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How to Buy a Car Online — from Start to Finish

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Walking onto a car dealership lot can sometimes feel like an experience straight out of a horror movie. Before you’ve even made it a few feet, car salesmen descend upon you like vultures, urging you to make spur-of-the-moment decisions that can bury you in debt up to your eyeballs for the next half-decade.

There has to be a better way. According to a 2015 survey by the research firm Accenture, 53% of people “would consider buying a car online.” And, according to the firm, 16% of people already have.

Buying a car online can be a much smoother experience and lead to better, more well-informed outcomes. But, it does require a bit more legwork on your part (at least digitally). In this guide, we’ll walk you through how the online car buying experience compares with the traditional route and the exact steps you need to know to buy a car online. Finally, we’ll show you what to watch out for to stay safe.

Following the steps in this guide can help ensure that you don’t get taken for a ride when buying your next car online.

Traditional vs. online car buying

Before the internet revolutionized everything, there really was only one way most people bought a car. They’d visit car lots, find a car they liked, and then sit down with a car salesman to work out an agreement. This lead to the dreaded negotiation process.

“There’s all this back-and-forth and, ‘Oh, I’ve got to go talk to my manager,’” said Jack Gillis, director of public affairs at the Consumer Federation of America and author of “The Car Book.” “Well, the guy goes back and has a cup of coffee and lets you sit there and steam for a while, then he comes back and gives you some song and dance about why they can or can’t do something.”

Because most people treated car dealerships as a one-stop shop for buying a car, they often wouldn’t be informed about the full range of available cars, financing options or trade-in options available to them. Without these bargaining chips, consumers are at the mercy of the car salesmen.

“It’s like a lamb being led to slaughter,” said Gillis.

What if someone could wave a magic wand and take away all those painful points? With online car buying, it’s possible to complete nearly every phase of the car-buying experience — from finding the right car to negotiation — entirely online.

In this guide, we’ll talk about the pros and cons of buying a car online and how it compares to traditional car buying.

While removing the painful points of dealing with hawkish car salesmen is certainly nice (especially for introverted folks who have a fear of negotiating), perhaps the biggest benefit of buying a car online is that it puts you in control of the car-buying process.

You’re no longer at the mercy of the salesmen at one dealership. You can expand your options for cars, financing and trade-ins, and use these as bargaining chips to negotiate for the best price possible.

“The whole digital part really is empowering for the buyer because there’s so much information that you can use to make an informed decision,” said Matt DeLorenzo, managing editor of KelleyBlueBook.com.

The downside of all this power is that it requires a bit more digital legwork on your part to bring all the pieces together. But, as we’ll see, it’s not rocket science. Doing your homework can literally save you thousands of dollars and ensure you get the best car possible.

Follow these seven steps to buy cars online

Step 1. Choose the right car

It’s important to choose a type of car that will fit your needs best. Do you want a very fuel-efficient vehicle for short commutes? How about hauling large amounts of cargo around? Do you have a large family, or a small one? Questions like these can help you zero in on what kind of body style (truck? SUV? compact car?) will suit your needs best.

Once you narrow down a body style, it’s time to research what specific makes and models of cars might be best for you. Consumer Reports offers comprehensive reviews of cars by make, model and year, however, it does charge a small monthly or annual fee. Other good websites to do research on specific types of cars include Edmunds, Car and Driver and Kelley Blue Book.

If you’re buying a new car, you might be offered certain options and add-ons from the dealer, such as VIN window etching or rust-proofing. Before you go signing up for every option offered (and sign away your whole paycheck in the process), it’s important to research these options.

According to a 2017 report from the National Consumer Law Center, the average markup on these add-ons is 170%. If you really do need these optional add-ons (and you probably don’t), perhaps it’s better to get it done yourself.

Step 2. Determine the price you want to pay

Next up is determining how much car you can actually afford. A good rule of thumb is the 20/4/10 rule:

  • 20: Make a minimum 20% down payment.
  • 4: Finance for no more than four years.
  • 10: Monthly transportation expenses shouldn’t exceed 10% of your monthly income (including insurance, gas, car payments, etc,)

This rule of thumb will help you set a cap on your car-shopping budget. For example, if you have $3,000 saved, it might be a good idea to avoid buying a car for more than $15,000 ($15,000 * 0.20 down= $3,000). From there, you can assess any financing offers to make sure that you’re not spending more than 10% of your income on the car, and that your financing doesn’t stretch out past the four-year mark.

