Is a Tesla Worth it? We Compare All the Numbers to a "Normal" Car

Many people consider buying a Tesla because they think the fuel savings might equate to overall savings. But is that really true?
Last updated Nov 15, 2021 | By Larissa Runkle
Is a Tesla Worth it? We Compare All the Numbers to a

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Automaker Tesla has been a household name for years now, even without founder Elon Musk’s social media notoriety. And with an ever-growing trend toward buying electric vehicles and reducing emissions, you wouldn’t be the only one wondering how to invest in Tesla stock or considering swapping out your current vehicle for a brand new Tesla Model S.

But despite how convenient and attractive these cars may be, the question often comes down to this: Is buying a Tesla worth it? Or does it make the list of big money mistakes?

As some of the more expensive cars on the market, it’s definitely worth running the numbers before investing in a Tesla vehicle —  which is exactly what we did for you in this article. Looking at factors like annual cost, gas savings, and even ongoing tax incentives, we’ve got the full scoop on all the incoming and outgoing cash flow associated with becoming a Tesla owner.

Here’s the breakdown you need before buying a Tesla, plus all the details to help you decide if getting one is the right move for you.

In this article

Is buying a Tesla worth it?

Tesla cars are a popular choice for anyone looking to buy a luxury car that is also an electric vehicle. In addition to being better for the environment than your typical gas-powered sedan, these cars have also become a bit of a status symbol, especially given their cost.

But is the high price tag actually worth it? In this section, we’ll look at things like purchase price, insurance costs, and the potential savings on fuel, car maintenance, and taxes to give the most complete picture of what buying a Tesla actually costs, and if it’s worth the hefty price.

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Purchase price

The Tesla Model 3, which is the company’s most affordable vehicle, followed by the Tesla Model Y Long Range crossover, and the sporty Model S sedan. There’s also the top-of-the-line Model X, which will set you back a whopping $104,990 at the minimum. Of course the actual price for a car will depend on the features and upgrades you select.

While many sources claim the Model 3 to be the world’s most popular electric vehicle, a lot of would-be Tesla owners are more interested in the company’s flagship vehicle, the Model S, so we’ll use it here as our main example.

Let’s say you were to buy a Model S at the starting price of $79,990. This price tag has the potential to be a lot more, especially given the add-ons Tesla offers to their base models, but let’s keep it simple and stick to this number. Assuming you don’t have $80,000 lying around and were to finance your Model S, it would look something like this.

Price of Tesla Model S $79,990
Down payment $7,500
Financed amount $72,490
Loan term 72 months (6 years)
APR 2.49%

These numbers assume a fair to excellent credit score and are based on average auto loan rates as of April, 2021, and for a buyer located in Colorado.

This puts you at a monthly payment of roughly $1,084, which over that six-year term would amount to paying a total of $88,035 for your new Model S. Something to keep in mind here is that this number only includes estimated state tax for Colorado, and does not include any city or local tax.

Another variable to keep in mind is the APR. While many car companies advertise low APRs if you go through their finance department, your interest rate will ultimately depend on your personal profile as a borrower, which will include things like your credit score, preferred loan term length, and down payment.


The number-one savings associated with an electric car is obviously fuel. Even if we consider the fuel cost of a relatively fuel-efficient and similarly sized car like the Toyota Camry, which gets roughly 32 MPG on average, the savings in this category are pretty significant.

Say you drive your Camry 15,000 miles per year. With average gas prices currently hovering around $2.88 per gallon, you’ll spend $1,350 in gas just to drive your Camry. If you own a less fuel-efficient vehicle, then you’d be spending even more.

On the other hand, the Tesla Model S has an electric charge cost of $0.037 per mile (which is roughly the cost you’d pay to charge your Tesla at home), which puts you at $555 to drive the same distance of 15,000 miles. So, yes, the fuel savings with a Tesla is significant.

But let’s not forget about the cost of installing a charging station in your home, which you are likely to do as opposed to just relying on the Tesla Supercharger network. According to the home repair experts at Fixr, the average cost of installing a home charging station is $1,200. So while you will save money on fuel every year you own your Tesla, you’ll also have that initial cost of the charger to factor in that first year.

