The Tesla Model 3 is one of, if not, the most important electric vehicles ever made. While the Model S proved an electric vehicle could be cool and work in the real world, the Model 3 proved it could be done for the masses. With a great range to price ratio, updated looks, and even a built-in AI assistant, the Model 3 is still one of the best options in the premium, near luxury electric market. With all this hype, you may want one yourself, but before you think about the savings you will gain now you’re not at the gas pump, there is another factor that may ruin those savings. In this article, we will look into the average Tesla Model 3 insurance cost, how Tesla Model 3 insurance rates can change based on the policy you select or the age of driver, and if it’s worth it to pay more for the more expensive trim levels.
Tesla Model 3 Overview
Base Trim Engine
EV
Base Trim Transmission
Automatic
Base Trim Drivetrain
Rear-Wheel Drive
Base Trim Horsepower
295 HP @7000 RPM
Base Trim Torque
309.3 lb.-ft.
Base Trim Battery Type
Lithium ion (Li-ion)
Segment
Compact Sedan
Infotainment & Features
7 /10
The Model 3 has been with us for years now, but it’s good to get to know the stats of the vehicle before we look at the cost to insure it. The Model 3 is coming up on its 10th birthday, having launched in 2017. Since then, it has gone through a few facelifts and model lineup changes, with the most major coming in 2023, updating the front and rear fascia, and modernizing the design. During its time on this earth, it has become one of the best electric vehicles of all time and, even in its old age, continues to sell well.
The Model 3 is currently sold in three trim options. The one you pick will tie into what kind of insurance payment you will have, as we will explain later. At the bottom is the Standard Rear Wheel Drive. This $39,990 base model comes with 321 miles of range and a 0–60 mph time of 5.8 seconds. It has all you would expect and nothing more, with a part cloth interior and no ambient lighting. Next up is the Premium in both rear-wheel drive and all-wheel drive. This will be the most common Model 3 you will see on the used market and comes with up to 363 miles of range and can do a slightly faster 4.9-second 0–60 mph dash. If performance is what you want, the aptly-named Model 3 Performance is the one to get, with its 510 hp and sub-three-second 0–60 mph time. This performance comes at the cost of range, with the top dog Model 3 capable of only 309 miles. With these three trim options varying in performance and power figures, do they have different effects on your insurance? We will explore as we look at why electric cars are more expensive to insure in general.
This guide serves to provide an overview of Tesla Model 3 insurance costs in context; buyers should always do their due diligence and research insurance costs unique to your circumstances.
Why Are Electric Cars More Expensive To Insure?
Mercedes-Benz EV charging at Tesla SuperchargerMercedes-Benz
It is no secret that electric vehicles cost more to insure than regular gas ones. On average, the premium for a regular gas car is just under 50% cheaper than the electric equivalent. What makes this the case?
Specialist Parts/Labor
Mechanic carrying out Mercedes-Benz Service AMercedes-Benz
You will notice that insurance companies don’t cut corners when it comes to repair shops if you are involved in an accident and need to file a claim. They use only OEM parts and dealer/manufacturer-approved technicians when repairing a car. At the moment, the position of an electric car mechanic is far more specialized than that of a general mechanic. While electric cars are known to be reliable, if they do need fixing, the parts cost is much higher for EVs in comparison to ICE vehicles. EV specialists charge high prices for their services since they are more of a coder than a technician. Because the insurance company anticipates having to pay more to get it back on the road, this higher expense to them is reflected in your monthly rate.
Electric Fires
Tesla on fireCity of Marietta Government
EV fires are among the hardest to contain, even if they are not as frequent as certain media may have you to believe. If an EV catches fire, it is generally agreed to just let it burn out since that big battery can become a real inferno if not handled correctly. From the standpoint of an insurer, it’s essentially a movable fire hazard that can go 0–60 mph in under five seconds, full of volatile chemicals with high voltage. The reason EV premiums are higher is precisely because of this kind of thinking.
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What Is The Cost Of Insuring A Model 3?
