Cost Per Month? Car Note, Insurance, Taxes, Stickers, Plates.....

[ModelNforNerd]

Car note ~$265* (I currently have $41K saved, and will maybe have ~$55K put away by then. Also, once I have the Tesla, I will be selling my Audi to Carmax, so I may even be able to pay off my $10-15k car note before the 1st payment is due.)

MA Tax, Title, Reg (6.25% sales tax on $65K...I'm going Ludicrous...) $4,187.50

Insurance $675/year (estimated based on my current policy)

Electrons = $6.60/month (4 mile commute, average price of $0.10/kWh, NEMA 14-50)

If I break all that into monthly, plus factor in the $7500 EV Credit, plus MA's $2500 EV rebate, my monthly cost is estimated to be:

$676.80

(but breaking the tax benefits down into monthly numbers means I would come out "ahead" $156.53/month)

Not bad for spending close to $65,000


(of course, the more I drive it, the more I'll save compared to an ICE, so there's that)

 

[Garlan Garner]

Ah, I presume that $40K is an addition to a minimum of 6-12 months of your salary also squirreled away in the event you become unemployed for that long. Remember 2008?

I will concern myself with my personal situation. Maybe I'm retired... Maybe not...... For now I have saved $40K.

 

[Blue Millenium]

I would agree.

The way I think about it is in two regards:
1. There could be a tax credit of up to $7,500 if you reserved pre-announcement. That brings it down to $52.5k.
2. Fuel savings (even after electricity costs) will save you money too, but depends on how much you drive. I drive a lot and so I expect this to be anywhere between $5-8k of value to me.

Those two bring the original $60k down to anywhere from $44.5k-$47.5k for someone like me. I'm hoping to start with a car that comes to maybe $42-44k after upgrades, call it $48k after sales tax, and so with the two adjustments above, I'm back to maybe $35k or so.

If gas prices go up between now and then, it might be even more valuable and a cheaper car, economically. If options come out cheaper or more expensive than I thought, that could swing the decision as well.

I'm really hoping for an inexpensive range upgrade, AP, and subzero options. AWD would be great, but is lower on my priorities.

Regarding the tax credit; I would not count on a full tax credit based on the timing of the reservation. Tesla said it will be a west-east rollout and existing owners get first option.

 

[182RG]

...I'm going Ludicrous...

Insurance $675/year (estimated based on my current policy)

Umm..afraid you're going to be a little light here.

Car insurance rates are built on a lot of data points, including cost to repair. Tesla's experience rates are pretty high based on costs / availability of parts, and a very small network of trained shops. The current fleet of cars are not ones you want to damage for this reason. Search here for threads.

Ludicrous is already bumping up the cost of quotes on S and X models.

I'm planning on $1,500 - $1,800, non-Ludicrous, based on what I'm paying on an S5. And I'm 51, married, with a clean driving record.

 

[Tiberius]

Internet 101 Let me google that for you

Also, if you're worried about the monthly payment you probably shouldn't be planning to max out the car's options. Financially you're looking at it all wrong.

 

[melindav]

@ModelNforNerd I really think you are underestimating the Ludicrous cost. How did you get to $65k? By the calculations I've looked at, based on Model S, the least it could be would be with some of the typical other upgrades and its in the $80,000 range.

 

[voip-ninja]

Absolutely fantastic. This and others posts are exactly what I needed to get my mind around the grown up part of all of this - called financials.

BTW - I hate your Side Note - Although I believe you are correct.

I have currently saved $40K and I am looking for a way to get the Luda at approx. $500/month with insurance included. ( I know, I know....save more money )
I have also determined that going to work @ 55 miles each way would require 16KWH ( MS85D ).

My average solar production on my house has been 39KWH per day. This means that I might have to start paying an electric bill again. I haven't had an electric bill in 3 years. SolarEdge

I currently pay approx. $.05/KWH according to my electric bill - which would equate to $1.60 every day for electricity to run my M3. Hmmmm. I wonder if I'm willing to sit at a Tesla Charging Station for $1.60? Hmmm

My entire house does not use 32KWH on a daily basis. ( trip to work and back using a Model S 85D).


View attachment 176407

Why does $500 a month matter? You can either afford the car or you can't. I think that a "fully loaded" M3 including performance options you seem interested in, as well as others (custom upholstery choices, other upgrades, etc) is going to top out at $75K+.

