Following up on a Tesla Model 3 vs. Toyota Camry 5 year cost of ownership analysis I published a few days ago, here’s a look at how the Tesla Model 3 stacks up against the other most popular midsized car on the US market, the Honda Accord. I actually did not expect, after recent Tesla price changes and a US federal tax credit reduction, that the Model 3 would come out on top of the Accord (or Camry) in these comparisons. I figured it would be close but a bit more expensive. However, to my surprise, the Model 3 soundly undercut the Honda Accord (and Camry) on a 5 year cost comparison.
Before jumping into that, though, it’s critical to remember that assumptions are key in such analyses. With very different assumptions for some of the variables, the Accord could be cheaper, or the Model 3 could be much cheaper. If you’re doing such an analysis for yourself, it’s critical that you input the best estimates you have for average price of gas over those 5 years, average price of charging costs (your residential electricity and/or charging station costs) over those 5 years, annual miles driven, resale value, etc. I tried to use averages or what I thought would be quite typical figures for my analysis, but the numbers could be significantly different even if you simply used California prices versus Florida prices. I explained the rationale for several of my assumptions in the Camry vs. Model 3 comparison. They are the same for this article.
I should note a few other things as well to make sure no one is confused by this analysis: 1) yes, even if the Model 3 has a lower cost of ownership, the Accord (and Camry) will typically have a lower monthly loan payment if you need to take out an auto loan — some of the Model 3’s expected cost advantage comes from a better depreciation forecast, 2) that extra monthly cash could theoretically be invested in some way that generates more money for you (for example, by buying a stock that goes up in value over that timeframe), but I think it’s much more common and realistic that the person would spend it on other consumer goods, 3) insurance costs are not included here because it is difficult to find decent generic data on them, and numerous Tesla drivers have reported that their insurance costs went down (even going from a Honda) while others have seen their costs go up, 4) it’s not all about cost — you may prefer the Accord for the slower acceleration, worse safety score, dramatically worse infotainment, worse autonomous driving tech, worse drive quality, or because it’s “normal” or what you are used to. There are a variety of reasons we choose one car over another, and cost does not override all the others. With all of that said, let’s move on to the cost of ownership comparison.
As you can see, these estimates put the Tesla Model 3 Standard Range Plus (SR+) as slightly less costly over 5 years than the Honda Accord LX, and significantly less costly than the Accord EX or Accord Touring. This is without adding any features to the Model 3 or the Accord trims.
When you consider that the Model 3 is quicker, is safer, has much better infotainment tech, has much better semi-autonomous driving tech, and is a cleaner and cooler car, buying a new Honda Accord instead of a new Tesla Model 3 doesn’t just seem illogical — it is bewildering. Of course, we live in a free country (sort of), so you are free to buy any car that floats your boat, but I am making this point in a “friends don’t let friends buy an Accord” kind of way. I legitimately feel bad for people with a new Accord, Camry, 3 Series, A4, or C-Class when I see them.
- Tesla Model 3 vs. Toyota Camry — 5 Year Cost of Ownership Comparisons
- Tesla Model 3 vs. BMW 3 Series & BMW 4 Series — 5 Year Cost of Ownership Comparison
- Tesla Model 3 vs. Mercedes C-Class & Audi A4 — 5 Year Cost of Ownership Comparisons
Just remember: these comparisons are not meant to be relevant to everyone! That would be impossible. They are based on what I think are fairly common or average figures, but there are so many variables at play that having a scenario perfectly match your situation is akin to winning the lottery. Therefore, I encourage you to crunch the numbers for yourself with some vehicle models that interest you. You can copy my Google Sheet and update each of the assumptions as best as possible for your life and expectations.
For this analysis, I tried to guesstimate the best assumptions for an “average” person in the market for a $35,000 new car, and over the course of the coming 5 years. I could have easily made the numbers look much better for the Tesla Model 3 — by using $0 for charging (which is what I pay), by using a lower interest rate (the interest rate on my Model 3 loan is 3.75%, rather than 4.25%), or by assuming many more miles driven per year (in a recent survey with 23 EV drivers in my area — almost all Tesla drivers — most of the respondents said they drive more than 21,000 miles per year, some of them more than 30,000 miles). Alternatively, I could have made the gasoline competitors look better by changing these or other assumptions in the opposite direction. In the end, what I did is I put in the numbers that seemed most sensible to me for a generic 5 year US cost comparison and then looked at the results. I did not do any biased tweaking after seeing the results in order to “get a result I wanted.” Actually, several of the core assumptions I used are more anti-Tesla than I think are realistic.
Of course, I have put my money where my mouth is. I recently bought a Tesla Model 3 Standard Range Plus. The case for the car is actually more compelling to me now that I have it than it was before — mostly because of how good the car is — and I’ll happily continue sharing my real-world cost of ownership as time goes on.
If you’d like to buy a Tesla and get some free Supercharging miles, feel free to use our referral code: https://ts.la/zachary63404. Or not.
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