Ross Gerber, CEO of Gerber Kawasaki, shared just how much he saved by driving a Tesla Model 3 for a little more than 3 years. He pointed out that, after savings, it could have been $100 a month to drive a Tesla. He bought his car in 2018 for $60,000 (including the cost of Full-Self Driving). He also got back $7,500 in tax credits (but didn’t qualify for the $2,500 California ZEV rebate). After potential those savings, his car cost $50,000. However, since he didn’t qualify for the California ZEV rebate, the actual cost was $52,500. [This has been updated to exclude the $2,500 that Ross didn’t qualify for.]
Tesla model 3 math. I bought my car in 18’ for $60k total with FSD. Got $7.5k back tax credit. ($2.5k in cal I didn’t qualify for) so $50k net. Sold the car for $46k 40 months of ownership $4k net cost. Never needed any service or cost. That’s $100 a month to drive a tesla. $tsla
— Ross Gerber (@GerberKawasaki) July 4, 2021
Ross sold his car for $46,000 after 40 months of ownership, thus with a $6,500 net cost. He added that he didn’t need any service or anything. This is how he came up with the monthly cost of owning his 2018 Tesla Model 3. Now, these numbers may differ for other Tesla owners depending on various factors, and it seems that Ross excluded the cost to charge the car. CleanTechnica has actually explored this topic of total ownership cost at length. See our Tesla Model 3 total cost of ownership (TCO) archives for more on that, or our broader EV TCO archives.
In 2019, Business Insider pointed out that, on average, a car costs its owner $8,500 a year in the U.S. (This includes depreciation/resale value, like the calculation Ross did, as well as fuel costs, which Ross seems to exclude.) If Ross had owned an average car, based on that $8,500 figure, he would have paid $708/month with all costs included. That’s a lot more than $162.50/month, and adding in charging costs certainly wouldn’t make up the difference. Even if you added in $300/month for charging, that would come to $462.50/mo. So, which is the more financially sound decision?
Newer Numbers To Consider
Lowest average monthly cost to own a car: $299 in Alaska.
According to Move.org, which shared some data back in February 2021, the average monthly cost of owning a car varies by state. Some states such as Ohio and West Virginia average out in the mid-$300’s. Other states such as Michigan ($775), Texas ($556), and Arizona ($520) are a bit higher. Ross, who lives in California, would have to pay $459 a month if his car was a state “average.”
This average monthly payment includes the average costs for car payments, gas, car insurance, and services. Move.org’s conclusion was that it costs around $5,264.58 a year to own a car, on average, which is much lower than the $8,500 average that Business Insider noted. That comes to $439 a month.
NerdWallet has noted that the average monthly payment on a new car was $577 in the first quarter of 2021, citing data from Experian. However that’s not the true cost to own a car, the article pointed out, while also citing AAA as Business Insider did.
“For vehicles driven 15,000 miles a year, average car ownership costs were $9,561 a year, or $797 a month, in 2020, according to AAA. That figure includes depreciation, loan interest, fuel, insurance, maintenance, and fees.”
The article pointed to a price calculator that gives you a total monthly car cost. It is pre-populated with an estimate based on 15,000 miles of driving per year. It should be noted that the price calculator is primarily for those who are leasing their vehicles.
Does Owning A Tesla Average Out To $162.50/Month For Everyone?
Probably not. Not every Tesla owner has the same model, bought their car at the same time, could take advantage of the now-expired $7,500 federal tax credit, sold the car 3 years after purchase at such a high value, had $0 maintenance costs, or had other variables that perfectly matched Ross’s.
One key takeaway, though, is that owning a Tesla Model 3 much more cost-effective than many people assume.