You can narrow your car search down even further using these budget caps. If you know that the MSRP of a particular new car is far outside of your budget, you can weed it out of consideration. You can use websites like Kelley Blue Book or the National Automobile Dealers Association to research the current prices for new and used cars in your area.

Step 3. Get approved for financing online

Traditionally, you’d walk into a dealership and tell the car salesman your monthly budget. Then, the car salesman would work out the final purchase price and the financing to give you one, final monthly payment number.

According to Gillis, this is one of the surest ways to pay more in the long run.

“The dealer will ask, ‘Listen, what if I can get you out the door for $325 a month?’ [but] you have no idea what you’re really paying for financing,” he said. “You may be getting into a financial arrangement that is more expensive than if you had shopped around.”

That’s why it’s especially important to get preapproved for an auto loan before you actually go shopping. Getting preapproved for a loan does not mean you have to take the financing; rather, it helps you stay within your budget and gives you a bargaining chip in negotiations.

You can easily get preapproved for an auto loan online through websites like LendingTree, which is the parent company of MagnifyMoney. Using our auto loan marketplace, you can fill out one short online form and potentially get offers from several auto lenders at once. It’s also a good idea to check around with local banks and credit unions, which may offer deals to you locally.

You’ll generally need a high credit score to qualify for the best auto financing offers that banks love to advertise. If you don’t have a high credit score, you will still often be preapproved for the loan, however, it may come with higher interest rates. If you’re outright denied for a preapproved loan, you may need to consider shopping elsewhere or waiting a little while so you can take steps to increase your credit score.

If you are qualified for pre-approval, the lender will give you a pre-approval letter. Make sure to keep a copy of this letter, and bring it with you to the table when it comes time to negotiate a price on the car you’ve chosen.

Step 4. Choose the right source

It’s now time to cast your net and see what cars are out there.

AutoTempest is a comprehensive website that proclaims to be the Kayak.com of cars: it searches several websites for specific makes and models, including on Craigslist. If you’re looking for one particular brand, don’t overlook your local dealership’s website. Other possible websites to scope out cars include:

Luckily, with the power of the internet, the whole world (or at least the whole country) can be your virtual car lot. If you’re able to travel to pick up your new vehicle, you might be able to save a trunkful of cash by broadening your search.

For example, if you live in a snowy climate and are looking for an all-wheel drive car, you might try looking in a warmer area. “There might be better incentives on all-wheel drive cars in, say, Arizona than in the Northeast where they got a lot of snow,” said DeLorenzo.

Step 5. Get quotes

Once you’ve identified your targets, the next step is to find out how much they’ll cost. You’ll negotiate the price lower in the next step, but this just sets a starting point.

Oftentimes, dealerships or third-party sellers won’t show you the price of a vehicle online as the price may have changed or the vehicle may have already been sold. That’s why it’s important to contact the dealership directly and ask for a quote for each vehicle you’re interested in.

Email or call the dealership and ask for their internet sales manager: this is the person you’ll be working with through the negotiation process. Give them the VIN or the stock number of the vehicle you’re interested in and ask for a quote. Then, ask them to email it to you so you have it in writing.

It can sometimes be difficult to get a dealership to quote a price. Dealerships may say, “’Oh, I see you’re shopping online, boy that’s great. Here’s what I want you to do. I want you to go and talk to all the other dealers, and then come back to me, and I’ll see what I can do for you.’” said Gillis. “Your response to that is, ‘No, I’m not gonna do that. I want you to give me the very best price you can give me for this make, model, year, and I want you to commit to that.’”

If quote collecting isn’t your thing, you can also hire a service such as CarBargains. For $250 and a detailed description of what you’re looking for, CarBargains staff will collect at least five different dealership quotes for you. According to Gillis, “statistically, about a third of the results actually come in at below so-called manufacturer’s price or inventory price.”

Collecting these quotes gives you the bargaining power you need to negotiate prices as low as possible in the next step.

Step 6. Time to negotiate

Ah, the dreaded negotiation. Since you’ve already gone through all the steps to be an informed consumer, it will be a much smoother process. Specifically, you’ll be negotiating the price of three separate items:

Vehicle price; financing cost; and trade-in value.

Vehicle price

This is the most important piece. You can — and should — play the offers you’ve received in the prior step off of each other. Did someone offer $12,500? Show that emailed quote to another dealer and ask if they can lower their price to $12,000.

