Thinking of getting a Tesla

Navyguy · Nov 1, 2015

Hey,

New here but I have followed Tesla off an on for the last year or two. Finally seeing that Autopilot has finally been released (when I read that it was an upgrade for a later dates release it was a bit of a turn off. I had thought it would be like in a few years).

Well it's here and now I am thinking of getting one.

The top of the line is out of my price range and even the lower ones are up there. I am curious what people here are paying monthly and approximately their income if they have no kids and are single etc.

I have no kids, single. I make about 70K a year. Commission could make that to 80 some years. Not really likely for the remainder of this year or probably next.

I know interest rates dictate significant the price of the payments. but just looking for some baselines. is 70-80K too low? 120+? Thanks for the input.

Also the EV incentives, were those taken later. and you are still financing the listed price. it shows the price, then the lower price after EV incentives.

Max* · Nov 1, 2015

There is a thread here about people's incomes.

Someone was making $40k a year, but had a Tesla (and not retirement income, he commented about it in another thread).

Look at how much you spend monthly. Do you go to restaurants a lot? Movies? Would you give up a vacation for a car? Etc. It's all about properties. Do you live in a big house? Would you rather live somewhere cheaper and have a nicer car?

You can calculate monthly payments by using any online calculator. Estimate your down payment, APR and how long you want to finance for. Estimate $1000-$1500. Do you have that much extra cash monthly?

It's just a car, a depreciating asset. I would get a house before a Tesla. Then again some people do Uber to supplement their income. It's your priorities, only you can decide what you want.

Navyguy · Nov 1, 2015

I would not only give up my lack of taking vacations I never really do. even when I was in the Navy I didn't take leave much. I will give my left nut for this car haha. Yeah i was seeing alot ranging from 800+ for a lease, I hate that idea I drive alot and this may be my only car.

40K damn. prob AAA credit with no house or any other payments. I can make the payments per say. but it might be tight due to other obligations for the next year or two, I could wait a year. but man. who has patience lol and yeah house I could see. but then again I wouldn't buy a house. an investment without a family like a a wife and or a kid. A condo is fine with me.

My condo costs me about a 1K a month. its decent I am happy with it. 1K for this car. but then 3200 in pay plus 800 flat money for expenses a month and commission which is maybe right now about 300 a month. so prob could be done. but misc expenses maybe another 1K then I have to worry about repairs etc.

Does anyone here have less than an 800 dollar payment on this car? lease not leased? prefer to not lease a car. never have but always seems like a bad idea. unless you like to get a new car every 3 years and limit on driving it. etc.

Soolim · Nov 1, 2015

Do you need a full size sedan, now? If not, save your pennies and buy a M3 in cash soon (EM time):wink:

Max* · Nov 1, 2015

Ate you thinking of a base 70kwh model? With no down payment, you're looking at about $850 a month for a 84 month loan (the longest that I'm aware of)

- - - Updated - - -

Do you drive a lot? Think total cost of ownership. Charging is about 4-5x cheaper than gas (in my area).

Navyguy · Nov 1, 2015

84 months Ive been looking at 72 max so that would be wicked better. also Soolim, I kinda do. I actually had an M5 Before my current car until I got rear ended by some broad in a ford f250 who was texting and driving

I miss that hard to find car

Maybe the base, but maybe one step up. def autopilot and cold weather at a min upgrades (ohio) it can get cold.

That's the pic I took for insurance. Was still in the Navy with that. miss that car haha.

- - - Updated - - -

Can't edit it, but never noticed hahaha you can see the Ford emblem on the ground must have fallen off when they towed it there lololol.

- - - Updated - - -

Max* said:
Ate you thinking of a base 70kwh model? With no down payment, you're looking at about $850 a month for a 84 month loan (the longest that I'm aware of)

- - - Updated - - -

Do you drive a lot? Think total cost of ownership. Charging is about 4-5x cheaper than gas (in my area).

How much does charging cost?

Soolim · Nov 1, 2015

Charging cost depends on your electricity rate. For me, my charging cost is about 20% of my gas cost. I think you can gauge it from there. I often said to my friends, with Tesla the more you drive the more you saved:biggrin:

calisnow · Nov 1, 2015

Please don't take the following as "holier than thou" - just answering your question to try to be helpful.

