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Does Buying a Tesla Make sense for me?
- Thread starter wkkimball043
- Start date
When you ask the internet if it is financially responsible for you to buy a new car, the answer is always no which comes from the same group of people who bought the exact car you are considering.
Akikiki
A'-Lo-HA ! y'all
Yes, buy it if you want it. After all you only live twice.
As a lot of people said:
1) House
2) Car
But I’m a family man so get married too!
And if you’re planning to have kids soon go for the model Y once you’ve bought the House
"Context". Bingo. A person almost never provides enough context to base meaningful, informed financial advice off of, but people will offer it anyway. Even what you've provided here isn't nearly enough for anyone to provide useful advice. Someone would have to know how old you are, what your actual salary is, what your current retirement balances are, what your health insurance looks like, what your HSA/FSA contributions and balances look like, how much house you aspire to buy... all kinds of things. All of that is to say "if you need financial advice, consult a professional financial planner".
Spacep0d
Active Member
We share some similarities here. I'm planning to purchase a Tesla Model 3 as well, except I bought a house with my girlfriend in 2004 and it's gone up in value a fair amount (about 150k). I also just got a 20k raise, but this can put you in a higher tax bracket so the net income isn't as much of a gain as one might think. Like you, I primarily work from home.
Sadly, my townhome has a rinky-dink electric setup so there's no way to install even a NEMA 6-15, but we weren't thinking anything about that in 2004. They were thinking about it even less when they built the place in 1990. You have the opportunity to find a property that you will love, that has great charging options (or lots of panel space), and is in a good area if you ever plan to have kids. My girlfriend and I are child-free by choice.
So, I highly recommend buying the house first. Your credit is probably good considering the existing loan rate you have. If you've been at your job for 2+ years, you can finance a house now and get a much cheaper used car since you will be working from home. I would do this because your needs are minimal (I have no car right now) and you can save a grip of money for your Tesla Model 3 down payment if you give up the Civic now. I only have a paid-off motorcycle which I use for occasional on-site work meetings. I simply don't need a car what with ride-sharing, Instacart, food-delivery services, a girlfriend who has a car, etc. It was a fun experiment, and it's easier than ever not to have a car while you save money. You work at home, consider carefully how much you're spending on payments and insurance on a car you plan to sell anyway.
Once you're settled in your house, get your Model 3 and you won't need to spend $50 for a parking spot where others may still park there, meaning you have to police that spot and it will lead to conflict with your neighbors beyond the way some people weirdly hate Teslas already. Your car may also be vandalized or damaged being parked outside every day, or it'll possibly attract some door dings and normal wear and tear with public parking. This is to say nothing of weather and other wear-and-tear. The house gives you a garage, best charging options, keeps your car nice and clean and secure, and it will hold its value better.
Having a good payment history on a house once you're ready to finance a Model 3 will look good too. Houses tend to appreciate, so real-estate is a good investment. Buy in the best area you can afford. Nothing matters here as much as location with respect to quality of schools nearby, low crime rates, road quality, charging, and appreciation of your home value.
Finally and I'm only bringing this up because it was mentioned in this thread; I do not recommend marriage unless you're really keen to do it, but I would time this after you get a house. Marriages done with any effort beyond a courthouse appearance are expensive, and divorces can utterly break you (divorce lawyers can ruin you quickly when it's a hostile pitched battle). Prenups can be ignored in whole or in part by judges with the bang of a gavel, or your partner could claim to have signed under duress—and think about why prenups exist at all (it's because of the risks you take with marriage contracts).
So, think carefully about this, but get the house first, and ideally purchase it by yourself. If you have a love-interest who wants to share the burden you can do that, but if things go pear-shaped you'll have to buy them out and that's assuming you're not in a battle over it.
Either way, good luck!
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US taxes are marginal. Only a portion of the additional income goes is calculated at the higher rates. And the rate change between brackets are low.
Getting bumped into the next tax bracket - no matter what bracket - never return as little as people lament.
The steepest hike is from the 24% to 32% bracket. For the most extreme scenario where the entirety of the +20k is assessed at the higher bracket, that's a tax liability of 6.4k instead of 4.8k.
Spacep0d
Active Member
If you're following Dave Ramsey's advice, you would probably buy the house and never own a car. Period lol.
If you want it asap you buy the car tomorrow, and the house next month.
I used to pinch pennies and save everything. Hardly had any debt and I was living the good life. Then my wife ended my marriage and I lost far more than 50% lol. My frugality helped her a lot though!
So I have more of the mindset of live as well as you can today, because tomorrow isn't guaranteed. Marriages can end, you can become disabled, you can die....all without taking vacations or buying the best car on the planet because you were planning for a future that never arrived.
I don't think there's a drastically wrong decision here. If you can be patient I'd buy the house then a model Y.
But I don't think you'd regret getting a 3 soon. Not at all. You'd regret the car value that you lose on the trade-in/sale, but that's it.
If you want it asap you buy the car tomorrow, and the house next month.
I used to pinch pennies and save everything. Hardly had any debt and I was living the good life. Then my wife ended my marriage and I lost far more than 50% lol. My frugality helped her a lot though!
So I have more of the mindset of live as well as you can today, because tomorrow isn't guaranteed. Marriages can end, you can become disabled, you can die....all without taking vacations or buying the best car on the planet because you were planning for a future that never arrived.
I don't think there's a drastically wrong decision here. If you can be patient I'd buy the house then a model Y.
But I don't think you'd regret getting a 3 soon. Not at all. You'd regret the car value that you lose on the trade-in/sale, but that's it.
RedModel3
Member
Knowing the housing market in Middle Tennessee, you'd be far better off buying a house ASAP and waiting for the Tesla. That way you'll be all set with a garage and ability to charge, and as fast as things change with Tesla, you'll probably have an even better and cheaper car by the time you walk across your threshold. It's always better to try to get a mortgage without a high car payment on your credit record.
Depending on income and amount, having a car loan does not impact the max house loan you can get (nor is maximum house loan necessarily a good idea). A house is not always an appreciating asset. Mine sold for 40k less than purchase (not including intervening tax payments). My mom passed before she reached retirement, only saving for the future may not pay off.
Be wise, but don't over optimize.
Be wise, but don't over optimize.
Garlan Garner
Banned
House first.
However, If you have $1500 per month for a car....you can get a Tesla NOW. Sell your Civic and get a Model 3 performance NOW. Unless you really want a model Y.
Garlan Garner
Banned
My insurance on my model 3 is the same as it was on my Camry. My rates didn't go up at all when I got my car 18 months ago. Allstate.
Thanks for posting that. It's amazing how few people understand how the tax brackets work. I would say more Americans know how to use a roundabout than understand how tax brackets work. LOL
Spacep0d
Active Member
Sure, but tell that to anyone who has worked a bunch of overtime and only made $4.64 more than their regular check because of presumed higher brackets.
Sure, but tell that to anyone who has worked a bunch of overtime and only made $4.64 more than their regular check because of presumed higher brackets.
Post up your math on that scenario!
Somehow, I think you still don’t get it. It’s explained simply here:
What Are Tax Brackets? - TurboTax Tax Tips & Videos
Spacep0d
Active Member
Oh, that was a bit of a joke. Hyperbole. Not meant to be taken seriously. I'll be happy to read up more later though. Admittedly, my grasp of this isn't as good as it could be. Dammit Jim, I'm an artist not a tax consultant!
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