As we approach the end of the EV tax credit, a question that many people have is, should I buy? Even with the EV tax credit, can I afford an EV? What about without? And can I afford a Tesla? Well, for a long time, Tesla vehicles came at a very high premium. But nowadays, they are much more accessible. Tesla still has a ways to go for a truly affordable car out of the gate without incentives, coming in truly under $40,000 or even under $30,000 one day. But for now, their cars start a little over $40,000. I've owned a number of Teslas over the years, so today I'm breaking down the true cost to own one of these cars, what I pay, and what you might expect to pay. So, let's get into it. [Music] Today, I'm going to break down the costs associated with buying two different Tesla vehicles that I have purchased. One is a 2024 Model 3 that was a purchase and the other is a 2026 Model Y that is a lease. But first, let's look at Tesla's offerings. Their cheapest car is the Model 3. It's a very functional car. It has five seats, decent trunk space, but of course, it's still a sedan. It's great for many people, but not for everyone, which is why it's not quite as popular as the Model Y. In any case, the Model 3 starts at $42,490 out of the gate, and this is for actually the longest range version in rear wheel drive. Up from there is longrange all-wheel drive for $5,000 more at $47,490. Then there is performance for $54,990. You can upgrade paint for anywhere between $1,000 to $2,000, upgrade wheels for $1,500, and upgrade to black and white interior for $1,000. Then you can pay upfront for a full self-driving that lives with the car forever at $8,000. So the cheapest Model 3 is $42,490. And then the best one with the most options, a 0 to 60 in 2.9 seconds, performance interior in white, FSD, and all of that is $62,990. However, those are prices prior to the EV tax credit. For the time being, if you do qualify, this can take $7,500 off of your purchase price, which brings a base Model 3 down to $34,990, or just about $35,000. Considering the savings you can experience not paying for gas or maintenance, it's a no-brainer for many people. But then comes the Model Y, which is just a bit more expensive. The longrange rear wheel drive Model Y is $44,990. So, it's only about $2,500 more than the Model 3, but it has many more features. Autofolding rear seats, a hatchback, it's generally larger, it has a hepailter, it has a much better sound system in the base model because the base Model 3 actually has a downgraded sound system, but the base Model Y has the same one as the higher trim. The Model Y also has the light bars on the front and back, etc. Up from there is the longrange all-wheel drive at $48,990. And really the only difference there is the motor because that sound system is the same. So then the most expensive Model Y with all of the options is $58,990. Then if we subtract the EV tax credit, you have a base model starting at $37,490 for the Model Y. Then there are other savings associated with these cars. Essentially, if you're asking the question of whether or not you can afford a Tesla, you'll be looking at one of these two cars. And honestly, they by far provide the best value. They're the ones I recommend to people. The Model S and X have upgrades, but the Model 3 and Y just feel more refined in many ways to me. And it's clear that Tesla builds a lot more of them. They're just better at building them. But then there's the Cybert truck, which starts at $70,000 or $62,490 with the tax credit. But in any case, if you're buying, you might not be shelling out all of the cash in one go. And that's where financing comes into play. What does it look like to finance a Tesla? And what about leasing? Then what comes next after you buy the car? What costs are you going to incur? Well, first let's look at my 2024 Model 3 purchase. This was a purchase, so we'll cover that first, then get into leasing after this. This is a Model 3 rear wheel drive standard range, which is actually a trim that Tesla discontinued. So, what you'll notice is this actually comes in a little cheaper than Tesla ships it today. You'll get more range in the newer car, but I'll do calculations accordingly. First on this configurator, you'll notice the base price of the car and then my upgrade, but then a destination fee. This is $1,390 and there is no way around this additional fee. Then there's the order fee. When you order, you put down $250 of a non-refundable order deposit. This actually is an extra cost. So, you see that total and need to add both of those numbers. Then, one thing Tesla can be pretty good at with their website is helping you calculate your estimated taxes and fees associated with your purchase. You just have to check all the right boxes. For instance, here we have a base Model 3 prior to the tax credit or those fees. But click on estimated taxes and fees. And quickly the price raises by $6,914. That includes all registration costs, sales tax, the destination fee, and order fee. Now we're at a total of $49,44. That's a Beverly Hills zip code. So let's look in Phoenix. $6,181. It's really going to be different in every single zip code and can vary by quite a lot. So, definitely check this for your particular area. But the breakdown here is $1,390 for the destination fee, $250 for the order fee, a $4 tire fee, $764 registration fee, and $3,774 of sales tax. Again, that's in Phoenix. For my Model 3, I locked in a pretty terrible interest rate that makes today's rates look absolutely incredible. I got 6.59%. Which was actually just what the rates were in early 