Even though it's a luxury car, it's still less expensive to own.
Loup Ventures recently updated a previous study where it compared the five-year ownership cost of a Tesla Model 3 to that of a Toyota Camry. The Camry is a good choice for comparison since it's a widely popular, mass-market, gas-powered sedan. It's not categorized as a luxury or premium vehicle, however.
Back in 2017, Loup Ventures' model proved that the Tesla was more expensive to own than the Toyota. This essentially boiled down to the Model 3 having a significantly higher starting price (initially estimated at $35,000). Interestingly, however, despite paying some 40 percent more upfront to buy a Model 3, the Camry was only 13 percent more expensive to own over a five-year period.
Fast-forward to today and now it costs 59 percent more to buy a Model 3 than a Camry. However, when you look at the vehicles' resale values, the Model 3 ends up being marginally less expensive to own over five years. Loup Ventures also includes a similarly priced luxury car to the comparison — the Audi A5. The study shares:
The bottom line: Model 3 is a superior car (electric, safer, Autopilot) compared to a Camry, and is slightly cheaper to own and operate over 5 years.
Average all-in cost per mile for a Model 3 is $0.46, compared to the Camry LE at $0.49, and Audi A5 at $0.80.
What accounts for the changes from the previous study?
- Gas price increases
- Insurance premiums
- Finance model instead of lease model
Loup Ventures expects gas prices to increase even more over time. When it comes to insurance, the Model 3 costs an average of $1,128 per year, while the Camry costs $1,212. The study also suggests that it will get cheaper to insure the Model 3, and insurance rates for the Camry will rise a bit. This could happen if Tesla is successful in launching its own insurance program and/or if more insurance companies consider the Tesla's safety and technology as positives when determining rates.
In the end, Loup Ventures believes its study is conservative and Model 3 cost-of-ownership could be even less. In addition, as time goes on, the Tesla could continue to become cheaper to own. For more detailed information, follow the source link below.