Tesla vehicles are among the most sophisticated and elegant-looking electric vehicles on the market right now. Tesla is still one of the leading manufacturers of electric cars, despite EVs getting more mainstream these days.
Autopilot, lithium-ion batteries, the ability to call the car from a garage or parking space, and minimal maintenance costs have all contributed to making Tesla one of the more well-known electric car manufacturers out there.
Before you buy a Tesla, it is definitely useful to do the math because they are some of the more costly EVs around. We do know the bigger picture on all the incoming and exiting cash flow connected with owning a Tesla. You just need to take elements like annual cost, gas savings, and even ongoing tax advantages into account.
Here is a breakdown of the things you should know before getting a Tesla, along with all the info you need to decide if buying one is the best move for you.
Is buying a Tesla worth it?
Anyone wishing to purchase a premium EV with a futuristic design often goes for Tesla vehicles. These cars have evolved into somewhat of a status symbol in addition to being more environmentally friendly than your regular gas-powered sedan, especially given their price.
But is the steep price really justified? Is there a long term cost to owning a Tesla? To offer the most accurate image of how much owning a Tesla truly costs and if these cards are worth the high premium the automaker charges for them, we'll examine items like purchase price, insurance expenses, and possible savings on gasoline, car maintenance, and taxes.
Cost of Acquisition
The Tesla Model 3 is the brand's most inexpensive vehicle, followed by the sporty Model S sedan and the Tesla Model Y. There is also the top-tier Tesla Model X, which costs a staggering $104,990 at the very minimum. The options and extras you choose will determine the final cost of the EV.
Several sources state the Tesla Model 3 is the most popular electric car in the world, but our main example will be the Model S because many people who want to acquire a Tesla are more fascinated by that model.
Consider you are buying a Model S at the $94,990 suggested retail price. Given the optional extras Tesla provides for its base models, this price has the capacity to be much higher, but for the sake of simplicity, let's continue with this figure. If you were to buy your Model S and didn't have $95,000 on hand, it may look a little like this.
With a six-year term and a monthly payment of about $1,365, you will have spent a total of $107,765 on your new Model S.
Fuel savings are perhaps the biggest benefit of an electric motor. The gasoline savings in this sector are rather substantial, even when we take into account the fuel costs of a car with a comparable size and fuel efficiency like the Toyota Camry, which gets about 32 MPG on average.
Let's say you log 15,000 miles a year on your Camry. At the current national average gas price of $3.39 per gallon, you'll need to spend $1,589 on petrol only to power your Camry. If you drive a less fuel-efficient car, your expenses would increase.
The Tesla Model S, on the other hand, costs $0.037 per mile to charge its batteries, which works out to $555 for 15,000 miles of driving. Consequently, a Tesla does save a lot of fuel.
Even though you will save money on petrol every year that you own a Tesla, you still need to account for the upfront cost of the charger in the first year. Installing a home charging station typically costs $1,200.
The federal tax credit for Tesla used to be substantial, however, the considerable $7,500 tax credit was taken away for Tesla sales beginning on January 1, 2020. That left buyers with only the tax credits being granted by their state.
The tax credit might be as high as $2,500 depending on the state you reside in, it could also be less or none at all. There is a lot of variability from state to state, but places like California, Colorado, Delaware, and even Maine are now setting the bar for hefty tax benefits for new Tesla buyers.
Despite the fact that the actual cost of insurance for your Tesla may vary depending on your state, the model you choose, as well as your own driving record, Teslas have historically had higher insurance costs than other cars.
This is partly because of its unique components, such as the power system and aluminum frame, that might lead to higher repair costs. Some insurance providers define Teslas as luxury cars too, thus demanding exorbitant insurance costs.
Tesla has developed its own insurance program that makes the claim to have lower prices than traditional insurers, although it is currently only offered in California.
Your insurance costs will also be impacted by the type of auto insurance you choose. Some estimates have the average cost of insuring a Tesla Model S at $3,673 per year, compared to only $2,200 for a new Toyota Camry. These figures may also change depending on your driving record and zip code. Future owners should still be aware of the greater cost of insurance for a Tesla.
When it comes to maintenance, Teslas are somewhat different from conventional gas-powered vehicles.
You won't need to take your EV into the shop too frequently if your engine doesn't require routine maintenance like changing the fuel filter and the oil. More often than not, your Tesla will mainly need software upgrades.
The Toyota Camry's five-year maintenance cost is estimated to be $4,981, or $996 per year. On the other side, the cost of maintenance for a Tesla Model S over five years will be $1,490, or $298 annually.
Despite the considerable yearly savings, it's crucial to remember that Teslas can still have automobile problems. In fact, the cost of replacing the battery pack in your automobile when it inevitably breaks down might range from $12,000 to $16,000.
You won't have to worry about this expenditure right now because the Tesla battery warranty will be having covered the first 150,000 miles. Although their range per charge is less, several older Teslas with their factory battery packs are still running strong after 300,000 and 500,000 miles.
If you think you can finance it, a Tesla might be a terrific choice for your next vehicle, particularly if you want to benefit from special features like Full Self-Driving and Autopilot. In order to cut down on one of the expenses associated with this vehicle that is believed to be higher, you may also think about searching around for the best auto insurance.
You're not alone if the price of a Tesla seems out of reach financially. A majority of people would not consider a Tesla to be "affordable" because of its premium price tag. If turning electric is essential to you, check out some of the other, more reasonably priced EVs available. The Nissan Leaf, Hyundai Ioniq Electric, Audi e-Tron, or even the Mini Cooper SE would be worth taking for a test drive.