Car dealerships are usually very easy to negotiate with online.

“If you think about it from an efficiency point of view, an online salesperson can be working more deals at one time than somebody on the floor who’s physically with one person,” said DeLorenzo. “Sometimes it’s actually more cost-effective for the dealer to sell it through or do a lot of the negotiation online.”

Car salesmen will often try and upsell you on add-ons when negotiating the price for a car. “They may say, ‘Well this will only cost you 10 bucks more a month.’ Well, yeah, and that’s $120 over a year. Over five years that’s $600, $700. You can’t let bells and whistles cloud your judgment,” said DeLorenzo. Stick to the basic numbers and don’t get distracted.

Trade-in price

Chances are that you already have a car you’re looking to trade in and help defray the cost a bit. Most dealerships will accept trade-ins, but be warned: you will probably get much, much less than if you shop around for trade-in prices on your own.

Tools such as Kelley Blue Book also allow you to find out a fair trade-in price for your vehicle. In addition, you can use a tool on their website called “Instant Cash Offer” to get bids from dealers on your car.

“The beauty of having something like that is that it sets a floor for what your car is worth,” said DeLorenzo. “You’ll know you’ll get at least that much in trade or in an outright purchase, and that’s important leverage to have when you’re negotiating a new car deal.”

Additionally, you can try selling your car yourself through websites like Craigslist. Generally, going this route will net you the best price for your old car, although this may take much more time and energy than simply driving onto a car lot with your old car and driving off with a new one.

Financing cost

The final piece of the puzzle is how you’re going to pay for your new car. Since you’ve already taken the time to be preapproved for an auto loan, this step is simple. Show the dealer your pre-approval letter and ask them if they can beat it.

If so, great. If not, then you know you’ve already secured the best auto financing deal possible.

Step 7. Making the final purchase online

Once you’ve lined up the three pieces of the puzzle — the lowest car price, the lowest financing price and the highest trade-in value — it’s time to make your decision.

Most dealerships still require you to physically come in to complete the final paperwork signing. However, that’s beginning to change.

“Savvy dealers are beginning to digitize as much of that kind of paperwork [as possible], to just make it easier to buy a car from them,” said DeLorenzo.

“It works out better for them, too. I mean, if they’re able to get you in and out quicker, they can sell more cars quicker. People have a much more positive view of how the deal went and it’s just good business.”

But as far as completing the entire purchase process online? DeLorenzo said, “I think there are dealers who are willing to do that. The question is, do you want to do that?”

But for now, we still can’t entirely get around some of the physical in-person aspects of buying a car. Perhaps someone will invent a virtual test-drive machine in the future.

Staying safe while shopping for cars online

Luckily, outright scams aren’t too common when it comes to buying cars online, according to Gillis. Many car dealers are subject to consumer-friendly regulation by the Federal Trade Commission.

Beware the bait-and-switch

One situation that Gillis has seen, however, involves a bait-and-switch technique after consumers arrive at the dealership to complete the purchase after negotiating everything online.

Here’s how he describes this common ploy: “You’ve got it all squared away. You get to the dealership to close the deal, and all of a sudden, ‘Oh my gosh. I can’t believe it, someone just came in and bought that car, but we have another one here that actually has a few better features on it, and it’s just the color you wanted, and it’s only gonna cost you $20 more per month.’”

If this happens to you, be prepared to walk away from the dealership — they’re just trying to weasel more money out of you.

While stories like that may be uncommon, there are a couple of things you can do to make sure that you don’t end up regretting your decision.

Get an inspection from an independent mechanic

If you’re buying a used car, whether at a dealer or from someone you found on Craigslist, you should absolutely get an inspection first. Everyone has heard horror stories about buying a lemon (or worse, been the person who bought the faulty car). The seller will surely tell you that the car is in perfect shape, but how do you really know? Getting an auto inspection by an independent mechanic is perhaps one of the best ways to protect yourself.

If you’re unable to take the car to your own mechanic, DeLorenzo recommends a great service from AiM Certify. For as little as $129, you can book an independent mechanic anywhere in the country to travel to the dealership and perform an inspection for you. You’ll get back a full mechanical report complete with actual photos of the car (not gorgeous stock images that seem to plague dealership websites).

