18 Model S 100D Totaled

[AMPd]

Not 100% sure, but I dont think gap works in the way you are thinking...

So you’re not going to explain which part about GAP I’m mistaken about?

 

[Dsancho]

Recently involved in a car accident that led to my 18 S to be deemed total, happened just a few days ago so i dont have the settlement value yet, according to kbb 2018 Model S go for around 60-70k. It had less than 25,000 miles.

I need help as the value is completely screwed up, I paid roughly 112k plus sales tax for the 100D back in 2018, i know i can get a similair 2020 S long range for about 85k now including fsd.

So I put about 50k down, so we finaced around 67k to the bank, we still owe 42k. So if the settlement is around 60-70k im down so much money as we will only get 18-28k back in cash after my insurance pays the bank.

This accident was deemed the other parties fault by the police, my insurance, and his own insurance.

So what i am asking is, is there anyway to recover the 40k or so extra that was lost during the 2 and a half years of owning my 100D?

Im hoping if the insurance offerse a low offer, i can argue that i had EAP which is 5k, premium interior which cost 5k back then, 3500 for the black interior color of inside, 1500 for midnight silver metallic, and free unlimited supercharging, which i hope can get more money so i won't have lost 40k of driving the car for two years.

I know that i can get a new 2020 S long range for 85k now compared to 112k when i bought but i feel this is insane how i lost so much money due to my car being totaled.

EDIT: is it possible to get back the sales tax i paid for the vehicle? in my state for 112k car it was around 6-7k of taxes alone.

My last car that was totaled my insurance gave me the average of the same year, model Of 5 similar cars that were listed online, plus the sales tax.

i would make sure they add sales tax To the total as if you were going to buy the same car that was totaled.

 

[2101Guy]

If insurance offers you 70k I say take it and run! I mean come on do you realistically believe your vehicle has only depreciated 15k in value over the last 2 years? Really?


Also sorry for your loss, I too went though a similar situation and that’s when I learned to put down as little as possible and get GAP insurance. That way if it’s totaled you Walk away with minimal financial hit.

In my opinion, that's backwards handling of financials. Sure, you are covered in the event of worst case scenario, but statistically speaking, by far, most owners dont end up with totaled or unrecovered stolen cars.

So if the goal is maximizing ones dollars and minimizing the financial impact of a car purchase, it wouldnt be financing $100k (for example) and paying auto loan interest (which is heavily front loaded in years 1 through 2 or 3) and paying Gap premiums . It would be to put as much down as one could afford (to save on interest), skip the premiums associated with Gap, and have full coverage from the best provider out there. Extra points if the buyer purchased 2-3 years old, and paid 100% cash for the car.

What is a good down payment on a car? | Life Lanes


"So, how much should you put down?
I know this may not be the answer you want to hear, but the answer is as much as you can afford without liquidating your emergency fund or making you feel strapped for cash"

 

[MP3Mike]

free unlimited supercharging

@Kush Plank this is the one thing that you will likely need to fight with the insurance company over. As no comparable 2018 Model S you can buy will come with FUSC. So how do they value the loss of that feature? (How much did you actually use it?)

Your best bet is to point them to Elon's tweet where he offered to give people $5k back in exchange for removing FUSC from the car. (As that sets a very clear value for it.)

Elon Musk @elonmusk
Oct 26, 2018

It was underpriced. Anyway, if you want $5k refund & free Supercharging turned off, we will do that.

As far as you having EAP, you will just have to say that since you can't get a 2018 with EAP now they will have to use a comparable car with FSD, or add the cost of FSD to the value. (Which is now $8k, so combined with FUSC that could add $13k to what they should offer you.)

 

[AMPd]

In my opinion, that's backwards handling of financials. Sure, you are covered in the event of worst case scenario, but statistically speaking, by far, most owners dont end up with totaled or unrecovered stolen cars.

So if the goal is maximizing ones dollars and minimizing the financial impact of a car purchase, it wouldnt be financing $100k (for example) and paying auto loan interest (which is heavily front loaded in years 1 through 2 or 3) and paying Gap premiums . It would be to put as much down as one could afford (to save on interest), skip the premiums associated with Gap, and have full coverage from the best provider out there. Extra points if the buyer purchased 2-3 years old, and paid 100% cash for the car.

What is a good down payment on a car? | Life Lanes


"So, how much should you put down?
I know this may not be the answer you want to hear, but the answer is as much as you can afford without liquidating your emergency fund or making you feel strapped for cash"

Ok, I understand what you’re saying but you’re both right and wrong

If your money is parked in a savings account then yes I agree try to put down as much as possible. But if your money is in the stock market then you’re actually losing money by not borrowing

Here’s my personal example, I want a model s, about 110k out the door. I have that in a stock that pays a 5-7% dividend I can cash that out or I can borrow it from a bank with a 2.9-3.5% interest rate. So in my case and anyone else who invests their money they’re actually losing money by paying all cash. Not to mention the extra security of not going through what op is going through.

