$50,000+ car while economy in freefall

[steinbej]

Longtime lurker. Put in my Model Y reservation the week it was announced. Perhaps my name will come up soon.

But 3 million people just filed for unemployment nationwide this past week with the coronavirus disaster. The country is moving into recession if not depression. People are stockpiling toilet paper and beans. Just doesn't seem like a great time to spend $50,000+ unecessarily. Yet post after post goes up at TMC reporting, "just got my Model 3!" or "my Model Y just arrived!" Many are thrilled, some posts complain about build quality, and more. But I'm just wondering how are folks reasoning their way through spending a large amount of money at this time?

I'm not saying choices are right or wrong. Just wondering how people are thinking through pros and cons.

 

[Qbenjamin]

For clarity, a recession is when we have back-to-back quarters of negative GDP and a depression is when we start talking years. Let's not equate the two in this scenario (acknowledge that recession may be imminent). For the folks that have the income to support life going on without a thought to the current economy, the worst thing that we/they can do is simply withdraw all support (money) from an already ravaged situation. We'll bounce back from this, it's just a matter of time before the virus has run its course. #LifeGoesOn

 

[Uncle Paul]

While some will stare at the issues we are confronting this very moment, others are looking forward into the future and realizing that like all things...this too shall pass.

There are really very few new cars still on the ground in US. People delaying getting one when available most likely will not be able to get anything until after Summertime. They have been waiting for a long time to get these cars, and don't want to wait any longer.

Buying a new car is usually a joyous occasions, and currently people need all the positive energy they can muster.

I was bored yesterday, so went out and hand washed my Tesla. It felt great to get some of the road grime off from our trip last week to Phoenix. Felt great to bring out the bucket and hose. Now the car is all shiney again and ready for when needed. Had a sence of pride and accomplishment. One of the more positive things I have done lately.

 

[Uncle Paul]

The 3 million that applied for unemployment are doing so to bridge them over until business get back to business. Top unemployment will annualize to $52,000 annually. Some will even come out ahead as they no longer need to pay normal expenses of working and eating out.

While it is envisioned that this will be only for a relatively short period, these relatively large unemployment checks, combined with the first $3,400 check for a family of 4 will allow many to weather the storm.

While the government will essentially just print the $ to make this happen, that cash will go into the pockets of workers and businesses. Keep the society solvent, but at a huge cost. The costs to keep solvent is expected to be much less than the costs to let everything stop.

 

[S4WRXTTCS]

There is no question that we're in uncertain times. Pretty much every car commercial I've seen on Hulu mentioned uncertain time where they have offers to help alleviate that concern.

The scariest thing isn't people buying expensive vehicles in a time like this, but if they don't. If people stop buying then we're definitely headed for a recession, and a depression if the sentiment last long enough.

Ultimately it's a personal decision depending on a persons own financial outlook.

I personally won't buy anything until I forgive myself for not pulling all of my savings out of the stock market, and only opted to pull 25% out. In was an inexcusable mistake because I knew things were going to get bad (this was in early March). So my depression will probably last 2-3 years as it will likely take that long to get back to where it was. Unless I made some really smart moves with the 25% of course.

 

[rxlawdude]

I was lucky enough to bank gains from TSLA in my after-tax account that I figured it was time to order the Y. My IRA TSLA rode the wave and I shed shares during the crash.

My wife and I have discussed this very issue - she's on the "wait" side and I'm chomping at the bit for the Y to replace our S.

But this isn't in our hands - the shutting of Fremont and the time to re-start will put existing orders behind. Unless there are lots of cancellations by people suddenly freaked out by the current economic situation.

 

[SparkyTX]

I think that if you can afford to do this, buying a new car is not a bad thing. This helps keep things going, money going into Tesla eventually finds its way out to its employees. We need to be cautious about pulling back too much as we need to keep spending at normal levels so the economy keeps rolling. Coming to a screeching halt is not a good idea. I'm doing my best to support all the small businesses I use: house keeper, lawn crew, dog walker, mom and pop restaurants, etc. I can see delaying a expensive car purchase if you don't have any cushion but if you can afford to do so, it helps us all in the long run.

 

[kong24680]

I was originally going to pay the car off in cash, but I was able to obtain a >2% interest on an auto loan. I'm now taking the money I would have spent on the car to invest in stocks. TSLA shares are a great buy right now. Once this blows over in 3-5 months, and Model Y sales are fully ramped up, share prices are bound to go up. Honestly you could probably say the same for most large S&P 500 companies..

 

[mobilesuit818]

There is another post about this, its all a matter of circumstances.

I personally traded my 3 in to get a Y and didnt lose any money and was about to hit 40k. We also wanted a larger car in general so figure that in as well

 

[tashtibet]

people who never set goal, hope & plan their lives will always in struggle whether economy is good or bad. People who can afford Tesla or any other luxury cars are equipped with good level of understanding any situation and know very well what they do & capable of doing.

 

[SSedan]

As said, if everyone stops buying things a recession or depression becomes a self fulfilling prophecy.

On the unemployment, wait staff, entertainment, and tourist jobs are going to be hurting for awhile, but the rest can get back to business pretty quick. In most places manufacturing is still up and running.

