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Are you financing to get the Model S?

Discussion in 'Model S' started by Bardlebee, Jun 26, 2012.

?

How much, if any, are you financing for the model S?

  1. Yes I am financing for the bulk of my purchase

    75 vote(s)
    36.1%
  2. Yes I am financing, but for less then half of the purchase

    21 vote(s)
    10.1%
  3. Yes, I am financing for nearly half

    31 vote(s)
    14.9%
  4. I am not financing at all

    81 vote(s)
    38.9%
  1. Bardlebee

    Bardlebee Member

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    I'm not sure if there is a thread out there, perhaps this is another demographics thread. If so mods slap me and point me in the right direction.

    I would like to get input on how many of us are financing, who perhaps don't want to wait or feel they can't afford to drop that much money down to buy the car with cash. I suppose I would like to hear that I am right. That is, maybe I feel I am a bit crazy trying to finance 40k worth of a vehicle which otherwise could go to almost a third of my mortgage and pay off my house better. Or perhaps buy an ICE car (something I don't want to do) and have money left over to invest in stocks, something I would like to try my hand at more. I could even put the money in retirement, I am young (26) and starting now would be smart. There are numerous ways I could use the extra money then dropping 40k then financing for another 40k as my plan is to get the 230 with most options.

    I guess my ultimate question is, are you financing and why? I feel like I am alone sometimes on this forum when it comes to being someone who doesn't make over 100k (yet! :) ) or perhaps single income purchasing. The wife makes good money like me, but doesn't want to help. And that is not a jab at people with higher incomes, as I like to think those people earned it and went to school or worked hard and are working hard for it, more power to them. I would like to see however those people who make... I don't know 50-100k or maybe less. I guess I would like to know I am not making a silly financial mistake and I'm not the only one my wife should be calling crazy. :)

    Also it would be nice to get a feel for those naysayers saying "THIS CAR IS ONLY FOR RICH PEOPLE!" Because while I am not rich, I am above average I think but still not rich. :)

    This thread may also be titled "Should I buy this considering other options?"
     
  2. ElSupreme

    ElSupreme Model S 03182

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    I am going to finance the car. Interest rates are pretty low. I can spend the cash I have better other places.
     
  3. Bardlebee

    Bardlebee Member

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    Plan B for me is to convince my wife we need this car. :)

    I suppose money could always be spent better in other places...
     
  4. ibcs

    ibcs Member

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    Ohio
    1.99% credit union rate sold me on financing for 60 months.
     
  5. Bardlebee

    Bardlebee Member

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    I ask this in ignorance, because I have only had one car, my mustang. Have interest rates dropped at all? I don't have a long and drawn out credit history and since my car now was my first, it was 7.5% My credit has since gotten better since.... well I have credit history. Is 3.0 and below pretty expected with a good credit rating?
     
  6. gg_got_a_tesla

    gg_got_a_tesla Model S: VIN P65513, Model 3 Res Holder

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    I'm financing for all of the following reasons:

    - A dollar today is worth a lot more than a dollar 5 or 6 years later. That'd apply even with the interest paid on money from a car loan.

    - As ElSupreme said, interest rates are quite low (2.99% is widely available) so, the monthly payments and the overall interest paid over the life of the loan are very reasonable.

    - I like cash liquidity rather than locking up all that money in a fast-depreciating asset. Can be invested elsewhere in a reasonably low-risk fashion.

    - From certain lenders, there's an affordable GAP insurance option that'll cover the delta between what the insurance company would pay and what you still owe on the loan in case of a total loss. So, a loan situation can be no worse than buying outright in that regard.

    - As someone (Robert.Boston?) said on another thread, not wanting to have any sort of debt could be "emotionally satisfying" but, not necessarily financially prudent.

    - I just cannot afford to buy it outright without making a huge dent in savings that I can tap into for a rainy day!
     
  7. kevincwelch

    kevincwelch Active Member

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    Stay tuned for my demographics survey. It will go live soon.

    A lot of people are financing at last some part of the car.

    Sent from my Nexus S 4G using Tapatalk 2
     
  8. NigelM

    NigelM Recovering Member

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  9. Bardlebee

    Bardlebee Member

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    Oh wow, what a difference there. It's almost fifty percent of people buying are financing. That is definitely good (though a low sample size) stat to show people who think this car is for rich people. Though you notice the media generally doesn't define what is "rich" when they refer to items such as a 50+ thousand dollar car. They always point out its a 100k car (they make it sound like thats the minimum) and that only the "SUPER RICH" can afford it. Well, I am neither superman, nor rich. :)

    Thanks for that link! I will search for your poll kevincwelch, I would like to contribute.