And please don't anyone chime in with the "Maybe it's worth the stretch for the OP, you can't put a price on his happiness." He asked specifically for input on his situation given his stated income level. No financial planner anywhere would tell him to buy a car equal to his yearly income.

It's like a cardiologist still trying to save for retirement buying a new Rolls Royce. I know a lot of broke, can't-retire doctors who blew their income on stupid crap when they were young.

To the OP - I make my living investing. So I think of money - always - in terms of what I will give up in the future if I consume a dollar now. You are giving up a ton of future dollars if you buy a car equal to your yearly income instead of investing that money. You're even better off in the long run investing that money in an overheated stock market headed for a crash (like we may have right now) - and leaving it there for 30 years - than you are spending it on consumption now.

So let me give you my advice - though I imagine you are a younger male who will not listen to me (I would not have listened if I was under 30 and single either).

Do not be a typical American and consume what you can't afford.

The self driving tech in the Tesla will be in Honda Civics five years from now. It is glittery and fascinating right now - but will not even be worth a mention in just a few years.

A Model S is not a Ferrari 355 - i.e. it is not a classic that will gain in value. It's a mass market production car (albeit a pricey one) that will be almost worthless in 10 years. Go look up what a 10 year old Mercedes S class with 200,000 miles on it is worth - it's not a pretty sight.

$70,000 now is easily several million $ by the time you retire.

The only counter situation I see is if you already must drive a ton of miles for work and you're spending money on gas anyway - and if you're willing to keep this puppy for two or three hundred thousand miles and at least 10 years to monetize the fuel savings to the point where they out-weigh the depreciation.

But if you aren't driving a ton and you like to trade cars frequently then sit tight and wait - for a 50,000 mile used autopilot Model S or a Model 3 at half the price a few years from now.

Life is long my friend - longer than you think. Your future self will thank your current self.

Financially, if you *must* blow money on a car equal to your yearly income I think you might be better off with a used Tesla roadster - they seem to have leveled off in price.

2fast2 · Nov 1, 2015

Since you're in snow country, I think a 70D would be preferred, if you could swing it. I know others will chime in that you don't need a D, but they probably don't live in Cleveland. Maybe 4 good snow tires on the base 70 would work for you.

Soolim · Nov 1, 2015

calisnow said:
Please don't take the following as "holier than thou" - just answering your question to try to be helpful.

And please don't anyone chime in with the "Maybe it's worth the stretch for the OP, you can't put a price on his happiness." He asked specifically for input on his situation given his stated income level. No financial planner anywhere would tell him to buy a car equal to his yearly income.

It's like a cardiologist still trying to save for retirement buying a new Rolls Royce. I know a lot of broke, can't-retire doctors who blew their income on stupid crap when they were young.

To the OP - I make my living investing. So I think of money - always - in terms of what I will give up in the future if I consume a dollar now. You are giving up a ton of future dollars if you buy a car equal to your yearly income instead of investing that money. You're even better off in the long run investing that money in an overheated stock market headed for a crash (like we may have right now) - and leaving it there for 30 years - than you are spending it on consumption now.

So let me give you my advice - though I imagine you are a younger male who will not listen to me (I would not have listened if I was under 30 and single either).

Do not be a typical American and consume what you can't afford.

The self driving tech in the Tesla will be in Honda Civics five years from now. It is glittery and fascinating right now - but will not even be worth a mention in just a few years.

A Model S is not a Ferrari 355 - i.e. it is not a classic that will gain in value. It's a mass market production car (albeit a pricey one) that will be almost worthless in 10 years. Go look up what a 10 year old Mercedes S class with 200,000 miles on it is worth - it's not a pretty sight.

$70,000 now is easily several million $ by the time you retire.

The only counter situation I see is if you already must drive a ton of miles for work and you're spending money on gas anyway - and if you're willing to keep this puppy for two or three hundred thousand miles and at least 10 years to monetize the fuel savings to the point where they out-weigh the depreciation.

But if you aren't driving a ton and you like to trade cars frequently then sit tight and wait - for a 50,000 mile used autopilot Model S or a Model 3 at half the price a few years from now.

