How Much Does It Cost to Insure a Tesla?
Tesla auto insurance rates vary based on where you live, your driving record, and which model of Tesla you're driving. For example, Tesla insurance costs in New York are $146 per month on average, but Illinois and California have cheaper rates because more Teslas are on the road. Keep in mind that electric luxury vehicles like Teslas will have more expensive Tesla insurance rates regardless. You should comparison shop online for the cheapest Tesla auto insurance quotes. Enter your ZIP code below to start comparing quotes now and find the cheapest Tesla insurance rates in your area.
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UPDATED: Jun 9, 2021
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Tesla cars have exploded in popularity over the last few years. However, there’s one question that frequently appears online: how much does it cost to insure a Tesla?
The so-called “car of the future” is certainly more expensive to insure than an average vehicle. Today, we’re going to explain how much it costs to insure a Tesla – including whether or not you can afford it.
Enter your ZIP code to get started comparing rates from more than one Tesla insurance company. Use our free tool to compare average rates.
What are the three Tesla model types?
Tesla has released three main vehicles so far. The newest model, the Model 3, is priced at $35,000 USD, making it the cheapest Tesla released to date.
The Model S, meanwhile, is priced at around $70,000 (although the model with the most inclusive trim will cost about $135,000), while the Model X costs between $86,000 and $136,000, depending on your trim.
Keep in mind that the more you pay for your Tesla, the better its battery life will be, and the faster your car will go. Buying the “most inclusive trim” version isn’t just about aesthetics.
We’ve seen a growing number of Tesla insurance quote requests for the Model 3. After all, a $35,000 car is within the budget of an average middle-class family. However, cautious vehicle buyers are naturally concerned about average car insurance costs.
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What should you consider about Tesla insurance?
Does insuring a Tesla cost more than insuring a car with a similar price tag? Here are some things to consider.
Expensive Cars Cost More to Insure than Cheaper Cars
We don’t need to explain much about this. A $30,000 car is almost always going to cost more to insure than a $20,000 car. If you’re upgrading to a Tesla from a cheaper car, you can expect a significant bump to your insurance policy cost.
Repair costs are more since every part of the vehicle is more expensive to replace.
Electric Cars Cost More to Insure
Electric cars cost more to insure than their gas counterparts, all things being equal. GEICO reports that it’s about 1.23 times more expensive to insure an electric vehicle compared to a gas vehicle. However, State Farm only charges about 1.07 times more to insure an electric vehicle (Source).
Luxury Cars Cost More to Insure
Luxury cars tend to get in more collisions than ordinary vehicles. In fact, according to a report by the Institute of Highway Safety, five of the ten worst cars for collision insurance are categorized as luxury vehicles (the other five are sports cars). Tesla CEO Elon Musk has famously said, “We don’t make slow cars.”
Even though the Model 3 is priced at a more affordable $35,000, it will still be insured as a luxury car.
Of course, you’ll need more than just collision coverage. For a Tesla, you’ll need to keep comprehensive coverage and additional coverage options. Many companies offer a discount to drivers to help offset costs.
Ultimately, upgrading your coverage policy to cover a luxury car might not be quite as expensive as you think. If the value of the vehicle is equal, then a luxury car will cost about 6% more to insure than a non-luxury car (assuming the vehicle’s value is between $30,000 and $35,000).
And it’s helpful to remember that while electric vehicle auto insurance — even from a manufacturer like Tesla — may be higher than for a gas-powered vehicle, EV owners can save in numerous other ways.
The best cities to own an electric vehicle have a high number of government incentives, good charging station infrastructure, and a low electricity cost that can actually make owning an EV cheaper, regardless of the auto insurance cost.
Even if the EV model you drive is an expensive Tesla, you will likely save more money in the long run compared to a similarly-priced gas-powered car.
How much are insurance costs for my Tesla?
Right now, in New York, you can insure the $70,000 version of the Tesla Model S with GEICO for approximately $1,750 per year.
We don’t have specific figures for the Tesla 3. However, the Huffington Post researched insurance quotes for the Kia Soul EV, an electric car that sells for $32,000. Insurance was approximately $1,446 per year in New York. Obviously, the Kia Soul EV isn’t a luxury car.
Based on the information we know above about luxury cars, the Model 3 should cost about 6% more to insure due to its luxury car status. That puts the Model 3’s coverage at a rate of around $1,500 to $1,600 per year in New York.
What about the more expensive Tesla models? Nerd Wallet did a comparison between Tesla insurance providers and found that the Tesla S60 typically had policies priced between $1,900 and $2,300 per year.
States with the highest Tesla ownership – Illinois and California – had the lowest average insurance rates for Tesla vehicles.
What is our conclusion?
The Tesla Model 3 is known for its affordable price tag. At $35,000, the Model 3 is within the reach of many average middle-class drivers budgets. Based on the information above, you’re going to pay slightly more for insurance – mostly because the Model 3 is classified as a luxury vehicle. However, the price difference is not quite as significant as you think – reports suggest it’s only around a 6% difference compared to other electric vehicles.
Compared to a standard gas vehicle in that price range, however, you’re going to pay anywhere from 15% to 30% more to insure a Tesla.
Enter your ZIP code in our free tool to compare annual rates from multiple insurers.