Tesla has added its most affordable Model Y to the list of vehicles eligible for low-interest financing, offering a 3.99% APR on the 2026 Model Y Standard. The new offer makes Tesla’s entry-level crossover more appealing for budget-conscious buyers — but there are some important fine-print details to consider.
A New Incentive for the Base Model Y
Until now, Tesla’s cheapest Model Y hadn’t qualified for any financing incentives, which was not surprising as it only launched earlier this month. But despite only being a few weeks old, the automaker has rolled out 3.99% APR financing for 72 months — the same rate offered on Premium trims, equating to a monthly payment of $599.
The drop from the previous 5.14% rate effectively reduces the total purchase cost by about $1,500 on a $40,000 vehicle, depending on loan structure.
Introduced earlier this month, the 2026 Model Y Standard serves as the new base trim, replacing the discontinued Model Y RWD. It offers the same exterior design and cargo capacity as other variants but omits certain premium features like the panoramic glass roof, Autosteer, and the rear infotainment screen.
The Fine Print
While 3.99% sounds straightforward, it comes with a key condition — buyers must put at least 5% down to qualify. Without that minimum down payment, the interest rate increases to 4.99% APR, which can add roughly $3,600 in extra interest over the life of the loan.
This makes the effective savings dependent on having a $2,000 down payment for a $40,000 vehicle. Tesla has not extended the offer to the 2026 Model 3 Standard, which still carries a 5.14% rate — despite the rest of the Model 3 lineup qualifying for 2.99% over 60 months or 3.99% with less than 5% down.
Could It Undercut the Model 3?
Oddly, the financing update creates an overlap between Tesla’s compact sedan and crossover. With the lower rate, the Model Y Standard could actually represent a better value than the base Model 3 once monthly payments and long-term costs are factored in, even though the sedan has a lower upfront price, $36,990 compared to $39,990 for the SUV.
That said, the Model Y Standard lacks several creature comforts that differentiate it from the Model Y Long Range and Performance trims, including fewer paint options, cloth seats instead of vegan leather, and no more panoramic glass roof (even though it’s still there).
Other Canadian & U.S. Offers
The new Model Y Standard financing rate comes as Tesla has also lowered financing and lease rates in Canada. Canadian buyers can now finance a Model Y at 2.99% (down from 4.69%) or lease one for $829/month (down from $999).
Tesla also slashed lease prices for the Model 3 and Model Y in the U.S. last week, but only until the end of the month.
The timing of these financing announcements suggests Tesla is aligning its North American incentives to stimulate demand as the automaker looks to build on the record Q3 delivery figures.