Try before you buy

“Most of the problems that consumers end up not liking about their vehicles could have determined in a test drive,” said Gillis. “For example, it’s hard to park, or the back seat really isn’t that comfortable, or the trunk really doesn’t hold that much, or ‘when I’m changing lanes, there’s a big blind spot in the back.’ So that’s why that test drive is really, really important.”

If you’re not happy with your choice, you may have wasted tens of thousands of dollars. “It’s not like buying a pair of shoes from Amazon,” said DeLorenzo. “It gets a little bit more involved if the car doesn’t fit you and you try to send that back.”

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Lindsay VanSomeren
Lindsay VanSomeren |

Lindsay VanSomeren is a writer at MagnifyMoney. You can email Lindsay here

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How to Get Out From Under a Bad Car Loan

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

iStock

We all make mistakes. Maybe you’re struggling to pay your bills, especially your car loan, and are looking for a way to get out from under that burden. Or perhaps you’re doing better financially than when you purchased your car and it’s time to refinance into a better loan. No matter how you got into a bad car loan or why you want out of it, you always have options.Understanding those options is the first step to improving your financial situation. Here’s what you should know:

How do I know if I have a bad car loan?

If you have a bad car loan, you probably know it. A bad car loan is one that you can’t afford, or that costs you too much money in interest expense every month. If you are struggling to make car payments or are falling behind on your loan, you’re likely in a bad car loan.

What’s important to realize is that circumstances change. You could have taken out a loan on a new pickup truck while you had a good job and could easily make the payments. When you’re unemployed, however, the truck payments become a huge burden. You may even fall behind.

Another possibility is that you could buy a car when you have a thin or damaged credit history, at a high interest rate. A year or two later, when you have a decent credit score, you could do a lot better. A good car loan when you bought the car is a bad car loan now.

If you think you’re in a bad car loan or one that no longer fits your needs, it’s time to start finding ways out of that loan.

What’s a good interest rate for a car loan?

The interest rate level you should consider to be “bad” depends on your situation, primarily your credit score. “The interest rate you pay should not be higher than what you would pay on a credit card,” said Bruce McClary, vice president of public relations and communications at the National Foundation for Credit Counseling (NFCC) in Washington, DC. “Check your credit score and see where you are. Could you qualify for a lower interest rate loan? If you have a credit score in the 700s or 800s, you’ll get a good loan. If it’s in the 500s or 600s, you’ll probably still have to pay a higher interest rate.”

Generally speaking, the higher the interest rate, the more important it is to try to find another solution. “I would say any auto loan that carries an interest rate in the 20% range is something you would want to get out of quickly,” said McClary. “In the teens, in the high end, you should consider refinancing.”

6 ways to get out of a bad car loan

Before you decide how you should get out of a bad car loan, you should decide exactly what you hope to accomplish by doing so. Are you trying to get a lower interest rate, keep your car or not have car payments at all? If you don’t set clear goals, you could get out of one bad loan only to make your financial situation worse.

Once you know what you want to achieve, you can decide which of these options is best for you:

1. Refinance a car loan

If your only car problem is that you took out a loan with a too-high interest rate, either because your credit score was lower or because you didn’t shop around as well as you could have, you should probably refinance your car. In fact, if you have a car loan, it pays to occasionally check that you are still getting the best deal possible on your car loan.

Refinancing with a new lender can help your credit history if you have missed payments on your car loan. “You can get creative, refinancing the amount you owe and flipping it into a new loan,” said McClary. “Then, you’re starting with an account that is healthy.” Bear in mind that if you have missed payments, your current lender has probably already reported negative information to the credit bureaus. That information will stay on your credit history for up to seven years, even after you close the account.

You could also refinance your car loan if you want to change the length of the loan. For example, say you originally took out a 3-year loan, but the payments are too high. You might refinance with a 4- or 5-year loan, instead.

Refinancing a car is almost always a better financial decision than getting a new car to get out of a loan. You generally pay a few fees to refinance, but you avoid paying sales tax on a new car, and you avoid the temptation to buy a more expensive car, just to get out of a bad loan.

Be sure to shop around for a car loan refinance. You can start your search at your local bank or credit union, or online at MagnifyMoney. Fill out an online form, and receive potential refinance auto loan offers from lenders at once, depending on your creditworthiness. Use the auto loan calculator to see how much a car loan should cost, and how much you can afford.

