How Owning a Tesla Can Save You Money
If you’ve never owned a Tesla, you’ve probably heard that owning one can save you money. When conducting research for this article, I compared all the associated costs of Tesla models with an Audi A4.
This table summarizes what I found:
| Tesla Model 3 (Rear Wheel Drive) | Tesla Model S | Tesla Model X | Tesla Model Y | Audi A4 (Rear Wheel Drive) | |
| Total Purchase Price (including APR of 2.49%) | $44,064.00 | $95,716.13 | $110,174.15 | $66,650.94 | $43,642.20 |
| Resale Value After Two Years | $39,551.40 | $31,156.20 | |||
| Year One Gas or Power Costs | $1,500 | $1,500 | $1,500 | $1,500 | $1,557.21 |
| Year Two Gas or Power Costs | $300 | $300 | $300 | $300 | $1,557.21 |
| Annual Insurance Rate | $568 | $448 | |||
| Annual Maintenance Cost (According to CarEdge) | $5,867 | $5,867 | $5,867 | $5,867 | $9,054 |
I’ll discuss these costs in more depth below:
Cost of Purchase
The high cost of a Tesla is what deters most people from buying one. However, Elon Musk has stated that he plans to introduce a cost-effective base model in the coming years to set you back no more than $25,000.
In the meantime, here is a table comparing the costs involved in buying a Tesla and an Audi A4:
| Tesla Model 3 (Rear Wheel Drive) | Tesla Model S | Tesla Model X | Tesla Model Y | Audi A4 (Rear Wheel Drive) | |
| Purchase Price | $45,990 | $99,900 | $114,990 | $62,990 | $40,995 |
| Deposit (10%) | $4,599 | $9,990 | $11,499 | $6,299 | $4,099.50 |
| Balance | $41,391 | $89,910 | $103,491 | $56,691 | $36,895.50 |
| APR (2.49%) | $2,672.91 | $5,806.13 | $6,683.15 | $3,660.94 | $2,647.34 |
| Monthly Repayment (60 months) | $734.40 | $1,595.27 | $1,836.24 | $1,110.85 | $727.37 |
| Total Cost | $44,064 | $95,716.13 | $110,174.15 | $66,650.94 | $43,642.20 |
As you can see, there’s only a $421.80 difference between Tesla Model 3 and the Audi A4, which is tiny.
On a related note, I wrote a similar article where I discussed Tesla affordability and all you need to know about the subject. Check it out!
Resale Value
Tesla is a sought-after car brand and is considered by many to be the top electric vehicle brand. It’s no surprise that a Tesla’s resale value is generally higher than its gas-guzzling counterparts.
According to a study conducted by iSeeCars.com, a Tesla Model 3 only depreciates by 5.5% after one year, the most impressive figure when ten cars were compared.
Using CarEdge’s Car Depreciation Calculator, here’s how a Tesla Model 3’s resale value compares with an Audi A4 after two years:
| Tesla Model 3 (Rear Wheel Drive) | Audi A4 (Rear Wheel Drive) | |
| Purchase Price | $45,990 | $40,995 |
| Depreciation Rate After Two Years | 14% | 24% |
| Resale Value After Two Years | $39,551.40 | $31,156.20 |
Gas vs. Electricity
When most folks think about saving money by buying a Tesla, they think about the saving in gas costs.
While owning a Tesla will save you a fortune on fuel, you need to consider the $1,200 charge for installing a Tesla charging at your home. In addition, if you normally charge your Tesla at home, you can expect to see an increase in your energy bill.
So, how does powering a Tesla compare with an Audi A4’s gas costs?
| Tesla (Any Model) | Audi A4 (Rear Wheel Drive) | |
| Fuel Consumption Rate | N/A | 29 MPG (Highway and City Combined) |
| Gas Cost Based On 10,000 Miles Per Year ($4.516 Per Gallon) | $0 | $1,557.24 |
| Tesla Charging Station Installation | $1,200 | $0 |
| Battery Charging Power Consumption ($0.03 per Mile) | $300 | $0 |
| Year One Costs | $1,500 | $1,557.21 |
| Year Two Costs | $300 | $1,557.21 |
In the first year of owning a Tesla Model 3 or Audi A4, your fuel or battery charging costs are roughly similar, with the Audi A4 being slightly more expensive. However, after the first year, a Tesla is around five times cheaper to power than an Audi.
Insurance
Insuring a Tesla is generally more costly than insuring a regular gas-fueled vehicle. Tesla parts are complex and more expensive to source, and some insurance companies classify Teslas as luxury vehicles.
