Save $39,000 to $114,000 Driving the Tesla Model Y, the World’s Best Crossover


Published on October 4th, 2020 |
by Paul Fosse

October 4th, 2020 by Paul Fosse 

In this article, I’m going to present a wide variety of ideas to save you money while buying an amazing electric car. This isn’t an apple-to-apple comparison with another model. I’ve done a bunch of those.

If you want to see how the Tesla Model Y compares to similar cars, see my articles where I compare it to the very fast but expensive BMW X5M and X6M, the similar Mercedes AMG GLE 63S, or the best selling premium crossover Lexus RX 350. If that is too much to read, the Model Y outperforms the BMW and Mercedes crossovers for less than half the price and about a sixth of the fuel costs. The Lexus RX 350 has a similar purchase price as the Model Y but also costs about 6 times as much in fuel costs. The catch with the Lexus is the Model Y is twice as fast from zero to 60 mph as the Lexus. That is noticeable to anyone who makes even the most cursory comparison of the vehicles.

The Model Y has gotten universally great reviews, including this review from the Wall Street Journal that asks if it is the world’s best crossover.

Why Does Your Family Own 2 Vehicles If One Or Both Of  You Work From Home?

Has the COVID crisis made you change your opinion of whether you can work from home? I reduced the number of cars we have from 2 to 1 before the COVID crisis since my wife already worked from home, but everyone’s situation is different. This article mainly discusses reducing your housing space, but it talks about how technology is changing how we work and live. Some of the reasons my wife and I don’t need 2 cars are:

  1. We both work from home.
  2. We have been exercising at home since the COVID crisis.
  3. If or when I go back to the office, I will bike or carpool some of the days.
  4. If or when I go back to the office, I’ll still have fixed work-from-home days that make it easy for my wife to schedule any appointments she needs a car for.
  5. We can use Uber/Lyft if we both need a car at the same time. The transit and bus system is very weak in many places, like the part of Tampa we live in. It is my belief that robotaxis will kill buses and trains in most cities in the US, with the exception of New York City and a few other dense cities. The COVID crisis has done much financial harm to these transit systems, which in many cases were failing even before the crisis.

In the rest of the article, I’ll compare ownership costs if you choose to buy a Model Y and keep it for 10 years compared to buying 2 crossovers (a compact and a midsized model) that you keep for 5 years and then trade in for 2 more crossovers. Why do I think you can keep the Tesla for twice as long as the gas cars?

  1. Over-the-air updates mean your car gets most of the features of new cars, so you are unlikely to need to buy a new car just because you want a cool feature you read about or saw on TV.
  2. Electric cars have many fewer moving parts, so there are fewer parts to be worn out. I’ve ridden in a Tesla Model S that had over 200,000 miles on it and the owner claimed it drove like a new car.
  3. The design of Tesla vehicles is many years ahead of other cars and changes infrequently, so a 10-year-old Tesla feels less dated than a 5-year-old regular car.

Another advantage of keeping a car a long period of time is you don’t have to keep buying accessories like a trailer hitch or roof rack after you trade cars in for new models.

For the cars to compare, I wanted to pick popular crossovers that have good reputations. I wanted cars that have similar seating and cargo space to the Model Y. Please refer to this article I wrote the day after I went to the Model Y unveiling for more on how the Model Y competes with the Toyota RAV4 and Highlander. I thought I would put a Honda CR-V in the mix as a replacement for the RAV4, but they are very similar vehicles. See the information I captured below for the 2 comparison vehicles.

Image Credit:

I decided to recalculate the financing costs since interest rates are very low since COVID has struck and Edmunds hasn’t adjusted their figures.

It has annoyed me for years that neither Edmunds nor KBB includes Tesla in their cost of ownership databases. I shouldn’t complain, though, since that has given me a chance to fill the void. In the table below, I compare the costs of owning the Model Y for 10 years to buying a Honda CRV and Toyota Highlander now and then trading them both in for 2 new cars in 5 years. I assumed you would trade the cars in for the same models with the same costs.

The $114,569 or 68% savings over 10 years is shocking, especially since you are moving from 2 mainstream vehicles to a premium luxury vehicle.

The depreciation is only lower because you are replacing 1 car with 2. Otherwise, it would be higher, even though you have a longer holding period. It is possible this is even better than I estimated. Many people think gas cars will become almost worthless by 2030 as people see the high costs of maintenance and if gas stations may become harder to find as fewer people have gas cars. Similarly, the savings in taxes and fees are due to reducing the number of vehicles and trading them in half as often.

The $34,340 in fuel savings is huge, and it increased because of my aggressive assumption that electricity will be available for 5 cents a kWh either from abundant solar or off-peak electricity as time-of-use billing is rolled out to more customers.