Is your $45K saved already earmarked in a car fund or is it the entire amount you have? You should always have a rainy day fund that includes 6-12 months of total expenses to fall back on in an emergency.... and you should never plan on using your 401K/IRA or other retirement funds for this purpose!

A car payment plus associated costs should never leave you feeling strapped for cash. Being strapped for cash in order to drive a car you really can't afford is called "being car poor" and I don't really recommend it.

Someone who can actually afford the car without sweating isn't going to get zeroed in on a monthly payment amount. They are going to decide if they are going to write a check for the entire purchase or if they would be better off financing it at a low interest rate and try to make more money on their investment dollars than the cost of the interest on the loan.

Now admittedly, a heck of a lot of people can't/won't write a check for a car purchase. In cases where financing is the only option (and rarely it is, a better option is to just drive a cheaper/older car) then as someone else mentioned you should set a percentage of your monthly net income as a benchmark. 10% is what most financial experts recommend and in some cases you could MAYBE justify 20% (you own your home outright, have a super cheap mortgage or other living situation). If paying cash and planning to keep the car very long term then perhaps 30-50% of your annual salary would be the maximum advisable.

I could write a check for a P90D but I don't drive one because it would be a very foolish use of my money. If and when I option my M3 deposit my benchmark is to keep the price as close to my current 340xi as possible and then based on interest rates, etc, make the determination on if I am going to pay for the car outright or finance a portion of it. Being an adult means exercising financial restraint and maybe not buying the max that we can afford.

One strategy is to only finance the portion of it that is going to be coming back to you later in the form of tax rebates and other incentives... then when you get those returns just pay off the note.

Sorry to be one of the realists in this discussion, my advice is worth exactly what you paid for it. At least I'm not as concerned as I am when we see posts from college students who live in their parents basements but are going to postpone moving into their own place so that they can buy/drive a Model 3.

 

[ModelNforNerd]

Umm..afraid you're going to be a little light here.

Car insurance rates are built on a lot of data points, including cost to repair. Tesla's experience rates are pretty high based on costs / availability of parts, and a very small network of trained shops. The current fleet of cars are not ones you want to damage for this reason. Search here for threads.

Ludicrous is already bumping up the cost of quotes on S and X models.

I'm planning on $1,500 - $1,800, non-Ludicrous, based on what I'm paying on an S5. And I'm 51, married, with a clean driving record.

Again, people making assumptions about other people. I have the highest possible driver safety Point Credit level. I have USAA. I inure my vehicles and my home through them, as well as using them for bank and credit cards, so i get multiple discounts. I'm also insuring a 2014 Subaru, and my 2015 Audi. I'm also not 20, when I make an estimation of my own insurance payment, it comes from a place of knowledge of my situation.

 

[ModelNforNerd]

@ModelNforNerd I really think you are underestimating the Ludicrous cost. How did you get to $65k? By the calculations I've looked at, based on Model S, the least it could be would be with some of the typical other upgrades and its in the $80,000 range.

If a Model S doubles with Ludicrous and all of the boxes checked, what makes you think a Model 3 would be more than double the base price with all of the boxes checked? Elon has already come out and said things like all-wheel drive will be a cheaper upgrade on the 3 than it was on the S.

 

[melindav]

If a Model S doubles with Ludicrous and all of the boxes checked, what makes you think a Model 3 would be more than double the base price with all of the boxes checked? Elon has already come out and said things like all-wheel drive will be a cheaper upgrade on the 3 than it was on the S.

here's the post with my logic on pricing, obviously everything is a guess at this point .

 

[Booga]

Now admittedly, a heck of a lot of people can't/won't write a check for a car purchase. In cases where financing is the only option (and rarely it is, a better option is to just drive a cheaper/older car) then as someone else mentioned you should set a percentage of your monthly net income as a benchmark. 10% is what most financial experts recommend and in some cases you could MAYBE justify 20% (you own your home outright, have a super cheap mortgage or other living situation). If paying cash and planning to keep the car very long term then perhaps 30-50% of your annual salary would be the maximum advisable.

I generally agree with the need to be conservative with finances. Much like an engineer who is designing a bridge, a 5,000 pound specification means that they are likely designing for 10,000 pounds, because it creates a margin of safety. It's crucial in that case, because people's lives are at stake.

In financial terms, it all translates, because that money represents a part of your life. I'm there with you on the importance.

