My Plan To Minimize My Total Cost Of Ownership On My Tesla Model Y For The Next 10 Years – CleanTechnica

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Total cost of ownership for a used 2021 Tesla Model Y over 10 years compared with Toyota RAV4 and BMW shows Tesla’s outstanding value!

I’ve written before on total cost of ownership (most recently about 2 years ago), but this article will be more personal. This won’t work for everyone, but this is just my personal plan. Even though I think Tesla will solve Full Self Driving (FSD) in the next 10 years, and that changes things dramatically, for the sake of this article, I will assume they don’t solve it. This will cover insurance, maintenance, repairs, taxes, financing, depreciation, & fuel. I will also assume no inflation or incentive changes for the next 10 years. Not realistic, but it’s too hard to predict these things. I’m going to assume we start with a 2021 Tesla Model Y Long Range with 40,000 miles and plan to put on 10,000 miles a year for 10 years.

Insurance

Insurance varies widely based on your state, mileage, and coverage desired. I do have some experience with Tesla Insurance, and it is priced aggressively in Colorado. It is especially a good deal if you are a young driver who is willing to drive carefully to save money. I’m just going to assume $1,200 a year for this article. Tesla vehicles are a little more expensive to insure than a typical Toyota or Honda due to the number of sensors they have and some other factors I discussed in this article about a minor accident I was in and the different estimates I received to fix the car.

Maintenance

I’ve owned electric cars for 12 years, and there really is very little scheduled maintenance on a Tesla. Here is Tesla’s official page for maintenance on the Model Y. Basically, it is wiper blades, washer fluid, and cabin air filters every other year. $200 every other year should cover that, even having someone else replacing the cabin air filter (which I have done twice, but it is a little tricky and needs a couple special tools). Plus, rotating tires every 6,250 miles is about $50 a year. I monitor the brake fluid to ensure there is no water in it, either using strips I purchased on Amazon or using an electronic tester. I’ll assume I have to replace the brake fluid every 4 years at $200. Now, they do recommend replacing the A/C desiccant bag every 4 years. Searching around for a pricing estimate, it looks like that is about $350 from Tesla. I don’t live where they salt the roads, but if I did, that would be an extra $100 a year for the Tesla (or any other car I assume). I don’t have the HEPA filter, but if I did, that would be more money to replace every 3 years.

For unscheduled maintenance, there’s the 12V battery replacement, wheel alignments, and the big one is tire replacement. A 12V battery should be about $200 every 4 years, an alignment every 4 years is about $100, and I plan to get 4 tires from SimpleTire.com for about $800. Radar Dimax tires have excellent ratings and reviews and cost less than half the money of tired from popular brands like Bridgestone and Michelin.

Repairs

I’m planning on buying a 10-year, 100,000-mile zero deductible plan from Xcelerate Auto. They have been an advertiser on CleanTechnica, but I’m not getting any special deal at $4,819. If I sell the car, I have the choice of transferring the contract to the new buyer (likely if it is a private sale) or getting a prorated refund for the amount paid (less any claims paid).

I’ll also add $200 a year for items not covered by the warranty.

Taxes and Fees

Since I already own the car, the taxes will be incredibly low ($46 a year) instead of the thousands in sales tax I would owe if I was purchasing the car, but I’ll pretend I’m buying the car because that makes it a better article for others to use.

The price to buy the car is $29,602 according to Edmunds.com. If my income was lower, I’d make sure I could find one under $25,000 so I could get the $4,000 used EV tax credit. Edmunds shows $2,178 for fees in the first year and $46 for every year after that. That sounds about right, so I’m going with that.

Financing

Edmunds.com has a 5-year financing cost of $5,763, and that looks reasonable for a 5-year loan. But since I’m proposing to buy a 10-year extended warranty, I need to do my own figures. I used bankrate.com to figure the costs of a 5-year, 7% loan. I found it cost $6,583 for a 5-year loan and them I put zero for the other 5 years.

Depreciation

I’m going to use Edmunds figures for the first 5 years, but then use $1,000 a year after that, since I don’t think a Tesla Model Y in perfect working condition (no reason to leave any issues unresolved with a zero deductible warranty) will go any lower than $7,570, even with 140,000 miles and being 12 years old. Having owned several cars that were 1o to 20 years old, that is one of the advantages — they depreciate very little once they get to a price of about $5,000 if they are in great condition. I would expect an electric vehicle with very low running costs to bottom out a little higher than $5,000, but we will see.