    EDIT: Contributed! :)
     
  10. Rifleman

    Rifleman Now owns 2 Model S's!!!

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    My model S will be the first car I have ever financed, I have paid cash for all of my previous cars. My plan is to put down a deposit equivalent to a car I would normally buy (25-30K) and to finance the rest. Hopefully the low rates will still be available when my number comes up.
     
  11. jomo25

    jomo25 P4398

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    Actually, my first pref would be to lease. But not sure if that will be available when my number comes up. I'm not opposed to purchasing/financing. But if given the choice, I'd strongly consider a lease.
     
  12. Lloyd

    Lloyd Active Member

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    If anyone has contact with a third party leasing company (in the US) willing to lease to new Tesla owners, please post that here.
     
  13. ckessel

    ckessel Active Member

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    I'll probably buy it outright, I don't like having debt. In theory, I could invest the money and do better, but after taxes it takes some risk in the investment to make it more than a wash with the interest paid on the car. What I want to avoid is a higher risk investement that goes south and Tesla goes bankrupt, leaving me with a unsupported car and a big car loan.

    Plus, I can't afford the car payment and house payment without pulling from the saved money anyway.
     
  14. efusco

    efusco Moderator - Model S & X forums

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    Taking out a home equity loan...hate to do it and hope to pay it off in no more than 2-3 years, but just don't have the liquid assets to buy this one outright.
     
  15. Zextraterrestrial

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    I'm pretty sure I posted somewhere .... I plan on getting the performance and I will make <90K this year but should be making ~ 100 in a couple of years
    my wife is a metalsmith (Au,Ag,Pt,Pd) and is in the process of trying to start a jewelry business for herself and has been working on setting up the shop and trying to make some pieces to show
    so she has pretty negative income - I pay all of the bills

    I plan on selling a 2008 Rav4 v6 (~$19K) and a 2002 Lexus Ls430 (~$10K ) - If i can sell them when I want to, I don't know.

    I am hoping to be able to put $45-55K down

    I paid 12K for the Rav and financed 18K and paid it off in 3.7 years ($30K car was the most expensive I've owned)
    The Lexus was a hand me down that just wouldn't sell in the Bay Area

    so I make less than you?...and I am Getting a performance:wink:
     
  16. SigS905

    SigS905 Sig S 905 + X 5

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    I've had my ML 430 for almost 14 years, has over 302,000 miles and cost my business $250K (purchase price, maintenance, gas and repairs, didn't include insurance). This is 120K out the window and will save my business ~$600/month on gas costs alone at CA premium gas rates. We don't finance anything and have been scrimping and saving for almost three years and have really buckled down for this purchase.
     
  17. Bardlebee

    Bardlebee Member

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    Ahem.... I make 55k a year :) The tesla I want is 80k

    Still early in my career and I am in the field (network engineering) that will make over 100k, eventually. Still new. Not in a hurry.... my greatest expense right now is just taking trips or buying video games, haha.

    Anyway, I have thought about the performance myself, but that would be another 6 months of saving... I may bite the bullet and save it up when it comes down to it.

    EDIT: I am not horribly religious but I feel blessed to live in America or a first world country period to have these first world issue of needing to finance. :)
    EDIT2: I will actually be turning in my mustang as well... betting it all on the EV!!
     
  18. jimbakker666

    jimbakker666 Member

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    #18 jimbakker666, Jun 26, 2012
    Last edited: Jun 26, 2012
    Hi Bardlebee,

    I make ~ $80k a year. My wife contributes to bring us over $100k, and will likely make more than me in the next couple years given her new career field. And, she actually loves the idea of this car. We had a reservation but pulled it for reasons unrelated to finances.

    There are a few things to mention that may be helpful to you in determining whether you can afford this vehicle.

    Firstly, IMO no you don't have to be 'rich' to be able to buy the S, much like you don't need to be rich to buy a Mercedes, a Rolex or a sailboat. The question, I think, is whether you can afford the upkeep.

