If someone is self employed, is in sales, or works in a profession where they get paid for time, such as legal or sometimes medical, then time savings compounds over the lifetime of a car. 5 minutes a week isn't a big deal, but if that 5 minutes is compounded over 50 weeks (two weeks vacation), then someone making $250-$500 an hour will get 100 minutes at that rate. Even if you assume half that time is captured because no one will likely capture all the time, then it's still savings. Multiply the yearly savings by the years of car ownership, and the numbers aren't irrelevant. Plus if someone saves two hours a year from dealing with ICE car maintenance, then that's another multiple of that hourly rate. Time savings is important if one gets paid for time at a rate that is significant to there specific finances. Otherwise, if not, it's irrelevant.
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Affording a Tesla
- Thread starter Scoopa
- Start date
If someone is self employed, is in sales, or works in a profession where they get paid for time, such as legal or sometimes medical, then time savings compounds over the lifetime of a car. 5 minutes a week isn't a big deal, but if that 5 minutes is compounded over 50 weeks (two weeks vacation), then someone making $250-$500 an hour will get 100 minutes at that rate. Even if you assume half that time is captured because no one will likely capture all the time, then it's still savings. Multiply the yearly savings by the years of car ownership, and the numbers aren't irrelevant. Plus if someone saves two hours a year from dealing with ICE car maintenance, then that's another multiple of that hourly rate. Time savings is important if one gets paid for time at a rate that is significant to there specific finances. Otherwise, if not, it's irrelevant.
I've never paid more than 13k USD for a car, before getting my X100D at 106k USD. I probably wouldn't have bought it if my Tesla shares hadn't done so well over the last year. It allowed me to pay half with pure taxed profits, and the rest I got a quite favourable interest rate on. Less than my mortgage, in fact. Theoretically, I should have borrowed more money, and simply paid down my mortgage with the extra cash, but it just didn't seem right. I wouldn't be able to feel I could afford the car if almost all of the money was borrowed.
It certainly makes no financial sense. Sure, I save some money gas and other stuff, but on the other hand, thus far I've paid ~150 USD on Abstract Ocean lights, ~600 USD for rubber mats and a Type 2 cable, ~550 USD to repair a scratch I managed to do on the first day, ~800 USD for paint protection and ~350 USD for a CHAdeMO adapter. And then I'm planning on getting extra sound proofing and a dash cam at ~1800 USD, and of course there's the car cleaning products, with is probably something like 200 USD. Also I did up the garage a bit. Replastered the walls, painted, changed the lights, added a Homelink-capable opener and a few other things, at maybe 1000 USD. Also bought a wifi repeater to get wifi in the garage, at ~100 USD.
At the rate I'm spending money on this car, I'll be poor soon...
But I'm hoping it will ramp down at some point.
It certainly makes no financial sense. Sure, I save some money gas and other stuff, but on the other hand, thus far I've paid ~150 USD on Abstract Ocean lights, ~600 USD for rubber mats and a Type 2 cable, ~550 USD to repair a scratch I managed to do on the first day, ~800 USD for paint protection and ~350 USD for a CHAdeMO adapter. And then I'm planning on getting extra sound proofing and a dash cam at ~1800 USD, and of course there's the car cleaning products, with is probably something like 200 USD. Also I did up the garage a bit. Replastered the walls, painted, changed the lights, added a Homelink-capable opener and a few other things, at maybe 1000 USD. Also bought a wifi repeater to get wifi in the garage, at ~100 USD.
At the rate I'm spending money on this car, I'll be poor soon...
But I'm hoping it will ramp down at some point.
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SageBrush
REJECT Fascism
Nothing to sneeze at, but not exactly a premier ingredient on the road to Tesla car ownership.
It reminds me of a cute joke my wife told me the other day: a mouse and an elephant are walking down a dirt road. The mouse turns to his friend and boasts "look at our plume !"
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Ha! Big savings for me was not on cable. My family was apparently supporting our entire local Whole Foods overhead. Simply not shopping there anymore saved between $600-$800 month buying much of the exact same groceries at lower cost venues. That's where my savings came. I'm sure most of you caught onto the "Whole Paycheck" sooner than I did, but better late than never!
SageBrush
REJECT Fascism
Granted ... but those other values are entirely subjective and have nothing to do with affording a Tesla.
vrykolas
Member
Wow, great thread/topic. I could go on for days since this was a MAJOR research point for me before buying.
