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Am I being an idiot by not taking delivery before year end?
- Thread starter tubaprde
- Start date
Right! I attached a spreadsheet with my calculations, but there are assumptions in there, ie depreciation over 5 years of each car
Attachments
Except you don't need to sell the 3 in 5 years, whereas it's more likely you would replace the S. Though that is also dependent on if the part replacements happened, the rest of suspension and such will gave aged too.
Residual value also dependant on what's newer on the car, would recoup some of the cost, unless 20k has that baked in already.
20k was just my best guess of what a 3sec 13yo model s with unlimited super charging and internet assuming 125k miles
Sure, just expressing the values are interdependent.
If it has a new pack, it's worth more which offsets the pack cost. If it's the original pack, it's worth less, but you didn't spend money on a pack.
Tam
Well-Known Member
Come on. We need clear math to decide which one is cheaper: buying a brand-new car or keep fixing an old car.
Which math is it?
ucmndd
Well-Known Member
My strategy:
Keep the car until it dies or you’ve achieved your goal of homeownership. Sock away the extra money in the mean time to deal with either or both of those eventualities.
Worst case: battery dies, you decide you don’t want to deal with expensive repairs, and sell it non-running for $15k or so and use the money you’ve been saving to help finance a new car when you actually need one.
Best case: you’ve saved more money for your home down payment, have paid off your car loan in the meantime, and have an easier time qualifying for a mortgage.
I really think this is a terrible terrible time to buy a new car. So much uncertainty related to the economy, upcoming EV tax credits and manufacturer responses to the rules, etc etc etc.
Tam
Well-Known Member
That's why the maths needs to be clear: What if you got the worst?
If you have to pay $40,000 to repair your old car or pay $60,000 for a brand-new car without repairs for 4 years.
So, which math is less for 4 years?
ucmndd
Well-Known Member
Yes, as that outstanding principal will decline rapidly and worst case he can sell the car for scrap to cover the loan, so there’s little to no risk of ending up significantly upside down.
TesslaBull
Member
I can understand this. As fast as battery/EV technology is likely to advance in the next five years, it may not make sense to sink a lot of money into an 8 year old car. I still think this is just a really low probability though.
ucmndd
Well-Known Member
I’d argue it’s better than pouring that $20k in equity into another depreciating asset with significant associated debt service.
Plus you have to consider the odds of that happening. That would represent the true “worst case”. It’s far more likely that OP will come out ahead. In any case, spending a guaranteed ~$70k to avoid a potential $20k repair is rarely if ever financially smart.
Lots of reasons to buy a new car. Financial savvy is not one of them.
Sometimes I look at the longer view too, in 7 years will they have needed to get a car? If so, when was the best time to?
ucmndd
Well-Known Member
Sure. IMO the answer to that question is the best time to buy a new car is when you NEED one.
Not that that’s when I buy new cars… don’t get me wrong. Sometimes you want what you want.
I will say I do think the WORST time to buy a new car is when you’re aspiring to buy a new home in the next year or two. Keep your DTI as low as possible. A 4-figure car payment can do some serious damage to mortgage qualification and affordability.
Agree, just seems a little different when there is an existing car loan...Sure. IMO the answer to that question is the best time to buy a new car is when you NEED one.
Not that that’s when I buy new cars… don’t get me wrong. Sometimes you want what you want.
I will say I do think the WORST time to buy a new car is when you’re aspiring to buy a new home in the next year or two. Keep your DTI as low as possible. A 4-figure car payment can do some serious damage to mortgage qualification and affordability.
So it's loan vs loan
Not no loan vs loan
If house purchase is in 2 years, it will again be no loan.
charisjapan
Member
Hey from Japan @tubaprde !
Good thread, and some pretty good answers that touch base with all the mechanical and financial aspects of your dilemma. And I hope that the experiences and advice help you to put your thoughts together. This being the internet, maybe not proper to bring up personal stuff, but what do you hear from spouse/significant other, family and friends say? Finances and assets are something more than cold facts. A few years back, on a whim, I took my wife to the Tesla Kawasaki showroom and we both took a test drive. We had little cash, but did have a paid-off Honda Odyssey. After the drive, the advisor answered all questions, and showed us how to make an account and place an order. No pressure at all, but we decided to put our ￥15,000 ($120) down ... under the stipulation to one another that we would talk with our kids and some friends to get their input. If there was any truly negative reaction, we'd cancel. Well, we didn't cancel. I guess my point is family and friends know you al lot better than forum pals. I'm sure you will get good information here, and that is a good thing. Share it with those who know you, and hope you get a clear answer!
Btw, I just recently did it again this August, and placed my order for a MYP, ETD Feb/Mar '23. Again, little cash, but the M3SR+ trade-in with Tesla is nearly what I paid, and the Japanese government is chipping in about 8%. After talking with family and friends, I have 100% support, so we are at peace. I would have cancelled otherwise. Simple.
Cheers!
Good thread, and some pretty good answers that touch base with all the mechanical and financial aspects of your dilemma. And I hope that the experiences and advice help you to put your thoughts together. This being the internet, maybe not proper to bring up personal stuff, but what do you hear from spouse/significant other, family and friends say? Finances and assets are something more than cold facts. A few years back, on a whim, I took my wife to the Tesla Kawasaki showroom and we both took a test drive. We had little cash, but did have a paid-off Honda Odyssey. After the drive, the advisor answered all questions, and showed us how to make an account and place an order. No pressure at all, but we decided to put our ￥15,000 ($120) down ... under the stipulation to one another that we would talk with our kids and some friends to get their input. If there was any truly negative reaction, we'd cancel. Well, we didn't cancel. I guess my point is family and friends know you al lot better than forum pals. I'm sure you will get good information here, and that is a good thing. Share it with those who know you, and hope you get a clear answer!
Btw, I just recently did it again this August, and placed my order for a MYP, ETD Feb/Mar '23. Again, little cash, but the M3SR+ trade-in with Tesla is nearly what I paid, and the Japanese government is chipping in about 8%. After talking with family and friends, I have 100% support, so we are at peace. I would have cancelled otherwise. Simple.
Cheers!
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