2. Renegotiate a car loan

If you just need help getting back on track, or need to make your payments more affordable, you can talk to your current lender. They may offer temporary hardship forbearance in certain circumstances, which means they can allow you a little more time to catch up.

Another way they may help is by extending the terms of your loan so your payments are lower. Be aware that the longer the term, the more total interest you will pay before your loan is paid off.

3. Pay off a car loan

If you want to keep your car, look for a way to pay off or pay down your car loan. You may have savings you could use, if you can do so without jeopardizing your emergency fund and other goals.

Avoid taking money out of your retirement account. For one thing, you could owe a hefty penalty and taxes to the Internal Revenue Service. For another, retirement funds are for retirement.

You could also sell investments or other vehicles to pay off your loan, or work extra hours. Even if all you can do is make extra payments on your principal every month, you will pay off your car loan more quickly, and save a significant amount of interest expense.

If you don’t want to keep your car; for example, if your household has two cars and can get along with one, you can sell your car to pay off the loan. You’ll get the best price if you sell your car yourself. Be aware that you need to gain enough from the sale to pay off the loan, or come up with the difference yourself.

4. Trade in a car to get rid of a bad loan

If you need a new car anyway, you could trade in your old car as a down payment on a new one. The advantage of getting out of your car loan and car ownership, this way is that it’s easy. The dealership is motivated to sell you another car, so they’re almost certain to take your old car. They may even take it if you’re underwater on your current loan — if you owe more than it’s worth — and roll the excess amount you owe into your new loan.

Trading in your car can be a good idea if you are hesitant to try and sell your car yourself, and you need a more reliable or different car.

It is not a good idea for people who might use a bad car loan as an excuse to trade up to a more expensive car that strains their budget and prevents them from ever paying off a car or reaching other financial goals.

If you trade in your car, make sure you get the best loan you can get. Check your credit score before you go car shopping, and make any improvements to your score before you shop for a loan. Don’t just take financing at the dealership without comparison shopping the loans first.

5. Surrender the car to the lender

If you’re in financial trouble and you can’t keep up your car payments, one option is to give up your car. You can drive your car to the lender, or wait for them to come and get it.

Either of these options should only be a last resort. “You can turn in the car,” said McClary. “They’re holding it as collateral. You can give them the keys and say, ‘Here. I can no longer afford it.’”

The problem with turning in your car is that it is a “voluntary repossession.” If you owe more on the car than the car is worth and you can’t pay the excess amount (which is likely if you can’t afford your payments), it may harm your credit history and score. You should also be prepared to keep making your car payments until they sell the car, if possible. “You need to talk to someone immediately about clearing it,” said McClary. “Your credit won’t get any better unless you continue to make payments until they sell the car.”

Whether you turn in your car voluntarily, or you miss payments and they tow it out of your driveway, the repossession will be reported on your credit report.

The lender can sue you for the deficiency, or the difference between the amount you owe and the amount the car is worth, less the expenses of selling the car. So it’s possible you can lose or turn in your car, and still have car payments. And now your credit report is damaged, so any car loan you get will likely carry a high interest rate.

6. File for bankruptcy

If your finances have reached a point where you cannot pay your bills and you don’t see any other way out of debt, you may need to consider bankruptcy.Chapter 7 or Chapter 13 bankruptcy can actually help you keep your car, which can be important if you need it to get to work and earn a living.

Filing for bankruptcy doesn’t get you out of a car loan, however. You must continue payments on your car loan to keep your car in bankruptcy. However, filing for bankruptcy can give you relief from collection efforts by other creditors, making it easier for you to keep up with your car payments.

If you are considering bankruptcy and you want to keep your car and car loan, you must indicate to the court that you want to “reaffirm” the debt. By reaffirming, you promise to pay your car loan as if you had not filed for bankruptcy, in exchange for keeping the car. You must show that you can afford to make the payments and that the vehicle is necessary. Your ability to keep your car may depend on your equity in it, and your state law. If you reaffirm the debt, but fail to make the payments, you can still lose the car.

Alternatively, you can surrender your car in bankruptcy. In a Chapter 7 bankruptcy, this wipes out your debt. You may be able to keep your car until the bankruptcy is finalized.

Remember your long-term goals when getting out from under a bad car loan

It’s easy to think about short-term fixes to financial problems. And getting through this month and the next is important. Try to choose a path that lowers your interest expense and total debt, if possible. Avoid decisions that can harm your credit history. Your long-term financial health depends on taking a longer-term view as you decide on the best way to get out of your bad car loan.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Sally Herigstad
Sally Herigstad |

Sally Herigstad is a writer at MagnifyMoney. You can email Sally here

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How Much Does a Tesla Cost?