Life is long my friend - longer than you think. Your future self will thank your current self.

Financially, if you *must* blow money on a car equal to your yearly income I think you might be better off with a used Tesla roadster - they seem to have leveled off in price.

Most astute advice imo. I never buy car that I cannot afford to pay in cash.

rdrcrmatt · Nov 1, 2015

I put about 20k down and took a loan or 83k, 5 years, 1500 per month. I'm thinking about upgrading to an autopilot car.

Tesla does have good used cars for sale too.

Modeler · Nov 1, 2015

I'm sorry, but this is just crazy talk! I make five times as much in a year as the price of the model S I bought, and I almost cancelled my order cause I didn't think I truly could afford it. I know that everyone's spending is different, blah, blah, blah. But paying for a car as much as your annual income or more is a recipe for a disaster.

sillydriver · Nov 1, 2015

calisnow said:
Please don't take the following as "holier than thou" - just answering your question to try to be helpful.

And please don't anyone chime in with the "Maybe it's worth the stretch for the OP, you can't put a price on his happiness." He asked specifically for input on his situation given his stated income level. No financial planner anywhere would tell him to buy a car equal to his yearly income.

It's like a cardiologist still trying to save for retirement buying a new Rolls Royce. I know a lot of broke, can't-retire doctors who blew their income on stupid crap when they were young.

To the OP - I make my living investing. So I think of money - always - in terms of what I will give up in the future if I consume a dollar now. You are giving up a ton of future dollars if you buy a car equal to your yearly income instead of investing that money. You're even better off in the long run investing that money in an overheated stock market headed for a crash (like we may have right now) - and leaving it there for 30 years - than you are spending it on consumption now.

So let me give you my advice - though I imagine you are a younger male who will not listen to me (I would not have listened if I was under 30 and single either).

Do not be a typical American and consume what you can't afford.

The self driving tech in the Tesla will be in Honda Civics five years from now. It is glittery and fascinating right now - but will not even be worth a mention in just a few years.

A Model S is not a Ferrari 355 - i.e. it is not a classic that will gain in value. It's a mass market production car (albeit a pricey one) that will be almost worthless in 10 years. Go look up what a 10 year old Mercedes S class with 200,000 miles on it is worth - it's not a pretty sight.

$70,000 now is easily several million $ by the time you retire.

The only counter situation I see is if you already must drive a ton of miles for work and you're spending money on gas anyway - and if you're willing to keep this puppy for two or three hundred thousand miles and at least 10 years to monetize the fuel savings to the point where they out-weigh the depreciation.

But if you aren't driving a ton and you like to trade cars frequently then sit tight and wait - for a 50,000 mile used autopilot Model S or a Model 3 at half the price a few years from now.

Life is long my friend - longer than you think. Your future self will thank your current self.

Financially, if you *must* blow money on a car equal to your yearly income I think you might be better off with a used Tesla roadster - they seem to have leveled off in price.

I hate to say it because I have always found it hard to defer gratification myself, but this^^^ is good financial advice. I am a 57 year old retired partner of a large Boston investment firm, so I am qualified to offer this opinion. But more than that, Tesla is currently advancing automotive technology the way Apple advances phones: if you can force yourself to wait, better stuff will come. In particular there will probably be a performance version of the Model 3 in not many years that will deliver a fantastic experience for good money: longer range and better self-driving that current buyers of P85Ds will ever have. In the mean while keep your powder dry by tiding yourself over with something that won't break the bank.

calisnow · Nov 1, 2015

Modeler said:
I'm sorry, but this is just crazy talk! I make five times as much in a year as the price of the model S I bought, and I almost cancelled my order cause I didn't think I truly could afford it. I know that everyone's spending is different, blah, blah, blah. But paying for a car as much as your annual income or more is a recipe for a disaster.

This.

Soolim · Nov 1, 2015

sillydriver said:
I hate to say it because I have always found it hard to defer gratification myself, but this^^^ is good financial advice. I am a 57 year old retired partner of a large Boston investment firm, so I am qualified to offer this opinion. But more than that, Tesla is currently advancing automotive technology the way Apple advances phones: if you can force yourself to wait, better stuff will come. In particular there will probably be a performance version of the Model 3 in not many years that will deliver a fantastic experience for good money: longer range and better self-driving that current buyers of P85Ds will ever have. In the mean while keep your powder dry by tiding yourself over with something that won't break the bank.

