Financing Model 3 need input.

[Rawlings2019]

What interest rate were you able to secure on your house at $126,000 and a payment of $1350 per month for 15 years?
Are you upwards of over 8%?


Your projected monthly vehicle expense would be well under 20% of monthly net - Which really is acceptable in today’s day and age.


I’m just old school, and purchasing a car worth > than your yearly “individual” salary on a depreciating asset and having to finance it over 6 years - isn’t the most responsible thing to do when you are young and free, but no one wants to hear that these days.

Oh I'm definitely with you I truly do understand this isn't the smartest financial idea, I know I can buy an 8,000 Honda Civic and it'll go for 5-7 years and I'll spend less on gas then I'll spend buying an EV and I'll have much more money I can put towards retirement, investments etc. That I do understand and I guess I'm willing to let go of 750 a month for something that will make me feel comfortable going to work, I will feel safer on the road, and I will be helping the environment at least a tiny bit, though I understand if I'm not charging through solar panels I'm still not fully renewable.

As far as our home we secured 15 year at 4.0% I should have refinanced when it was 3.5% 2 years ago but we weren't done doing renovations.

I bought home in 2015 for 126k. At that time it was my first home loan. I got 4.25 interest. My payment was $980 a month (including taxes, insurance and mortgage insurance since I put down less than 20%) now between 2015 and 2017 I spend about $25,000 dollars to fully renovate the home, a job that several contractors quoted at $65-80,000. It took 2 years to do myself with my dad (my dad works in construction/renovations) we would work on house on nights or weekends when free. Completely did upstairs, and completely did our basement. We customized everything. Anyways the 25,000 I spent was all with 0% 21 months credit card. That card I completely paid it off in 2017. (I would pay about 1,000-1500 a month to keep up and I paid some lump sums from coaching money I made on side) 2018 we re financed. Our home is worth just over 200k. At the time on original loan I owed 114k. Home worth 200k. We took 25k from equity to Pau ourselves back and we went to 15 year loan which would save us almost $95k in interest when compared to staying with 30 year loan. So essentially I don't see taking $25k of equity out of the home as bad cause our new loan is 138k (added closing cost) 15 year 4.0% . But the house is worth 200k now in a very desireable suburb in St Louis area. I still have over 60k of equity. Our new payment is $1347 includes taxes, insurance, got rid of PMI since we have equity.

Our 2 current cars is a 2014 Honda Civic my wife purchase out of college. She's done paying it in April. It's got 50,000 miles. So it'll drive for another $150,000. Payment 330 a month. Interest 1.9%

My lease is a Lincoln MKC Select. Lease payment $517 (includes all taxes, property taxes, 15,000 miles allowance per year, all maintenance and free loaner any time)our last 3-4 years we have paid 850 in car payments plus another 200 in gas between both per month.

With her being done paying her Honda. Now we will only pay 750 for a Tesla. 750 is less than 850. And we only will pay like 80 for gas for her car and like 30-40 for electric for Tesla. That's a out 850 total vs 1050 we pay now in cars and gas. And we would end up with a 2014 Civic and a 2018 model 3. I'm just waiting for model y announcement because maybe I will just wait 1 year for model y just for size.

It's definitely not smartest idea but I don't think I'm am setting myself up for bankruptcy. I'm an educated person with a college degree in Management Information systems with over 6 years experience in the information systems world. I also have over 7 years of high level soccer coaching experience and I run a side business creating video content for prospective prospect athletes that I started last year which doesn't bring much yet cause of time but I've been bringing in additional 5-6000 a year coaching youth and another 2-3000 making a few highlights for players wanting to showcase talents. I guess I could say I use those side gigs as the money to spoil ourselves a bit. By no means do I work 70 hours a week either. I work 30-40 hours a week at my job and average 6 hours a week coaching which I love. I totally understand your point though I guess it's the millennial in a lot of us we tend to live a little more in the present than the future. I would agree. I definitely still worry about retirement we have retirement accounts etc but you know life is short you don't know if you will wake up tomorrow anything can happen so I like to spoil ourselves a bit we work all year and to me it doesn't sound like very fair to myself to work 30-40 years never spoil myself just so that when I'm 60 I can retire and finally buy my dream car... I don't think I would enjoy that dream car as much when I'm 60 as I would when I'm fully healthy and capable. Just like I don't think I'll enjoy going to Iceland or New Zealand and doing 7 day hikes as much if I waited till retirement. At retirement we probably will sell everything live in an RV and travel keep costs low instead throwing money keeping up a house .I think main mistake people make is buying these homes with 2500-4000 mortgages. I chose a place that's safe, fun, cheap which allows us to have a little more lifestyle. Rather than California where my wife is for that's amazing but we wouldn't be able to afford a shack for what we paid here and our current lifestyle.

 

[Knightshade]

You are not saying that if this individual qualifies for a $100,000 loan, he should go out and buy a P100D because one can borrow at below inflation?

I'm saying if he was planning to buy a P100D anyway and has the cash to do so, he'd be foolish to use the cash rather than taking a 1-2% loan, and getting a significantly better return on his cash while also getting to "pay" for the car with future money which thanks to inflation makes the car cheaper over time.

If you don't have the cash, but plan to buy a car anyway then taking a loan at/below inflation is still the best route since you're effectively getting a "free" loan thanks to the inflation thing.... on top of that, it means you can take whatever extra money you DO have and put that in places you'll get an actual return on it (larger 401k or IRA or HSA contributions for example) rather than dumping todays (more valuable) cash into a depreciating asset.

 

[Diesel123]

Shouldn’t a $138,000 15 year mortgage at 4% be around $1020 per month?
Where is the extra $300 going ?
Extra payments or Insurance / property tax?

 

[Rawlings2019]

Shouldn’t a $138,000 15 year mortgage at 4% be around $1020 per month?
Where is the extra $300 going ?
Extra payments or Insurance / property tax?

Yes it's around 1020 for principal and interest the other 330 dollars are for home insurance and property taxes it's all escrowed. So 1347 for everything in 1 payment due every 1st of the month. As I stated going this routed will save us over 90k in interest payments when compared to original cost plus we removed PMI which was 65 dollars of throwing money away. We accumulated over 80k in equity of which we took 25 out to pay ourselves back for what we invested fixing ourselves. Still have over 60k in equity and paying the house off in half the time. I don't see how taking the 25k out of equity is bad since we are also saving 90k in interest we would have paid to the banks. So it balances out quite in our favor anyway I see it. I guess this whole thread was about if it a perfectly good financial decision to get a Tesla but rather if we have a good shot at being approved at these good rates from other experience of other people who may be similar financial state. I've never applied for a single car loan of over 25k. My wife Honda was 20k 5 years ago. I leased a 36k car 3 years ago. We have carried payments of 850 between 2 cars and have never missed one payment and have been more than comfortable so in my head a bank should be fine with giving us 50k if we only have a $1350 mortgage as debt in our credit profile when we apply with a gross of 7300 fixed income .In other words I wanted to hear from people who might have been on same or similar finances and credit profile etc. Last thing I want is to order the model 3 apply for credit and get some *sugar* 4 or 5% deal or have to put in 15-20k down. Even if we do have that much money I'd feel better getting a 2.9 or 3.25% loan with 5k down and keep 15-20k in our savings. People argue paying for a car cash is better but it isn't always depends on loan terms as you might be better off investing that cash while still paying the car monthly if obviously you have way more than enough to cover and have leftover.