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Last updated: February 17, 2023

Why Brand-New Teslas Are Showing Up in Junkyards

Visit a junkyard lately? You could find 2022-2023 Teslas worth $60,000 to $80,000.

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A total loss occurs when a car’s repairs are worth more than its actual market value. In that case, the insurance company would total the vehicle and, provided the insured has enough coverage, replace it with a new one. But recently, many auto insurance companies have deemed new Tesla Model Ys too expensive to repair, which is why they’ve started showing up in junkyards.

Teslas Are Too Expensive to Repair

Rather than repairing Teslas under collision or property damage coverage, some car insurance companies are sending Tesla Model Ys that have been in crashes to salvage auctions, where they are sold for parts.

According to data from Copart and IAA, two of the U.S.’s largest salvage auction houses, of the 120 Model Ys listed in December 2022 and early January 2023, the majority had fewer than 10,000 miles on them, and all were from the model years 2022 and 2023. They originally retailed for anywhere between $60,000 to $80,000, making them high-end and lightly used vehicles. So why are they being sent to salvage auctions rather than repaired and returned to their owners?

The reason is because of Teslas’ high repair costs. According to RepairPal, the average cost of both scheduled maintenance and unscheduled repairs of a Tesla is $832, compared to $652 across all car types. That means, on average, Teslas cost nearly one-third more to repair and maintain than all other cars.1 Repair costs would be even higher if the issue is due to a collision.

As a result, companies like State Farm, GEICO, Progressive, and Farmers are buying back totaled cars and auctioning them off, which is why you might see some pretty pricey Model Ys in junkyards.

Elon Musk Responds

On an investor earnings call for the fourth quarter of 2022, Tesla CEO and product architect Elon Musk addressed these “unreasonably high” repair costs. He said the company is going to make design and software changes to the vehicles so they’re cheaper to repair and insure. In order to pressure auto insurance companies to reduce their rates, Tesla will change the design of the bumper and provide spare parts, which will lower repair costs.

Tesla’s Insurance: Who Would It Be Good For?

Tesla has its own insurance option, launched in 2019, which the company claims results in car insurance costs 30 percent lower than competitors’. Tesla Chief Financial Officer Zachary Kirkhorn said that as of Q4 2022, its insurance business had total annual premiums of $300  million and is growing 20 percent quarterly, a rate faster than Tesla vehicle sales.2

However, most Tesla drivers won’t be able to purchase Tesla’s in-house insurance. That’s because, as of February 2023, it’s available only in the following states:

  • Arizona
  • California
  • Colorado
  • Illinois
  • Maryland
  • Minnesota
  • Nevada
  • Ohio
  • Oregon
  • Texas
  • Utah
  • Virginia

For those who live in the eligible states, Tesla’s insurance is available for the following models:

  • Model S
  • Model 3
  • Model X
  • Model Y


In 2022, Tesla sold the largest number of electric vehicles worldwide after manufacturer BYD.3 In 2019, the most recent year for which the U.S. Department of Energy released data, the Tesla Model 3 was the most popular electric vehicle, making up nearly half the U.S. market share.4

Costs Based on Real-Time Driving Behavior

Rather than taking into account the typical factors that affect the cost of car insurance, such as your credit score, age, claim history, driving record, and gender, the cost of Tesla’s insurance is based on your real-time driving behaviors. Furthermore, unlike most telematics programs, which require an app or plug-in device to monitor your driving, Tesla’s program uses built-in vehicle features to evaluate your driving and give you a Safety Score based on Safety Factors. These include:

  • Number of forward collisions per 1,000 non-autopilot miles
  • Hard braking
  • Aggressive turning
  • Unsafe following distance
  • Forced autopilot disengagement
  • Late-night driving (between 10 p.m. and 4 a.m.)5

The Safety Score, which is a number from zero to 100, determines the likelihood that you’ll get into a collision. Along with this data point, Tesla also factors in your car model and year, where you live, how much you drive, and your coverage to determine your insurance rate.


Tesla’s insurance isn’t available for the majority of Tesla owners, as it’s an option in only a few states. Some of the best auto insurance companies for Teslas include State Farm, Allstate, Farmers, Liberty Mutual, and USAA.

If you live in a state where Tesla’s insurance is available for your model, keep in mind that it’s best for good drivers who avoid driving at night. It’s also a good option for people with a bad credit score, as the company doesn’t consider credit when determining rates. For residents of California, your rates won’t be based on real-time driving behaviors at all.

If you have safe driving behaviors, you may be able to save money by insuring your Tesla in-house. Even better, obtaining Tesla insurance will make it less likely your car ends up in a scrapyard.


  1. Tesla Repair & Maintenance Costs. Repair Pal. (2023).

  2. Tesla, insurers take different paths to deal with expensive repairs. Reuters. (2023, Jan 27).

  3. BYD #1 In World In Plugin Vehicle Sales In 2022. CleanTechnica. (2023, Feb 7).

  4. Maps and Data – U.S. Plug-in Electric Vehicle Sales by Model. U.S. Department of Energy Alternative Data Fuels Center. (2023).

  5. Safety Score. TESLA. (2023).