your monthly lease payment. If you go over the annual mileage limit, you’ll be charged an excess mileage fee at the end of the lease.

The bottom line: buying a Tesla is better than leasing

Buying a Tesla with a loan is better than leasing:

Tesla owners have more autonomy over their vehicle than those who lease.

A Tesla is likely to return a high percentage of investment if you ever choose to trade in or sell.

Leasing can be a good idea for some people in certain situations:

If you own a small business and use your car for that business, you can often deduct the cost of the car on your taxes—and keeping yourself in a lease ensures you’ll always have that deduction

If you value always having a new car and you’re comfortable knowing that your payments are not an investment—just an expenditure

Where to lease or buy a Tesla

Tesla doesn’t sell new vehicle models out of any dealership. Instead, you’ll need to head to

Tesla’s website

to build and price your vehicle.

What to expect: Once you place your order, you can pick up your new Tesla at a delivery center, or it can be delivered to your door for a $1,200 fee. If you’d like to

test drive

a Tesla, you can schedule a touchless test drive at a

Tesla showroom

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