Are Tesla Cars Crazy Expensive To Insure?

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About: Tesla, Inc. (TSLA), Includes: BMWYY, DDAIF
by: Steven Moseley
Summary

In response to questions about Tesla insurance costs, I compared Tesla Models 3, S, and X to comparable offerings from BMW and Mercedes.

The Tesla Model 3 Performance is on average 8% more expensive to insure than a BMW M3, and 21% more than a MB C-Class 43 AMG.

The Tesla Model S P100D is on average 10% more expensive to insure than a BMW M5, and 21% more than a MB E-Class 63 AMG-S.

The Tesla Model X P100D is on average 16% more expensive to insure than a BMW X6 xDrive 5.0i and 20% more than a MB GLE 63 AMG-S.

The Teslas in this test were on average 17% more expensive and 30% quicker than the competitors, which may impact the results slightly.

There has been much talk about Tesla (TSLA) insurance prices of late, in response to the news about Tesla announcing an impending insurance offering. To address the speculation about relative Tesla insurance prices, I decided to do a comparison on the prices myself, using insurance comparison site insurify.com to generate quotes. The results speak for themselves.

Methodology

I selected 9 comparable vehicles (3 Teslas, 3 BMWs, and 3 Mercedes Benzes) and rated each of the 9 vehicles in 3 regions (Dallas, TX, San Mateo, CA, and Orlando, FL).

In each region, I received multiple insurance quotes:

  • In FL 4-5 quotes per vehicle
  • In CA, 8-9 quotes per vehicle
  • In TX, 10-11 quotes per vehicle

For each region, I excluded carriers who didn't rate all vehicles, and selected the cheapest and median pricing for each vehicle+region. In CA, I excluded one carrier that wasn't available in TX or FL, and was around 50% cheaper than the next cheapest for all vehicles (in order to preserve regional comparability).

Driver & Vehicle Info and Coverage Levels

For all quotes, I used the same driver information:

  • 45/M Single
  • Employed, Homeowner
  • Excellent credit, No tickets, No accidents
  • Has prior coverage for 6 years

For all vehicles, I used the same profile:

  • Used for commuting to work
  • Driven 7,500 miles per year
  • Owned outright

For all coverage levels, I selected:

  • 50/100/50 liability
  • 1,000 deductible for comprehensive and collision
  • No towing or labor
  • State minimum requirements for uninsured / underinsured coverage
  • State minimum requirements for PIP / Medpay

Locations

I opted to generate quotes in 3 of the bigger insurance markets: TX, CA, and FL. Within those regions, I was looking for areas that would be typical of cars of this value. Within each region, I selected home addresses of around $750k-800k value (based on Zillow Zestimates), so as to attempt to obtain comparable location ratings between the regions.

The specific cities I used were:

  • Dallas, TX
  • Orlando, FL
  • San Mateo, CA

Mid-size Sport Sedans

For this comparison, I decided to put the Model 3 Performance up against the BMW M3 and MB C43 AMG. All 3 vehicles are similar in price, and not terribly disparate in performance. I think this is probably the best comparison of the 3 categories, as the cars are very similar.

2018 Tesla Model 3 Performance

  • Base Price: $59,500 (3% cheaper than competitors)
  • 0-60: 3.5s (14% faster than competitors)

2018 BMW M3

  • Base Price: $66,500
  • 0-60: 3.9s

2018 Mercedes Benz C-Class 43 AMG

  • Base Price: $56,245
  • 0-60: 4.1s

Full-size Sport Sedans

For full-size sedans, I put the Model S P100D up against the BMW M5 and MB E63 AMG-S. These are all crazy-fast, crazy-expensive sedans, although the Tesla is faster and more expensive by a pretty hefty margin.

2018 Tesla Model S P100D

  • Base Price: $135,000 (23% more expensive than competitors)
  • 0-60: 2.5s (24% faster than competitors)

2018 BMW M5

  • Base Price: $102,600
  • 0-60: 3.2s

2018 Mercedes Benz E-Class 63 AMG-S

  • Base Price: $104,400
  • 0-60: 3.0s

Sport Crossover SUVs

For Crossover SUVs, I put the Model X P100D up against the X6 5.0 and the GLE63 AMG-S. The BMW in this category is pretty out-classed on both price and performance, which makes this a not-so-great comparison on insurance pricing. When looking at the Tesla vs the Mercedes, the Tesla is priced relatively favorably.

2018 Tesla Model X P100D

  • Base Price: $138,000 (32% more expensive than competitors)
  • 0-60: 2.9s (52% faster than competitors)

*2018 BMW X6 xDrive 5.0i

  • Base Price: $77,700
  • 0-60: 4.7s

2018 Mercedes Benz GLE-Class 63 AMG-S

  • Base Price: $109,700
  • 0-60: 4.1s

My Take

While not perfect, this test does give some indication of relative insurance prices for Tesla models as compared to similar vehicles from other brands.

The Tesla models used in this test were on average more expensive and higher-performance than their counterparts. It's probable that these factors impacted the premiums in some way.

Nevertheless, on average, Teslas do appear more expensive than their BMW (+10%) and MB (+20%) counterparts. However, this difference amounts to on average only $200 to $400 per year, when considering the cheapest options.

The take-away here is that while Tesla vehicles are more expensive than comparable ICEs, they aren't "crazy" prices, and in some cases are cheaper, when a given region has a carrier which has underpriced Tesla premiums relative to other carriers in the region.

Disclosure: I am/we are long TSLA. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.