Lower Income model S owners

[Garlan Garner]

I know people who are 85+. Their income is very low. They want 30 year loans for everything and are somehow getting them.

Its not a joke. I'm serious. I play the piano in a nursing home.

 

[JayyyDeee]

I make 67k but in CAD. I got a bare model S75 service loaner this year for 76k CAD I had 23k for my down payment though and im paying about 940 a month for 6 years.

I was spending 450 dollars on gas a month to begin with so getting something in the Acura TL range would cost me about the same over the 6 years

67k CAD right now is about 54k USD

I noticed that I am a lot less forgiving toward Tesla for their mistakes and fit and finish issues compared to the some of the other posters on this forum. Also for example it actually shocks me that some people will pay 400 dollars for Tesla's 1 year recommended service which is actually only worth about 50 dollars of labour at most.

 

[jaguar36]

The amount of money someone has in the bank (or investments), the amount of income they have, the amount of shiny things they have and how much they feel they can afford to spend on a car frequently have very little correlation at all. With very little income its quite possible to easily afford a Model S. Even without significant savings, if you are frugal with your other expenses you can afford one. On the other hand you can make quite a lot of money, but if you live in a high cost area, have a large home and aren't willing to sacrifice on other expenses, then you probably can't afford one.

And that's not even considering the folks who are heavily in debt.

 

[The Raza]

I know people who are 85+. Their income is very low. They want 30 year loans for everything and are somehow getting them.

Its not a joke. I'm serious. I play the piano in a nursing home.

Depending on the depth of the underwriting process, I'd imagine lots of banks would still approve their auto loan if these older folks fully own their home and have a sizable estate despite low income. Now if they're upside down in net worth, then I'd be very curious how they're getting approved.

 

[mattack4000]

How would they know your net worth legally...

 

[RogerHScott]

other people spend that much money or more on things that are much less satisfying like ... women.[ emphasis added ]

Speak for yourself!
The key is to find a woman (or partner, in general) who also enjoys the Tesla. Then you've got the best of both worlds

 

[RogerHScott]

Affording certain luxuries isn’t about how much money you make but how you choose to spend it.

Well.....
You can only "choose" to spend what you actually have. If you don't have it, there's no "choosing" to do.

 

[RogerHScott]

I don't fully understand the American system but I know they don't have universal health coverage by default like you and I do.

And we're working frantically to eliminate whatever vestiges of it we may have!

 

[Russell]

other people spend that much money or more on things that are much less satisfying like drugs, alcohol or women.

Having a wife is expensive!!!

 

[McRat]

It needs to be measured in disposable income and adding existing transportation costs.

Two people who make $50k are not necessarily equal, and when it comes to EVs, it certainly is likely to have a wide spread.

EV buyers tend to older. Many have paid for their homes already. Their kids are gone.

This is nowhere near the situation of somebody who is 40 years old and putting one one or more kids through college, and pays a mortgage.

There are people who cannot afford a $50k car who make $100k a year. There are people who make $50k a year who can afford a $100k car. For somebody who derives their income from tax-free bonds or pays little tax and owns their home, a $100k Tesla is about 1/3rd of their income, which could be largely disposable. That number is actually lower because their previous car was not free either, and electricity is usually cheaper than gas.

 

[Pentium2004]

Well.....
You can only "choose" to spend what you actually have. If you don't have it, there's no "choosing" to do.

Didn't realize we were talking about unemployed people buying Teslas. I'm talking about people that actually work regardless of how much they make. If I only made $40k a year and really wanted a Tesla I could save and control my spending and make that happen. I would have to sacrifice other luxuries like dining out and going out on the weekends but It all comes down to what you choose to do with your money.

 

[mattack4000]

Not really, unless you forgo homeownership to buy a car. The math just doesn’t work, especially if you have some sort of out of pocket cost.

 

[Pentium2004]

Not really, unless you forgo homeownership to buy a car. The math just doesn’t work, especially if you have some sort of out of pocket cost.

