Affording a Tesla

[JCLeonard]

I still have three car payments, Mortgage, HELOC, college tution for one. Problem is - I could pay it all of in cash if I took investment money off the table. I don't mind the 0% and 4% car loans much and mortgage is 3.5% with deductability so it's not all bad.

I don't follow.. you took FPU and have not used your cash to pay off debt?

The FPU approach resonated with us so we did it. All in. We are now in a position to stash cash and save to make purchases in cash. Usually what happens is we set some savings goal for a large item and by the time we hit that goal we decide against buying it I don't think that will be the case with the Model 3, though, and that's ok because when we decide to buy it we'll write the check and move on with no regret.

We all have ways to justify our expenditures and methods to calculate why one way is "better" than the other. In the end we all apply some weight to the different attributes and make a decision that makes sense for us. Cool.

 

[Shock-On-T]

Did you compute in winter energy usage for an electric car (rule of thumb is 30% less range on a charge if you like a warm cabin - you can do pre-heating at home but that draws extra power).
Also, no cost for annual maintenance? How many years will it take you to do 100k miles?

Best way to save money in driving situations is to go from office work to telecommuting and/or job working closer to home. In today's age, some people are trying to buy larger homes farther away from work and doing herculean commutes (like some 80-100 mile commutes in California and NYC areas). CPO is a smart way to go. The TCO of buying a Tesla new is well over $1/mile when all-in (insurance, depreciation, maintenance) for a new buyer of anything 100D or higher.

Off peak is not relevant in many states. Mostly in high-population areas or highly regulated and PUC constrained markets like California.

Something I've been wondering ... the extra battery usage in winter is usually attributed to:
- cabin heating
- pushing car through denser atmosphere

Don't both these factors affect ICE cars too?
EVs provide such perfect insight into energy usage that differences in driving style, weather, even a wet road can be seen. But surely all these things affect ICE cars just as much, but you can't tell because it's just a clumsy E <--> F guage in 1/8th increments.

 

[ItsNotAboutTheMoney]

Something I've been wondering ... the extra battery usage in winter is usually attributed to:
- cabin heating
- pushing car through denser atmosphere

Don't both these factors affect ICE cars too?
EVs provide such perfect insight into energy usage that differences in driving style, weather, even a wet road can be seen. But surely all these things affect ICE cars just as much, but you can't tell because it's just a clumsy E <--> F guage in 1/8th increments.

Plus:
- snow tires

Yes, ICEVs are affected, but they are not affected as much because they produce so much waste heat, that the engines warm up quite quickly and they can use waste heat to heat the cabin. In a BEV the need to heat both cabin and battery effectively reduces your usable battery capacity, particularly when driving after a long time in the cold.

 

[Shock-On-T]

No offence but one of the reasons I take financial planner's advice with skepticism, and I manage my own finances, is because, if you want to build wealth, no one should be financing a $100k plus car. Fiance investments, such as rental properties, then with the income earned, after paying them off, buy a Tesla in cash. It's only at that time that it makes sense to buy a Tesla and even then a financial planner really should be saying it's a waste of money since any significantly depreciating asset is a waste of money. There's nothing wrong with wasting money, and if you have money to waste a Model S/X is a good place to put it -- but it's not a sound financial decision no matter how you look at it, even if the advice comes from someone who is a financial planner, at least in my view.

Actually if the finance on the Tesla is cheaper than the finance on your investment, you're better off financing the Tesla instead of paying cash. That cash would be better spent by paying down your investment finance.
Of course, to really build wealth we should all be driving Toyotas or taking Uber

 

[KidDoc]

I was obsessed with Model S since it was announced. Back in 2013 I changed from a salary to productivity pay model as a pediatrician and my pay jumped from 250k to 300k ish due to being very busy. At the time I had a Mustang convertible I liked but it was approaching 100k miles. It cost me 36k new and was the must expensive car I had owned. I justified the Model S because I was in the market for a luxury sedan which is going to run 50-70k anyway and last maybe 6 years. At the time gas was $3.50 a gallon as well.

So I figured as long as I keep my S 10 years it is about the same as other fancy cars. I have a cheaper model though paid 86k for it with 1.49% interest over 6 years and something like $20k down.

Now I have a new position and making even more so it isn't much of a strain thankfully.

 

[Shock-On-T]

Plus:
- snow tires

Yes, ICEVs are affected, but they are not affected as much because they produce so much waste heat, that the engines warm up quite quickly and they can use waste heat to heat the cabin. In a BEV the need to heat both cabin and battery effectively reduces your usable battery capacity, particularly when driving after a long time in the cold.

Good point about the waste heat for the cabin, although it's an ironic advantage to benefit from the car's own inefficiency.
But that's about it, right? Maybe some subtle battery chemistry behavior changes or something...

 

[b team]

He has a house (since we are talking mortgages) surrounded by trees. He had a large tree to remove. That tree was looked at by Company A. Guy wanted $3300 to take the tree down. Down, without tree removal. Too much for he and his wife. Company B came in to look at it. $2200 to cut it down and stack it. No removal. Guy then calls over the Amish guy who is working trees in his neighborhood that week. Amish guy looks at it, computes somethings with pencil and paper. Says 30 bucks. $30 to take the tree down but he wanted the wood. Mills it and makes furniture out of the wood.