Here in Wisconsin with the safer at home order, restaurants are actually still doing well with takeout and delivery, yes wait staff it hurt but they will have a place to go back to when this is over. Manufacturing is still going strong, sure it will dip but I am optimistic a year from now this will all be long behind us, market recovered and all.

 

[Matsayz]

YOLO!

 

[M3BlueGeorgia]

Longtime lurker. Put in my Model Y reservation the week it was announced. Perhaps my name will come up soon.

But 3 million people just filed for unemployment nationwide this past week with the coronavirus disaster. The country is moving into recession if not depression. People are stockpiling toilet paper and beans. Just doesn't seem like a great time to spend $50,000+ unecessarily. Yet post after post goes up at TMC reporting, "just got my Model 3!" or "my Model Y just arrived!" Many are thrilled, some posts complain about build quality, and more. But I'm just wondering how are folks reasoning their way through spending a large amount of money at this time?

I'm not saying choices are right or wrong. Just wondering how people are thinking through pros and cons.

People who got laid-off or who are expecting it, aren't going to buy a new vehicle, obviously.

But even with 30% unemployment rate, that means 70% employment, less some proportion of those fearful of losing their jobs.

Other automakers have a much bigger problem, because they've being shipping product into dealer inventories for months, to prepay for the Spring sales season, which isn't going to happen.

So better question is who is going to pay $50K to $70K for a Ford or GM truck or SUV, and draw down the hundreds of thousands of vehicles on dealer lots

 

[travis1906]

Folks who can afford to buy a Tesla will still buy a Tesla. If you were one of the unlucky people who were laid off, then you likely are not buying a Tesla. Some folks who have the type of job or business where you aren’t affected by the current pandemic and economic downturn, there will be no impact to your pending purchase.

 

[cgiGuy]

The Y fits a LOT more toilet paper than the 3... when TP is the national currency, you'll have been smart to invest in a new Y.

 

[SandDune]

Here's my 2¢ on this, and I just took delivery today. I am lucky and I work in Tech. I work for a large company, and am not worried about my job. Will the economy bounce back, it's too early to say. But if the people who have the ability to spend money stop spending on things, then overall the economy is going to be a lot worse off than it is.

If you think about all those people involved in designing, building, shipping, and delivering my car to me, by putting my purchase on hold, I'm putting their jobs at risk, And it snowballs from there.

There is no easy answer. There is no one answer. But for those of us who are working and making just as much as we were last month (and we expect to make just as much next month), we need to do everything we can to keep our purchasing as normal as possible to make sure this economy doesn't get even worse and is in a place where it can recover when this is all over..

Again, just my 2¢ on the situation.

 

[travis1906]

Here's my 2¢ on this, and I just took delivery today. I am lucky and I work in Tech. I work for a large company, and am not worried about my job. Will the economy bounce back, it's too early to say. But if the people who have the ability to spend money stop spending on things, then overall the economy is going to be a lot worse off than it is.

If you think about all those people involved in designing, building, shipping, and delivering my car to me, by putting my purchase on hold, I'm putting their jobs at risk, And it snowballs from there.

There is no easy answer. There is no one answer. But for those of us who are working and making just as much as we were last month (and we expect to make just as much next month), we need to do everything we can to keep our purchasing as normal as possible to make sure this economy doesn't get even worse and is in a place where it can recover when this is all over..

Again, just my 2¢ on the situation.

Agree with you as I am in the same boat. My salary is guaranteed no matter what. But even if we wanted to contribute to keeping the economy moving, there will be an impact as most states have shelter in place/stay at home orders so we can’t support local small or large businesses because many of them are closed unfortunately.

 

[KRG21]

Here's my 2¢ on this, and I just took delivery today. I am lucky and I work in Tech. I work for a large company, and am not worried about my job. Will the economy bounce back, it's too early to say. But if the people who have the ability to spend money stop spending on things, then overall the economy is going to be a lot worse off than it is.

If you think about all those people involved in designing, building, shipping, and delivering my car to me, by putting my purchase on hold, I'm putting their jobs at risk, And it snowballs from there.

There is no easy answer. There is no one answer. But for those of us who are working and making just as much as we were last month (and we expect to make just as much next month), we need to do everything we can to keep our purchasing as normal as possible to make sure this economy doesn't get even worse and is in a place where it can recover when this is all over..

Again, just my 2¢ on the situation.

This mirrors my situation and my opinion. The only hit I've taken are my long term investments, but I'm only 33 so that doesn't influence my day to day life or spending. I look forward to doing my part to keep the economy going.

 

[KRG21]

Agree with you as I am in the same boat. My salary is guaranteed no matter what. But even if we wanted to contribute to keeping the economy moving, there will be an impact as most states have shelter in place/stay at home orders so we can’t support local small or large businesses because many of them are closed unfortunately.

Yeah it's so sad. A lot of small business have already closed permanently around me. Most restaurants/etc are trying to ride it out with to-go and restructured business models and i'm trying to give them business as much as can.

 

[myMY808]

As others have mentioned, each person’s situation is different. There’s also the issue of optics — someone may be personally financially capable of purchasing a new car, but if that person’s business is furloughing workers (or asking their vendors for financial relief), rolling up in a brand new $50K+ Tesla may not be a good idea.

I’m worried about the ripple effect — even if your company is in a pretty good situation right now, if your company’s customers are impacted (or those company’s customers, etc.), your company may feel the impact at some point.