Electric Vehicles model-e_1

Published on August 28th, 2014 | by Christopher DeMorro

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Five Steps To Save Money For The Tesla Model III

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Say you’re like me, an aspiring member of Generation Y who sees Tesla as much more than a car company. It’s a beacon of hope for a greener, better future, and the return of the can-do American spirit. Oh, electric cars aren’t viable? Tell that to Elon Musk. The man has helped revolutionize the way the auto industry sees EVs, and I want to do my part by throwing my hard-earned money at him.

As I’ve previously pointed out though, by the time the Tesla Model III is built, the $7,500 federal tax rebate is likely to have expired. That means the Model III is going to cost at least $35,000 out of my own pocket, almost exactly twice what I paid for my fuel-sipping 2012 Chevy Sonic. It’ll likely be a stretch (being a writer isn’t exactly a lucrative business these days), but I figure if I’m smart with my money, pay down some debts, and keep things realistic, I could be one of the first to own Tesla’s mass market electric car.

How cool would that be?

I figured I would share with you all my plan, and maybe inspire somebody to do the same thing. So here’s my plan, as it may pertain to you.

5) Keep Driving What You’re Driving
Right now my wife and I (still not used to writing that!) drive the aforementioned Chevy Sonic, and have less than three years left of the five-year loan. That means I should be able to pay off the Sonic just in time for the launch of the Model III, freeing up about $270 a month.

As you can imagine, splitting a car with your significant other can be challenging, but since I work out of the home, I only need the car every now and then to run errands. We’ve been doing this for two years now, and don’t see a problem with keeping it up for another three years.

4) Pay Off Some Of That Debt
Like so many members of my generation, I’m saddled with thousands of dollars of college debt; I racked up just over $40,000 of student debt over five years (at a public university, mind you), though if I’m lucky and smart enough, it’s not inconcievable that I could pay off my loans a couple of years early. Currently, I’m halfway through my ten year repayment term, and if I can pay off my loans early, I’ll free up another $350 a month. Yes, you read that right; my student loans cost me $80 more per month than my new car payment, but that’s a story for another post.

Between those two monthly debt burdens, I can free up about $600 a month, which could put me right where I need to be to pay for a Tesla Model III. But obviously this isn’t the same case for everyone else out there, and there are other ways to save up the money needed to buy a Tesla, including…

3) Buy A Bike And Use Public Transit
This pertains more specifically to city dwellers, though suburbanites can benefit from the practice of biking and public transit rather than driving as well. Most cars get far worse gas mileage in stop-and-go city traffic than they do in smooth highway travelling, and even an efficient hybrid still costs thousands of dollars a year to own and operate once you factor in things like wear-and-tear and taxes.

In fact, by going car-free, the average American can save as much as $10,000 a year by simply not owning a car. This obviously isn’t practical for everyone, but with the Model III about 3.5 years away, you could save close to the $35,000 or so the affordable Tesla is estimated to cost.

2)Buy Tesla Stock

This one is for the believers in Elon’s all-electric philosophy, as well as those who don’t mind taking a big risk. Tesla is one of the hottest stocks on Wall Street, sitting at or above $250 per share for most of the year. Yet recent estimates have suggested that the share price could easily rise to $385 a share or more, especially once the Tesla Gigafactory gets going right along the time Model III production begins.

$250 a share is a lot, but its not inconceivable that the share price could double in the next few years. Analysts are constantly comparing Tesla to Apple and Google, both of which have seen their shares soar in recent years.
Wait for a down day, and then snap up as many Tesla shares as you can; if you’re lucky, you could earn enough for a down payment by the time Model III orders open up.

1) Sell Your Extra Stuff
Look inside just about any American home, and you’re likely to find a treasure trove of unopened and barely-used appliances and devices. I’m no different, and over the next few years I intend on seriously downsizing the amount of extra stuff I have in my life. While it certainly won’t make me rich, it will put a few extra bucks in my pocket, and selling excess goods on eBay and Craigslist is likely to keep me busy, so I don’t end up spending money on even more unncessary crap.

Most of these things are low-value items, but surely some of you have campers, jet-skis, or other valuable “toys” that see little or no use these days. So…sell ‘em! Put that money aside, or invest it in Tesla stock, and just pretend it isn’t there for awhile.

If I sell a few items each week, have a few more tag sales, and just keep my wallet in my pocket, saving up enough for the Tesla Model III doesn’t seem like nearly as much of a stretch as it once did.

Hopefully in a few years, I’ll be able to look back on this post as the beginning of my electric car journey.




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About the Author

A writer and gearhead who loves all things automotive, from hybrids to HEMIs, can be found wrenching or writing- or esle, he's running, because he's one of those crazy people who gets enjoyment from running insane distances.



