Can You Afford a Tesla on a Retirement Budget? Here’s Experts’ Advice

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Teslas are known not only for their impressive performance and up-to-date tech but also for their hefty price tag. While Teslas are one of the most desired electric cars, they’re not cheap.

If you’re looking for super high-end, the 2026 Tesla Roadster will cost you at least $200,000, per Car and Driver. If that’s not in your budget, the luxurious 2025 Model S starts at $81,630, while the 2025 Tesla Model 3’s starting price point is $44,130.

With their cutting-edge features, sleek and modern design, and dynamic electric ability, Teslas are seen as quite the status symbol. But for retirees watching their money, is it a smart decision to shell out the money?

Factors To Consider

When contemplating a big purchase during retirement, there are many things to consider — especially for retirees on a fixed income. According to Eric Mangold, CWS, founder of Argosy Wealth Management, here are the questions to mull over.

• Can you afford it with your current retirement income? 
• Do you need to dip into other sources of money (like taking a loan)?
• Is the big purchase a lifelong dream or something impulsive?
• Will this big purchase increase the chances of you running out of money in retirement?
• Is the purchase something that can be done without risking your retirement strategy? 

“Retirement planning is really retirement income planning, and we have a saying, running out of money before you run out of breath is never a good strategy,” Mangold said.

A Luxury Car Isn’t Always Worth It

Retiring in style with an indulgent purchase like a Tesla is a nice idea, but it might not be the best investment. New cars depreciate 60%, on average, in the first five years, per LendingTree. A Tesla Model 3’s depreciation is right in line with that at 59%, per CarEdge. A Tesla Model S, however, depreciates an average of 71% after five years, per CarEdge.

“Traditionally, buying a car in retirement isn’t a smart move — cars are liabilities,” per Peter Diamond, a federally licensed tax, accounting, real estate and structure expert and Certified Bankability Expert. “They go down in value, bring zero cash flow (unless you’re Ubering on weekends), and eat into your nest egg.”

Tesla Incentives

While cars do depreciate in value, Tesla is offering good deals right now that could be worth it if it’s in your budget.

“Tesla just rolled out 0% financing and free lifetime charging on many models,” Diamond said.

If you’ve been eyeing one, it could be a good time to purchase, but it’s vital to have the right mindset. “You will lose money on the car — it’s not an investment,” Diamond stated. “But if a new vehicle was already on your radar, you’re buying it with a major discount and interest savings.”

How Much Money You Need To Afford a Tesla

Everyone has a different financial situation, so there is no clear-cut answer here, but to make a car like a Tesla affordable, which includes the payment, maintenance and insurance, Diamond explained it should not cost more than 15% of your “take-home pay.”

“Just because you can afford it, doesn’t mean you should overextend on a liability,” he said.

If you’re on a fixed income or have a tight budget as a retiree, don’t let yourself get into financial trouble buying a Tesla. Whatever decision you make, ensure that it won’t derail your retirement income plan. With that in mind, if you don’t take advantage of the Tesla incentives now, it can still be attainable by planning in advance.

“If carefully planned for, if within reason and executed the right way, a retirement dream purchase should be something you can accomplish,” Mangold said.

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