Automaker Tesla is a company that almost everyone has heard of by now and is arguably one of the best electric car brands today, even though founder Elon Musk has been tweeting about it on social media. Something bad came out. As more and more people are willing to buy electric vehicles, and the government's growing trend of reducing emissions, many people will definitely want to ask, is Tesla worth buying? Should I consider replacing my current car?
The Tesla electric car is the slightly more expensive option on the market right now, so it's definitely worth taking a closer look at it before investing in it, and that's exactly what we'll break down for you in this article. Everything from annual costs to gas savings and even ongoing tax incentives is covered.
Here's what you need to know before buying a Tesla, plus all the details on whether it's right for you.
Is Tesla worth buying?
Tesla electric vehicles have a modern look and are quite luxurious in every part, which is why they are so popular these days. In addition to being more environmentally friendly than typical gasoline-powered cars, the brand is now also a status symbol. is its selling price.
However, is such a high price really worth it? In this section, we'll look at the purchase price, insurance costs, and the potential for fuel, car maintenance, and taxes to give you the most complete picture of what it really costs to buy a Tesla, and whether it's worth the premium price you're paying for it.
1. Purchase price
The most budget-friendly vehicle in Tesla's lineup is the Tesla Model 3, closely followed by the Tesla Model Y and the sleek Model S sedan. There's also the top-of-the-line Tesla Model X, which starts at $104,990. Actual prices will depend on the features and specifications you choose.
While many sources claim that the Model 3 is the most popular electric car in the world, for some potential Tesla owners, they are more interested in the flagship Model S, so here we use this as the main example.
The Model S starts at $94,990, so depending on the options, the price will become more expensive. In simple terms, the starting price means the base model. If you discuss each price point, it will be very complicated, so we will keep it simple and direct Use the price of the base model.
Assuming you don't have $95,000 today and need a loan, it would look like this:
- Tesla Model 3 Price – $94,990
- Down Payment – $9,500
- Loan Amount – $91,190 (including some taxes)
- Loan term – 72 months (6 years)
- Interest rate – 2.49%
The rep says you'll pay about $1,365 a month over the next six years, bringing the total to $107,765 for your Model S ($98,265 in loan payments and $9,500 down payment). This does not include local taxes, registration and other potential fees.
Another thing to watch out for is the APR (interest rate). Many car companies advertise very low APRs, but the actual rate depends on the borrower's profile information. Items such as credit score, preferred loan term length, and down payment will vary.
2. Fuel
The most economical place for electric vehicles is nothing more than gasoline fuel. The savings are substantial when we consider the cost of a comparably sized and fuel-efficient vehicle such as the Toyota Camry, which has an average fuel efficiency of around 32 MPG.
Assuming you drive your Camry 15,000 miles a year, the average gas price currently hovers around $3.39 a gallon, meaning you'll spend $1,589 on gas, and more if your car is fuel-inefficient.
A Tesla Model S costs $0.037 per mile to charge (the cost of charging a Tesla at home), so $555 would cover the same distance of 15,000 miles. Therefore, Tesla saves a lot on fuel.
Be warned though, don’t forget that installing a charging station in your home also costs money, and according to Fixr’s home repair experts, the average cost of installing a home charging station is $1,200, so it’s going to cost more the first year, but save after that up.
We also calculated the price of the charging station into the fuel cost, and Tesla saved it from the second year. Fuel cost for summer for 15,000 miles:
- First year – Tesla $1,755, Camry $1,589
- Year 2 – Tesla $554, Camry $1,589
- Total price over two years – Tesla $2,310, Camry $3,178
3. Deduction and credit
Tesla's federal tax credit used to be very satisfying, but as of January 1, 2020, Tesla's $7,500 deduction credit has been phased out, and car owners can only receive tax credits provided by the state.
Depending on the state you live in, the deduction can be as high as $2,500. States such as California, Colorado, Delaware, and even Maine currently offer very generous tax incentives for Tesla owners, but there are differences between the states. For example, some states have incentives only for vehicles at a certain price, and some states have specific Tesla models.