 

[electricar]

You might consider having some aches and pains due to the accident. That can often go a long way to helping the other party's insurance company get their thinking straight. Calling an attorney before doing anything might also be a good idea - the call is free. Absolutely everyone employed by the insurance company of the party at fault will direct all their efforts to making sure that you get as little as possible.

 

[Ostrichsak]

In my opinion, that's backwards handling of financials. Sure, you are covered in the event of worst case scenario, but statistically speaking, by far, most owners dont end up with totaled or unrecovered stolen cars.

So if the goal is maximizing ones dollars and minimizing the financial impact of a car purchase, it wouldnt be financing $100k (for example) and paying auto loan interest (which is heavily front loaded in years 1 through 2 or 3) and paying Gap premiums . It would be to put as much down as one could afford (to save on interest), skip the premiums associated with Gap, and have full coverage from the best provider out there. Extra points if the buyer purchased 2-3 years old, and paid 100% cash for the car.

What is a good down payment on a car? | Life Lanes


"So, how much should you put down?
I know this may not be the answer you want to hear, but the answer is as much as you can afford without liquidating your emergency fund or making you feel strapped for cash"

I was beginning to think that nobody understand finances in 2020. Everyone is too distracted by shiny objects that they do mental gymnastics on just making it fit into a monthly budget w/zero consideration what something actually costs. I got tired of debating why buying a 3-4 year old car with cash was SO much better financially than financing at a "good rate" and then investing your "liquid" assets. IMO as long as you owe money to anyone you don't technically have any "liquid assets" but it's like talking to a wall. Oh well, I guess someone needs to fuel our delicate economy by buying crap they can't afford.

 

[craigger]

@craigger - You are forgetting that he likely paid $1000+ per month in loan payments in addition to his 50K down? He's in for much more than $22K

I'm not forgetting that at all. I stated "The payments you made the past 2 years pretty much went to the privilege of using someone else's money (also known as interest)".

When you take out an auto loan, the first couple years are pretty much all interest payments. No matter what, that's pretty much money you'll never recover and anyone going into a contract like that needs to understand that sunk cost. Over the life of a loan for $67K, the interest payments are going to be close to $10K - that's lost money totally separate from getting into an accident or not.

 

[domodan]

I doubt that this is going to be what you want to hear but new cars generally lose 50% of their value in 3 to 4 years regardless of the manufacturer. Some slightly better, some slightly worse but it only swings a few percent in either direction. So you saying that you're down 40 grand in 2 years on a $112,000 car isn't too far off of about what I would expect it to be worth. This is exactly why I don't buy new cars and it doesn't matter who the manufacturer is. The hit you take in depreciation on a brand new vehicle is one of those painful things that most people simply turn a blind eye to. Personally, it's exactly why I buy used cars that are about 4-years-old. It seems to be the sweet spot on getting a nice newer and well cared for car that has already taking the largest decline in value in terms of depreciation rate. It's still going to lose value but at a much slower rate. There's a reason why the wealthiest people alive tend to not buy new cars and if they do they just keep the same one for 10 or 15 years. Meanwhile, the family down the street for me gets a new car every 6 months and then does nothing but complain about their debt and bills every time I see them.

Bingo. I just put $53,500 down (the entire purchase price - I own the vehicle outright) on a 2016 P90D with every option ($127k MSRP when new). Car has 50k miles. That owner lost over $80k with tax consideration in 4 years. Actually more because he added the center console and carbon fiber spoiler. When I sell it in ~3 years, I suspect I’ll lose $5k-$10k. It isn’t that I couldn’t afford buying a new one - I just don’t want to for the reason outlined here.

 

[AMPd]

Bingo. I just put $53,500 down (the entire purchase price - I own the vehicle outright) on a 2016 P90D with every option ($127k MSRP when new). Car has 50k miles. That owner lost over $80k with tax consideration in 4 years. Actually more because he added the center console and carbon fiber spoiler. When I sell it in ~3 years, I suspect I’ll lose $5k-$10k. It isn’t that I couldn’t afford buying a new one - I just don’t want to for the reason outlined here.

LOL good luck with that, thanks for the laugh

 

[domodan]

LOL good luck with that, thanks for the laugh

Maybe it will be more, maybe not. I just sold my F-150 Platinum after holding it 34 months and only lost $3.1k. I was in the car biz a long time and generally know how to make that happen. If not, I’ll either decide to take a bigger hit or keep the car. The title is in the nightstand...doesn’t cost me anything.

 

[Kandiru]

With 42k left on the loan I don’t think GAP will be coming into play.

Porque no? Gap should cover anything above the valuation that you owe on the car.