We are not 'rich', and make nowhere close to the 'average' Tesla owner. But here are my financial reasonings:
Does it make sense from a purely individual-financial perspective to buy a Tesla? No.
But then I decided I wanted to:
Do I try to eat out less? Yes, but we eat better (healthier) at home anyway.
Ok, I'll stop now... hopefully that helps others. But please, if it's a REAL financial stretch to get a Tesla, don't... wait a bit and don't put your or your family in undue debt that you can't handle.
We are not 'rich', and make nowhere close to the 'average' Tesla owner. But here are my financial reasonings:
- We always bought new cars, but usually kept them for 9-10 years, and fuel-efficiency was always calculated into previous-car considerations.
- We never bought a car >$32k USD (Honda Odyssey)
- We spent $500/month on Odyssey loan and ~$120-150/month on fuel
- I'd received a modest raise over the last 2 years at work (not a lot), but we saved all of it.
- Previous loan + fuel savings + saved job-raise amount-per-month was within ~$100/month of owning a Model X90D
- I'd obsessed over Tesla since the Model S (I was the one at dinner parties people tried to avoid because somehow my conversations always ended up talking about Tesla and electric vehicles)
- I don't have any other vices (don't drink much, don't smoke, don't play golf/tennis/etc), so my wife finally gave 'approval' and I put a reservation down in early 2015.
- After AP2 came out and free-supercharging (was 'supposedly' ending in 2016) that got us to pull the trigger
Does it make sense from a purely individual-financial perspective to buy a Tesla? No.
But then I decided I wanted to:
- Vote with my wallet
- Serve as an example/ambassador for electric vehicles
- And finally have some fun with working hard for a good number of years
Do I try to eat out less? Yes, but we eat better (healthier) at home anyway.
Ok, I'll stop now... hopefully that helps others. But please, if it's a REAL financial stretch to get a Tesla, don't... wait a bit and don't put your or your family in undue debt that you can't handle.
SageBrush
REJECT Fascism
I suppose that is possible, but I suspect your savings are mixture of lower prices and changes in consumption patterns. Time will tell if your patterns change long term, but beware the curse of diets: weight usually returns.
SageBrush
REJECT Fascism
On the cable front - we ditched cable years ago in favor of Netflix ($7/mo at the time), and have recently ditched even Netflix in favor of just watching free YouTube. Not so much to save the $7/mo, more because we got addicted to some better YouTube channels and realized we weren't watching Netflix anyway. Our 3 and 5 year old used to watch cartoons on it, but now they'd rather watch Minecraft tutorials, volcano documentaries, things like that, which are abundant on YouTube. We don't miss cable / satellite TV at all. Though you might've been talking about just internet, in which case, feel free to ignore this off-topic suggestion
I would argue affordability isn't just about dollars, though. The main currencies I worry about on a daily basis are time and money. Not because time is money, but because I have a limited amount of both, and I want to spend them wisely. Incidentally, I have a much easier time freeing up money than I do freeing up time.
Just to say one more thing: I'm quite frugal, and have been over the last decade or so. I can tell you I spent 628 USD on groceries in June 2010, because I maintain a spreadsheet with all my costs and income.I've never paid more than 13k USD for a car, before getting my X100D at 106k USD. I probably wouldn't have bought it if my Tesla shares hadn't done so well over the last year. It allowed me to pay half with pure taxed profits, and the rest I got a quite favourable interest rate on. Less than my mortgage, in fact. Theoretically, I should have borrowed more money, and simply paid down my mortgage with the extra cash, but it just didn't seem right. I wouldn't be able to feel I could afford the car if almost all of the money was borrowed.
It certainly makes no financial sense. Sure, I save some money gas and other stuff, but on the other hand, thus far I've paid ~150 USD on Abstract Ocean lights, ~600 USD for rubber mats and a Type 2 cable, ~550 USD to repair a scratch I managed to do on the first day, ~800 USD for paint protection and ~350 USD for a CHAdeMO adapter. And then I'm planning on getting extra sound proofing and a dash cam at ~1800 USD, and of course there's the car cleaning products, with is probably something like 200 USD. Also I did up the garage a bit. Replastered the walls, painted, changed the lights, added a Homelink-capable opener and a few other things, at maybe 1000 USD. Also bought a wifi repeater to get wifi in the garage, at ~100 USD.
