The new Tesla owner has significantly cut his monthly car payments by switching from a Lexus RX 350 to a Tesla Model Y. The savings were further amplified by gas savings and when he switched from Allstate to Tesla Insurance.
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I was reading through the Tesla group on Facebook and came across this interesting post that shows how much cheaper owning an electric vehicle is compared to a gas car. Over the past year, the prices of all the most popular electric vehicles have fallen precipitately; some models have even seen their prices decrease by as much as 30 percent.
This is especially true for Tesla vehicles. Tesla’s entire vehicle lineup, consisting of the Model S, Model 3, Model X, and Model Y, has been discounted by more than 20 percent since the start of 2023. In addition, considering the lower cost of running electric vehicles, there has never been a better time to switch to an EV.
More than any other EV, if you specifically choose a Tesla, you also have the chance to use Tesla Insurance, a revolutionary product that uses real-time driving habits to calculate insurance premiums.
If you are a cautious driver, switching to Tesla insurance can significantly reduce your monthly payments. This is especially helpful in the current high-interest environment, where monthly car payments have reached a new record high.
At this point, if you are wondering exactly how much you can save on your monthly car expenses by switching from a comparable internal combustion vehicle to a Tesla vehicle and Tesla insurance, let’s go back to the Facebook post to break down the numbers.
Carol Butler, on Facebook, recently replaced his Lexus RX 350 with a Tesla Model Y. Butler shared his personal experience and how exactly his finances improved by going from a comparable gas car to a Tesla Model Y.
Carol writes…“I’ve owned my 2024 Model Y for about five weeks now….I don’t have a home charger, but I live within walking distance from a free ChargePoint charger, 15 minutes from a supercharger, and 5 minutes from a Shell Recharge, which costs about $2.00 for about 50% charge…I traded in my 2022 Lexus RX 350….I filled my gas tank every Sunday and Thursday for about $45 each…my car payment was decreased by about $80 a month, and my insurance decreased by about $120 a month…I switched from Allstate to Tesla insurance….so I think I made the right decision because I have more time than money.”
Adding up all the savings Carol has gained by switching to a Model Y, his car-associated payments have fallen by more than $300 a month while he still drives a comparable, arguably even better vehicle.
The gas and insurance payment savings are particularly noteworthy here. Let’s break down his savings into
- Gas Savings earned by moving to a Tesla
- Insurance premium savings by moving to Tesla Insurance
- Finally, monthly car loan payment savings by moving to a Model Y
Gas Savings as a result of moving to a Tesla
First, looking at the gas savings, Carol spent $90 per week or $360 per month simply driving his car. However, by switching to his Model Y and utilizing free public charging around his house, Carol has decreased the cost of driving his Tesla Model Y practically to zero.
Tesla unusually includes gas savings when showing the final price of its vehicles. Most people are unhappy with this practice because they feel it misleads potential buyers into believing their Tesla vehicle costs less than its true price.
However, Carol’s case shows that he’s indeed saving close to $4,000 in gas expenses a year by switching from his Lexus to a Model Y. If people in the real world are seeing these savings, Tesla can be excused for heavily promoting gas savings while promoting its vehicles.
In Carol’s case, he does not have any home charging and completely relies on public charging to recharge his Model Y. In his post, Carol even states that frequent trips to public chargers are okay for him since he has “more time than money.”
However, people in the comment section have pointed out that Carol can simply use his mobile connector, plug it into a regular 120-volt outlet at his house and he will be able to get about 40 miles of range overnight.
More than ninety percent of individuals drive less than 30 miles a day, which means if Carol happens to be in this large group, he can use regular outlets in his home to power his Tesla Model Y.
Charging his EV at home will definitely increase his energy bill; however, he can greatly increase his experience of owning a Model Y by only paying a little more for electricity.
Depending on his state and utility, Carol can use off-peak charging to power his EV at a significantly discounted price. For example, in Texas, Tesla has a program where Tesla vehicle owners can charge their EVs for a flat $15 per month fee as long as they charge during off-peak hours.
Insurance premium savings by moving to Tesla Insurance
Second, let’s examine the savings that could be had by switching to Tesla Insurance. Carol says that by moving from Allstate to Tesla Insurance, he has been able to save $120 on his premiums.
A $120 per month savings is significant for monthly insurance premium payments. Let alone $120 in savings, observers in the comment section have pointed out that their entire insurance payment doesn’t amount to $120.
Insurance premiums take into account several factors determined by the individual. However, in addition to Carol, many individuals who have moved to Tesla insurance have reported large savings.
Tesla Insurance uses real-time vehicle driving habits and Tesla’s vehicle driving Safety Score to determine risk levels and insurance premiums.
To get a higher Safety Score, Tesla considers things such as hard acceleration, vehicle following distance, use of autopilot, driving late at night, specifically after 11 p.m., and so on to calculate the risk of future collision and an insurance premium.
Tesla says you can directly improve your driving habits to lower your insurance premiums. This is gamifying the insurance and driving experience. However, Tesla also gets a pass here, as the entire scheme is meant to improve safety.
Tesla Insurance is available in Arizona, California, Colorado, Illinois, Maryland, Minnesota, Nevada, Ohio, Oregon, Texas, Utah, and Virginia, with more states coming soon.
Monthly car loan payment savings by moving to a Tesla Model Y
The last thing to consider here is that by moving from a comparable gas vehicle to a Tesla, Carol has been able to save $80 on his monthly car payments. Electric vehicles still have a reputation for being expensive; however, as I mentioned above, they have seen massive price cuts in the past year.
Now, purchasing an electric vehicle is nearing parity with purchasing an internal combustion vehicle. That’s before factoring in gas savings and maintenance and service savings, which can balloon to more than $10,000 over the vehicle's lifetime.
Another thing to consider is that, as of the start of 2024, electric vehicles qualify for a $7,500 tax credit that can be directly applied to the vehicle's purchase price.
Unlike previous electric vehicle tax credits, this scheme directly deducts the price of the vehicle rather than receiving a tax refund at the end of the tax year. You can read more about the new time-of-purchase EV tax incentive, vehicle price and personal income restrictions necessary to qualify here.
Overall, as I mentioned above and Carol’s case prove, it has never been cheaper to own an electric vehicle, and switching to an EV can easily save you hundreds of dollars off your monthly car-related expenses.
This is all the information we have currently; however, we’ll be sure to keep you posted as the economics of owning an EV improve even further. Until then, visit our site, torquenews.com/Tesla, regularly for the latest updates.
So, what do you think? Are you surprised to learn that you can save more than $300 a month by switching to a Model Y from a comparable gas vehicle? Also, what other savings can you get by switching from a gas car to an electric vehicle? Let us know your thoughts in the comments below by clicking the red “Add new comment” button.
Image: Courtesy of Joe Tegtmeyer on YouTube
For more information, check out: Tesla Increases Cybertruck Production Run Rate by a Whooping 50% in Three Weeks – Annualized Cybertruck Production Now Seats at 75,000 Units Following a Buttery Smooth Production Ramp
Tinsae Aregay has been following Tesla and the evolution of the EV space daily for several years. He covers everything about Tesla, from the cars to Elon Musk, the energy business, and autonomy. Follow Tinsae on Twitter at @TinsaeAregay for daily Tesla news.
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Come on Guys, please read…
Come on Guys, please read your own headline before publishing... I would be willing to bet Tinsae NEVER owned an EX 350, ever.