Tesla quietly introduced 1.99% APR on the 2024 Model 3 sedan yesterday, the first financing deal we've ever seen on the heavily updated EV. However, our analysis found that while this limited-time offer constitutes a price cut, built-in limitations could make electric car buyers want to wait for an even better deal.
From June 6th through the 16th, 2024 Tesla Model 3s are eligible for 1.99% financing for 36 months. Tesla also has 48 and 60-month options at 4.99%. The rate on every other Tesla remains 6.39% on loans up to 72 months. On a 5-year loan for a $40,000 vehicle, we estimate this amounts to about a $1,500 price cut.
That's not bad, but it's also not great. Last month, the larger Model Y got 0.99% financing for 72 months. At the time, our analysis found that the Model Y could be $9,000 cheaper than the Model 3 when factoring in a $7,500 federal tax credit. Due to the 36-month limit of the Model 3 offer, we consider this a lousy deal.
On a 3-year loan, Tesla says the cheapest Model 3 would cost $1,034 per month. Meanwhile, the Ford Mach-E offers 0% APR for 72 months plus $3,000 off GT trims. You can also finance some VW ID.4s at 0% for 72 months. Since the Model 3 remains ineligible for the federal tax credit, other EVs may be better deals.
There's also the fact that Tesla is only offering 1.99% financing on the entry-level Rear-Wheel Drive and Long Range All-Wheel Drive variants. If you've had your eye on the recently introduced Model 3 Performance, you'll still be looking at an interest rate of 6.39%. These quirks could be dealbreakers for bargain hunters.
Having said all of that, this is the first financing deal we've ever seen on the refreshed Model 3. But we can't help wondering what Tesla has in store after June 16th. After all, if the brand can offer 0.9% financing on the Model Y, inventory discounts, and free Supercharging, who's to say there won't be better deals later?
Source: Tesla
Photo Gallery: Tesla Model 3
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Alex Bernstein Senior Pricing Analyst
Alex has been writing about car buying and leasing for over a decade. Originally from San Francisco, Alex has a degree in History from the University of California, Santa Barbara, and has been a lifelong lover of cars. Alex’s work has been featured in publications such as Forbes, The Wall Street Journal, Motor Trend, and more.
