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Are you financing to get the Model S?

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

  • Yes I am financing for the bulk of my purchase

    Votes: 75 36.1%
  • Yes I am financing, but for less then half of the purchase

    Votes: 21 10.1%
  • Yes, I am financing for nearly half

    Votes: 31 14.9%
  • I am not financing at all

    Votes: 81 38.9%

  • Total voters
    208
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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.

Glad to help dude! Keep in mind that this is coming from a 34 year old man who just recently splurged on his first 'smartphone', something that I now realize should have been purchased years ago...oh the fun I missed out on :mad: I'm frequently too conservative, but it's good to get the contrarian view out there nonetheless. As Carl Sagan once said, "The more we want something to be true, the more skeptical of it we should be."

EDIT: That's awesome Jomo25
 
I have been struggling with this question myself. I am able to pay car in cash ($80K), yet if I am able to get one of those 1.99% auto loan deals, wouldn't it make more sense to finance half or more for the car? With the inflation may be getting worse in the coming years, seems like a good idea to keep as much cash as possible now and use someone else's money to finance the car. Of course, with the interests that I will be paying in a 5-year 1.99% loan, I can use it to pay for a couple of options right now (Air suspension + upgrade audio). What do you think?
 
There has been some fantastic information offered in this thread. I do not know if my contribution will be of much value but feel compelled to make a comment being in the financial field. Sometimes the issue is not necessarily whether to finance or not but whether to buy at all or not. Personally speaking I very often get so excited about something I am tempted to spend money I should not part with it. Model S is not going to be an inexpensive car. The purchase price is expensive for many people and the maintenance, being an unknown, is a financial risk. There are wants, needs, desires, necessities, and "unnecessary" necessities. It is important to be honest with myself and examine not just this individual purchase but my overall financial situation. How can I most intelligently buy this car assuming buying it does make sense?

In the case of Model S the options add up very quickly. I could save a lot of money by passing on many of them. Do I really "need" all those options. $10,000 saved now and placed in an IRA or retirement plan may be a significant sum 20-30 years down the road. Do I really need to get to 60 mph in 4.4 seconds? Though it may be a good value at $1500 and get me the car a couple months sooner is air suspension really a requirement for me or is it a luxury I can pass on? I've never had it before. Can I be happy with an excellent sound system rather than an awesomely excellent sound system? Aren't the 19" tires actually more practical as well as money-saving? If I only drive 50 miles a day do I really need an 85 kwh battery? Even with degradation would the 60 kwh or the 40 kwh suffice? Do I really need the leather and wood options or can I be content with the standard fabric / piano interior which actually looks pretty sharp? If I almost never have rear seat passengers do I really need the extra rear headroom of the panoramic roof? Can I live with a white or black exterior? Are any of the items in the tech package really necessary from my standpoint or are they mostly luxury items?

You see my point. With interest rates so low financing may be a good idea for many people. Yet piling on desired but unneeded options for those folks stretching for the car may not be a wise use of funds. This is an awesome car with or without all the options. The future value of the money saved on options may be far more valuable than the marginal satisfaction they offer spending that money today, financed or not.
 
Very interesting to see the different opinions on financing a car.

To me a car is an item I use every day. So it is important to me.
BUT
To me a car is not an investment. It has no cash flow. (cash is flowing, but not into my pocket but out of my pocket).

I will use financing only on investments. I will finance only if the investment provides a cash flow to cover financing. Not so with a car.

So my approach is to save the money, buy the Model S and enjoy it.
No financing.
 
While I recognize that there are very good financial reasons to borrow money under certain circumstances, I never do it. For most of my life I had very little money and lived frugally. I saved up for what I wanted rather than financing. No money, no toy. It meant that I did not own much stuff. It also meant that I lived stress-free. Now I can afford a lot of stuff, and I enjoy it. Having money is better than not having money. But to my way of thinking, being in debt is worse than either. I've known people who buy as much stuff as their credit limit will allow, and it always seems to me that their lives are full of stress. Of course, moderation or lack thereof is a factor. And there's a big difference between spending money you don't have vs. borrowing only as much as you have in savings because you can borrow for less than the yield on your savings. If you're getting 5% yield on your investments and you can finance the car for 3%, that's a lot different than if you have no savings and you go deeper into debt to buy a new toy. A lot of people got into big trouble because they counted on the value of their house to balance their debt, and then property values fell. The same could happen if the market falls and you've been counting on the value of your stocks to balance your debt.

So I am of the opinion that borrowing to buy a car is always a bad idea unless you need the transportation to get to work, and you buy the cheapest reliable transportation. As much as I love electric cars, and Tesla, the Model S is an expensive car. It's a great car for those who can afford it. But if you have to go into debt to buy it, then IMO you can't afford it.

OTOH, modern capitalism depends on debt spending and people buying stuff they don't need with money they don't have. So maybe the yield on my investments depends on your debt spending. So, everyone reading this should borrow $90K and buy a Performance 85 kWh Model S. :wink:
 
Jimbakker and ddruz-

Very important considerations and excellent advice. Something for all of us to think about. This is a big expense for many and a financial uncertainty for most when it comes to the upkeep.

I am thankful for all those who come before me; we will all benefit from their experiences over the next year.
 
Does anyone know the details of the recently announced financing that Wells Fargo is providing for Tesla? Should we expect anything different than what they provide for other auto financing?

Wells Fargo Now Backing Financing For Tesla’s Model S | Hybrid Cars

I don't think the Bank of America tie-up for the Roadster was anything special either; it's probably going to be like dealer financing where you can get it all done in one shot rather than working with an independent lender beforehand and bringing in a check from them. If anything, Wells Fargo rates may not be the best; you could do better with your own credit union and such.
 
