Financially Irresponsible or Worth It?

[Gagan]

Hello All... been lurking on the forums and Tesla website for few months now as I inch closer and closer to convincing myself to buy a Model S. So I thought that I could get real advice from real people and whether you think it would be financially irresponsible for me to buy a Tesla. I'll give you my numbers and thought process so please help by giving input of whether or not I actually should purchase it.

I'm 21(if age matters) and I make about 40,000 a year as a junior software developer. I plan on buying a new car early this coming year so probably February or March. By then, I predict my salary to also become 5-10k higher but I won't factor that in since it's speculation.

So basically, my reasoning is as follows.

- I make about 3,000 a month.

- I live with family so little to no cost on rent but come from immigrant family who recently tied up their money on new house mortgage so this car will be all on me.

- I typically spend about 500 dollars a month on food since I eat at home quite often. Factoring in other expenses here and there and I easily stay under a total of 1,000 dollars a month on personal expenses.

- I am still not sure of CPO or New but I'm leaning towards CPO since it'd be more affordable and because of the fact that the 7,500 rebate will most likely not apply to me at all.

- I currently commute to work which totals to nearly 80 miles a day and typically 3 hours of drive time. With a tesla though, I'd be able to get a clean air vehicle sticker which would save about 30 minutes each way.

- Insurance would be about 200/300 a month?

So based on this, what do you guys think? Things I should worry about? Hidden Costs? Need more info?

I have fairly good credit since I have cosigned on a new car before.

Thanks in advance to all repliers even if you do believe I am not being logical. And please be honest even if it may not be what I wanna hear! Thanks!!!

 

[DrReid]

No no no no no. If you make 40k per year you should absolutely not be buying a 70k car. You have no idea where your life will be in a few years. Lots of things can happen. Don't lock yourself into an expensive car payment like that! You are very young - save up and be a baller in 5-10 years instead.

 

[Az_Rael]

What price range CPO are you looking at? And how much cash are you using towards the car purchase?

 

[Gagan]

What price range CPO are you looking at?

I prefer to get one with AP1 at least so I'd say 50-60k would be my range after basic research.

 

[Az_Rael]

I prefer to get one with AP1 at least so I'd say 50-60k would be my range after basic research.

Why not a 3? Might be a better option.

 

[Jxtheone]

I would recommend to not get a loan on a car (or anything) for any amount that is above your total savings (or net worth). In other words, if you cannot afford to pay it cash, do not buy it yet until you can. Next, once you can buy it cash, get a loan for it if you can invest what you have. If you don't invest, then don't get loans.

 

[Gagan]

Why not a 3? Might be a better option.

Mostly because I would have to wait for a year and need to buy a car this upcoming year because I won't have the car I'm currently driving.

 

[Gagan]

No no no no no. If you make 40k per year you should absolutely not be buying a 70k car. You have no idea where your life will be in a few years. Lots of things can happen. Don't lock yourself into an expensive car payment like that! You are very young - save up and be a baller in 5-10 years instead.

Yeah, that makes sense. The thing is that I guess I kind of spoiled myself since I bought a new Mazda6 for 35k when I was making only about 15k a year and that has worked out.

 

[Az_Rael]

Mostly because I would have to wait for a year and need to buy a car this upcoming year because I won't have the car I'm currently driving.

When I first graduated and was making $40k a year, there was no way I could buy that expensive of a car. I struggled to manage a $25k car with a $400/month payment. Insurance might be higher than you expect as well, get quotes first.

Maybe buy a used Leaf for less than $10k and drive that until 3's are out?

 

[skitown]

Can you charge at work? If I were in your shoes and could do that, I would probably put in for a Model 3 reservation and buy a used Leaf to hold me over.

Edit: LOL, looks like @Az_Rael and I had the exact same idea.

 

[Gagan]

Can you charge at work? If I were in your shoes and could do that, I would probably put in for a Model 3 reservation and buy a used Leaf to hold me over.

Yes, I can charge at work.

When I first graduated and was making $40k a year, there was no way I could buy that expensive of a car. I struggled to manage a $25k car with a $400/month payment. Insurance might be higher than you expect as well, get quotes first.

Maybe buy a used Leaf for less than $10k and drive that until 3's are out?

Ahhhh, but it's a Leaf!

What are your thoughts on a Ionic?

 

[Az_Rael]

Yeah, that makes sense. The thing is that I guess I kind of spoiled myself since I bought a new Mazda6 for 35k when I was making only about 15k a year and that has worked out.

Probably did since your expenses are so low. However, what's the long term goal for you? Do you want to move out on your own eventually? Might be better to buy a cheaper car now and save the rest for your nest egg.

I think the Ionics are very interesting. Dunno what they go for, since I haven't looked at them. Driving EV is a lot of fun even if it's in an ugly car. I loved my Volt, that was an awesome car.

 

[Gagan]

Probably did since your expenses are so low. However, what's the long term goal for you? Do you want to move out on your own eventually? Might be better to buy a cheaper car now and save the rest for your nest egg.

I think the Ionics are very interesting. Dunno what they go for, since I haven't looked at them. Driving EV is a lot of fun even if it's in an ugly car. I loved my Volt, that was an awesome car.

Nah, not moving out anytime soon. But that's because on Indian culture which is whole off-topic. But yah, don't see myself paying any rent/mortgage for the next 10 years at the very least.

 

[skitown]

Yes, I can charge at work.

Ahhhh, but it's a Leaf!