  • shecky vegas

    Jesus! Why don’t you just tell people to stop buying food and living indoors? Your article is edging to extremism for a damn car. Yes, yes, yes, it’s a Tesla, but I’m not going to prostrate myself in front of ANY car manufacturer, no matter who it is.
    And buy Tesla stock??? If you had that kind of money lying around, I seriously doubt you’d have ANY student debt.
    Get real, dude…

    • http://www.insteading.com/ Jo Borras

      Depending on your student debt’s interest rate and the rate of appreciation for Tesla’s stock, using his money to pay down debt instead of buying stock might be an irresponsible move.

      • TheSA-X

        going the tsla stock route would be much more speculative, though. and the stock is already super high.

        besides, tsla isn’t the only stock out there.

        • http://www.insteading.com/ Jo Borras

          Yes, but my point was that there was much greater risk/reward payoff potential in paying the minimum on a low interest loan and chasing a windfall.

    • Christopher DeMorro

      Fair points, though regardless of it I get a Tesla or not, it’d be nice to pay down some of my debt (most of which I incurred paying for my own, rather humble wedding this summer). Can’t fault a man for that.

      You’ll have to trust me when I say I don’t want for things to do either; I literally haven’t had a free weekend since…April? My wife and I just completed one Tough Mudder, and signed up for another one next year. I’m quite keen on the notion that tomorrow isn’t guaranteed, but it’s always worth looking at long term goals too.

      Long term…I want a Tesla. And you may not know this, but being a writer on the Internet isn’t exactly a fast track to getting rich. So, I’ve got to pick and choose my battles. I won’t be buying any jet-skis in the next four years, but that doesn’t mean I plan on being a hermit either!

    • Kyle Field

      Calm down shecky. No need to blow a gasket over a simple suggestion. If it doesnt fit your life, fine.

  • Kyle Field

    I like this, but it just puts you right back in debt when you but the Model III. I just went through a financial class (dave ramsey’s baby steps) and they recommended the “debt snowball” method. Basically, pay the minimum monthly payment on all your debts…then start with your smallest debt payment (car, credit card, student loan, etc) and aggressively pay that off first. Selling extra stuff around the house can be a great way to get started towards paying off debt. From there, once you pay off that first debt (let’s say it was $50/mo with a total of $300 outstanding debt)…roll that monthly payment into your next smallest debt (let’s say it’s your car payment. Now, instead of paying $270, you’ll be paying $320 (plus whatever extra you can scrounge to “attack” the debt each month). …that snowballs and eventually you’ll be paying that $320 + the $350 on your student loans…which will cut that down as well.

    The challenge is not to get into debt in the first place…so try to keep the sonic for another few years (let’s say 5 years from now), pay off all your debt and have $15k to put down on the model III. Anyhow…the “Baby steps” are outlined in the link below…but I would encourage you to try to avoid debt from the get go. Also, saving (beyond a base emergency fund)/investing in stock shouldnt be on the radar for quite awhile as any interest/stock price increases you gain are eaten away by the interest you’re paying on your debt each month.

    http://www.daveramsey.com/new/baby-steps/

    • Christopher DeMorro

      All good suggestions!

  • Pingback: Russia Tesla Model S Adventure, BMW i8 Tech Being Passed On… (EV News) – CleanTechnica | Car tools market

  • Offgridman

    Wow you sure have dug yourself into quite a hole so far as the debt is concerned, and this doesn’t even account for month to month living expenses.
    Most of your basic ideas for getting out of this are okay, but you really need to stress #4.. You need to get rid of your current debt and the extra payments are the best way, and to make sure it has the best effect make sure that extra goes towards capital payments. You may need to set up a special payment plan with the loan institution for a certain amount of extra each month, but this will ensure that you pay off less over the long run, instead of still paying the full amount with interest, just in a shorter amount of time.
    Also give up on the idea of buying stocks until you are out of debt, with the few that you can buy, even if Tesla doubles, by the time you take care of taxes, fees and etc you will be losing money compared to the debt payment. If you want to save some money do it through government I bonds, very low minimum investment, you can pull it back out almost anytime you want, and they have been returning 7-9.5% over the past few years that can be tax deductible.
    Lastly don’t buy another car (even the Model3) unless you have enough down to pay it off free and clear, or worst case scenario within a year or two. This way if you don’t like it (doubtful with Tesla I know) or something comes up (the wife pops out triplets) you can get your money back and clear up the debt.
    This advice is coming from a semi old man that has owned over thirty vehicles of all varieties through the years, and only took a loan on one of them twenty five years ago, and still has five of them to play with.

  • Hayden

    Sounds like you should have gone all-in for $100 on a Elio, taken advantage of the Elio credit gas card and had no car payment for two of those years. You could start that trip by putting a request to be one of the 25 reporters to get the pre-production prototypes Elio intends to build. Sayin’.

    • Christopher DeMorro

      Yeah…no. If I was going to spend $6,800 on a two seater, it’d be a used Miata.

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