A Bad Idea, Whose Time May have Come

[wdolson]

It looks like you could run some numbers and get a feel for how much extra cost you're going to have. First off, is the commute 150 miles each way or round trip? If it's 150 miles each way, you'll have to stop at a supercharger everyday or charge the car at work somehow.

You will see an income increase of $30K a year, that's $2500 a month. Tesla's a cheaper to run than even a Prius, but you will have to figure out the difference based on your cost of electricity, whether you need to pay to charge at work, etc. So how much will it cost to drive a Prius (the current one or a new replacement) to the new job vs a Tesla?

After taxes you will be making say $20K a year more, how many years will it take to pay for the Tesla out of that? You will have some monthly savings in maintenance and energy costs, but it is a more expensive car. Run the numbers and see what comes up.

There is a spreadsheet floating around somewhere that compares the cost of ownership of a Tesla to an ICE. The creator had run the numbers against a Honda Odyssey, but you could plug in the numbers for your current car vs the Model S and see what comes out.

With an increase in your income, there will be a break even point where the car has paid for itself out of your increased income alone, but when that is depends on a lot of factors.

 

[rpiolends]

What does your wife say?

My wife thinks its a lot to spend on a car, but if I say we need it, then we need it.

For me, I put the kids and wife in the Tesla and commuted by bike.

The safety of the Tesla is what sold me. There is simply nothing safer for the family and I was very comfortable knowing that.

My wife thinks motorcycles cause instant death. I tell her i'm well insured, but bless her heart she'd rather have me than the money.

What do you drive now? Without knowing any financial details its a tough for us to provide any help. Will you put $ down? What are your other monthly expenses ie mortgage, wife's car payment, student loans, credit cards, etc?

I know you said that your current job will end but why must you take the 150 mile commute job? If I knew my job was ending, I would either look for a new job or take the severance when my current job ends and find a new job with a shorter commute. The time I spend with my daughter is priceless. With a commute like that and the assumption you're working full time hours, there's a good chance that you will won't see your kids during the week. No car or job is worth that to me.

If I were to make some basic assumptions like ~$2000/month for mortgage or rent, 15% for retirement, $500/month wife car payment, $500 per month for misc expenses (utilities), $800/month for groceries, and $300/month employee contribution towards health insurance. This would leave you with ~$2000 to go towards the Tesla payment and whatever auto insurance would be. Based on these assumptions, my personal opinion would be to not go with a Tesla.

I have a paid for prius, I have a nissan leaf, which is a lease due back next month. My wife's car is a hybrid highlander, Payment of 380 a month. To get the tesla, I would sell the prius, most likely for $4k. mortgage payment is 1900. 500 for utilities is accurate, groceries run 600 a month. I don't know what the health insurance contribution will be so lets go with your 300 assumption as well.

I am looking for work all around where I live. not much luck as palm beach is not known for its big business like Miami is. My work is currently governmental on an annual contract, as such there is no severance.

 

[Rich_PSU]

Ok. So based on that, you have about $2400/month net left over for the Tesla payment plus your auto insurance. You said that you estimated the Tesla payment would be about $1100 in an earlier post. So now you're down to $1300/month net. Let's assume auto insurance is $200/month for both vehicles. You're left with $900/month net. I think I personally would still hold off if I were you.

I think what might be a great exercise is for you to put $1100 into some form of an account every month for the next 10+ months. This allows you to see if it would truly create a financial strain without being bound to an auto note. If you can do this for 10+ months comfortably, you have a sense for how it will be to live with that kind of car payment plus you will have saved $11000+ dollars.

 

[Nosken]

This post convinced me!
Why you should not wait to buy | Tesla Motors

 

[Ulmo]

Let me throw a monkey bone of an answer in there: Here are some outcomes to consider:

1. Ruin your financial situation for half your life by getting an overpriced luxury car, lose jobs and families because of your bad decision, and don't get promoted because of being too flashy.
2. Die prematurely a third of your life from now in a crash that was caused by owning a non-luxury car.
3. Die in the luxury car rather soon.
4. Buy the luxury car, don't die, and end up being able to afford it easily.

 

[Drivin]

How much do you saving per month for:
- College tuition or are you planning on not helping your kids?
- Medical expenses (especially braces for kids)?
- Summer programs and other incidental education expenses
- OMG something bad happened savings?
- All the other normal expenses of raising 3 kids?
- Vacations?
- Home repairs?
- Retirement
- Etc. etc.



If you don't plan on saving any money for your kids and they are totally on their own at 18, that is okay, as long as you plan it that way.