What are your thoughts on a Ionic?

Yeah, but I wold love to have a used Leaf up here in central Idaho as another run around vehicle. Alas, I would have to tow it here, so it's a big pain. But if I lived in a city, I would 100% have one (too) as they are an amazing value right now and pretty torquey and fun to drive. The best life advice I ever got was from an older guy at my first job who talked to me about saving as much of my paycheck as I could and resisting expensive "toys" as long as possible. Basically to live like a college student for as long as I could stand it. All I can say is that advice has made a big difference in my life, and my ability to pick and choose my careers, etc.

No thoughts on the Ioniq. Would definitely rather have a used Leaf now + a new Model 3 in a year or so, than an new Ioniq now. M2C!

 

[Az_Rael]

Nah, not moving out anytime soon. But that's because on Indian culture which is whole off-topic. But yah, don't see myself paying any rent/mortgage for the next 10 years at the very least.

Gotcha. If I was in your shoes and could live rent free for 10 years, I would totally be aiming for this: financial independence / early retirement • r/financialindependence

I'm too old now, though ;-)

 

[Gagan]

Yeah, but I wold love to have a used Leaf up here in central Idaho as another run around vehicle. Alas, I would have to tow it here, so it's a big pain. But if I lived in a city, I would 100% have one (too) as they are an amazing value right now and pretty torquey and fun to drive. The best life advice I ever got was from an older guy at my first job who talked to me about saving as much of my paycheck as I could and resisting expensive "toys" as long as possible. Basically to live like a college student for as long as I could stand it. All I can say is that advice has made a big difference in my life, and my ability to pick and choose my careers, etc.

No thoughts on the Ioniq. Would definitely rather have a used Leaf now + a new Model 3 in a year or so, than an new Ioniq now. M2C!

It's just that the Ioniq doesn't look as ugly haha...

And I'm 6"3 and imagining myself getting in and out of a Leaf just doesn't sound fulfilling!

Gotcha. If I was in your shoes and could live rent free for 10 years, I would totally be aiming for this: financial independence / early retirement • r/financialindependence

I'm too old now, though ;-)

Gotta make my contributions to the world though (and make tons of money)...

 

[futurem3owner]

Nah, not moving out anytime soon. But that's because on Indian culture which is whole off-topic. But yah, don't see myself paying any rent/mortgage for the next 10 years at the very least.

A fellow Indian in the house! I placed my reservation down on Model 3 on the day of unveiling but after saving up money as a Physician, I finally decided to buy a new 90D two weeks ago and couldn't be happier with the decision since I probably will have regrets if I purchased Model 3 when it comes out. In your case, I'd wait to buy Model 3 which you might still get by next year. At least you don't have to pay rent. Wish that was the case for me as well since I live an apartment. But then, I wouldn't be getting people gathering around my car and being amazed by it almost on a daily basis

 

[skitown]

It's just that the Ioniq doesn't look as ugly haha...
And I'm 6"3 and imagining myself getting in and out of a Leaf just doesn't sound fulfilling!

Well, I hate to type this, but my experience is that you might ironically have an easier time getting in and out of a Leaf than a Model S, so I wouldn't use that as justification on your part! Whenever someone your height drives my Model S, I feel like I need to give them tips on how to get in and out of it. Sounds like you need a Model X.

 

[Gagan]

A fellow Indian in the house! I placed my reservation down on Model 3 on the day of unveiling but after saving up money as a Physician, I finally decided to buy a new 90D two weeks ago and couldn't be happier with the decision since I probably will have regrets if I purchased Model 3 when it comes out. In your case, I'd wait to buy Model 3 which you might still get by next year. At least you don't have to pay rent. Wish that was the case for me as well since I live an apartment. But then, I wouldn't be getting people gathering around my car and being amazed by it almost on a daily basis
View attachment 248878

Ah, so jealous. And thanks...

After all these replies, I feel like I'm going to put my payment down for a M3 within the next hour!

Well, I hate to type this, but my experience is that you might ironically have an easier time getting in and out of a Leaf than a Model S, so I wouldn't use that as justification on your part! Whenever someone your height drives my Model S, I feel like I need to give them tips on how to get in and out of it. Sounds like you need a Model X.

Oh, worded that wrong but I was trying to refer to how much more stylish the Model S is and seeing myself getting out of Leaf just sounds boring!

 

[idleuser]

It's actually not a bad idea despite what people will tell you. Since you drive 80 miles each way, multiple that by 260/261 working days @ 3 dollars a gallon with an efficiency rating of 30mpg.

If 30 mpg, it will take 666.67 gallons or 2,523.61 litres of gas with fuel cost of $2,000.00.
If 40 mpg, it will take 500.00 gallons or 1,892.71 litres of gas with fuel cost of $1,500.00.
If 50 mpg, it will take 400.00 gallons or 1,514.16 litres of gas with fuel cost of $1,200.00.
If 60 mpg, it will take 333.33 gallons or 1,261.80 litres of gas with fuel cost of $1,000.00.

You're looking at a savings of 10,000 over 5 years and since you get to charge for free, you basically pay 0 out of pocket for fuel cost. This is not factoring insurance cost, etc etc. If you purchase a CPO at 50-55k, you're essentially paying 40-45k for a Tesla. Is it a bit much? Yes but since your take home is 3000 with a personal expense of 1000. That leaves you roughly with 2000 dollars of disposable income. You can easily afford this without going broke.