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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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A co-worker changed jobs and he was able to pay the 401K loan off monthly without any penalty. He had a choice of paying it off all at once or paying it at the same rate as when he was employed. Because it's Federal it should be the same everywhere but perhaps it varies by plan policy.

My 401K does automatic payroll deductions to repay the loan, that can't be done if you are no longer an employee. It also gurantees the loan is paid off in a maximum of 60 months (the plans limit), and also the maximum loan amount is $50K, even if you have more in the 401K, so the rules are setup plan by plan. Mine must be paid off within 60 days...
 
My 401K does automatic payroll deductions to repay the loan, that can't be done if you are no longer an employee.

The plan I have also has payroll deductions but if you stop being an employee you can still pay it off at the same rate. Of course, if you miss a payment then it's converted to income.

It also gurantees the loan is paid off in a maximum of 60 months (the plans limit), and also the maximum loan amount is $50K, even if you have more in the 401K, so the rules are setup plan by plan. Mine must be paid off within 60 days...

It's weird that a Federal policy is plan by plan but I guess that's how it works.
 
The real cost of borrowing from your 401(k) is that the capital is no longer there earning returns. If, for example, you had borrowed funds from your 401(k) a year ago, you wouldn't have enjoyed the substantial capital gains that equities have earned this year. Of course, there's no guarantee that equities will continue their upward trend.
 
The real cost of borrowing from your 401(k) is that the capital is no longer there earning returns. If, for example, you had borrowed funds from your 401(k) a year ago, you wouldn't have enjoyed the substantial capital gains that equities have earned this year. Of course, there's no guarantee that equities will continue their upward trend.

True, unless you are already sitting in mostly cash anyway, because you are near retirement (perhaps early 50's) and you've already captured substantial gains in the last 15-20 years, or you are concerned about another 2008 type meltdown. Just because you have a 401K, doesn't imply you are invested in stocks. If you have a large cash position, there's no reason not to be you're own bank. Maybe you've done well, but are not near 59 1/2 so you can't start regular withdrawals either. There are several cases where it makes sense to borrow your own money.
 
GG standing in for DD... this was how I did it: Financing options - Page 5

Yep, thanks GG! I just looked and the Loan shows approved with comments saying that they need the VIN. I emailed my specialist who got back to me right away and said he made a note in my file that says to provide the VIN as soon as it is available.
 
I have to finance. This will be (by far) the most expensive car I’ve ever purchased, and I’m not a high roller by any means. I’m actually glad it’s going to take over a year to get my Model S because it gives me plenty of time to put away cash each month for the large down payment ill need… the longer it takes, the less I have to finance :p

Right now I have two cars; A 2000 Honda Insight (for work), and a 2012 Honda Accord (for the kidos). I drive over 40,000 miles per year so I need a very energy efficient car, but I also need room for the kids. After almost a year of research (yes really, a year… I’m not kidding) I found that the Model S was the only sedan that had the room I needed for the kids, and the efficiency I need for work. Although the Prius and the Volt had the room, they were less efficient then my Insight over the long the distances I drive, while the Model S was more efficient... much more efficient.

For my situation the Model S is the only choice if I want to save money. Even with its high price tag, the Model S should save me close to $13,000 a year in transportation costs. I can’t wait for Tesla’s cheaper sedan to come out so I can get bigger savings. I think there’s a huge market for cheap, long range EV’s for people like myself.
 
Is there a pre-payment penalty with a PenFed loan? I'm considering holding on to my Tesla stock if it is not substantially over $30 by the time I get my car. But wouldn't want to keep the loan long term, just till TSLA hits $40.

Hmm, I'm not sure. While the Payment Saver Auto Loan terms clearly indicate that there are no prepayment penalties for it, the New Auto Loan page doesn't say so. Someone like Andrew Wolfe who went with PenFed and is getting his Model S very soon may be able to tell us.

Still, Erik, not sure what your motivations there are (more psychological than practical?), but, if the monthly payment's not going to be a burden, the interest you are paying over 60 months on upto $70K is so small (heck, way less than the tech package option!) that you may be better off seeing the loan period out. Having the cash in hand (or holding onto TSLA for longer) may be better than paying it off.

I paid off all my prior car loans well ahead of time (with a penalty on one occasion) but, am now questioning the logic behind that; the interest rates were less than 4% on those occasions.
 
Well, I'd be looking at substantial monthly payments vs. no monthly payment at all if I sell my stock and pay cash for the car. I can suffer a bit for a few months and get rewarded by the time TSLA stock finally surges, but can't afford these payments to go on for 60 months.

All along my goal with buying TSLA one year ago, was to sell at $40, to make enough of a profit to pay for some upgrades (e.g. 60kWh pack). The problem now is, it's not there yet and my check to Tesla will be due in a couple of months.
 
Well, I'd be looking at substantial monthly payments vs. no monthly payment at all if I sell my stock and pay cash for the car. I can suffer a bit for a few months and get rewarded by the time TSLA stock finally surges, but can't afford these payments to go on for 60 months.

All along my goal with buying TSLA one year ago, was to sell at $40, to make enough of a profit to pay for some upgrades (e.g. 60kWh pack). The problem now is, it's not there yet and my check to Tesla will be due in a couple of months.
Interest rates like 1.49% give you free money. Inflation is running at about this rate, so real interest rate is approximately zero. So, don't be too eager to pay back cheap money before it's due!