If you’re wondering why Teslas are so expensive and getting more expensive, check out this related article that I wrote. What maked them so expensive?
Insurance costs will vary by age, driving history, location, and insurance company, among other things. However, to give you an idea of how insuring a Tesla compares with doing the same for an Audi A4, I obtained an online quotation with Progressive using the exact personal details but changing only the vehicle. Here’s how the rates compare:
| Tesla Model 3 (Rear Wheel Drive) | Audi A4 (Rear Wheel Drive) | |
| 6-Month Insurance Rate | $568 | $448 |
Maintenance
Teslas don’t have fuel systems, so you don’t have to worry about changing the oil, oil filters or engine tune-ups.
| Tesla Model 3 (Any Model) | Audi A4 (Rear Wheel Drive) | |
| Average Maintenance Cost Over 10 Years (According to CarEdge) | $5,867 | $9,054 |
Of course, if you have a warranty when you buy your vehicle, you won’t typically need to worry about most of these costs. Tesla offers its customers a four-year or 50,000 miles (80467.2 kilometers) whichever comes first. Audi offers the same warranty on its new vehicles, so the two cars tie in this section.
Body Repair Costs
Most responsible car owners have vehicle insurance, so after paying any deductibles, any damage to their car’s bodywork will be covered by the policy.
Although maintaining a Tesla can be very affordable, the repair costs can be incredibly expensive if your Tesla is dinged, sideswiped, or dented.
If you want to keep your Tesla warranty, you can only take your Tesla to an accredited body shop for repairs. Tesla-accredited body shops may only buy parts directly from Tesla, and if you live outside of the USA, you’ll need to wait for your parts to arrive.
Since parts and body repair specialists are limited, it can take a long time for your Tesla to be repaired, and you may need to fork out for a rental car if your insurance policy doesn’t provide a courtesy car.
Federal Rebates
The federal government sadly stopped offering Tesla customers tax rebates for purchasing electric vehicles, so you’ll need to check what kind of tax rebate your state provides for buying an electric vehicle.
The regulations are continuously changing and are vastly different from state to state. Still, currently, you can count yourself lucky if you live in Delaware, Maine, or California, as these states are the most generous with tax rebates.
Roadside Assistance
Tesla offers you membership to their roadside assistance program if your Tesla is still under warranty. Audi offers the same service to its customers.
However, the main difference between the two programs is that Tesla will not help you if your vehicle breaks down due to running out of battery power. In such cases, you’d need to contact the AAA or another roadside assistance service and pay for them to help.
If your Audi runs out of fuel, their roadside assistance program will provide you with just enough fuel to get you to the closest gas station.
Car Subscription
In one of the previous sections, I discussed Tesla’s purchase price. While buying a Tesla outright might be too much money for many people, Tesla offers a car subscription service allowing customers to try out their vehicles and drive a Tesla by paying a reasonable monthly fee.
Tesla’s car subscription model is similar to a cell phone contract. You pay a monthly fee to use the cell phone service, and you get to upgrade your phone after a few years, allowing you to enjoy the latest model regularly.
While you could always lease or finance a car, these are generally longer-term commitments and don’t include insurance or maintenance costs, which are included in a Tesla subscription service.
Audi offers a car subscription service, but it’s currently available only in Texas and not available for all models.
Other Benefits of Owning a Tesla
Now that I’ve described how much money you could save by owning a Tesla, what are some other non-financial benefits of owning one?
These are the main benefits of owning a Tesla:
Silent Driving Vehicles
Teslas are known for emitting almost no noise while driving, creating a relaxing and peaceful atmosphere in your car.
This means that you can enjoy no engine revving or exhaust sounds and focus on the music coming out of your high-quality Tesla sound system.
Battery Technology Will Improve
If you buy a Tesla, the battery will probably last throughout the time you own the vehicle. Currently, a Tesla’s battery life ranges from 300,000 to 500,000 miles (482,803.2 to 804,672 kilometers). In 2019, Tesla released an Impact Report revealing that the batteries on their popular Model S and X vehicles typically retain 80% or more of their range.
However, with electric vehicles becoming increasingly popular, we can expect battery technology to improve even more over the coming years. This is good news because replacing your Tesla’s battery could set you back between $20,000 and $35,000, depending on the model.
Low Carbon Footprint
Most people are looking for ways to do their bit for the planet, and owning a Tesla allows you to lower your carbon footprint by driving a fuelless car.
