4 Reasons That the Rich Purchase Teslas — Are They the Same for the Middle Class?
Written by
Angela Mae
Edited by
Ashleigh Ray
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For the wealthy, the sticker tag on a Tesla might not be as big of a concern as it is for the middle class. But even the upper class can still make financially sound decisions. For some, that means purchasing a Tesla.
The average Tesla costs anywhere from about $40,000 to $90,000 before any upgrades, dealership fees or taxes. Many electric vehicles, including Teslas, benefit from a federal tax credit that shaves up to $7,500 off the base price, though., which brings the overall cost down quite substantially.
Here are some key reasons why people — regardless of class — decide to purchase Teslas.
Reduced Maintenance Costs
Many Teslas have a higher sticker price than your average internal combustion engine (ICE) car, but the long-term cost of car ownership is often lower in many regards. One such area is maintenance and repairs.
“EVs have fewer moving parts. This means there are fewer breakdowns,” said Rei Vardi, the founder and CEO of Eon, a platform about revolutionizing car ownership. “Teslas generally require less frequent and less expensive servicing than ICE vehicles.”
According to AAA, the average vehicle owner spends $1,452 a year (assuming 15,000 driven) on car maintenance and repairs. Jalopnik, another automotive website, estimated that Teslas cost about $849 a year in maintenance and repairs in the first five years of ownership.
Most vehicles, ICEs and EVs included, have higher maintenance costs the longer they’re on the road. Even so, driving a Tesla could save someone money here — something both the financially savvy rich and the more budget-conscious middle class could benefit from.
Cheaper To Drive
Lower maintenance costs are only part of the bigger picture. There’s a reason why many wealthy people stay wealthy, and that’s because they’re careful with how they spend their money.
For them and the typical middle-class consumer, Teslas are a sound purchase because they’re simply cheaper to drive.
“Charging an electric vehicle is often much cheaper than fueling with gas, leading to significant long-term savings, especially when home charging is available,” said Vardi. “This can result in lower fuel costs, typically around 40% of gas rates.”
According to J.D. Power, the average American spends between $150 and $200 on gas each month. Households tend to spend closer to $5,000 on gas each year.
The exact cost depends on quite a few factors, including location, local gas prices, driving habits and vehicle type. Still, gas prices have gone up over the years, and people are allocating more of their monthly budgets — around 2.24% of their income in 2023 — on gas alone.
While installing an at-home charging station does cost money, it can be cheaper in the long run than having to pay for gas. For those looking at long-term costs and savings potential, this is often worth doing.
Slower Depreciation
Depreciation is the rate at which something, like a car, loses its value. Neither the rich nor the middle class, nor anyone else for that matter, wants their purchase to lose value, especially if that purchase was initially expensive.
Standard gas-powered cars can lose their value at different rates. Progressive found that some vehicles can lose up to 50% of their original value in the first five years of ownership.
“Tesla vehicles tend to retain their value better due to increasing demand for electric cars and their technological advancements,” said Vardi.
This does depend on the model, as well as the condition, of the vehicle. It also depends on consumer demand for that vehicle. Some studies have found that Teslas depreciate more rapidly than ICEs — it all just depends.
Tax Benefits
Last but not least are the tax benefits, said Vardi. This includes federal and, in some cases, state incentives.
Purchasing an electric vehicle generally comes with tax benefits that can cut the overall price and make them much more attractive to the average consumer. And while wealthy individuals might not need the money in the same way, it never hurts to score a great deal.
Is a Tesla Worth It For You?
No matter who you are, you’ll want to consider your overall financial situation before investing in any vehicle — whether it’s a Tesla or not.
If you consider yourself “middle class,” you could benefit from the same financial benefits the affluent do. This includes lower maintenance and gas costs, greater incentives and possibly slower depreciation.
Review your budget and household needs, though. One thing that the rich often don’t do is take out a loan to get a car.
If you’re going to need financing, you’ll need to consider other factors like interest and other lender fees, since these can radically increase the overall cost. If you plan to pay in cash, however, Teslas could be a viable purchase.
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