Model Y and Model 3 are among the cheapest cars to maintain but insurance weighs on Tesla ownership costs

Automotive industry analysts have long been warning that electric vehicles may be cheaper to make and maintain, but rising repair costs hence insurance premiums may offset those advantages.

A case in point is a new study by that pegs the Tesla Model 3 as the cheapest car to own among the bestselling mass market vehicles in the US, with Model Y among the top ten in the ranking.

With $5,061 total annual cost of ownership, however, the Model 3 is only the meager $43 cheaper to own than the next car in the ranking, a gas-powered Hyundai Elantra. The third-cheapest vehicle to run in America is the Toyota Corolla, and its annual costs are $5,182, not that much higher than those of a Model 3.

The reason for the negligible difference in annual ownership costs between Tesla's cheapest electric car and the rest of the vehicles in the ranking is that its low fuel and maintenance costs are more than offset by its high premiums, fees, and taxes.

The average cost to insure a Tesla Model 3 in the US is $2,241 versus $1,511 for a Corolla, and its owners also pay $1,041 in fees and taxes, which is twice what the Hyundai owner pays on average.

Tesla Model Y annual insurance and maintenance costs

The same goes for the Tesla Model Y, which is the seventh-cheapest vehicle to run in the US. Its low $708 charging and $1,339 maintenance costs are overshadowed by the second most expensive insurance of $2,399 annually, eclipsed only by the Model S.

In fact, the three Tesla vehicles are the most expensive to insure among America's mass market cars, and the study doesn't even include the Cybertruck which as it is not in the bestselling mass market category.

Their insurance premiums are higher since the dearth of parts, the hard-to-repair gigacast sections, and the battery replacement costs often force insurers to write off an EV that has been in a serious accident, rather than try to repair it.

Rental giant Hertz learned that the hard way when it ordered 100,000 Model 3 cars from Tesla, and flooded the second-hand market with those just two years later, citing price drops, slow repairs, and high insurance costs.

Furthermore, individual states have increasingly started to raise the road taxes on electric vehicles, with the argument that they are heavier and bring more wear and tear on public roads, adding to the rising costs of EV ownership.

The Tesla Model 3 and Model Y have one undeniable advantage before gas-powered vehicles, though, their annual fuel and maintenance costs that are much lower than those of an ICE car.