How to Finance a Tesla in the UK

Why People Finance a Tesla

Tesla’s allure lies in its innovative technology, impressive electric range, and unmistakable brand status. For many UK drivers, Tesla represents the future of motoring: sustainable, high-performance, and packed with cutting-edge features. However, with prices starting at around £40,000 for a Model 3 and rising to over £100,000 for a Model X, few buyers opt to pay the full amount upfront.

Financing makes Tesla ownership accessible. By spreading costs over time, buyers can drive a Tesla without a hefty initial outlay. Most Tesla drivers in the UK choose finance products like Personal Contract Purchase (PCP) or Hire Purchase (HP) to keep monthly payments manageable and budget-appropriate. With the right finance plan, both new and used Teslas become viable options for a broader range of motorists.

Your Car Finance Options Explained

There are several tried-and-tested ways to finance a Tesla in the UK. Each has its own merits, depending on your budget, ownership preferences, and how long you plan to keep the car.

PCP (Personal Contract Purchase)

PCP remains a popular choice for Tesla buyers who want low monthly payments and flexibility at the end of the agreement. Here’s how it works:

• You pay an initial deposit (typically 10%)

• Monthly payments cover the car’s depreciation, not its full value

• At the end, choose to pay the balloon payment (Guaranteed Minimum Future Value) to own the car, hand it back, or part-exchange for a new Tesla

Pros: Lower monthly payments, flexibility at contract end.

Cons: Higher final payment if you want to own the car, mileage restrictions apply.

HP (Hire Purchase)

HP is straightforward and suits those set on eventual ownership. You’ll:

• Pay a deposit

• Make fixed monthly payments on the full value (minus deposit)

• Own the Tesla outright after the last payment

Pros: No mileage limits, ownership guaranteed.

Cons: Higher monthly payments than PCP, less flexibility if you want to change cars sooner.

Lease or PCH (Personal Contract Hire)

For those who prefer new cars every few years and don’t wish to own, PCH is worth considering:

• Pay a deposit and fixed monthly rentals

• Hand the car back at the end—no option to buy

Pros: Hassle-free, often includes maintenance options, no depreciation worries.

Cons: No ownership, excess mileage/condition charges possible.

Personal Loans

Some buyers use unsecured personal loans to fund their Tesla. While this can offer ownership from the outset and no mileage limits, rates may be higher than secured car finance.

How to Get the Best Deal on a Tesla

Finding the best Tesla car finance deals in the UK requires a blend of research, timing, and negotiation. Here’s how to maximise your options:

• Compare Lenders & Online Brokers: Don’t settle for the first deal. Use reputable brokers like Kandoo to compare Tesla PCP offers, HP deals, and lease packages from a panel of UK lenders.

• Check Your Credit Score: A strong score unlocks better rates. Review your credit file in advance, correct any errors, and avoid new credit applications before applying for Tesla finance.

• Negotiate Dealer Finance: Tesla’s online sales model means less haggling, but don’t overlook dealer-approved used Teslas, where conventional negotiation can still apply. Sometimes, dealers offer incentives or discounted finance rates.

• Deposit Size Tips: A larger deposit reduces monthly payments and total interest. Typically, 10–20% is standard, but more can improve approval odds and rates.

• Timing Matters: New registration plate releases (March and September) or end-of-quarter targets can prompt special offers or more competitive finance rates. Monitor for seasonal promotions or manufacturer-backed schemes.

Quick Table: What Impacts Your Monthly Tesla Payment?

Tip: Search for the best Tesla PCP deals UK and compare Tesla finance offers regularly to find the most competitive package.

Eligibility & Credit Check Tips

Lenders want to ensure you can afford your Tesla finance agreement. Here’s what they typically look for:

• Income and Affordability: Proof of regular income (payslips, bank statements) and manageable existing financial commitments.

• Employment Status: Permanent roles are favoured, but self-employed applicants are often considered with extra documentation.

• Credit File: A clean credit history helps, but lenders on Kandoo’s panel cater to a range of credit scores.

• Deposit: A higher deposit can help offset weaker credit profiles.

“Even if you have bad credit, Kandoo can help match you with lenders who may still approve your application.”

Tip: Before applying, check your credit file for errors, pay down existing debts, and avoid multiple hard credit checks within a short period.

Example Finance Scenarios

Let’s say you’re buying a 2-year-old Tesla Model 3 for £30,000. Here’s how PCP and HP payments might compare:

PCP offers lower monthly payments, but you’ll need to pay the final balloon to own the car. HP has higher payments but no lump sum at the end.

Common Questions About Tesla Finance

Can I get 0% APR on a Tesla? 0% APR deals are rare for Tesla vehicles in the UK. Some mainstream brands offer these promotions, but Tesla typically focuses on straightforward pricing. Always check for any manufacturer-backed incentives.

Is it cheaper to lease or finance? Leasing (PCH) may offer lower monthly costs and includes road tax, but you’ll never own the car. Financing (PCP/HP) means higher payments but offers a path to ownership. Consider total cost over your intended usage period.

Can I get Tesla finance with bad credit? Yes, while rates may be higher, specialist lenders are available. Kandoo works with a range of lenders who may approve applications from those with less-than-perfect credit.

Can I refinance my current Tesla? Refinancing is possible. It could reduce your monthly payments or release equity if your Tesla is worth more than your current finance balance. Speak to a broker to explore your options.

How Kandoo Can Help

At Kandoo, we work with a panel of trusted UK lenders to help you find the best Tesla finance deals—quickly, securely, and with no impact on your credit score. Whether you’re seeking a PCP, HP, or lease, our online process is simple and tailored to your circumstances.

Ready to take the next step? Compare Tesla finance deals now →