I recently published some cost comparisons between the Tesla Model 3 and various Honda Accord trims. As I implied at the time, these models shouldn’t even be in the same discussion since the Model 3 is a much better vehicle (safer, quicker, more advanced tech, better handling), but the fact is that they do compare when it comes to 5 year cost of ownership.
However, when I published the previous comparisons, I didn’t include the cost of interest if you took out an auto loan to finance the purchase. (Basically, the analysis assumed straight cash purchases and no time value of money.)
So, I decided I should run an updated Model 3 versus Accord analysis and publish the results. As before, I’m not actually doing so for the $35,000 base Model 3, which is still dramatically better than the Honda Accord. The base Model 3 would have beaten the Accord in every single cost comparison, but most buyers are interested in the Model 3 Standard Range Plus (SR+), so that’s the only Tesla model I used for the comparisons.
As a final note before looking at the results, after doing a larger variety of Model 3 versus Camry comparisons, I decided to run additional scenarios for the Accord to see a broader range of possibilities. I added the absolute base version of the Accord, the Honda Accord LX CVT, and I added the Honda Accord Touring Hybrid E-CVT. I also ran comparisons at the US average of 13,500 miles a year for all of the options.
The short story from doing all of these comparisons is: The Tesla Model 3 beats the Honda Accord in nearly every scenario. Actually, the Accord only wins with the base version at 10,000 miles/year — and it would have lost to the base version of the Model 3 if I had been a bit more fair and included that.
Short summaries for each trim at a few different annual mileage levels are as follows:
|Model||5 Year Cost (est.)|
|Tesla Model 3||$23,240|
|Honda Accord Touring Hybrid E-CVT||$26,323|
|Honda Accord EX-L Hybrid E-CVT||$27,725|
|Honda Accord EX Hybrid E-CVT||$26,399|
|Honda Accord Sport CVT||$25,805|
|Honda Accord LX CVT||$24,143|
|Model||5 Year Cost (est.)|
|Tesla Model 3||$23,678|
|Honda Accord Touring Hybrid E-CVT||$27,416|
|Honda Accord EX-L Hybrid E-CVT||$28,818|
|Honda Accord EX Hybrid E-CVT||$27,493|
|Honda Accord Sport CVT||$27,499|
|Honda Accord LX CVT||$25,893|
|Model||5 Year Cost (est.)|
|Tesla Model 3||$22,803|
|Honda Accord Touring Hybrid E-CVT||$25,229|
|Honda Accord EX-L Hybrid E-CVT||$26,631|
|Honda Accord EX Hybrid E-CVT||$25,305|
|Honda Accord Sport CVT||$24,112|
|Honda Accord LX CVT||$22,393|
You can view the various details/assumptions in this Google Sheet. As before, I strongly encourage you to copy one of the tabs as an example and run your own numbers — to better match the inputs and outputs to your specific case.
My core assumptions, which did not vary across the numerous scenarios summarized above, included:
- $5,000 down and 5.5% interest on the auto loans.
- Kelley Blue Book estimates for resale values/depreciation after 5 years.
- $3,750 US federal tax credit for the Tesla Model 3.
- No extra features for the Model 3 or the Accord (of course, the Accord has much worse performance and driving assistance tech, as well as a significantly lower NHTSA safety rating).
- $0.10 average cost of electricity for charging (this could be much lower or significantly higher, depending on the individual, but I think it’s a decent guess for a median value).
- $3/gallon for gasoline. The average price in California is currently over $4/gallon. In New York, it’s nearly $3/gallon. In Florida it’s $2.8/gallon and in Texas it’s $2.6/gallon. The price of gas will surely fluctuate in the coming 5 years — it could go much higher or could drop lower again. I’d bet on it going higher, and thus see $3/gallon as conservative (favoring the Accord), but it’s up to you what figure you think is best to go with for this period of time.
- $0 maintenance costs. There’s a strong case the Model 3’s maintenance costs should be much lower than the Accord’s, but there’s also an opposite argument and we simply don’t have much insight into what is in store after 5 years of ownership, so I’m leaving the figure at $0 and anyone can easily add maintenance costs as they see fit and can quickly adjust the calculations.
- 4 miles per kWh efficiency for the Model 3, which is a bit lower than the official rating.
- MPG ratings from Honda’s website for each of the trims.
Regarding the matter of insurance, I decided again that the cost varies too much by state, individual, etc. to include it in these comparisons. Also, Tesla should be launching its own insurance option in coming weeks. For much more on the matter of insurance, I highly recommend this tremendous analysis: Tesla Insurance: Information Arbitrage To Save You Money.
Want to improve the analysis for your own needs? Gather some insurance estimates for yourself for the Model 3 and Accord and then add those figures to the spreadsheet. Also, select the extra features you’d choose. (However, if you’re adding features to the Model 3 that the Accord doesn’t offer at all, take that into consideration.) One more time, you can copy a template from here.
As I noted at the top, objectively, the Model 3 is a tremendously better car than the Accord. The fact that the Model 3 is also estimated (in these scenarios) to cost less than the Accord makes the Model 3 a no-brainer in my opinion. Even if specific variables are changed giving the Accord the cost advantage (different resale values, a lower average gas price, or fewer miles driven, for example), the fact that these two models are close on costs is insane. Looking at these comparisons and comparisons with the Toyota Camry, it seems clear to me that the Model 3 should be the top selling car in America — and will be one day.
Let me know if you think there’s anything critical I missed in these comparisons, or what your individual results show.
Interested in buying a Tesla Model 3 (or Model S or Model X)? Need a referral code to get 1,000 miles of free Supercharging? Use ours: http://ts.la/tomasz7234 (or use someone else’s if they helped you more).
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