From Allstate:

Gap insurance is an optional car insurance coverage that helps pay off your auto loan if your car is totaled or stolen and you owe more than the car's depreciated value. Gap insurance may also be called "loan/lease gap coverage." This type of coverage is only available if you're the original loan- or leaseholder on a new vehicle. Gap insurance helps pay the gap between the depreciated value of your car and what you still owe on the car.

As for taxes, the King never returns taxes.

Lastly OP, very sorry for your loss and good to know everyone made it safely.

 

[AMPd]

Porque no? Gap should cover anything above the valuation that you owe on the car.

Correct, I am assuming insurance will value the vehicle a little more than 42k.
Otherwise I’d hate to be in op’s shoes.... again

 

[AMPd]

Maybe it will be more, maybe not. I just sold my F-150 Platinum after holding it 34 months and only lost $3.1k. I was in the car biz a long time and generally know how to make that happen. If not, I’ll either decide to take a bigger hit or keep the car. The title is in the nightstand...doesn’t cost me anything.

If Tesla continues doing what they’re doing, innovating and messing with older vehicles, you’re in for a surprise. Unfortunately.

 

[CapeOne]

When you take out an auto loan, the first couple years are pretty much all interest payments..

Not for a typical auto loan. It's not nearly as much so as something like a 20 or 30 year mortgage. The OP said he financed around $67k at 1.49% APR. Assuming it was for 60 months, the monthly payments would be around $1,159 and interest paid over the first two years would only be around $1,650. About 94% of the payments would’ve gone towards the principal. If it was "pretty much all interest payments" as you stated, the OP would owe a lot more than $42k of the $67k loan.

 

[craigger]

Ok, I understand what you’re saying but you’re both right and wrong

If your money is parked in a savings account then yes I agree try to put down as much as possible. But if your money is in the stock market then you’re actually losing money by not borrowing

Here’s my personal example, I want a model s, about 110k out the door. I have that in a stock that pays a 5-7% dividend I can cash that out or I can borrow it from a bank with a 2.9-3.5% interest rate. So in my case and anyone else who invests their money they’re actually losing money by paying all cash. Not to mention the extra security of not going through what op is going through.

I think it's a false economy to talk about opportunity cost when it comes to money spent on a car. Other than necessities, any money you have is either 'working money' or 'play money'. Maximize ROI on working money and maximize fun on 'play money'. Paying interest on a depreciating asset is always a losing proposition, but if it fits into your play money budget and makes you happy - more power to you. Just be OK with the fact that it's a foolish financial move.

-craigger.

 

[craigger]

Not for a typical auto loan. It's not nearly as much so as something like a 20 or 30 year mortgage. The OP said he financed around $67k at 1.49% APR. Assuming it was for 60 months, the monthly payments would be around $1,159 and interest paid over the first two years would only be around $1,650. About 94% of the payments would’ve gone towards the principal. If it was "pretty much all interest payments" as you stated, the OP would owe a lot more than $42k of the $67k loan.

Ah - missed the 1.49% - that's a great rate. So - looks like OP paid a lot more per year for usage of the car. It sucks but no one comes out ahead in a situation like this...

 

[AMPd]

I think it's a false economy to talk about opportunity cost when it comes to money spent on a car. Other than necessities, any money you have is either 'working money' or 'play money'. Maximize ROI on working money and maximize fun on 'play money'. Paying interest on a depreciating asset is always a losing proposition, but if it fits into your play money budget and makes you happy - more power to you. Just be OK with the fact that it's a foolish financial move.

-craigger.

Fair point.

 

[Kush Plank]

@Kush Plank this is the one thing that you will likely need to fight with the insurance company over. As no comparable 2018 Model S you can buy will come with FUSC. So how do they value the loss of that feature? (How much did you actually use it?)

Your best bet is to point them to Elon's tweet where he offered to give people $5k back in exchange for removing FUSC from the car. (As that sets a very clear value for it.)



As far as you having EAP, you will just have to say that since you can't get a 2018 with EAP now they will have to use a comparable car with FSD, or add the cost of FSD to the value. (Which is now $8k, so combined with FUSC that could add $13k to what they should offer you.)

Thanks for the info on elons tweet and eap, I am waiting on my insurance offer which i hope will be atleast 70k, i should have an offer this week i will keep you guys updated on what you think.

 

[2101Guy]

on a (somewhat) related note. Learned last year that personal injury lawyers' 33 and 1/3 % fee, is negotiable. There is no rule (at least not in VA) that mandatesa specific fee. On a slam dunk case (like if you are rear ended by an insured driver), by far, the cases never get to court. Gets settled. And takes minimal amount of the actual lawyers time who reps you. Its typically all handled by the paralegals in the office, and the lawyer just signs off.

If you shop around a bit, you can get as low as 20% fee for the lawyer...