I’m expecting dramatic insurance reductions both because of the demonstrated safety of Tesla vehicles and Tesla’s aggressive action in entering the insurance market to ensure lower rates to customers as risks are reduced.

Maintenance and repair costs are also a large source of future savings.

After reviewing these figures, I hope you will meet with your family members and see if this is something you could implement to save money and improve your family’s safety and enjoyment. The savings will be much greater if you compare replacing 2 BMWs or 2 Lexus vehicles. Below, I explain how I came up with each cell in the above workbook.

  • Cash Price — For the other vehicles, I used the price Edmunds calculated. For the Model Y, I took the $49,990 base price and the destination charge ($1,200) and sales tax in California ($3,624). This is just for reference and other calculations — it isn’t added to the costs.
  • Depreciation — I used Edmunds for the other cars and I used a 60% depreciation for Tesla based on 8-year-old Model S cars still selling for 50% on used car sites.
  • Taxes & Fees — I used the Edmunds estimate for all cars but the Tesla Model Y, for which I used the $1,200 destination charge and 7.25% California sales tax. Also included is $300 a year multiplied by 10 years for the annual registration fee, for a total of $7,824.
  • Financing — I used a 2% for a 5-year loan for the other cars, but for Tesla, I calculated the financing costs based on a 3-year loan at 1.74% (available at DCU credit union for energy-efficient vehicles). I figured the 3-year loan is affordable since you will only have one car payment instead of 2. I used this calculator.

Image credit:

  • Fuel — I used the EPA rating and calculated using an aggressive 5 cents a kWh based on either charging using a low time of use rate or prepaying for your electricity by buying solar, and I used the California average price per gallon of $3.20. Go to to add your assumptions. I multiplied the Model Y result by 1.33 to reflect the increased miles expected on 1 car replacing 2 vehicles.
  • Insurance — For insurance rates, I assumed the cost of insuring a Tesla will go to 25% the price of other cars that don’t have the advanced safety features of the Tesla Model Y. If insurance companies fail to realize this, Tesla will take matters into its own hands.
  • Maintenance & Repairs — I used Edmunds’ estimates for the Honda and Toyota and I used this article on new research from Consumer Reports to calculate expected maintenance and repair costs for the Tesla Model Y. Of the $6,300 in costs expected over 200,000 miles, I put $4,000 into maintenance and the rest in repairs. For ideas on how to reduce your tire costs, please see this recent article I wrote on deflating tire costs 90%.

If replacing 2 cars with one doesn’t work for your family, but you think you can keep the Tesla Model Y for 10 years, look at this comparison of just replacing one of your cars with a Model Y.

In this scenario, we still get a very substantial $39,349 or 42% savings from replacing a gas crossover with the Model Y and keeping it twice as long.


Without going into all the advantages of the Model Y over the Honda and Toyota, 3 of the most significant advantages are:

  1. Dramatically faster acceleration and better handling. The dual-motor Model Y gets to 60 miles an hour in 4.6 seconds, a full 3 seconds faster than the Honda CR-V and 2.6 seconds faster than the Toyota Highlander.
  2. The safety of the Tesla Model 3 that the Y is based on is unmatched and ever improving, as you get software updates. The Honda and Toyota are very good vehicles, but you get what you buy and they don’t get any better with time.
  3. It is likely but not assured that you will be able to upgrade your Model Y to have full self-driving capability so that you can do other things while it takes you where you want to go. This will also help you use one car to replace two, since the car will be able to take one person to work, then go back home and get another person. It will also give you the ability to use your car to make money when you don’t need it by transporting trusted people.

I hope this article gives your family ideas on how to cut your transportation costs and afford the leap to a Tesla. Many of these same advantages also apply to the Ford Mustang Mach-E and the Volkswagen ID.4. Make sure you compare all your choices and purchase the vehicle that best meets your family’s needs.

If you liked this article about saving money, read this one about saving $170,000 in electric costs, this one about a big drop in Tesla solar prices that can help you save big, or this one about downsizing your home.

If you decide to order a Tesla, use a friend’s referral code to get 1,000 miles of free Supercharging on a Tesla Model S, Model X, Model 3, and now the Model Y (you can’t use it on the Cybertruck yet). Now good for $100 off either solar panels or a solar roof, too! If you don’t have any friends with a Tesla, use mine: 


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Tags: EV TCO, Tesla, Tesla Model Y, Tesla Model Y costs, Tesla Model Y price, Tesla Model Y Total Cost of Ownership

About the Author

Paul Fosse A Software engineer for over 30 years, first developing EDI software, then developing data warehouse systems. Along the way, I’ve also had the chance to help start a software consulting firm and do portfolio management. In 2010, I took an interest in electric cars because gas was getting expensive. In 2015, I started reading CleanTechnica and took an interest in solar, mainly because it was a threat to my oil and gas investments. Follow me on Twitter @atj721 Tesla investor. Tesla referral code:

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