Fuel

Since I’m getting solar this month (that will be another article) and don’t take a lot of long trips, I’m going to figure 9,000 miles/3 is 3000 kWh at 5 cents a kWh is $150 plus 1,000 miles from Superchargers would be 333 kWh at 45 cents a kWh or ~$150. So, a total of $300 a year for fuel.

Total for 10 Years

The total estimated cost of ownership for 10 years/100,000 miles is only $59,276, or about 60 cents a mile! If you would like to play around with your own figures, here is the link to my workbook — you can view it, or if you sign into your google account, you can make a copy and change any figures you want to change. The Tesla’s second 5 years came out to only 38% of the cost of the first 5 years! The prepaid warranty distorts that a bit. If I distribute the cost of the warranty across the years (reducing the first 5-year costs and inflating the second 5-year cost), the second 5 years comes out to 46% of the first 5 years.

Toyota RAV4 for Comparison

This isn’t an apples to apples comparison, since buying a RAV4 for 5 years and then buying another for 5 years incurs some extra costs. Edmunds is also figuring 15,000 miles a year instead of 10,000 miles a year. Having said that, here are the screenshots:

First, you would buy a 2021 RAV4 and have a TCO of $47,690 for 5 years.

Then, you would have another $41,927 in costs to own it another 5 years. That is a total of $89,617. Let’s subtract the $4,618 in financing, since you already paid off the first car. Let’s also reduce the fuel costs by $6,400 since this is for 150,000 miles instead of 100,000 for the Tesla. Let’s take off $1,500 for sales tax too. So, $89,617 less $4,618 and $6,400 and $1,500 is $77,099. The second 5 years came out to about 61% of the first 5 years.

If I wanted to do the opposite and increase the miles on the Tesla to 150,000, I’d have to estimate the repair costs. Xcelerate doesn’t offer that long of a warranty on Tesla vehicles at this time.

So, the Toyota RAV4 costs 30% more to own even though it takes almost twice the time to go from 0 to 60 mph and isn’t close to the performance, technology, or luxury of a Tesla. Let’s look at a BMW to see how much that would cost to own.

BMW Comparison

Let’s estimate that the second 5 years is the same 61% of the first 5 years as Toyota’s was, or $58,512. So, the total for 10 years would be $154,434, or nearly 3 times to cost of the Tesla with comparable room and performance and with technology far more advanced.

Conclusion

I’ve always tried to keep my cars as long as possible. I’ve had to sell cars in the past because of accidents or expensive repairs. It appears that electric vehicles might last longer than gas and diesel vehicles. I’m nervous about owning one out of warranty since, although I have found my Nissan Leaf and Tesla Model 3 and Y to be very reliable, I have also heard of expensive repairs. That is why the Xcare warranty at about $500 a year makes me much more comfortable owning my Tesla for many more years.

You can see from my figures that the used 2021 Tesla Model Y is an outstanding value, and with the availability of a quality extended warranty created by ex-Tesla employees that is designed to work with Tesla Service, it is a safe choice for people to buy. I’ve spoken with the sales advisors and they really understand how Tesla Service works, what items are paid for by the warranty, and what items would be paid for my your auto insurance (if the repair is caused by an accident or vandalism).

The ability to own a high-performance luxury crossover for substantially less money than a regular gas Toyota means that Tesla should be able to take a lot of market share from the legacy gas vehicles as more people realize the outstanding value electric vehicles provide.

I have recently been contacted by several Republican friends who suddenly think it is okay to buy a Tesla now that Musk has helped their cause. I realize Elon Musk has also offended a great number of people on the left. Of course, most of the people in the middle don’t care about politics, they just want the best car for their hard earned money.

If you want to take advantage of my Tesla referral link to get Reward Credits, here’s the link: https://ts.la/paul92237 — but as I have said before, if another owner helped you more, please use their link instead of mine. If you want to learn more about Tesla’s new referral program (August 2024), Chris Boylan has written an excellent article on it.

Disclosure: I am a shareholder in Tesla [TSLA], BYD [BYDDY], Nio [NIO], XPeng [XPEV], NextEra Energy [NEP], and several ARK ETFs. But I offer no investment advice of any sort here.