Secondly, you should never compare pretax money (gross salary) with after tax expenses (the car). It is not 60% of your income unless you don't pay any taxes and have no paycheck deductions.

As many mentioned, you should actually have a realistic budget instead of this 60% of your income perspective.

There are plenty of people who live paycheck to paycheck and don't save much (62% have $1000 or less in savings) , so if that is your plan, you won't be alone.

 

[brianman]

For me, I put the kids and wife in the Tesla and commuted by bike.

The safety of the Tesla is what sold me. There is simply nothing safer for the family and I was very comfortable knowing that.

My wife thinks motorcycles cause instant death. I tell her i'm well insured, but bless her heart she'd rather have me than the money.

I think he meant bicycle not motorcycle. FYI

 

[whitex]

The final decision has to be yours. First and foremost make sure you don't end up with a financial obligation that will suck all the fun out of this. If you are one of those people who don't feel comfortable with debt and the monthly payment will feel like a never ending toothache, don't do it. Btw, putting down some down-payment can alleviate some of these issues.

That said, also consider the other side of the coin - there are some things in life that you enjoy a lot more when you are younger. When I was 17 I took a loan to buy myself a nice 2-seater car - a used Toyota MR2 for ~$9K. It was FUN. A lot of fun. I sold it a year later because the insurance was draining my finances (no accidents or tickets, simply a teenage driver), but I never regretted it. By the time I was 27 I bought a brand new, custom ordered Porsche 911 C4 for ~$100K. I also had a lot fun and did some crazy things in that car, but I remember thinking to myself that even though the car was loads of fun, it wasn't as exciting as driving my MR2. The moral of the story is that there are certain things that are a lot more enjoyable at certain stages of life.

PS> I've been driving a Model S for over 2 years now - best cars I've ever owned!

 

[davidc18]

Safety was at the top of the reasons we have the 70D. We chalked up the price delta over all of my other options as paying forward for safety. The fact that the car is pretty fun to drive and had room for our 2 child seats was a bonus (none of my other choices had 4 seats).

 

[plaid]

This is easy:

*Take the job.

*Do NOT buy the car.

*Move close to your new job to cut commute time and cost.

*Evaluate in a year.


/

 

[Bimbels]

I agree with others that maybe you should wait for a CPO car (with AP, because that would make your life so much better) that won't stretch your budget OR keep your prius and wait for the Model 3.

 

[rpiolends]

It looks like you could run some numbers and get a feel for how much extra cost you're going to have. First off, is the commute 150 miles each way or round trip? If it's 150 miles each way, you'll have to stop at a supercharger everyday or charge the car at work somehow.

You will see an income increase of $30K a year, that's $2500 a month. Tesla's a cheaper to run than even a Prius, but you will have to figure out the difference based on your cost of electricity, whether you need to pay to charge at work, etc. So how much will it cost to drive a Prius (the current one or a new replacement) to the new job vs a Tesla?

After taxes you will be making say $20K a year more, how many years will it take to pay for the Tesla out of that? You will have some monthly savings in maintenance and energy costs, but it is a more expensive car. Run the numbers and see what comes up.

There is a spreadsheet floating around somewhere that compares the cost of ownership of a Tesla to an ICE. The creator had run the numbers against a Honda Odyssey, but you could plug in the numbers for your current car vs the Model S and see what comes out.

With an increase in your income, there will be a break even point where the car has paid for itself out of your increased income alone, but when that is depends on a lot of factors.

The commute is approximately 75 miles each way, so the entire trip can be easily made on an 80-90% charge. Electricity is reasonably cheap in S.Fl .11/KW. I have started doing the numbers, but as always it is all in the unknown variables. Gas is <$2, but will it stay there, as this will be the primary cost. Secondary costs on repairs if I keep the 8 year old prius.

If I keep my lifestyle the same, which is the plan. Then that 20k could be used to cover the car. Then we are looking at 3.5 years. The loan for the car I was looking at was 6 years at 1,100 a month.

How much do you saving per month for:
- College tuition or are you planning on not helping your kids?
- Medical expenses (especially braces for kids)?
- Summer programs and other incidental education expenses
- OMG something bad happened savings?
- All the other normal expenses of raising 3 kids?
- Vacations?
- Home repairs?
- Retirement
- Etc. etc.


If you don't plan on saving any money for your kids and they are totally on their own at 18, that is okay, as long as you plan it that way.

Secondly, you should never compare pretax money (gross salary) with after tax expenses (the car). It is not 60% of your income unless you don't pay any taxes and have no paycheck deductions.

As many mentioned, you should actually have a realistic budget instead of this 60% of your income perspective.

