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Thread: Need The Opinion Of Others For My Purchase

  1. #1
    Member Bardlebee's Avatar
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    Need The Opinion Of Others For My Purchase

    Disclaimer: I realize any and all financial opinions/advice given here are from strangers on the internet who could be posing to know what they are talking about. I am just looking for another side of the coin.

    ---------------------------------

    Hello Everyone!

    You may have seen me on these forums before. I have been on here for more then a year and I watched as everyone got their Model S and enjoying the hell out of it. I am going to be taking my FIRST test drive in 12 hours and putting in my deposit next month FINALLY!

    However I am having second thoughts financially and I was wondering if anyone wanted to weigh in on a "What would you do?" sort of conversation. To give you background, I am 28 years old, I work as a network engineer at a very nice company which pays me well. I live in San Antonio, TX which has low living costs in housing and all that.

    The reason I am having second thoughts on buying the Model S I think stems from most of my friends/family saying "Well, its an awesome car! But its so EXPENSIVE". I am adverse to debt and I am very careful with finances and that is partially why I am nearly debt free. I only have my house, which is 140k.

    I invested enough in TSLA to in total have 80k in stock total. This is probably the main reason I can afford to put 50k down on the car. But with all my friends/family reminding me that I am not making a metric ton of money it has me second guessing my financial decision here. To be clear, the monthly expenses are not what frighten me as I would have to finance the other 40k. I make more then enough to pay for this monthly and have plenty of money, 70 percent roughly, left over to pay extra on the car AND my house at the same time. My concern is.... with this much in stock I could literally almost pay off my house.

    I just don't know when I will see this much cash in a long time so I am on edge. Since I am so young, I am looking at my future. I love the car, I love EV's and I can't stop searching the web 24/7 on Tesla news. It is definitely a passion, but my frugal side is also pulling me. Its a brain vs. heart moment right now.

    Anyone have any thoughts on my dilemma? I know opinions will be skewed on this forum FOR getting a Tesla. But sometimes I like to make sure I am not TOO crazy. If you need more info on my finances, I can share. I just don't want to offend anyone on the forum for sharing my own finances.

    Sorry this was so long

    TL;DR: I can afford the car, but wonder if financially its the best choice to use all this gained cash on a passion or a frugal investment. Also, I don't feel like waiting till Model E and I would like a vehicle in this class.

  2. #2
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    My profession is Financial Planning. I can tell you from the start cars are luxury items. There are probably no cars out there that will do anything to enhance your financial situation. Every car is an expense item, so it is impossible to justify the purchase from that standpoint and usually I would tell a young person to save their money. You could be 100% practical and purchase a Corolla or Civic. You could be impractical and purchase a BMW or Corvette. You will certainly be splurging if you get the TESLA. But now you can justify it this way, if you look at marginal costs,(the difference in cost over any other purchase) over a 5- 7 year period against any other consideration and understand that is the splurge factor. You will be taking a lot of your cash reserves to accomplish this so it then becomes a personal decision. I am much older and would never have considered a luxury purchase at your age. You also can be 100% practical and wait for the Gen III which would be more in line with what your budget would allow in a few years, or pay cash with that $50k.

    BTW, I would sell that TSLA and put the money away for your purchase. I love the car, love the company but dont think the stock price is justifiable and will someday drop considerably. Take the money and run
    Last edited by Mnlevin; 2013-12-15 at 04:49 AM. Reason: additional information
    VIN P09031 Sequence #4172 60KwH/Std Suspension/Panoramic Roof/19"/Cargo Shelf/Leather/ Order Aug 2011 / Finalized Jan 2013 / Delivery May 3 2013

  3. #3
    Member Bardlebee's Avatar
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    Thank you for your input! I agree any car is definitely an expense that is not an investment. Currently I drive my mustang and if the Tesla didn't exist I would drive it until it couldn't drive anymore because I am not passionate about vehicles. I am passionate about EV's, and maybe that doesn't make a whole lot of sense, but it does to me.

    In any case, if I purchased the Model S, I know in my heart I would not replace it with anything new any time soon. Like the Mustang I would likely drive it for 10+ years if I could get that kind of time out of it. I don't like buying large items if they don't make financially structured sense. I think to myself "Self, you could put that 50k into your retirement!" but then my heart counters "You could also put more into your retirement now per month".

    I certainly don't take for granted to being able to even consider the Model S at my age. I have always looked to others who have been there before me to weigh what large choices I have in front of me. There is a lot you can learn from those who are successful and have been there. That is how I am in this position.

