Tesla Model 3 running costs & insurance

The Tesla Model 3 looks expensive to buy, but it's cheaper to own than most combustion-engined alternatives once you factor in fuel and tax costs

Overall rating

4.0 out of 5

Running costs & insurance rating

5.0 out of 5

Price
£42,990 - £57,990
Fuel Type:
Electric
Insurance groupWarrantyService intervalAnnual company-car tax cost (20%/40%)
48-504yrs / 50,000 milesVariableFrom £172 / £343

It's not one of the cheapest electric cars on sale today, but prices for the entire Model 3 line-up were slashed in January 2023, bringing its starting price down to £42,990 – £5,500 less than it did before. Combine that with its performance, desirability and rock-bottom running costs, the Model 3 is a compelling financial prospect.

Of course, a lot of that also applies to the Tesla's main rivals, the Polestar 2, Hyundai Ioniq 6 and BMW i4. Diesel-powered alternatives like a BMW 330d or Audi S5 Sportback (both of which are close to the standard Model 3 on performance, executive swagger and price) will cost a similar amount on finance, however they'll will be more expensive to run.

That's because like all electric cars the Model 3 is exempt from the London Congestion Charge and road tax (VED) until 2025, and benefits from only 2% Benefit-in-Kind company-car tax for the next few years.

Tesla Model 3 insurance group

Insurance groups for the Model 3 are pretty high: 48 for the base rear-drive Model 3 and the highest possible rating of 50 for the Long Range and Performance models, so coverage won't be cheap.

Warranty

Tesla offers a standard four-year/50,000-mile warranty, which is a bit low on the mileage side, but does exceed the three-year warranties offered by rivals Audi, BMW, Mercedes and Jaguar. The car's batteries get an eight-year/100,000-mile warranty and will also be refurbished or replaced by Tesla if they fall below 70% of their as-new performance within that time. That’s unlikely to happen though, given Tesla’s excellent reputation for battery longevity.

Servicing

Tesla doesn’t state specific servicing intervals – the car will inform you if it needs attention. However, Tesla recommends checking the interior air filter and brake fluid every couple of years. Tesla has a few service centres dotted around the country, and offers a mobile service where a technician will come to you.

Road tax

Thanks to its zero tailpipe emissions, there’s currently no road tax (VED) to pay on the Model 3 or any other purely electric car for that matter, but that will change in 2025 when electric cars will also be liable for the charge.

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