Could I get the number for that Amish guy? I've already gotten three quotes for my trees, none of them less than $4,000. I greatly look forward to having them magically removed for $30.

 

[gabeincal]

Could I get the number for that Amish guy? I've already gotten three quotes for my trees, none of them less than $4,000. I greatly look forward to having them magically removed for $30.

Amish people don't have phones, do they?

 

[b team]

Amish people don't have phones, do they?

Touché.

 

[JCLeonard]

Good point about the waste heat for the cabin, although it's an ironic advantage to benefit from the car's own inefficiency.
But that's about it, right? Maybe some subtle battery chemistry behavior changes or something...

Poor road conditions also use more energy, pushing through snow or slippery roads. Same for ICE, just not as noticeable given the higher "range" for a tank of fuel (using our Leaf as an example)

 

[bonaire]

Something I'v e been wondering ... the extra battery usage in winter is usually attributed to:
- cabin heating
- pushing car through denser atmosphere

Don't both these factors affect ICE cars too?
EVs provide such perfect insight into energy usage that differences in driving style, weather, even a wet road can be seen. But surely all these things affect ICE cars just as much, but you can't tell because it's just a clumsy E <--> F guage in 1/8th increments.

Batteries have chemical reactions within. Ambient air conditions drop the core temperature of an EV unless active warming is in effect. Li-Ion like to operate about 72*F or 20*C. Winter conditions mean the batteries themselves have to run the coolant loop with heat injection to warm the battery core up to better conditions. It is one reason why regen braking works poorly until the battery warms up or a car cold-soaking overnight loses a lot of range if not plugged in and using shore electricity to keep the battery warm.

Cabin heating too - and may be part of the primary loss of range. Or buy a hat and gloves and stick it out. Some say that the size of the Tesla battery allows comfort conditions in winter and "extra miles" in the summer than if it had less. An ICE is less effected by ambient air temps and cabin heating comes off the waste head of the engine (via coolant through a heating-core radiator). ICE only has to overcome road conditions and air density. Rain is bad for any car's range as the water displacement of the tires is effecting range. I used to have a 27mpg car that dropped to maybe 25-26 mpg in winter or rain on the highway at 65mph.

One thing overlooked tire pressure. People need to keep their winter tire pressure a bit lower for better traction. Lower tire pressure also naturally occurs as temps go down. 40psi in 80*F can drop to 35psi in 30*F conditions. So, either you get traction or pump up the tires to 40psi again and risk traction issues in rain and snow. Tire pressure can be a big issue in EV range.

 

[personthing]

When I looked into off peak (I'm on Xcel, in Bloomington) they also had an extra monthly charge for the additional meter ($10). Usage during peak is something like 2x the standard rate:
https://www.xcelenergy.com/staticfiles/xe/Regulatory/Regulatory PDFs/rates/MN/MNResRateCard.pdf

For our mileage situation my spreadsheets steered me toward keeping our standard rate service when we purchased our Leaf. We'll see how that pans out when we get the second EV.

All this to say: it's important to crunch the numbers for each individual situation to see if one of the "programs" actually make sense.

Good point, I should've mentioned meter charges. I was actually quoted $4.95/mo for the additional meter, not $10, so you may want to look into that again. I'm curious what your normal rates are? We don't currently have xcel (this is all planning ahead for a move next month to a place that is on xcel), so I can't just look at my last bill. But according to some PDFs I'm finding online, it looks like the 2017 rates vary between $0.09285 and $0.10865 per kWh depending on the time of year. So being generous and using the lower of the 2 prices, the usage per month (in kWh) at which the EV rate plan pulls ahead can be found with...

4.95 + 0.033x = 0.09285x
4.95 / (0.09285 - 0.033) = x
4.95 / 0.05985 = x
Break even @ 82.7 kWh per month.

Using 3 mi/kWh for a range estimate, that's about 248.1 mi/mo, or 2,977.2 mi/yr. We'll definitely be doing more than that.

Going the other way, estimating around 15,000 mi/yr, 3 mi/kWh... 5,000 kWh / 12 = 1,250 kWh/mo...
EV off-peak rate plan:
$4.95 + $0.033*1250 = $46.20
vs just additional usage on regular rate plan:
$0.09285*1250 = $116.0625

This also doesn't factor the efficiency hit we take being in the cold north. The less efficient the car, the easier it is to justify switching to the off-peak plan.

 

[Scoopa]

I'm curious to know if you have the data for median annual income? Average seems pretty useless because it is going to get skewed heavily for those few who have extraordinary incomes (like professional athletes).

Good question. I don't have that info. But it's nice to read about everyone's stories and how they made things work to acquire their ride. I'm about 5 weeks into my S ownership, and it is awesome. Being my first EV, it still feels weird not having gone to a gas station in 5 weeks. Happy driving!