I think I disagree in terms of the percentages though. If we go with the median expected price of the car, $42,000, plus $3,000 of sales tax and $1,000 delivery/documentation, your median Model 3 is going to come to $46,000. For people to have that be 10% of their income would require earnings of $460,000. That's ridiculous, in my opinion. (And in the case of Tesla with very different fueling costs, you have to really adjust the price and then look at it.)

I think this decision will depend on each person, but in order for it to be an intelligent purchase, it has to be thought through. If people are thinking it through and being realistic, it's not going to be the end of the world.

I'm not 100% decided if I'll take delivery, because I don't know the total cost after everything just yet. This thread was originally meant to help determine that. For people like me who are going from a Honda Civic, this is a big shift, and the changes in insurance for example could be fairly large.

Again, you bring up really good points - I would just encourage people to think about how it fits into their finances and impacts retirement savings among everything else you want in life.

 

[zenmaster]

your median Model 3 is going to come to $46,000. For people to have that be 10% of their income would require earnings of $460,000. That's ridiculous, in my opinion.

Not quite. If financing/leasing, the rule is generally 10% per year. Take the vehicle price+maintenance+insurance and divide by number of payment years. This figure should probably be less than 10% of your annual earnings.

 

[Model3G]

I'm wondering how much the bottom line is going to be.

I'm planning on maxing out my M3. All Options available. Without question - Ludicrous mode.

My current insurance company GEICO can't quote a price yet because there is no M3 data to do research on. Understood.

What would a 5 year car note ( purchase ) be on a 60K car?
I know how much the plates are
I know how much my city sticker is
Not sure what the Insurance costs will be.
Not sure on what the taxes will be.
I don't know how much my Electricity bill will increase.
Am I missing some other costs?


I'm hoping that the costs per month would be the same costs for an Audi A4.

I'm just wondering if this car maxed out will approach $1k per month. What do you guys think?

I can't quote you what these costs are mostly because they are all to do with personal details. Your past driving record? Your commuting needs, and your battery size? A lot of answers come from variables in your life.
One thing I think you should consider is the amount you would save in gas costs that you are spending now. What's your yearly mileage looking like and what is your average mpg with your current vehicle?

 

[voip-ninja]

I generally agree with the need to be conservative with finances. Much like an engineer who is designing a bridge, a 5,000 pound specification means that they are likely designing for 10,000 pounds, because it creates a margin of safety. It's crucial in that case, because people's lives are at stake.

In financial terms, it all translates, because that money represents a part of your life. I'm there with you on the importance.

I think I disagree in terms of the percentages though. If we go with the median expected price of the car, $42,000, plus $3,000 of sales tax and $1,000 delivery/documentation, your median Model 3 is going to come to $46,000. For people to have that be 10% of their income would require earnings of $460,000. That's ridiculous, in my opinion. (And in the case of Tesla with very different fueling costs, you have to really adjust the price and then look at it.)

I think this decision will depend on each person, but in order for it to be an intelligent purchase, it has to be thought through. If people are thinking it through and being realistic, it's not going to be the end of the world.

I'm not 100% decided if I'll take delivery, because I don't know the total cost after everything just yet. This thread was originally meant to help determine that. For people like me who are going from a Honda Civic, this is a big shift, and the changes in insurance for example could be fairly large.

Again, you bring up really good points - I would just encourage people to think about how it fits into their finances and impacts retirement savings among everything else you want in life.

For those financing the monthly payment would typically be recommended to be about 10% of net.

Let's say that I'm sensible with my finances. I have a "car fund" and put money into it every month planning for that next big car purchase. When my Model S is delivered I have $20,000 in my car fund and the price of my car with taxes and options is $50,000.

I am now financing $30,000 because I'd rather take delivery of the car now than wait until I can pay for it in cash (and maybe there's a pressing need like my old car is falling apart, etc). I do a 5 year note at a relatively low interest rate and my payments are about $550 per month.

For a $550 monthly payment + 100 in other expenses (electricity, insurance, registration) I should probably have a monthly net income of around $6500. For most earners and depending on how many deductions they have, etc, that probably means a pre-tax annual salary of around $100K+.

Now is that realistic? For me it is. For others, they will happily put 20% or more of their monthly net into a car purchase and live in mom's basement, etc.

I look at 10% as "top end" on a car and feel bad if I'm not putting 20% of my income into various retirement and non-retirement investment vehicles. I work with plenty of guys who do the opposite. Put 30% into a car(s) and zero into investments and retirement. It's true you only live once, but it's also true that life is short and I'd rather spend my golden years enjoying life rather than working at Starbucks or Walmart to make ends meet.