4. Insurance
The exact cost of Tesla insurance depends on the state you live in, the type of car you buy, and your personal driving history, but it's safe to say that Tesla insurance rates are generally higher than other vehicles. This is due in part to elements such as electrical systems and aluminum frames, which can have higher repair costs. Additionally, some insurers classify Teslas as luxury vehicles and therefore charge high premiums.
Tesla has also launched its own insurance coverage, claiming to have lower premiums than mainstream insurance companies on the market, but it is currently only available in California.
By some estimates, the average cost of insuring a Tesla Model S is $3,673 a year, while insurance for a new Toyota Camry is just $2,200 a year, and those figures will vary based on your driving history and region.
Therefore, for interested car owners, the cost of Tesla insurance will be relatively high.
5. Maintenance
Unlike regular gasoline-powered cars, Teslas are easy to maintain. You don’t need to drive to the maintenance center as often, and most problems can be fixed with software updates.
Five-year maintenance costs for a Toyota Camry are estimated at $4,981, or an average of $996 per year, according to estimates by the automotive website Motor1. Five-year maintenance on a Tesla Model S costs $1,490, or an average of $298 per year.
This seems to save a lot of money every year, but one thing to note is that when the mileage reaches a certain number, the battery pack will need to be replaced, which will cost a lot, ranging from $12,000 to $16,000.
Tesla's battery warranty covers the first eight years or 150,000 miles, whichever comes first, so there's no need to worry about this needing a replacement anytime soon.
6. Six-year cost comparison
Is Tesla worth it to you? It just depends on your personal financial situation and how important it is to you to own an electric car.
If you possess the financial means to afford a Tesla and reside in an area equipped with a charging station, the expenditure could prove to be a worthwhile investment.
Assuming you have good credit and are able to take out a 72-month loan at the current 2.49% APR with a 10% down payment, here's how we calculate the difference in vehicle costs over six years:
- Cost of Purchase (Loan) - Tesla Model S (+$107,765), Toyota Camry LE (+$31,660)
- Electricity/Fuel – Tesla Model S (+$4,530), Toyota Camry LE (+$9,534)
- Potential tax breaks – Tesla Model S (-$2,500), Toyota Camry LE (n/a)
- Insurance – Tesla Model S (+$22,038), Toyota Camry LE (+$13,200)
- Maintenance – Tesla Model S (+$1,788), Toyota Camry LE (+$5,976)
If you switch to Tesla's most affordable Model 3 model, the six-year cost will become:
- Cost of Purchase (Loan) - Tesla Model 3 (+$51,041), Toyota Camry LE (+$31,660)
- Electricity/Fuel – Tesla Model 3 (+$4,530), Toyota Camry LE (+$9,534)
- Potential tax breaks – Tesla Model 3 (-$2,500), Toyota Camry LE (n/a)
- Insurance – Tesla Model 3 (+$12,684), Toyota Camry LE (+$13,200)
- Maintenance – Tesla Model 3 (+$1,788), Toyota Camry LE (+$5,976)
The total price becomes $67,543 for the Tesla Model 3 and $60,370 for the Toyota Camry LE
As can be seen from the above, Tesla Model 3 and Toyota Camry are closer in terms of cost.
It’s important to note here that there are many variables to these calculations, such as: There are factors that affect car insurance rates, such as driving profile and credit score, and the amount of tax credits depends on where you live. Fuel, like energy costs, depends on where you live, etc.
Is a used Tesla worth buying?
Just like any other used car, buying a used Tesla comes with its own set of challenges, such as making sure the power battery pack is still in good condition, which is very difficult.
Unlike many electric vehicles, Tesla's depreciation has mostly been slower than average. The average depreciation rate for a new sedan (electric or internal combustion engine) drops 39 percent in the first three years, compared with 52 percent for an electric vehicle, according to a survey analysis by car search engine ISeeCars.com. But the Tesla Model S lost only 36.3% in value.
So, you may not be able to get a very cheap price when buying a second-hand Tesla .