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Tesla Roadster
Tesla

Teslas are the newest, spiffiest electric vehicles on the block. The first models were priced as luxury vehicles, but Elon Musk promised to make an EV affordable for most Americans by rolling out the Model 3 at an advertised price below $35,000. There is more to the price, however, as we’ll explain.

Musk’s fancier models will cost you a pretty penny — up to $250,000 — along with Tesla’s upgrades. Availability and price depend on the model and the trim you choose. For the whole picture, keep reading.

How much does each new Tesla model cost?

In order of price, Tesla offers five consumer car models: 3, S, X, Y and the upcoming second-generation Roadster, which you can reserve now. It speaks to company founder Elon Musk’s sense of humor that if you put the first models in the order they were produced you get “S3XY.”

*It’s important to note that the advertised prices don’t include a $1,200 destination and document fee, and they do include a $1,875 federal tax incentive and an estimated savings in gas over six years. Neither price includes taxes or registration fees.

What about the tax credit?

Time ran out on the full $7,500 federal tax credit that was available to the first 200,000 new Tesla owners. Customers who have their Teslas delivered from July 1 to Dec, 31, 2019 get a fourth of the tax credit amount, $1,875.  In 2020, there is no scheduled tax credit.

The good news? There are state tax credits you may be able to use for your new Tesla. The following states and Washington D.C. offer incentives like tax credits, tax exemptions and reduced rates for EV charging: Arizona, California, Connecticut, Colorado, Delaware, Hawaii, Louisiana, Maryland, Massachusetts, Nevada, New Jersey, New York and Pennsylvania.

How much does a Model 3 cost?

The Model 3 is Tesla’s least expensive car. You may be able to drive away in one for a minimum of $41,100. If that amount surprises you, then you know the Model 3 is often highlighted as costing less than $35,000. So why the discrepancy?

The quoted $33,725 price tag is after estimated savings, including the $1,875 tax credit and the fuel savings you would have over six years if you owned a gasoline-powered car. Add those back in and you get to the sticker price of $39,900. Then, tack on Tesla’s standard $1,200 delivery and document fee to get a price of $41,100, not including tax and registration fees.

How much does a Model S cost?

The sticker price for the Standard Range AWD of a Model S is $75,000. For a greater driving range by about 76 miles, the Long Range AWD trim comes in at a $85,000 sticker price. And for a greater performance, the Performance AWD goes from zero to 60 in 2.5 seconds, a 64% faster acceleration for $11,000 more than the Long Range AWD.

How much does a Model X cost?

While models 3 and S are sedans, the Model X is an SUV crossover with optional third-row seating. The lowest trim, the Standard Range AWD, has an $81,000 sticker price. The next trim up, the Long Range AWD has a sticker price of $91,000 and will get you 58 miles more in driving range. The top trim Performance AWD for $102,000 will get you from zero to 60 mph in 2.9 seconds, instead of 4.7 seconds that the Long Range AWD achieves.

How much does a Model Y cost?

A smaller crossover than Model X, Model Y doesn’t have a Standard Range option. Its least expensive trim is the Long Range at a price of $48,000. The Long Range AWD is $52,000 and the Performance AWD is $61,000.

How much does a Tesla Roadster cost?

The most expensive Tesla model is the second-generation Roadster. A Founders Series Roadster is $250,000; although you could get a base Roadster for $200,000. Given the $50,000 price difference between the Founders Series Roadster and the base Roadster, which is enough to buy a whole other Tesla, the Founders Series Roadster has got to offer something special — and it does. You can go from zero to 60 in 1.9 seconds and from zero to 100 in 4.2 seconds, which is pretty dang quick acceleration.

Can you negotiate?

Most car brands let you negotiate on prices. We even wrote about how to negotiate a car price. With Tesla, however, there is no price negotiation. James Wolf, a senior engineer at LendingTree, the parent company of MagnifyMoney, bought his Model 3 in October 2018. He explained, “There is no negotiation when it comes to the price, only your options [can] adjust the price.”

There are no back-and-forth, tit for tat price negotiations on a new Tesla. The price is the price, take it or leave it. The only negotiation on a new Tesla is the one you may have with yourself and your budget: there are plenty of drool-worthy option upgrades, the cheapest of which adds a cool $1,000 to the price tag. More on that later.

