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Am I getting ahead of myself? Pls read

Discussion in 'Model X: Ordering, Production, Delivery' started by phaduman, Sep 16, 2016.

  1. phaduman

    phaduman Member

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    Alright, I need some help here...I would like to know if I am going ahead of myself by considering to buy the Model X (say a $100K tag car). I could buy it with cash if I like, tomorrow, but what % of your worth would you put into a car? Knowing that in about 8yrs, it would be all gone.

    Sorry if this Q is quite odd in this forum. Likely the members here are the self-selected and already filtered. But I am hoping to catch some in the fence who don't have that $1M+ cash sitting gathering dust not knowing what to do...

    My main objective behind why Model X (vs. a X5 or XC90 e.g.) is that:
    * I need to replace two cars I have today (a BMW 5 series sedan and a minivan) into one single car that can be fun to drive, be a commuter, and a family hauler and is next generation/futuristic/uses alternative fuel etc. Wife has a separate electric car already for her commute. And we have solar.
    * I am now in the market for a $50K-$60K car and Model X is double that. I know it is worth it. But, what % of your cash would you be willing to burn for a car like this? Is 25% worth it? Quite likely in about 8yrs, you would burn through all of it....so, would I? Should I? How did you convince your wife?

    thanks so much for reading through...
    PN
     
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  2. number12

    number12 Member

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    Easy... two year lease on inventory car... get destination and delivery fee waived in you accept delivery this month. Done
     
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  3. Paul Carter

    Paul Carter Active Member

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    Call Suzie Orman. She did approve at least 1 Tesla purchase.

    I just didn't like her comment on whether Josh did a smart thing. Of course he did! :p
     
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  4. hmmm

    hmmm Member

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    You beat me to it.

    Also, why buy cash? you can get sub 2% loans or about 4.5% on lease with the freedom to invest your money instead...
     
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  5. LuckyX

    LuckyX Stormtrooper X60D, Autopilot, and Hitch

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    Finance the X, use my referral (save you a $1000 so it's only $99k, lol), invest your remaining cash. Have your money work for you. I surely don't have $1M+ under my mattress. As long as you live by your means everything should work out.

    Im guessing my X60D is plenty for my daily 50 mile commute and hauling 3 kids under 6.
     
    • Like x 1
  6. number12

    number12 Member

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    I don't understand all these people paying cash. It's 1.72% interest. What mortgages do you all have 1%? I mean finance the car and pay down a house.. Mind blown.

    Next argument, but my home interest is deductible.. Write off the car.
     
  7. gearchruncher

    gearchruncher Member

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    Everyone has a different situation. If you have no mortgage (rent? already paid off a house?) then where the heck can you get a low risk 1.7% return on your money? The best rates are basically 1% for anything secure. Telling someone to borrow the money for the car and then go play in the stock market is no different than borrowing money to play in the stock market, which is a very risky deal.

    If you know of a place to get a guaranteed return of 1.5%+ on $100k+ cash, I've got it right here. Let's go!
     
    • Like x 2
  8. RamgeRover

    RamgeRover Member

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    Spending 25% of your cash on a rapidly depreciating asset like a car makes no sense at all. Sounds like Tesla is out of your price range.
     
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  9. number12

    number12 Member

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    If anyone wants to give me any amount of money for a guaranteed 2% return on their money let me know.

    didnt realize so many people pay cash for these cars
     
  10. TrendTrader007

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    this is Not an advice to you but this is what i would do (actually I've done even more than i care to admit):
    i would buy the car on super low interest rate financing available through Tesla and invest my cash into TSLA stock
    to me it's a no brainer
    also, paying cash for any depreciating asset instead of financing it especially in this super low interest rate environment does not make any financial sense
     
    • Helpful x 1
  11. gearchruncher

    gearchruncher Member

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    This is turning into a financial advice thread, but can someone explain why it matters if it's a depreciating asset or not when deciding to borrow money?

    Show me some quick math. Assume you are buying a $100K car, will keep it for 6 years, and it will be worth $25K at the end. In what way is it cheaper to borrow money than use your own unless you can beat the loan rate?

    As you can see, I just joined. I was assuming I would pay cash, but I'm interested if there's a better way.
     