It is crazy stupid foolish to buy a car that costs more than 50% of your annual income unless you can put a pretty generous amount down on it up front... plenty of people do it though. Look at how many people have reported that their $35,000 Model S will be a real stretch for them, because they don't even earn enough to get the full benefit of the $7500 federal tax credit.

This is why they should be teaching finances and economics in school and stop believing that teaching computers and world history is the recipe to a successful life financially.

 

[omgwtfbyobbq]

Umm..afraid you're going to be a little light here.

Car insurance rates are built on a lot of data points, including cost to repair. Tesla's experience rates are pretty high based on costs / availability of parts, and a very small network of trained shops. The current fleet of cars are not ones you want to damage for this reason. Search here for threads.

Ludicrous is already bumping up the cost of quotes on S and X models.

I'm planning on $1,500 - $1,800, non-Ludicrous, based on what I'm paying on an S5. And I'm 51, married, with a clean driving record.

Yeah, it depends on your insurance/etc... I got a quote from my insurance agent on an S a couple years ago and it was I think ~$1100-1200/year w/ max liability/collision/uninsured/$1k collision deductible/$0 comprehensive. It was only ~$200+ more per year than their quote on a Mitsubishi i. The thing is, my family has three homes and four cars insured through them, and have been customers for decades. I've tried quotes from other insurance companies, but no one can touch them.

 

[omgwtfbyobbq]

Not quite. If financing/leasing, the rule is generally 10% per year. Take the vehicle price+maintenance+insurance and divide by number of payment years. This figure should probably be less than 10% of your annual earnings.

Is that gross or net earnings?

 

[Garlan Garner]

I can't quote you what these costs are mostly because they are all to do with personal details. Your past driving record? Your commuting needs, and your battery size? A lot of answers come from variables in your life.
One thing I think you should consider is the amount you would save in gas costs that you are spending now. What's your yearly mileage looking like and what is your average mpg with your current vehicle?

Yes...Excellent reminder - Count gas savings.

 

[Garlan Garner]

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For those financing the monthly payment would typically be recommended to be about 10% of net.

Let's say that I'm sensible with my finances. I have a "car fund" and put money into it every month planning for that next big car purchase. When my Model S is delivered I have $20,000 in my car fund and the price of my car with taxes and options is $50,000.

I am now financing $30,000 because I'd rather take delivery of the car now than wait until I can pay for it in cash (and maybe there's a pressing need like my old car is falling apart, etc). I do a 5 year note at a relatively low interest rate and my payments are about $550 per month.

For a $550 monthly payment + 100 in other expenses (electricity, insurance, registration) I should probably have a monthly net income of around $6500. For most earners and depending on how many deductions they have, etc, that probably means a pre-tax annual salary of around $100K+.

Now is that realistic? For me it is. For others, they will happily put 20% or more of their monthly net into a car purchase and live in mom's basement, etc.

I look at 10% as "top end" on a car and feel bad if I'm not putting 20% of my income into various retirement and non-retirement investment vehicles. I work with plenty of guys who do the opposite. Put 30% into a car(s) and zero into investments and retirement. It's true you only live once, but it's also true that life is short and I'd rather spend my golden years enjoying life rather than working at Starbucks or Walmart to make ends meet.

It is crazy stupid foolish to buy a car that costs more than 50% of your annual income unless you can put a pretty generous amount down on it up front... plenty of people do it though. Look at how many people have reported that their $35,000 Model S will be a real stretch for them, because they don't even earn enough to get the full benefit of the $7500 federal tax credit.

This is why they should be teaching finances and economics in school and stop believing that teaching computers and world history is the recipe to a successful life financially.

Excellent Post. That's exactly what I was looking for.

 

[AZ Desert Driver]

when I look at ownership costs the second highest item is depreciation.. in these calls, finance of purchase over five years says there is zero residual value when payments are done..
car maint like gas oil car wash wiper blades are tiny compared to depreciation. try adding all ownership costs over five years, include insurance and finance opportunity cost, back out disposal value in five years divide by miles driven and you should be near fifty cents per mile.

easier... the federal government has a reimbursement rate that has been real close to actual cost. last time I looked it was 48

 

[AZ Desert Driver]

I too like geico as a Berkershire Hathaway play. however, I buy insurance with USAA - they beat geico on rate, and deliver the intangible "trust". will they pay a claim or fight you? sometimes price is no the whole story