There are a lot of factors. Whether you have a spouse that contributes, rent, distance to work and all that other good stuff. There are many ways to make it happen. I know this because I've had expensive cars even with an entry job. I've always just saved as much as I can and invested wisely and keep my monthly bills low.

 

[RogerHScott]

Didn't realize we were talking about unemployed people buying Teslas. I'm talking about people that actually work regardless of how much they make. If I only made $40k a year and really wanted a Tesla I could save and control my spending and make that happen. I would have to sacrifice other luxuries like dining out and going out on the weekends but It all comes down to what you choose to do with your money.

You have an interesting understanding of how millions of people in this country live. It is quite possible to be fully employed and have zero disposable income. Many, many fully employed people live on less than $40k/year. Tesla ownership among this population is shockingly low

 

[Maximilien]

Just for fun I will disclose my garage.
20013 S, fully loaded
1979 Malibu, 800HP 454 cu in
1986 Chevy PU. 400 HP crate motor
1985 BMW K100RS bike
2002 Gulfstream motor home, that tows any of the above on my trailer.

Hint, start planning at 18, when you get 70ish it will all be just fine.

20013 S, can that time travel? I want that

 

[Zeromus-X]

Not really, unless you forgo homeownership to buy a car. The math just doesn’t work, especially if you have some sort of out of pocket cost.

I'll be renting for another 2-3 years partially as a result of going with this car, but that's just because it made my numbers bad -- not necessarily because I can't "afford" it. I was willing to accept it because I'm happy renting at this point in my life, but admit that if I didn't have the car I'd probably have a mortgage by now.

 

[mattack4000]

There are a lot of factors. Whether you have a spouse that contributes, rent, distance to work and all that other good stuff. There are many ways to make it happen. I know this because I've had expensive cars even with an entry job. I've always just saved as much as I can and invested wisely and keep my monthly bills low.

How do you invest if 25% of your take home pay is going toward a car? I am just saying because I made the same mistake when I was younger, I had to struggle to pay off my mortgage and my car.

 

[Pentium2004]

How do you invest if 25% of your take home pay is going toward a car? I am just saying because I made the same mistake when I was younger, I had to struggle to pay off my mortgage and my car.

I started investing before buying the expensive cars. I'm not talking major investments when I first started but some days on the stock market I could clear $500 a day with a very small amount of money. It only takes a couple of those a month to take care of the car payment. Not saying everyone should do that because you can also lose it pretty quick. I also do not finance the entire amount of the car and generally try to keep the loan interest and length low. Many may disagree with me but that's fine because it worked for me and now I own a Tesla at 30 years old and I didn't go to college. If you want something and you aren't afraid to work for it then there really isn't any limit how far you can go.

 

[ModelNforNerd]

I make just under $90K/year at my current job, and just over $17K in untaxable pension. The wife makes....significantly more. But the mortgage, cable, and power/gas bills are all covered by my pension income. The basics are out of the way before we even get out of bed on the 1st of the month. That helps a lot.

 

[mdk1a]

I'd echo many have said here that income by itself isn't a sufficient indicator of affordability.

W/r/t car buying, I usually ask two questions that I think have served me pretty well over the years (these generally apply to other things, but I'll keep them confined to car buying here):
1. Will my monthly cash flow be positive?
This is fairly basic. Your income (how/where ever it comes from) must be greater than your expenses. If your income includes investment sources, you may want to be a bit conservative in your estimation. You may also want to include in your expenses some buffer for unexpected/unforeseen stuff.

2. What is the ratio of my depreciating assets w/r/t overall net worth?
The value of the depreciating assets should be the net after you subtract any liability (i.e. loan). This question obviously necessitates setting a ratio. What's the right ratio is different for different people, but what's more important is to stick to it. There's a correlation here with the first question in that, in order to satisfy it, the ratio here may become higher.

From purely economical reasons, the first question will you determine whether you could afford it. The second question will help you determine whether you should.