Is a Tesla Model 3 Cheaper to Own Than a Camry Over 5 Years?

The decision between purchasing a Toyota Camry or a Tesla Model 3 can be a challenging one, especially considering the long-term costs involved. Both models have their advantages and disadvantages, and the choice often depends on the preferences and needs of the consumer. In this comprehensive analysis, we will compare the two vehicles over a 5-year period for someone who drives 20,000 miles a year, taking into account the initial purchase price, interest rates, maintenance costs, and fuel expenses.

Initial Price and Interest Rates

According to recent market data, the base model of the Toyota Camry in the US starts at around $28,000, while the Tesla Model 3 starts at approximately $55,000. Let's assume a standard loan term of 60 months with an interest rate of 3% for both vehicles. This would result in a monthly car payment of approximately $550 for the Camry and $883 for the Tesla.

Over the 5-year period, the total cost for the Camry would be $32,950 in loan payments, plus the initial price of $28,000, totaling $60,950. For the Tesla, the total cost would be $52,980 in loan payments, plus the initial price of $55,000, totaling $105,980. Therefore, the Tesla would cost $45,030 more than the Camry over the 5-year period.

Maintenance Costs

One of the key differences between a traditional internal combustion engine (ICE) vehicle like the Camry and an electric vehicle (EV) like the Model 3 is the ongoing maintenance required. The Camry, being a hybrid, requires regular maintenance such as oil changes, brake pad replacements, and tire rotations. Conversely, the Tesla has fewer parts requiring maintenance and fewer scheduled service visits. In the first 5 years, maintenance and service costs for the Camry and Tesla can be estimated as follows:

Camry: Approximately $2,000 for oil changes, brake pad replacements, and tire replacements. Tesla: Approximately $1,000 for scheduled service visits and minor maintenance.

Over the 5-year period, the Camry would incur $2,000 in maintenance costs, while the Tesla would incur $1,000, saving $1,000 in maintenance costs.

Fuel/Charging Expenses

The fuel cost for the Camry is a significant expense, while the Model 3 relies on electricity. In the US, the average cost of gasoline is around $3.00 per gallon, while the cost of electricity is approximately $0.12 per kWh. The Tesla Model 3 has an estimated range of about 250 miles on a full charge. If the vehicle is charged at home, the cost of electricity can be significantly lower than the cost of gasoline.

Over 5 years, assuming an average of driving 20,000 miles per year, the fuel cost for the Camry would be approximately $5,000 (20,000 miles / 10 miles per gallon * $3.00 per gallon $6,000, but with fuel economy of 10 miles per gallon, it's closer to $5,000). For the Tesla, the charging cost would be approximately $2,000 (20,000 miles / 250 miles per charge * $0.12 per kWh $960, but rounding up for convenience to $2,000).

Over the 5 years, the Camry would spend approximately $25,000 on fuel, while the Tesla would spend approximately $10,000 on electricity, saving $15,000 in fuel costs.

Other Considerations

Warranty: The Camry comes with a standard 3-year/36,000-mile warranty, while the Tesla Model 3 comes with an 8-year/160,000-mile warranty for the drivetrain and battery. This advantage could significantly influence the overall cost of owning the vehicles over the long term.

Brakes, Tires, and Windshield Washers: In the case of the Camry, the brake pads, tires, and windshield washers may need regular replacement. The Tesla, on the other hand, has fewer components that require frequent replacement due to the lack of a traditional engine and exhaust system. These minor costs can be significant when considering the long-term ownership.

Conclusion

When comparing the Toyota Camry and the Tesla Model 3 over 5 years, the Tesla emerges as a more cost-effective choice, primarily due to lower maintenance costs and cheaper fuel expenses. While the initial purchase price of the Tesla is higher, the savings on fuel and maintenance more than offset the difference, making the Tesla a more economical option for the average driver who drives 20,000 miles per year.