    • Like x 1
  12. gavine

    gavine Petrol Head turned EV Enthusiast

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    SolarCity was selling bonds with 6.5% interest. I'm not sure if that deal is still going or not though. I know it was a limited time.
     
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  13. GoTslaGo

    GoTslaGo Learning Member

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    When we bought our S, I ran a spreadsheet for my wife. I found comparable vehicles (HP, 0-60 ratings, cabin room, autopilot, etc...) that she would be interested in. We were also getting rid of her BMW 5 series after 9 years. The comparison showed us that the S70D (after rebate) was actually just a couple thousand more than a Mercedes E400, BMW 535xi, and Audi A6. Then factoring gas, maintenance, etc... It wound up being even more equal and possibly cheaper (especially since the E400 needed a maintenance package, as recommended to me by my Mercedes owning friends).

    I would suggest you do the same. Using the SUV's you think are comparable (esp if you want the E versions of the X5 and XC90). Option them similarly and then run the math, and don't forget gas for the ICE and a charger for the X. I still cannot figure how to quantify the OTA updates or the Slacker radio. Also insurance, etc... Finally after you've picked it all out, test drive. That was the clincher for us.

    As for paying in cash, with current interest rates, I believe it's better to borrow to purchase now. Remember these are simple interest payments. Pay enough down to get a comfortable monthly loan payment. Leave the rest in an emergency fund (online only savings accts are paying 1% and are easy to use), and any extra invest.

    Good luck!
     
  14. hmmm

    hmmm Member

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    I am not a math person, but here is my back of the envelop logic:

    - You can get really cheap money and while we're in a period where you have to chase yield, there are things out there. Many blue chips will pay 2%+ in annual dividends, you can fiend tax-free bonds that will yield more than that. So net net, borrow sub 2%, make more than 2% on your money. Positive return overall.
    - On the other end, no matter what, a Tesla will depreciate, not increase in value. So basically you know you won't make money on the car, why would you want to buy it out right? Put money to work in a way that is *not* guaranteed to lose you money instead.

    The buy vs. finance decision may be different for example if you considered purchasing an asset with potential for appreciation (say a home. And yes, mortgage rates are ultra low too, but work with me here...). The appreciation of a home is not guaranteed so you'd be taking a chance but may come out ahead. With a car, not a chance of coming ahead (unless we're talking classic car or hard to find supercars...)

    Does that make sense?
     
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  15. hmmm

    hmmm Member

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    That would take courage at that stage, but up and to the right is your friend so far on TSLA, Not sure I would be a buyer at that level but that's for another thread...
     
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  16. number12

    number12 Member

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    Btw car going up or down in value should have no impact on this decision.

    If you are considering letting your car get repod and have some bankruptcy exit plan then maybe that's a bonus.

    Only other reason is can you make more than 1.74% on your money bottom line. Also is car a deductible asset (+interest).

    That's it. What is their to consider.
     
  17. Brandon332

    Brandon332 Member

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    I am 23 and am worth only about $100,000, but have a buisness mind so easily made this work. Ordered and picked up a MX in July that cost just over $100,000, and financed $80k of it.What I'm doing is renting the MX on the website TURO.com at least 2 days a month, for $360 each day. I've actually averaged 5 days a month, so I'm making profit, but initially I anticipated 2 days. 2 days takes care of well over half the monthly payment, making it the equivalent of a $50k purchase. Plus not paying for gas rapidly adds up, plus the $7500 in incentives, lack of paying for new breaks, oil changes etc, actually has already added up more than you'd think. I would very highly recommend.
     
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  18. Ormond

    Ormond Member

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    I would be really nervous about renting out my car. How do you vet the drivers?
     
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  19. number12

    number12 Member

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    People really pay $360 for one day? how many miles?
     
  20. Brandon332

    Brandon332 Member

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    The website vets the people, and insures the car for up to $1 million of value. I'm about 30 minutes from Boston so there are people around there, though oddly half of the people I've rented to aren't in or around the city. I have the website standard of 200 miles per day for my car, though you can modulate it to whatever number you want. If there are any issues with the car afterwards, you can file an easy quick claim on Turo's site. I haven't had any issues though but do like to creep sometimes using the phone app to see where people are going :E
     

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