There are plenty of people who live paycheck to paycheck and don't save much (62% have $1000 or less in savings) , so if that is your plan, you won't be alone.

The kids have funded 529 accounts from their grandparents. 3k in emergency cash, regualar expenses are budgeted. Vacations / home repairs usualy come out of the extra 2 paychecks in the year, 26 2 week pays = 13 months instead of 12.

I have small pensions from each of my previous jobs.

I think he meant bicycle not motorcycle. FYI

In my case, it is hard to bike 75 miles

This is easy:

*Take the job.

*Do NOT buy the car.

*Move close to your new job to cut commute time and cost.

*Evaluate in a year.
/

The closer you get to miami the more expensive housing generally gets. I have a wonderful house now that is the right size for my family, I'd worry that to move closer, I'd have to get a smaller house to stay on budget.

 

[mmccord]

I have a 150m round trip commute. It is a ton of wasted time every day, but my MS makes the drive stress-free.

If the M3 existed I'd have that instead. It might be worth waiting for at this point.

 

[Max*]

This post convinced me!
Why you should not wait to buy | Tesla Motors

Yeah, if that's who I think it is, he got a 2nd Tesla.

- - - Updated - - -

3k in emergency cash

Your emergency fund for a family of 5 is very small. Minimum recommendation is 3 months of expenses (though lots of people recommend 6 months), and you obviously use more than $1k a month.

With that being said, if you have another place to get emergency cash from (like pulling it out of an existing HELOC, at a low APR), keeping hoards of emergency cash isn't that useful vs. paying down debt.


Is there a particular reason you don't want to go CPO or used?

 

[adamglass]

Wait, this post isn't about Trump?

 

[rpiolends]

With that being said, if you have another place to get emergency cash from (like pulling it out of an existing HELOC, at a low APR), keeping hoards of emergency cash isn't that useful vs. paying down debt.


Is there a particular reason you don't want to go CPO or used?

Yes, The cash for the immediate emergency when no other form of currency is accepted then and there. My true emergency fund is in the 100k of equity I can access if necessary.

I'm not opposed to used, or a "new" service loaner. In fact my original goal was an 85 with auto pilot. The goal was to keep it at or near 70k in cost. With Tesla revamping their cpo site, I cannot find a match. I would be hoping that an 85 with autopilot will be traded it, and be available when I am ready to buy.

 

[Jool]

Hmm, I dunno. I do love my Model S, but if I were in your position I'd probably reconsider. Kids are super expensive! I have no children so my monthly expenditures aren't nearly as high as other people :smile: I would say hold onto that Prius and drive it into the ground until the Model 3 is released.

 

[TMobe]

I was living 5 miles from my work. I ended up moving 50 miles from my work. I have no CC debt but my gas cost was about $500 per month and Lexus payment was $350 per month. I wanted a Tesla. But to buy a new one..I am too frugal for that. I found a CPO loaded at $70k and put down $56k. It made sense for me since I charge at work everyday for free and the superchargers are near my home. I have yet to pay a penny to charge my car.

If I were you, I shop for the CPO you want with AP. It will come with a Tesla warranty. Or wait for the Model 3 if you can and rock the Prius till then.

Bias opinion...what ever Tesla you can afford...you wont be disappointed Good luck

- - - Updated - - -

Oh, and please don't consider "My true emergency fund is in the 100k of equity I can access if necessary." as an fund. It is an emergency loan unless you sell your house for that $100k.

 

[rpiolends]

I was living 5 miles from my work. I ended up moving 50 miles from my work. I have no CC debt but my gas cost was about $500 per month and Lexus payment was $350 per month. I wanted a Tesla. But to buy a new one..I am too frugal for that. I found a CPO loaded at $70k and put down $56k. It made sense for me since I charge at work everyday for free and the superchargers are near my home. I have yet to pay a penny to charge my car.

If I were you, I shop for the CPO you want with AP. It will come with a Tesla warranty. Or wait for the Model 3 if you can and rock the Prius till then.

Bias opinion...what ever Tesla you can afford...you wont be disappointed Good luck

- - - Updated - - -

Oh, and please don't consider "My true emergency fund is in the 100k of equity I can access if necessary." as an fund. It is an emergency loan unless you sell your house for that $100k.

I don't believe it is a fund. I also don't believe in leaving cash, laying around doing "nothing"

 

[Drucifer]

I don't believe it is a fund. I also don't believe in leaving cash, laying around doing "nothing"

Agree. I keep a HELOC for emergencies and keep all my money in a position where it is tax advantaged, working in less liquid investments, or both. When the banks start paying 5% or 6% interest in a 90 day CD again, I will reconsider.