    Consider a few items here, some of which I've learned through participation here on TMC:

    1) **Registration Fees: Yearly registration fees on a $60,000 car will be triple that of a $20,000 car/spacecraft (which the Model S most certainly is). The registration on my '08 Civic is about $150 a year. That would jump to $450 a year in my case. Not that much more in terms of absolute dollars, but for some people that increased bill might be pretty painful.
    ** Depending on state

    2) Insurance Rates: Again, a more expensive car invites more expensive rates. I've never owned a car >$20k, so I don't know what the rates typically are. There's a Model S Insurance thread floating around somewhere, check that out and see what the premium delta might be for you.

    3) Annual Maintenance: I'm not sure that the cost for regular annual maintenance is known yet, but I think I've heard numbers like $500 mentioned before. I don't know if that inclues Ranger fees or not. Compare that to what you typically pay for your current vehicle. At a guess, I pay about $125 a year on my Civic for oil changes. If the $500 figure is accurate...ouch.

    4) Unscheduled Maintenance: Again, unknown. For all the suggestions that the S is a great car that won't need maintenance, the truth of the matter is that nobody knows. It's a first generation vehicle, built literally from scratch, by a company new to automaking on a large-scale. Tesla tells you that it won't need maintenance like an ICE because Tesla wants to sell you a vehicle. That isn't a knock on Tesla, it's just the honest truth. They are in business to sell cars. A reasonable person would expect at least a few bumps along the way. If something occurred with your car then you'd very likely be okay if you're under warranty, but I'm not sure we know yet what the warranty covers. Reading about the PEM issues in the Roadster forum is scary for a person like myself who isn't comfortable dropping $5k to reup a warranty, or $10k to replace a PEM (costs quoted from memory).

    4a) Related to unscheduled maintenance: Ranger fees and rental fees. (If you are near a service center then this is irrelevant) How much would it cost you to call a Ranger out for service? If a Ranger or a service center needed to take your car for a few days to fix it, are you okay with paying for a rental? From what I gathered reading a different thread, Tesla at this time does not give loaner vehicles. That might change down the road, but we don't know.

    5) Tire replacement (Subject to change/void): I can't speak too authoritatively on it as I've never owned a car like the Model S, but somewhere was a thread discussing the tires on the S. They are definitely not the tires on my Civic lol, the ones that are still rolling strong at nearly 70k miles and will cost me about $500 total to replace. I don't want to put numbers here because I don't know enough to even guess, but my basic understanding is that the S tires will not last as long as typical tires, and they will cost much more to replace given their size. Look for that tire thread, or maybe someone can provide input here. Personally, the cost of tires doesn't scare me as much as the longevity. Please note that this might be a null issue based on feedback from people in the know, I'm just going over what has stuck out in my mind the last few months.

    6) Houshold infrastructure: The cost to install new wiring and plugs to charge your spacecraft. A one-time charge, but something to consider. You might even be set up already, but if not, the cost might be anywhere from $500-$2000.

    7) Internet Access: What is the cost for internet access for your Model S? This sounds trivial, but what if it were an additional $75-100 a month?


    I will disclose that I am very conservative financially, and any risks I take are calculated. I don't really bargain shop, but if I'm spending money on something I always verify that the reviews are excellent before dropping the cash. My Model S reservation was a little hasty, but I had wife buy-in and an earful of Tesla marketing so I went for it. If I still held the reservation, I may have had second thoughts related to finances but I'm not sure as I haven't given it much actual thought.

    If you can handle these things then go for it dude! But if not, don't stress it. If Tesla is successful, you'll have plenty of time to own an S, X, or beyond. By that time, you'll likely be even more prepared financially and some of the anticipated items above (like maintenance & Rangers) will have been addressed. I don't have a reservation, but I'm still here drooling over this spacecraft because I still want to buy one down the road.

    Hope that helps, and hopefully you guys understand that I'm not trying to be critical of Tesla. Better to have an informed potential owner than an actual owner who is dissatisfied.

    PLEASE: Anyone, feel free to correct me as needed! I'm going off memory on a lot of this and some things might be unintentionally inaccurate.
     
  19. Bardlebee

    Bardlebee Member

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    Wow! Thanks Jim! Yeah I have thought of most, if not all of these. I will have to keep all of this in mind. I am thinking I will have to save up a little longer then I may have thought.
     
  20. jomo25

    jomo25 P4398

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    Some states do have EV incentives for your annual registration fees. E.g. in AZ the annual fee is based on your car's value (as determined by an assessed value a la property tax). The rate for EVs is significantly reduced from the one for regular vehicles. An $80K Model S will have a lower registration fee than my current 3 year old mid-range Lexus.

    But Jim does bring up good points about factoring all the associated costs (and benefits).
     

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