 

[gabeincal]

Good question. I don't have that info. But it's nice to read about everyone's stories and how they made things work to acquire their ride. I'm about 5 weeks into my S ownership, and it is awesome. Being my first EV, it still feels weird not having gone to a gas station in 5 weeks. Happy driving!

Wait till you have it for 6 months or so and then drive a gas engined car. It will be a very negative experience based on what I felt and what others wrote on the forums.. And don't forget to switch off the engine when you get out

 

[BLKMDL3]

Hello All,
I went through my budget, discovered I was spending an unconscionable amount of money on groceries and dining, as well as too high of a cable bill. My wife and I candidly now go to Whole Foods way less (almost never),

First of all, congrats!
Second, just don't eat ever and get a P100D!

 

[Scoopa]

Wait till you have it for 6 months or so and then drive a gas engined car. It will be a very negative experience based on what I felt and what others wrote on the forums.. And don't forget to switch off the engine when you get out

Totally. My wife's car is a Lexus 400h, and it feels weird to coast now whenever I drive that car after I take my foot off the gas. No regenerative breaking. Also no acceleration worthy of giggles when I need a quick burst. Plus the nav screen seems like a little baby compared to the massive Model S touchscreen.

 

[Scoopa]

First of all, congrats!
Second, just don't eat ever and get a P100D!

Ha! I'm a little worried to ever test drive a P100D, as my quick feeling (to me) acceleration of my 100D won't seem so quick anymore!

 

[BLKMDL3]

Ha! I'm a little worried to ever test drive a P100D, as my quick feeling (to me) acceleration of my 100D won't seem so quick anymore!

Dont test drive one. I did and made a mistake. Keep eating to an almost healthy amount!

 

[Markk993]

i might have a slightly different spin.

I did the same justification of car payment + gas in my Cayenne vs. a higher MS payment. But I stuck to my strategy of never buying a new car. The tax credit is nice but let someone else take the huge hit on depreciation.

Also know what you want and what you don't need. I know I would not use AP 99% of the time so a used non AP car was an even sweeter deal. I got an AMAZING deal on a P85+ but would have been happy with a non plus car (at the time anyway, now I would never give up the +)

Second, know the laws in your state.. In Nevada buying a private sale used car means no sales tax. 9% tax on 70K is a $6300 savings... this allowed me to save the money or get a model a notch above what I thought I could afford for the same cost.

I also got the original owner to buy the extended warranty (4K) before he sold me the car. this gave me 6 more years of warranty and up to 100K which is more warranty than if I bought a CPO car.

So in short here is how it ended up..Keep in mind this was about 14 months ago...

Found a fully loaded 2014 P85+ with 14K miles for 68K (original sticker was 128K)
Paid the original owner 4 K for the warranty and ZERO in sales tax...
72K ALL IN...got 1.49% financing from Alliant and I have not looked back...

I will get another one a couple years down the road but I am OK with being 1 or 2 steps behind the latest technology for half the price. to me those that are trading in cars that are 6 months old because of a technology update are throwing away good money...because there is always going to be another update 6 months to a year down the road... Even if you have that kind of disposable income it is a stupid decision in my opinion.

So thank you to whomever out there just bought my next Tesla

 

[gabeincal]

i might have a slightly different spin.

I did the same justification of car payment + gas in my Cayenne vs. a higher MS payment. But I stuck to my strategy of never buying a new car. The tax credit is nice but let someone else take the huge hit on depreciation.

Also know what you want and what you don't need. I know I would not use AP 99% of the time so a used non AP car was an even sweeter deal. I got an AMAZING deal on a P85+ but would have been happy with a non plus car (at the time anyway, now I would never give up the +)

Second, know the laws in your state.. In Nevada buying a private sale used car means no sales tax. 9% tax on 70K is a $6300 savings... this allowed me to save the money or get a model a notch above what I thought I could afford for the same cost.

I also got the original owner to buy the extended warranty (4K) before he sold me the car. this gave me 6 more years of warranty and up to 100K which is more warranty than if I bought a CPO car.

So in short here is how it ended up..Keep in mind this was about 14 months ago...

Found a fully loaded 2014 P85+ with 14K miles for 68K (original sticker was 128K)
Paid the original owner 4 K for the warranty and ZERO in sales tax...
72K ALL IN...got 1.49% financing from Alliant and I have not looked back...

I will get another one a couple years down the road but I am OK with being 1 or 2 steps behind the latest technology for half the price. to me those that are trading in cars that are 6 months old because of a technology update are throwing away good money...because there is always going to be another update 6 months to a year down the road... Even if you have that kind of disposable income it is a stupid decision in my opinion.

So thank you to whomever out there just bought my next Tesla

So much truth in this..... The only thing I'd say is that nobody, coming from the ICE market can be sure that they would not use AP 99% of the time. It just does not make sense as it's a technology that grows on you. Especially the traffic aware cruise control part... Congrats on the deal and as much as I love the new technology, I'm becoming one of those that jump on the curve a little later to save money (and to avoid early problems with technology)!