2024. The breakdown here shows that by the end of paying off this car, I will have paid $8,96268 extra to the bank to finance this purchase. This car was $42,630, but add in sales tax, registration charges, and rough financing charges, and my total ends up well over $50,000. Ultimately, I put down $6,249.58 and then financed $41,361 of this purchase, which brought me ultimately to a monthly payment for 72 months of $696.96. Multiply that by 72 and we see their breakdown here. the costs really can start stacking up, especially with high interest rates, which is why a 0% interest rate when it's offered is such a great deal, especially right now. For my purchase with that down payment, I took delivery of my car and have paid that same amount, almost $700 a month since. Part of that is because at the time I didn't qualify for the EV tax credit. But all of this would have been lowered quite a bit with that credit. For example, Tesla's configurator can break this all down for you. Tesla says there is 2.99% APR available with $1,950 down for 60 months and that it will only be $619 a month. That is way better than my deal right out the gate. But this deal isn't actually as good as it looks on its surface because they're automatically including certain things and maybe hiding others. Let's take off the tax credit, add taxes and fees, and then put $6,800 down. That's the only way to get 3.99% back to 2.99% because we had to take off the EV tax credit. Then we're at a $753 a month payment. Keep everything the same though and add the tax credit back. We're at $619 per month for 60 months as well. Alternatively, you can lower your down payment if you qualify for the tax credit since it's functioning as one. And you'll see something like this. As you can see, interest rates make a huge difference. So now you may be understanding the payment amount of around $600 to $700 per month for a Model 3. For a Model Y, it typically ends up a bit more expensive. Of course, it's a more expensive car. There's a higher base interest rate and more. We also have to put more down in order to get a 3.99% APR if not qualifying for the tax credit. Now, one discount that can be available on Teslas that is worth mentioning right now is the referral program. If a friend of yours has a Tesla, they'll have a Tesla referral link. Use that link and you'll get a benefit and then so will they. Right now, this gets you three months of FSD on the Model 3 and Y. At other times though, it can include a discount of up to $2,000. So, it's always worth checking. But now that we're there, what about other costs? Next, of course, comes one you're required to have in order to buy your car, insurance. First is my experience, Tesla insurance. Tesla insurance is offered in a number of states in the US. In California, it operates as a normal insurance policy, and that's what I've had for about 5 years now. But in other states, they use a safety score to quote track your driving behavior to control your monthly rate. It's all handled through the Tesla app. And in my experience, it has been fine. But it's definitely a different experience when you have that safety score actually determining your rates. When I first signed up for Tesla insurance back in 2020, my 6-month premium was $851.83. So about $141.97 per month for a 2020 Model Y. Of course, you can shop around here, but for my area, Tesla insurance has been good. Today, I have multiple cars on my policy, and I pay about $80 a month for this Model 3. For a 2022 Model Y, I'm at about $102 per month. When we look at industry averages, though, the average Model Y insurance cost ends up around $255 a month and $282 a month for the Model 3. That's quite a bit different than what I've paid. And part of that is because of Tesla's competitive pricing with insurance. We can see a breakdown of that here. Insurance on Tesla vehicles can be pretty high from many companies since they are sometimes costly to repair. So, it's definitely worth researching for yourself. In any case, for me and that 2024 Model 3, I had put down $6,249.58 and have paid $696.96 a month as a car payment. Then I pay about $80 for insurance, so I'm at $776.96 a month. Then comes hidden costs somewhat. One of these is Tesla's premium connectivity subscription. This is $10 a month to get certain streaming features in the car. That's something to keep in mind, but for myself, it has been free since I'm using Tesla referral credits. Similarly is the FSD subscription. I don't typically buy FSD with a Tesla vehicle because it costs $8,000 and Tesla has been promising a lot for a long time. However, today FSD has gotten very good, which is a consideration for me. But also, you can subscribe for $99 a month. Assuming Tesla's price stays the same for that subscription, it would take 80 months before paying $8,000 upfront pays off. But, of course, that all could change in time. They could definitely raise this subscription price. In any case, that's another $100 a month. So, I would be at $886.96 a month for this car with all of its features. But again, I'm at $776.96 since I'm using Tesla referral credits for FSD and premium connectivity. So, what about maintenance? Well, I haven't really had any on this car. The only real charges are replacing cabin filters, windshield wiper fluid, and tires. Tires can be expensive, but on the base Model 3, you're looking at an average, if you go with pretty popular options, of $227 per tire, and that's for new from America's Tire in my area. It's $98 for a full set when they need replacing. Depending on how much you drive, this could be