At the rate I'm spending money on this car, I'll be poor soon...
But I'm hoping it will ramp down at some point.
I dropped cable for Netflix a couple of years ago, which meant I could also avoid a ~350 USD annual television tax too. We only shop at the cheapest grocery stores, and I have no expensive vices. I spend almost nothing on clothing. We don't eat out more than ~6 times per year. For the past few year, I've been able to save 10-30% of my annual (pre-tax) income. And I'm certainly not rich. I currently make ~70k USD per year, and I support my wife through college. (That's not as bad as it sounds though, as college is free, here.)
Over the past ~7 years I've grown my net worth from zero to over 300k USD, and the Model X is my reward.
I took on voluteering about a year ago and the experience has been priceless.
Just to say one more thing: I'm quite frugal, and have been over the last decade or so. I can tell you I spent 628 USD on groceries in June 2010, because I maintain a spreadsheet with all my costs and income.
I dropped cable for Netflix a couple of years ago, which meant I could also avoid a ~350 USD annual television tax too. We only shop at the cheapest grocery stores, and I have no expensive vices. I spend almost nothing on clothing. We don't eat out more than ~6 times per year. For the past few year, I've been able to save 10-30% of my annual (pre-tax) income. And I'm certainly not rich. I currently make ~70k USD per year, and I support my wife through college. (That's not as bad as it sounds though, as college is free, here.)
Over the past ~7 years I've grown my net worth from zero to over 300k USD, and the Model X is my reward.
Nice job saving. Not easy to come up with $300K off $70K income over a 7 year period. Hope you like your X!
Just to say one more thing: I'm quite frugal, and have been over the last decade or so. I can tell you I spent 628 USD on groceries in June 2010, because I maintain a spreadsheet with all my costs and income.
I dropped cable for Netflix a couple of years ago, which meant I could also avoid a ~350 USD annual television tax too. We only shop at the cheapest grocery stores, and I have no expensive vices. I spend almost nothing on clothing. We don't eat out more than ~6 times per year. For the past few year, I've been able to save 10-30% of my annual (pre-tax) income. And I'm certainly not rich. I currently make ~70k USD per year, and I support my wife through college. (That's not as bad as it sounds though, as college is free, here.)
Over the past ~7 years I've grown my net worth from zero to over 300k USD, and the Model X is my reward.
You've reminded me again why Norway is my favorite place on Earth =)
dgpcolorado
high altitude member
I retired young, at age 45, almost two decades ago and have been doing a wide variety of volunteer work ever since. I find it much more satisfying than I did my career, even though it doesn't earn me any income. I get by from being thrifty, same way I accumulated my retirement savings in the first place. My CPO S60 purchase is a huge exception to my otherwise thrifty living, however. Some health issues caused me to start doing a bit more to live for today rather than always waiting patiently for the future. Much like retiring young in the first place.
Canuck
Well-Known Member
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.
SageBrush
REJECT Fascism
mbhforum
Active Member
My math was pretty simple. My son's day care payments were coming to an end since he is starting Kindergarten in the fall, which automatically gave me $450 a month right off the bat towards a car payment. I took 20k out of savings towards the 31k down payment (I sold my 328 for 11k) and was able to have a manageable $672 monthly car payment. If you factor in fuel savings, I wasn't far off. I purposely waited until one of my other bills disappeared before even considering a new car. Now when my daughters day care payments end in three more years, that will be time to upgrade Model S to the latest and greatest!
The goal was to still put away money in my savings a month, retirement and kids college funds and I am still doing that. My quality of life hasn't changed one bit financially since I took ownership and I think that is the sign that I could afford to car. Sure, I could have saved money with a cheaper car but I think something an he said of enjoying your hard earned money once in awhile...
The goal was to still put away money in my savings a month, retirement and kids college funds and I am still doing that. My quality of life hasn't changed one bit financially since I took ownership and I think that is the sign that I could afford to car. Sure, I could have saved money with a cheaper car but I think something an he said of enjoying your hard earned money once in awhile...
All great posts however every situation will be different and in my case fuel here in Montreal is much more expensive than in the US so I'm saving around 5000$ per year in fuel as well as around 500$ per year on other expenses (oil change, etc). In my case that alone was enough to justify the higher tesla monthly payments. We also have only one car in the family while almost everyone I know owns two cars. People sometimes don't realize how expensive it can be to run two cars (two ICE cars in particular).
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