    I am still torn. I feel that once I drive it later today I will want to buy it so I am glad I have a month or two of waiting (my last few checks of saving for the car) to really step back and decide. Because I have been passionate about this car since the Roadster was new, it may be hard for me to see clearly.

    I look forward to hearing more input.

    EDIT: I guess I should add I am married and my wife also has a position in the same field. So the money is there monthly. Its just the large cash point that keeps me on edge. Monthly wise I think I could pay this car off in two years, instead of the 7 year financing I would be doing.

  4. #4
    Senior Member SwedishAdvocate's Avatar
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    If you try and envision the absolute worst cases…

    Financially: Could you be forced to sell the Tesla? Could you be forced to sell your house? Could you somehow end up in debt even if you sell both the Tesla and the house?

    In such a scenario, could there be members of your family in need of financial help? Members of family that you would want to help out? Could there be friends in need of financial help that you would want to help out?

    How are the risks with regards to climate change? If San Antonio were to get rainfall in excess of what climate scientists refer to as a thousand year event – how is your house situated? Could your house get flooded? What if somehow your Tesla gets flooded in such an event?

    What would happen if San Antonio were to get hit by a Hurricane stronger than anything previously on record?

    What are the risks here? And do you feel ok with them?

  5. #5
    Member Bardlebee's Avatar
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    Quote Originally Posted by SwedishAdvocate View Post
    If you try and envision the absolute worst cases…

    Financially: Could you be forced to sell the Tesla? Could you be forced to sell your house? Could you somehow end up in debt even if you sell both the Tesla and the house?

    In such a scenario, could there be members of your family in need of financial help? Members of family that you would want to help out? Could there be friends in need of financial help that you would want to help out?

    How are the risks with regards to climate change? How is your house situated if San Antonio were to get rainfall in excess of what climate scientists refer to as a thousand year event? Could your house get flooded? What if somehow your Tesla gets flooded in such an event?

    What would happen if San Antonio were to get hit by a Hurricane stronger than anything previously on record?

    What are the risks here? And do you feel ok with them?
    Wow! I never thought of some of these questions, I am glad I opened this thread!

    When it comes to emergency funds (losing employment or loved ones need help) I felt I had that under wraps, but I never thought about natural disasters. One other thing I will be doing before "the day" is speaking with a financial planner like Mnlevin and talking to them about me selling my stock. I have never owned stock beyond TSLA and SCTY in a great amount, so taxes wise its concerning to me how much they will be. They are all a year or old, so that makes them long term stock I think.

    I will have to think about all these questions, thanks!

  6. #6
    Member Gwgan's Avatar
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    Given your interest in cars you are probably talking about an optioned/expensive MS, yes? Car loans are very cheap now and your mortgage is probably a good rate but not as good. IMO: Paying off your mortgage faster is the best use of your money, unlike a car that is an investment; if you double your mortgage payments can you still afford the car? Not paying too much for any car but instead financing as much as possible is the second best use (you need reliable transportation, yes?), especially one with such a good future value; too bad the Tesla financing is not available in TX. Best use of those TSLA shares is to keep them until retirement—they’ll be worth several Teslas by then. Is it ok if your first Tesla is not an optioned-out P85+ but a “plain” sedan? That could be your path to less worry and more than satisfactory enjoyment.
    Gwgan, like Model X, is almost a wagon. MX Res 8,690.

  7. #7
    Member Bardlebee's Avatar
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    Quote Originally Posted by Gwgan View Post
    Given your interest in cars you are probably talking about an optioned/expensive MS, yes? Car loans are very cheap now and your mortgage is probably a good rate but not as good. IMO: Paying off your mortgage faster is the best use of your money, unlike a car that is an investment; if you double your mortgage payments can you still afford the car? Not paying too much for any car but instead financing as much as possible is the second best use (you need reliable transportation, yes?), especially one with such a good future value; too bad the Tesla financing is not available in TX. Best use of those TSLA shares is to keep them until retirement—they’ll be worth several Teslas by then. Is it ok if your first Tesla is not an optioned-out P85+ but a “plain” sedan? That could be your path to less worry and more than satisfactory enjoyment.
    The Tesla I am considering is going to be 97k total, before the tax rebate which will probably be countered by taxes from my stock. This is something again I am going to talk to a professional about.