While I recognize that there are very good financial reasons to borrow money under certain circumstances, I never do it. For most of my life I had very little money and lived frugally. I saved up for what I wanted rather than financing. No money, no toy. It meant that I did not own much stuff. It also meant that I lived stress-free. Now I can afford a lot of stuff, and I enjoy it. Having money is better than not having money. But to my way of thinking, being in debt is worse than either. I've known people who buy as much stuff as their credit limit will allow, and it always seems to me that their lives are full of stress. Of course, moderation or lack thereof is a factor. And there's a big difference between spending money you don't have vs. borrowing only as much as you have in savings because you can borrow for less than the yield on your savings. If you're getting 5% yield on your investments and you can finance the car for 3%, that's a lot different than if you have no savings and you go deeper into debt to buy a new toy. A lot of people got into big trouble because they counted on the value of their house to balance their debt, and then property values fell. The same could happen if the market falls and you've been counting on the value of your stocks to balance your debt.

So I am of the opinion that borrowing to buy a car is always a bad idea unless you need the transportation to get to work, and you buy the cheapest reliable transportation. As much as I love electric cars, and Tesla, the Model S is an expensive car. It's a great car for those who can afford it. But if you have to go into debt to buy it, then IMO you can't afford it.

OTOH, modern capitalism depends on debt spending and people buying stuff they don't need with money they don't have. So maybe the yield on my investments depends on your debt spending. So, everyone reading this should borrow $90K and buy a Performance 85 kWh Model S. :wink:

Your advice hits pretty hard with me. I try to do no debt. In fact I will only have my mortgage and student loans left if I didn't get the Model S. It seems against my nature to want to take on more debt. I always tend to have a 5 year "forecast" though and I feel I should be able to pay off all my debt, including the Model S, mortgage, and student loans in the next five years. It would just be a hell of a lot easier without it.

I sadly have a lot of time to think about it, I won't be reserving until about August so I won't get the car probably about the same time next year. I may come to a point to where I say "You know I have 40k in my back account, this house mortgage doesn't seem very fun anymore" :)

I also tend to be very fickle with money. Not a lot of things hold my attention for to long, so the fact that the Model S has kept my attention for 3-4 years is telling of maybe how bad I want this car and to support the movement. Not to go into a huge spiel about this, but I think I said this before somewhere else on the forum. My main focus on why I want this car is to support innovation, putting aside it being green and just an excellent vehicle. Putting aside the wars caused by oil consumption, I just really hate the fact that items as important as transportation is being bottle necked by corporate greed. Lack of innovation will sink America, and I want to say that I at least tried to support it. :)

Hopefully I can find a good middle ground, maybe I will convert my wife (she asks about the car weekly almost, I think she is getting interested) to save with me. Or maybe I will just bite the bullet and save longer or get a lower end model to save money and avoid debt.
 
I am very anti-debt. But it can be a good and smart thing.

In general to help cash flow. Temporary debt. I don't consider this 'real' debt, as you have money to cover it, but are taking a month or two to safely pay it.
And large purchases. I subscribe to the thought that you shouldn't keep a large amount of cash lying around for long periods.
And emergency spending. Say large medical bills, loss of employment, legal costs.

I am financing the Model S. I am financing more than I will have to. I can always pay the loan down faster if I want.
I am financing my house currently . I financed as much as I possibly could.
Having some cash on hand is a HUGE advantage.

My current debt load is my current AmEx (charge card, not credit) balance that HAS to be paid every month, along with all my other monthly bills. And my mortgage. And I owe my friend a dinner.

I moved back home after graduating college. I worked for 6 months and my only expenses were car payment, Taco Bell lunches, tolls ($1 a workday), and student loans, and my credit card debt. I paid off ALL of my debt before I moved out.

Since I moved out of my parents house after paying off my student loan debt I have only taken on 'real' debt 4 times.

To buy a expensive road racing bicycle. Put on a 0% interest card, paid off at end of 0%, 9 months later. :biggrin: The day after I finally paid off my student loans.
To buy my current car (old one was totaled :mad:, not by me). Paid off.
During a (3 month unemployed spell). Paid as many expenses with debt as possible while holding cash. :scared: I cut my spending to almost nothing (except for HBO which is a blessing and curse when unemployed) during this period. I ended up having enough cash left to pay all debt after getting a new job, but just barely.
To buy my house. Didn't have 6 digits in cash lying around in a bank account. :frown:


As an aside, I also think inflation is going to start overcoming my fixed interest rates in the next decade. But that is more hunch than anything else.
 
I think sales tax is waived in AZ too. Might want to verify that.

I'll be selling an older Prius and financing the rest, but only because I have investments that can pay the monthly payment.

I have never purchased a new vehicle(We drive used hybrids) and this will be the 5th most expensive thing I have ever purchased, behind only properties.

It kind of tears me that I could pick up a used Roadster in great shape for $15k less then a Perf S.

Sent from my DROID BIONIC using Tapatalk 2
 
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I think sales tax is waived in AZ too. Might want to verify that.

I'll be selling an older Prius and financing the rest, but only because I have investments that can pay the monthly payment.

I have never purchased a new vehicle(We drive used hybrids) and this will be the 5th most expensive thing I have ever purchased, behind only properties.

It kind of tears me that I could pick up a used Roadster in great shape for $15k less then a Perf S.

Sent from my DROID BIONIC using Tapatalk 2
Sales tax is not waived in AZ for electric vehicles. Only annual license tax is reduced per my previous message.