All Teslas are zero-emission vehicles; although you will need to use electricity to power the battery, this environmental impact is negligible compared to gasoline or diesel.
When your Tesla’s battery reaches the end of its life, you can send it back to Tesla for recycling.
Excellent Road Safety
Whenever Tesla designs a new vehicle, its goal is to create a vehicle that is the safest in the world.
You could say that Tesla has achieved this because, in 2020, Model Y was awarded an impressive five-star rating in each of the National Highway Traffic Safety Administration’s (NHTSA) categories.
The most popular safety features in a Tesla include the following:
- Automatic emergency braking
- Lane assist
- Collision avoidance assistance
- Cabin camera
- Speed assistance
- Obstacle aware acceleration
- Blind spot monitoring
Of course, this isn’t an exhaustive list, and Teslas have all the standard safety features you’d expect, like airbags and ABS brakes.
High-Tech Autopilot Features
Teslas come with a nifty Autopilot feature that allows you to sit back and enjoy the drive.
The Tesla Autopilot feature is incredibly high-tech, with 12 ultrasonic sensors and eight surround cameras. This means that you don’t have to lift a finger while your Tesla does the steering, helps you to change lanes when you need to, and maintains a safe following distance from other vehicles. If you put it into “park seek” mode, it will find you a parking spot.
Impressive Performance
Despite being an electric vehicle, a Tesla offers impressive acceleration and a smooth driving experience.
Here’s a YouTube video explaining more about the performance and features of the Tesla Model 3:
Order Directly From Tesla
One of the most common complaints about people looking to buy a car is that they hate dealing with car salespeople.
Unfortunately, car dealerships (even new car dealerships) still have a reputation for being dishonest and charging too much. You can avoid a dealership if you buy a Tesla, as your only option is to buy directly from Tesla, which is generally a seamless and pleasant experience.
The Cool Factor
The largest benefit for most Tesla owners is the cool factor. With its sleek, electric vehicle design, and striking features, a Tesla is the ultimate in trendiness.
It’s also fun for many Tesla owners to use the Tesla app, which is packed full of cool features, like being able to control your car remotely, checking which mode your vehicle is currently in (drive or park), and defrosting it from bed on an icy morning.
Fun Fact
Did you know that Tesla was named after Nikola Tesla, a brilliant scientist who registered over 300 patents and is widely considered the Father of Alternating Current (AC)?
The company’s original name was SRA (Silicon Valley Motors), but the owner, Elon Musk, wanted it to pay homage to Nikola Tesla.
Disadvantages of Owning a Tesla
Like everything in life, there are benefits and drawbacks. Although it’s challenging to find fault with Teslas, owning one has some disadvantages.
I’ll discuss these in more detail below:
Costly Battery Replacement
You can expect your Tesla’s battery to retain 80% of its functionality, even after 500,000 miles (804,672 kilometers). However, if you’re the type of person who likes to buy a good quality car and keep it for several years, you’ll eventually need to replace your Tesla’s battery.
Setting you back between $20,000 and $35,000 doesn’t make financial sense, and at that price, you may as well buy a new vehicle.
Still Too Few Charging Stations
Most folks know that electric vehicles are likely to become more mainstream in the coming years, with them gradually replacing ones using fuel.
However, if you own a Tesla, you’ll soon notice that there are still too few charging stations available when you’re on the road. Thankfully, this should change in the next few years, but it’s currently inconvenient.
Doesn’t Come With a Spare Tire
You may have noticed that many new cars don’t come with a spare tire, which was common practice in previous years.
Tesla is one of such car brands, and if you want a new, Tesla-approved tire, you need to call the service center hotline and request one. Furthermore, if you want a tire inflator to mend minor punctures, you’ll need to use the Tesla-approved one, which will set you back around $90.
Range Meter Not Accurate in Cold Weather
One of the most popular features in Teslas is the range meter that allows car owners to view how many miles their car can still drive if they need to charge it.
Unfortunately, some car owners have stated that the range meter can be inaccurate in cold weather. Tesla is certainly working on this niggle, though, and future models shouldn’t present the same problem.
Frequently Asked Questions
Does Buying a Tesla Make Financial Sense?
Buying a Tesla makes financial sense due to low maintenance costs, high resale value, and the guaranteed gas savings. Those living in states with considerable tax rebates also save a little more.
What Makes Teslas So Special?
From an owner’s perspective, Teslas are special thanks to their spacious interior, intuitive instrument panel, and the impressive software updates. People also appreciate the minimalist design.
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