But even if we calculate that station into the fuel cost, it only takes two years of driving for the Tesla to still come out on top:

Fuel cost for 15,000 miles Camry Tesla
Year 1 $1,350 $1,755
Year 2 $1,350 $555
Total fuel cost $2,700 $2,310

*Includes initial cost of buying a charging station ($1,200) plus electricity costs.

Tax credits

The federal tax credit for Tesla used to be impressive, but that big $7,500 tax credit was phased out for Tesla buyers as of January 1, 2020, leaving buyers with only the tax credits being offered by their state.

Depending on which state you live in, the tax credit might be as much as $2,500, although it could also be less or nothing at all. States like California, Colorado, Delaware, and even Maine are currently leading the way in offering generous tax incentives for new Tesla owners, but there’s quite a bit of variation from state to state. For example, some states only offer the incentive for vehicles above or up to a certain purchase price. Other states limit which model Tesla they offer incentives for.

If the size of your tax break is a critical factor in whether or not a Tesla is worth it for you, then be sure you do the research on what is available in your state.


While the exact cost of insuring your Tesla will depend on your state and the model you buy, as well as your personal driving history, insurance rates have typically been higher for Teslas than other vehicles. This is due in part to their potentially higher repair costs because of the out-of-the-norm components like the electrical system and aluminum frame. In addition, some insurance companies classify Teslas as luxury vehicles and charge high insurance premiums for that reason as well.

Tesla has launched its own insurance coverage that claims to offer lower premiums than mainstream insurers, but it is only available in California at this time.

How much car insurance you want will also impact your insurance premiums, but according to some estimates, the average cost to insure a Tesla Model S is $2,220 per year, whereas insurance for a new Toyota Camry only comes out to $1,432 per year. These numbers will obviously vary based on your driving history and zip code, but the higher cost of insuring a Tesla is something to keep in mind for would-be buyers.


Unlike regular gas-powered cars, Teslas are pretty different when it comes to maintenance. Without a regular engine that involves things like oil and fuel filters, you won’t need to bring your car into the shop very often, and your maintenance might look more like software updates.

Automotive website Motor1 estimates the five-year maintenance cost on a Toyota Camry to be $4,981, an average of $996 per year. On the other hand, Motor1 estimates that five years of maintenance on a Tesla Model S will run you $1,490, an average of $298 per year.

While this annual savings is significant, it’s important to note that Tesla's aren’t entirely immune to car troubles. In fact, when your car’s battery pack eventually needs a replacement, it could run you anywhere from $12,000 to $16,000.

The Tesla battery warranty will cover you for the first eight years or 150,000 miles, whichever comes first, so you don’t have to worry about this expense in the short term. There are examples of older Teslas that are still going strong with their original battery pack at 300,000 and 500,000 miles, though their miles of range per charge is lower.

How the math works out

There’s no doubt about it, Tesla is making some great vehicles in the electric space. But, they definitely do not come without a cost. Whether or not a Tesla is worth it to you comes down to your personal finances, and how important it is for you to own an electric vehicle. If you can afford a Tesla, and live in a place with charging stations, then this investment might be worth it.

Assuming you have good credit and are able to finance your new car at the current rates of 2.49% APR for 72 months, with roughly 10% as a down payment— this is what the price breakdown between the two vehicles looks like. We ran these numbers over a six-year period (the typical amount of time people keep new cars), meaning everything you see here includes your expenses for the first six years of ownership.

Six-year cost of vehicle Tesla Model S Toyota Camry LE
Cost to buy (financed)* +$88,035 +$28,574
Electricity/Fuel cost +$4,530** +$8,100
Potential tax credit -$2,500 N/A
Insurance +$13,320 +$8,592
Maintenance +$1,788 +$5,976
Total expense: $105,173 $51,242

*Based on a 2.49% APR for fair to excellent credit and down payment of approximately 9%. Actual amounts could vary based on vehicle options, taxes, and registration Fees.
**Includes initial cost of buying a charging station ($1,200) plus electricity to charge the vehicle for six years at $555 per year.

