Who Can Realistically Afford a Tesla? I did the Math

Finance-specific takeaways (Tesla affordability math)

The video frames buying a Tesla as an affordability problem and uses a rule-based budget to estimate what income is needed.

It uses the “24/10 rule” (as stated):

• 20% down
• 4-year max loan (48 months)
• 10% of monthly gross income for the car payment
• 15% max total including “other costs” (maintenance/insurance, etc.)

Step-by-step framework / methodology used

1. Pick a Tesla model/trim and its stated price.
2. Compute financing assumptions:
   • Down payment = 20% of MSRP
   • Loan amount = 80% of MSRP
   • Loan term = 48 months
   • Assume ~5% interest (explicitly “about… if you have good credit”)
3. Estimate monthly payment using the above assumptions.
4. Determine required income such that:
   • Monthly payment ≈ 10% of gross monthly income
   • (Implicitly tied to the overall 15% max including other costs.)

Key numbers & required income (by model/trim)

Tesla models mentioned (affordability thresholds)

• Tesla Roadster
  • Noted as “still not here”
  • No affordability numbers provided

Model X Plaid

• Price: $115,000
• Down payment: $23,000
• Loan term: 48 months
• Monthly payment: $2,118
• Required income (for the 10% rule): $254,000/year

Model S Long Range

• MSRP: $95,000
• Down: $19,000
• Monthly payment (implied): loan referenced as $1,750/month
• Required income: $210,000+/year

Cybertruck (entry-level)

• Starting price: $69,990
• Required income: $154,000/year

Model Y

• Model Y Performance (max)

  • Max price: $57,490
  • Loan amount (80% after 20% down): $45,992
  • Monthly payment: ~$1,057
  • Required income: $126,000/year

• Model Y Premium AWD (the creator’s)

  • Monthly payment: $901
  • Required income: $108,000/year

• Model Y Premium RWD (best value per creator)

  • Required income: $99,000/year

• Model Y Standard

  • Required income: $92,000/year

• “Just get into a Model Y” affordability target

  • Monthly payment: $737
  • Required income: $88,440/year

Model 3

• Model 3 Performance

  • Price: $54,990
  • Loan amount: $43,992
  • Monthly payment: $1,011
  • Income: ~$121,000/year (stated as “$10,110” monthly income / $121k annually)

• Model 3 Rear-Wheel Drive (entry-level)

  • Price: $36,990
  • Loan amount: $29,592
  • Monthly payment: $680
  • Monthly income: $6,800
  • Annual income: $81,600/year

Additional affordability / budgeting insights mentioned

Loan-term warning (interest leakage)

• Example: $50,000 car, 20% down, 5% interest
  • 48 months: payment $921
  • 72 months: lowers payment, but increases total interest by $2,165 (explicitly stated as “you pay $2,165 more in interest”)
• Implied recommendation: avoid extending loans just to lower the payment.

Depreciation assumption

• Tesla/luxury vehicles fall about ~20% in value after the first year
• 20% down is intended to help reduce the risk of being underwater immediately.

Price-to-income sensitivity heuristic for Model 3/Y

• “Every $5,000 change in vehicle price shifts your income by roughly $7,000–$9,000/year.”
• Example ranges:
  • Staying under $40,000 → mid $80,000 income range
  • Around $50,000 → about $120,000 territory

Insurance & taxes handling (risk/cost caveats)

• Insurance costs are not factored into the affordability numbers.
• The creator disputes the idea that EV insurance is always higher:
  • Claims that “in my experience” it’s “simply not the case.”
• Recommendation: use an insurance broker to shop rates
  • Claimed savings: ~$1,000/year
  • By shopping every 6 months
• Taxes are referenced earlier as part of “other costs,” but no specific tax calculation is shown.

Used vs. new / depreciation & procurement

• The creator says: buying new is never a great purchase decision, while used is.
• Mentions a used pricing idea:
  • Some Tesla used prices can be $50,000–$60,000
  • (No specific model identifier/ticker given)

Disclosures / sponsorships

• Video sponsor: Monarch Money (personal finance app)
  • Promo code: “Geebs50”
  • Offer: 50% off the first year
• Insurance broker mention:
  • Creator states they are not sponsored by the broker; they share a link used personally.
• No explicit “not financial advice” disclaimer appears in the provided subtitles (only practical budgeting guidance and sponsor disclosure).

Instruments / tickers mentioned

• No financial market tickers or ETFs are mentioned.
• No explicit mentions of bonds/commodities/crypto.
• Real-world assets referenced: Tesla vehicles (Roadster, Model X Plaid, Model S Long Range, Cybertruck, Model Y trims, Model 3 trims)
• Other car brands/services mentioned: Rivian, Lucid, Nissan Z, and Chevy, Kia, Honda
• Insurance broker service mentioned (no ticker).

Presenter / sources

• Presenter/creator: “Geebs” (also referenced in the Monarch promo code)
• Sponsor/source mentioned: Monarch Money
• Methodology/source: a “nerd came up with a formula” called the “24/10 rule” (no named author given in subtitles)