something you need to replace every 2 years or earlier. So, assuming 24 months of life here, which could be very aggressive for many drivers, that's about $38 a month as a buffer. So, my costs $814.96. If I paid for FSD and premium connectivity, $924.96. But then we have to fuel this car. The good news here is that fuel in EVs is almost always cheaper than gas. So, if you've gotten to an uncomfortable total amount here, but then you're thinking about paying an extra $200 a month for gas, you could see that nearly eliminated. For myself, I've driven about 800 m in the past month. My electricity cost at home is actually quite high. I have a special rate plan for EVs for my summer rates, but still off- peak here is 25 cents per kilowatt hour. I only ever charge off peak. So, in practice, this standard range Model 3 gets roughly 250 mi of range out of its 60 kWh battery. That means I used approximately 192 kwatt hours of energy, which when charged at home came in around $48. If I had driven that same amount in a Honda Accord, I'd be looking at about $109.34 with gas prices in my area. This is California, though, so high energy prices and high gas prices are the reality. But let's go back to Phoenix just as a comparison. There you can see an average electricity cost of around 15 cents per kilowatt hour. So that would have been roughly $28 to charge versus $93.34 driving a Honda Accord. Now, it's worth noting here, supercharging is more expensive than this, and it's worth checking for your particular area if that's how you need to charge. Near me, it's around 50 cents per kilowatt hour on average, but again, there are off- peak hours here, and sometimes you can find cheaper superchargers. Everyone's situation is going to be different since there is so many options for how you would charge your electric car. So, a final breakdown of my true monthly costs for this standard range Model 3 from 2024. $696.96 a month for the car payment, $80 a month for insurance, $38 a month to save for tires when I have to change those, and $48 for electricity for a total of $862.96 each month, all costs included. Then, if I were to be paying for full self-driving and premium connectivity, that would add another $17.75 for FSD with tax and about $11.6 6 a month for premium connectivity with tax, bringing us to $991.77 per month. The last consideration here though is if you qualify for the federal tax credit, because if you do, that can knock off somewhere around $100 a month right here. Next though, let's look at a lease. This is my recent Model Y lease. It's the newest rearwheel drive Model Y after they did the refresh. I decided to lease here because of the enticing rates and a lower monthly payment, but also I often change over cars for this channel and reviewing purposes, and it just made sense for me. But I resisted previously because you couldn't buy out leases. But now from Tesla, you can buy out leases at the end of your agreement. On my Model Y order agreement, the total cost came to $48,130. But here, you'll see a $500 sales incentive. That's because of Tesla's loyalty program where you can get discounts for buying another car from them. Tesla also built in the EV tax credit into the lease. So, my breakdown here was $10,196.91 down, which thanks to the tax credit ended up adding up to $17,696.91. That brought their advertised monthly payment of $349 a month at the time down to $271. So, $271 is a huge difference compared to that cost we were just talking about buying a standard range Model 3, but of course, this is a lease. Also, many advise against a high down payment like I did because if your car gets totaled, you'll essentially lose that value. But I went this route because when I totaled the cost of leasing for 36 months and then buying out, it actually ended up cheaper than if I were to finance a purchase. Plus, this gave me more flexibility for my particular situation. Also, I was able to use Tesla credits towards that down payment amount. But a quick total there, the car was $10,196.91 upfront, but for the next 35 months after that initial payment, I'm looking at $271 a month for the lease payment. Then insurance for this one is about $150.40 a month. I'll save a similar $40 a month for tires and then pay slightly more, about $52 for electricity each month if I'm driving an average of 800 miles. That comes to $51,340 a month for the longest range Model Y. It's a stark contrast from that payment for the Model 3. But of course, that is leasing versus buying. I'm also essentially saving up that difference to get ready to buy this out in 3 years or get a new car depending on what the situation is at the time. Add in FSD and premium connectivity, though, and you're at $6321. That is the full out the-do cost each month with self-driving and fuel costs. So overall, that can be pretty solid. But still, this isn't cheap and it's expensive for a lot of people, and I want to see Tesla finally fix this. Hopefully in Q4 with a cheaper variant of this Model Y. In any case, that's the true cost I pay for my Tesla in a loan format and a lease format. So, I hope it illustrates a clear picture for you. A lot of these calculations are dependent on location, the tax credit eligibility, which will be going away soon, and more. So, it's definitely something to look into for yourself in your particular situation. I hope this video was a helpful breakdown for you. And in the meantime, if you want to see the latest Tesla tech and EV news, you can check out that video linked up here or in the description below. Thanks so much for watching and I'll see you on the next