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What Is the Insurance Cost for a Tesla Model 3?

insurance cost for tesla model 3

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Driving a Tesla can be a great way to save money on gas, as these vehicles offer an impressive range with entirely electric engines. While the savings on gas can be phenomenal, you may pay more for insurance than you would for a more traditional car. If you already own a Tesla Model 3 or are in the market for a new car, you may want to explore how much it costs to insure this vehicle.

Your specific insurance payments can vary based on several factors, so you can benefit from knowing how to reduce these costs. Here is a breakdown of the average insurance cost for the Tesla Model 3, with some tips for lowering your rates.

How Much Does It Cost To Insure a Tesla Model 3?

While numerous factors affect the ultimate price of insuring a Tesla Model 3, it can be helpful to look at some average costs. According to ValuePenguin, the average cost to insure a new Tesla is $3,947 per year. The Model 3, with an average insurance rate of $3,386 per year, is the second cheapest Tesla car to insure behind the Model Y. Compared to the average premium of $4,956 per year for the Model S, this rate is very competitive.

You may encounter higher premiums if you want to customize your Model 3 beyond the factory defaults. This average cost pertains to the base model, so you may pay more if you add features like self-driving capabilities or paint color options. These customizations can increase your insurance cost because repairing the vehicle may be more time-consuming and expensive.

What Companies Offer the Best Insurance Rates for the Model 3?

In addition to the car’s customization options, the company you choose to insure your Model 3 can affect the price. Different insurance companies offer varying quotes for this vehicle, so shopping around before selecting a provider can save you money. While your exact quote can differ, it may be helpful to review the average cost of insuring a Tesla for some popular insurance companies. Here is a breakdown of a few common insurance providers:

  • USAA: $1,416 per year
  • State Farm: $1,756 per year
  • Progressive: $2,536 per year
  • Geico: $2,658 per year
  • Allstate: $3,151 per year

When examining these rates, it’s important to remember that USAA is only available to active military personnel, veterans, and military families. If you are eligible for insurance under USAA, it may be the most cost-effective option for you. Before inquiring about a quote, you should check the eligibility guidelines and ensure that you qualify.

Should You Use Tesla’s Car Insurance?

In addition to these popular insurance companies, Tesla also offers insurance services. The Tesla insurance services are unique and are only available in Arizona, California, Colorado, Illinois, Ohio, Oregon, Texas, and Virginia. Tesla insurance is remarkable because the car manufacturer uses a system to grade your real-time driving behavior and bases your payments on your safety score.

With a maximum score of 100, this system automatically monitors how you drive and generates reports to grade how safe you are. If you drive your car safely and avoid accidents, this score can help reduce the cost of your monthly and annual payments. An important exception to this system is in California, where state law prohibits Tesla insurance from using this score to calculate costs. When selecting your insurance plan, you may want to compare Tesla’s in-house insurance services and the rates offered by other companies.

What Makes the Tesla Model 3 So Expensive To Insure?

If you’re wondering why the Model 3 is so expensive to insure compared to other sedans, several factors affect this price. One of the most significant contributors to this cost is that each Tesla has an aluminum body that is much more expensive to repair than the traditional steel bodies found in most other cars. Repairing this unique chassis material can be costly and time-consuming, so many insurance companies will charge extra to cover these cars.

Additionally, many other parts used to manufacture Teslas are unique to this company, so they can be costly to repair. The advanced systems in the car’s onboard computer can also lead to expensive repairs, as specialized personnel are often necessary to restore service to the vehicle.

How To Reduce the Cost of Insuring Your Model 3

If you love your Model 3 but would rather not pay these high insurance costs, you may want to explore some strategies for reducing your payments. Many different factors contribute to the cost of insuring a Tesla, so identifying them can help you manage your monthly rates. Here are a few strategies you can use that may help you reduce your insurance costs:

Drive Safely

One of the best tips for keeping your insurance costs low is to drive safely. Depending on the company you choose to insure with, you may be able to benefit from incentive programs that reward safe driving. When you avoid collisions and accidents on the road, the insurance company views you as a low-risk driver and may reduce your payments. When using Tesla’s insurance system, the monitoring device will also provide you with a higher safety score that can lower costs.

Don’t Choose Expensive Upgrades

If you’re buying a new Model 3, upgrading with some expensive features may be tempting. While these features are exciting, they may lead to higher insurance rates due to how expensive those extra parts are to repair. If you want to keep your payments as low as possible, you should only select upgrades that don’t lead to higher insurance rates. If you aren’t sure what to expect when upgrading, it’s helpful to consult the manufacturer and your preferred insurance carrier.

Relocate to a More Affordable Location

Insurance rates can vary based on where you live in the country, so relocating to a less expensive location can help you save money. If you’re committed to reducing your monthly expenses, moving to an area with lower insurance premiums may be effective.

The above info was a brief analysis of some of the factors related to your Model 3’s insurance costs.

FIXD Research Team

At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.

We’re here to help you simplify car care and save, so this post may contain affiliate links to help you do just that. If you click on a link and take action, we may earn a commission. However, the analysis and opinions expressed are our own.


About the Author

FIXD Research Team

FIXD Research Team

At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.

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