2025 Tesla Model 3 DrivingTesla
With an overview of the Model 3, and the factors that can lead to more expensive insurance premiums for electric vehicles explained, what can you expect the insurance quote for a Tesla Model 3 to be?
Standard vs Performance
The Tesla Model 3 Performance. Fast, but also leaning towards the heavy side.Tesla
Going 0–60 mph in under three seconds is not what an insurance company wants to see, and as such the Model 3 Performance suffers from a higher insurance premium than its Standard and Long Range counterparts. With that being said, they are not as bad as you think, and when compared to other performance sedans like the BMW M340i, the Model 3 Performance is a bargain. A test comparing all Model 3 trims found that the Performance carried a $31 more expensive monthly premium than the regular standard model. Most customers going from a lower trim report only a relatively small increase in premiums when upgrading to a Performance trim.
With that being said, it is important to remember that the Model 3 suffers from generally high premiums like most electric cars, with a yearly premium for a Standard Range Model 3 coming to around $2,500, while a Performance comes to around $2,700–$2,800. It is one of those situations where taking the initial plunge is expensive but once you are in the ecosystem, upgrading to the Performance doesn’t cost much more.
Third Party vs Comprehensive
paper letter contractNicola Barts / Pexels
Third-party coverage is rare in the world of Model 3s, as almost all Model 3s are leased, and insurance providers generally don’t allow for liability-only insurance on financed vehicles. If you do own your Model 3 out right then it can save you hundreds of dollars a year, provided nothing goes wrong. And it is when something goes wrong that third part liability coverage can bite you. Owners report that while they may have saved a few hundred dollars a year on their premium, if something does happen to the car, and you have to pay out of pocket, the numbers quickly add up to four or even five digits. If you are already spending a decent amount on the coverage anyway, just like with the comparison of the Standard Range and Performance, it is generally safe and easier to just spring that little bit of extra money to give yourself a complete piece of mind.
Young Drivers vs Mature Drivers
A student and driving instructor in a car turn to smile at the cameraYoung Driver
Young drivers are at a significant disadvantage when it comes to insuring a Model 3. The idea of giving an inexperienced driver all that instant torque is not something an insurance company would like the sound of, so premiums are priced accordingly. Teen rates range from $733 to an eye-watering $2,016 per month for a Model 3, while the average adult ranges from $209 and $394 per month. Nationwide and State Farm are the most willing to take on young drivers, but even still the costs are monstrous. It is recommended that if a young driver wants to have an electric vehicle, they start out with a less powerful model, or begin with a hybrid, before transitioning to an electric vehicle.
Are Rivals Cheaper?
2021 Ford Mustang Mach-E GTFord
Simply put, yes. Tesla pioneered the electric car in the western world, but with that popularity comes a lot of people driving and crashing Tesla cars. Most EVs from legacy manufacturers are cheaper to insure than the Model 3, with standouts including the Hyundai Kona, Kia Nero Electric, and Toyota bZ, each coming in at around $1,700 a year. Other compact electric cars like the Fiat 500e are cheaper to insure as well, but they are not great comparisons as they do not comfortably seat four.
Are Tesla Model 3s Expensive To Insure In 2026?
2024 Tesla Model 3 Black and Red Front Angle DrivingTesla
With an average yearly Model 3 insurance cost of around $2,400 to $2,800, it is more expensive than the average new car premium. It offers great technology, range, and performance, but with a large amount being bought, the likelihood of one being crashed is higher. Tie this with an expensive cost to repair and the Model 3 could potentially lose any savings it was to gain from being cheaper to charge than a regular gas car. On the flip side, if you are already thinking of buying one, the move to more expensive or more powerful trim levels does not affect your premium much. Young drivers will suffer getting insured at all on them, but if your older and are playing in the premium sedan segment already, then the Model 3 is still a great choice.
Sources: Tesla, Valuepenguin.com, Evinsurancehub, Businessinsider, teslamotorsclub, Insurance.com, Insure.com,