    With the Model S I am still able to pay double payment on not only my house but my future Tesla as well. So, payment wise its not that big of a deal. I financed my home when rates were still low so I am thankful for that. My "Master Plan of Tesla Buying" is to pay both the Tesla and house off as soon as possible. Besides, the Tesla, I don't spend my money on anything but paying off any debts I have. I find financial stability a lot more appealing then buying new toys or things I don't need, if that makes sense. I will buy new furniture from time to time of course and do upgrades to the house, but for the most part my lifestyle is very low key.

    To give you a picture. I plan to have a Tesla payment of no more then 700 a month. If I have to save more so be it. Currently my monthly house payment is also 700 (my wife pays half as well). So my plan is to pay close to 2000 a month on both per month. The only reason I am not sinking 4k a month into my house is because I am saving for the Tesla. Haha. So, I should have the Tesla payed off hopefully in 2-4 years as opposed to the full 7 years.

    But as above people have noted natural disasters can happen. I have savings for 6 months out in case of unemployment. But I didn't think of other risks.

    My Tesla: Blue, Pano Roof, Leather, 85kwh non-performance, tech package, audio package, sensors, lights, interior lights.

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    First of all, don't listen to your family. It sounds like you have spent a lot of time researching and learning about Tesla and they likely have not. Therefore, their input is biased to ICE experience alone. Many people I know just can't seem to grasp a car not using gas. Secondly, consider what you will save by not buying gas, oil changes, replacing any number of parts that break down. I believe the MS motor has only 11 moving parts vs. about a hundred in an ICE. With the MS you mainly have to worry about burning up the tires too fast Thirdly, Elon is committed to making a high-quality car, traditional automakers not so much. Fourth, no carbon monoxide pollution spewing out of a tailpipe is a huge benefit as far as I am concerned.
    Last edited by Neech; 2013-12-15 at 07:01 AM.


  9. #9
    Member Bardlebee's Avatar
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    Quote Originally Posted by Neech View Post
    First of all, don't listen to your family. It sounds like you have spent a lot of time researching and learning about Tesla and they likely have not. Therefore, their input is biased to ICE experience alone. Many people I know just can't seem to grasp a car not using gas. Secondly, consider what you will save by not buying gas, oil changes, replacing any number of parts that break down. I believe the MS motor has only 11 moving parts vs. about a hundred in an ICE. With the MS you mainly have to worry about burning up the tires too fast Thirdly, Elon is committed to making a high-quality car, traditional automakers not so much. Fourth, no carbon monoxide pollution spewing out of a tailpipe is a huge benefit as far as I am concerned.
    So this probably wasn't clear earlier (because I didn't say it) I am very concerned about global warming and one of the main reasons I am getting the car beyond the points I have said now is to create awareness that electric cars can be real cars. And not just real cars, but as good if not better then ICE cars. When I talk to my friends and family, they don't judge me saying they don't trust electric. Thankfully they have been nice enough to ask questions about how far it goes, what if you run out of electricity, how many miles before the batteries are dead permanently, etc. They are surprised to find out a LOT of positive things that they have not heard.

    I do not equate the cost savings from the gas/oil changes/repairs. Simply put, if I buy a car more then 20k, I am not saving money. I kind of already written this off as an item I just want and that its just not a good financial choice, but taken to the extreme the same thing could be said about a lot of things. It is simply a self fullfillment choice and the only pause I have now is my frugal side wondering if I could have done something different. Will I be here 5 years from now thinking I could have used that money on a smarter investment? Sure. Will I be happy with the choices I make in the next few months? That is what I am trying to decide.

    It also helps that it is a very safe car, I plan to have children in a few years and it gives me comfort to know they will be riding in it, to be honest. And I am not just telling myself that to convince myself I need the car either.

  10. #10
    Senior Member AlMc's Avatar
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    I have read all the entries and admire that you are weighing all the pros and cons and not making this an impulse decision. It is also good that you can lay out your entire situation with a financial planner that you will be meeting with soon. However, you noted this is not only a financial decision but an emotional one as well (clean energy/safety). If it were entirely a financial (head) decision I would tell my son to pay off the mortgage and get a used model S or a brand new 'E" in 3 years. If you feel very strongly about the EV revolution I would suggest
    looking at a Prius/Volt now and to trade it in on that used S or X or 'E' in 3-4 years. If everything goes very well in three years, solid retirement savings, paid off mortgage (maybe you will need a bigger house as your family grows?) then I would reconsider whether I would want a new S or X.
    85P+ Blue ( delivered May 29, 2013 ); reservations SX 604; PX 5374

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