For anyone looking at this and wondering why we’re comparing a luxury electric car to a Camry, it’s because we’re comparing what’s currently the most popular Tesla against a well-known fuel-efficient vehicle. But for further context, here’s the breakdown of buying a Tesla Model 3 (the company’s most affordable model) as well.

Six-year cost of vehicle Tesla Model 3 Toyota Camry LE
Cost to buy (financed)* +$42,850 +$28,574
Electricity/Fuel cost +$4,530** +$8,100
Tax credit -$2,500 N/A
Insurance +$13,320 +$8,592
Maintenance +$1,788 +$5,976
Total expense: $59,988 $51,242

As you can see from the numbers, a Tesla Model 3 and a Toyota Camry are much closer cost-wise than the luxury Model S — and the Tesla might even pull ahead after a few more years of use. But a lot of that will depend on how you personally drive and maintain your vehicles.

Another thing to keep in mind here is that there are a lot of variables that go into calculating these totals. For example, there are factors that affect car insurance rates, like your driving profile and credit score, while the amount of your tax credit will depend on where you live. Fuel and energy costs will also depend on where you live, as well as how energy prices evolve over time.


Do you really save money with a Tesla?

Whether or not you save money with a Tesla really depends on what other vehicle you’re comparing it to. It could be less expensive than other luxury vehicles, but it’s more expensive than a Toyota Camry, for example. And while you might not actually save money when buying a Tesla compared to some vehicles, it’s hard to put a price on owning an electric vehicle.

For some people that aspect will count for more than a difference in the price tag. But if you’re looking for a more affordable electric vehicle, you might consider the Nissan Leaf or the BMW Mini Cooper SE.

Is it worth buying a used Tesla?

Like any used car, buying a used Tesla will come with its own unique set of challenges like ensuring the car and its powerhouse battery pack are still in good working condition, which might be difficult to do.

And unlike many electric vehicles — which tend to depreciate rapidly in value — Teslas tend to depreciate less than the average. According to the automotive search engine, which analyzed the sales of off-lease cars, the average new sedan (with either electric or internal combustion engines) depreciates by 39% in the first three years, while electric vehicles depreciate at a rate of 52% in three years. But a Tesla Model S depreciated by only 36.3%.

You could look at that as a positive if you’re buying a new Tesla and think it’s good for a car to hold its value. Or you might see it as a negative if you’re looking for a sweet deal on a not-too-old Model S.

Does it cost more to insure a Tesla?

Typically, yes, it will cost more to insure a Tesla vehicle. Many insurance policies tend to characterize Teslas as “luxury vehicles” and charge higher premiums to insure them. In addition, the repair costs for electric vehicles and aluminum-framed vehicles tend to be higher.

Bottom line

When it comes to the overall question of whether or not a Tesla is worth it, it’s important to take an honest look at your personal finances. Can you afford the start-up costs of a home charging station? If you keep the car for an extended time period, will you be prepared for the cost of the eventual battery replacement? Is renewable energy something that is of utmost importance to you and something you’re willing to pay a premium to support?

If you feel you can afford it, a Tesla might be a great option for your next new car. You might also consider shopping around for the best car insurance in order to save money on one of the costs that is known to be higher with this vehicle.

If a Tesla doesn’t seem financially feasible, you’re not alone. A Tesla comes with a luxury price tag and isn’t a car that’s considered to be “affordable” for most Americans. If going electric is important to you, take a look at the other more affordable EVs on the market, like the Nissan Leaf, Hyundai Ioniq Electric, or even the Mini Cooper SE. 

And remember, owning an electric vehicle isn’t the only way to be more environmentally conscious with your money. You could also choose to invest in Tesla (TSLA) on the stock market or any other number of environmentally friendly companies.

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Author Details

Larissa Runkle Larissa writes for FinanceBuzz and divides her time between a cabin in the San Juan Mountains and traveling in a van. She enjoys writing about travel, debt relief, personal loans, and mortgages. Her work has been featured on MagnifyMoney, LendingTree, and Outside of finance and real estate writing, she’s also at work on several fiction projects. When away from the computer, you’ll find her reading, exploring local trails, and climbing rocks.