+1. Let those who can afford lead the way in supporting Tesla at this time to produce the M3 for the masses.

mmccord · Nov 1, 2015

Buying an auto that costs your annual income is a terrible financial decision. That said, some people don't make it to 57, so saving for retirement could mean you never get to spend any of your hard earned money at all.

I don't have much else to add here.

Drucifer · Nov 1, 2015

Rules of Thumb I have used:

Car Loan <= 1/2 pre-tax annual income (or 6 months income, pre-tax)
Home Loan <= 3 years pre-tax annual income (or 36 months income, pre-tax)

If you want more car or more house than fits the equation, save for a down payment big enough to reduce the car note or mortgage.

Personally, I couldn't wrap my head around a car payment that went over 60 months and over $1k a month, including interest - even though that was well under my rule above. I had to make a bigger down payment to stay in my comfort zone of "what a monthly car payment should be"

YMMV - seriously. OP - I am not you and cannot live your life for you.

2 edges of the sword

Edge 1 is you should save and invest wisely
Edge 2 is you only live once and you can't take it with you

Max* · Nov 1, 2015

mmccord said:
Buying an auto that costs your annual income is a terrible financial decision. That said, some people don't make it to 57, so saving for retirement could mean you never get to spend any of your hard earned money at all.

I don't have much else to add here.

I see the perspective of the people who say that buying an auto that costs your annual income is risky.

OTOH, some people indulge in cars sacrificing other things (whatever your vice may be, alcohol, gambling, going out, bars, women/men, restaurant, concerts, etc.). If anything, now is the time to buy a car if you think your job is secure. Interest rates are low, the fed may or may not raise them soon.

I take a lot of calculated risks financially [I went back and forth about the Model S for months], some of them have paid off, some of them I'm still paying for. Do I regret it? Nope. So my advice, if you can afford it, and you can pull it off, go for it.

You could always get a used 85kwh model with AP. Just continue looking at the CPO site.

OP - here is the income thread -- Model S Buyers: What's Your Income?
Plenty of people who bought a Model S have FAMILY incomes which are less/close to the cost of the car.

ndhaon91 · Nov 1, 2015

I'm not going to tell you what to do; I'll just give you my story and let you compare.

Like you, I really debated whether I could afford a Model S. There is still a part of me that thinks it wasn't a great decision, but like you, I'm in sort of "aw **** it" mode. I know the money is better spent elsewhere, but I've never done something like this for myself and I decided my enjoyment is worth it.

Having said that...

I'll make almost twice what you do this year, and I own my business so my entire monthly lease is tax deductible. And I still feel like I can just *barely* afford to do this. Again, take that for what it's worth.

Electric700 · Nov 1, 2015

Navyguy said:
I would not only give up my lack of taking vacations I never really do. even when I was in the Navy I didn't take leave much. I will give my left nut for this car haha. Yeah i was seeing alot ranging from 800+ for a lease, I hate that idea I drive alot and this may be my only car.

40K damn. prob AAA credit with no house or any other payments. I can make the payments per say. but it might be tight due to other obligations for the next year or two, I could wait a year. but man. who has patience lol and yeah house I could see. but then again I wouldn't buy a house. an investment without a family like a a wife and or a kid. A condo is fine with me.

My condo costs me about a 1K a month. its decent I am happy with it. 1K for this car. but then 3200 in pay plus 800 flat money for expenses a month and commission which is maybe right now about 300 a month. so prob could be done. but misc expenses maybe another 1K then I have to worry about repairs etc.

Does anyone here have less than an 800 dollar payment on this car? lease not leased? prefer to not lease a car. never have but always seems like a bad idea. unless you like to get a new car every 3 years and limit on driving it. etc.

From what you say, it looks like you really want a Model S :smile:

So, you might want to consider a lease if you would like lower monthly payments in the $800 - $900 area. Plus, you'd get the option of actually purchasing your car at the end of the lease term.

Thinking of getting a Tesla

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