Tesla fees and options

As with any car purchase, there will be unavoidable fees and some enticing options you could add to the vehicle. Both will increase the final price.

Can you avoid the destination and document fees?
No. Of the $1,200 fee, $1,000 is the delivery fee, which is charged in the U.S. and Canada regardless of delivery method or location, even if you pick it up hot from the factory floor. Why? It’s government-mandated. The delivery fee, also known as the destination charge, has to be separate from the MSRP and clearly disclosed. The remaining $200 is the document fee.

How much do options cost?
The least expensive upgrade is getting a black and white interior in a Model 3, rather than the all black. The most expensive is adding autopilot after you buy the car for $7,000, instead of ordering it for $5,000 when you get the car new.

**For Models S and X the interior options of Black and White, and Cream are available for purchase on the two lower trims only. The Black and White option is available for no up-charge on the top trim, but the Cream is not available on the top trim.

How much is tax?

Property tax. Vehicle property tax depends on your state and your county or city of residence. It varies pretty wildly, so check your state’s Department of Motor Vehicles website for more information.

Sales tax. If you’re lucky enough to live in state without sales tax (Alaska, Delaware, Montana, Oregon, New Hampshire), you may not have to pay taxes on the car’s purchase.

For the rest of the country, state sales tax applies. You may also have local sales taxes to contend with. The highest average combined state and local sales tax rate is in Tennessee at 9.46% as of July 2018. The lowest is Alaska at 1.43%. And the average in California is 8.55%.

Is tax included in the final amount I pay for the Tesla? If you live in a state where Tesla has a sales license, the applicable taxes you’ll have to pay will be included in your total. If you live in a state where Tesla does not have a sales license, taxes will not be included in the total, but you will have to pay them when you register the car in your state.

Do I have to pay California sales tax? If you pick the car up in California and you live in a different state where Tesla does not have a sales license, Tesla, by law, has to charge California sales tax. For further information on this, see a tax professional or talk to a Tesla representative.

Where does Tesla have a sales license? Tesla has a sales license to directly sell vehicles in about half of U.S. states. Different states have different automotive sales laws. You could see a thread on the Tesla Motors Club website with a map on Tesla sales licensure.

Financing a Tesla

If you’re not paying cash, you may be able to get a loan through Tesla or another lender. It does not hurt your credit to apply to multiple lenders any more than it does to apply to one lender, as long as you do so within a 14-day window. It’s always good idea to shop around for a car loan just as you would for the car itself — only talking to one lender is one of the common mistakes people make when they need an auto loan.

Tesla financing and leasing. Once you create a Tesla account, which you may do here, you can submit a credit application online and hear back from Tesla within 48 hours. Tesla financing is only available in these states: California, Colorado, Florida, Georgia, Hawaii, Illinois, Indiana, Maryland, Massachusetts, Minnesota, Missouri, Nevada, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, Tennessee, Virginia and Washington.

Financing with your own lender. If you have your own lender, you’ll need to provide the name of the lender, the exact dollar amount of the loan and the lender’s address and phone number to Tesla. In turn, the lender will want the VIN, which you can find in your Tesla account.

How much does a used Tesla cost?

Despite it being a relatively new car company, there are used Teslas available for sale. Some models are almost 10 years old, as the first generation Roadster came out in 2008. It’s these older models that are the least expensive Teslas you’ll find, priced in the upper $30,000 range. Tesla itself offers used models that passed a rigorous inspection and come with a warranty. You can also find used Teslas for sale off third-party car buying sites, such as AutoTempest and CarGurus.

Because they are used, you won’t have to pay the $1,000 destination fee, which only applies to new cars; unless, of course, you’re getting the car shipped to you specially. If you buy the car from a dealership rather than a private person, you will still face all of the typical dealer fees. And no matter how you buy the car, you’ll need to pay the appropriate taxes.

The bottom line

The least expensive new Tesla will cost you $41,100 before taxes and before any available tax credits. You can’t negotiate on the price of a Tesla, but you can pick and choose options that suit you. If you’d like to see what else is out there without leaving your couch, you could look at the best online car buying sites for 2018.

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Jenn Jones
Jenn Jones |

Jenn Jones is a writer at MagnifyMoney. You can email Jenn at [email protected]