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Tesla Model 3 vs. Toyota Camry: True Cost to Lease One

Gerelyn Terzo

Published: April 27, 2024 7:14 am

The auto industry is more competitive than ever, and consumers have many opportunities to capitalize on market conditions. After all, it wasn’t too long ago vehicle inventories were depleted as a consequence of supply-chain issues owing to the pandemic.

These days, auto inventories are hovering at their highest levels since 2020, making the case for a buyer’s market. While Toyota’s inventory falls on the lower end of the spectrum, that’s not shocking considering the Camry holds the title as the top-selling vehicle in the U.S. market. 

One automaker with the potential to give Toyota a run for its money is Tesla (Nasdaq: TSLA), especially now that the EV maker is targeting the mainstream with more affordable prices.  

Lap of Luxury 

Leasing a car is ideal for people who aren’t looking for a long-term commitment. When you’re in the market for an EV, where innovation never stops, leasing could be a good strategy. You’re only locked in for a few years, say 24-36 months, while your mileage leash is likely to be anywhere between 10,000 and 15,000 per year. 

If you’re looking to save on costs in the short term, leasing is the better option vs. buying. Your payments are likely to be lower because unlike when you buy you won’t be paying back principal. As a result, chances are good you’ll find yourself driving a vehicle you might not otherwise afford, like a Tesla. 

But the last thing you want to do is be caught off guard by the costs associated with leasing. The Tesla Model 3 and Toyota Camry Hybrid are both in-demand vehicles that are closer on costs than you might think.  

Tesla Model 3 

Source: jetcityimage / iStock Editorial via Getty Images

jetcityimage / iStock Editorial via Getty Images

• Model 3 
• Model Year: 2024 
• Monthly Payment: $329
• Down Payment: $4,500
• Cost to fully charge the battery: $10.95-$14.70

If your budget calls for a low monthly payment, the Tesla Model 3 does the trick. For a down payment of $4,500, and a monthly payment in the ballpark of $329, you could be on your way in one of the most high-profile vehicles on the road.

Tesla generally focuses on car ownership vs. leasing, especially given its direct sales model that excludes third-party dealerships. But Tesla leasing is available in 44 U.S. states. Tesla has been cutting prices on many of its vehicles, except the Model 3 and Cybertruck. 

While EVs and tax credits often go hand in hand, you won’t get to participate when leasing. According to Consumer Reports, EV tax credits, which can be as lucrative as $7,500, are reserved for the leasing company, not the leaser. But you could potentially  still benefit if the EV maker passes along those savings to the consumer in the form of a lower lease price. Unfortunately, as of year-end 2023, neither the Tesla Model 3 Rear Wheel Drive nor the Long Range were eligible for the EV tax credit.

If you were thinking of buying your Tesla model 3 outright when the lease is up, think again. “All Tesla vehicles delivered on or after April 15, 2022 are not eligible for purchase at the end of the lease,” per the company.

As of Q4 2023, the Tesla Model 3 RWD cost $429 per month to lease across three years with a down payment requirement of $4,500. That comes to just under $20,000 in total for the lease. If you were buying, it would cost you closer to $40,000 in the same span. But after the three years, Model 3 owners come out on top because they can then sell the car somewhere around $25,000, a privilege not available to leasers.

If you spring for the Performance version of the Model 3, which has a purchase price of approximately $40,000, buckle up because it goes from zero to 60 MPH in less than three seconds.

Toyota Camry 

Source: Tramino / iStock Unreleased via Getty Images

• Model: Camry Hybrid LE
• Model Year: 2024 
• Monthly Payment: $439
• Down Payment: $2,399
• Cost to fill the tank: Approximately $48

With a price of approximately $28,855, the 2024 Camry Hybrid LE will set you back you $439 per month to lease. Terms include 36 months and 12,000 miles per year. The monthly payment is $110 steeper than Tesla’s Model 3. But where you offset that expense is with a lower down payment of $2,399, which is roughly $2,100 less than Tesla’s. 

While you can fully charge your Tesla Model 3 for under $20, hybrids like the Camry are powered by gasoline. Toyota’s newer vehicles are trending toward lithium ion battery packs, replacing nickel. A replacement battery for today’s Camry hybrid can run you anywhere from several thousand dollars to more than $5,000, per J.D. Power. You may not need to replace yours, considering they can last between five and eight years from the assembly line. But there’s no hard fast rule, as battery life can be affected by many variables, including the weather.

The Toyota Camry might not have lots of bells and whistles, but at 51-53 miles per gallon, you’ll get bang for your buck. If you want to keep the car, you should be able to get a buyout quote from Toyota. The company warns that a semiconductor shortage has affected supply. 

Knowledge Is Power

At the end of the day, choosing between a Tesla Model 3 and Toyota Camry comes down to your preference. Whichever automaker you choose, know your mileage needs so you don’t overpay now or later. If you overshoot, you’ll wind up paying for road trips you never took. If you undershoot, car dealers charge anywhere from $0.15-$0.25 for overages. If you’re 5,000 miles over, that’ll cost you $1,250 on the high end of the scale. 

Walk into the showroom with a clear vision of your needs and wants so you won’t be handcuffed to a deal that stinks. This holds whether you’re leasing a Model 3, Camry or any other make or model.