A lot depends on finance rates, guaranteed values and how much cash you happen to have spare. We bought our MX on PCP because at the time it was 1.5% APR and a very generous MGFV with a flat 7p/mile unlimited mileage excess. It worked out considerably cheaper than a Volvo XC90 or Porsche Cayenne even though the list price was higher on the Tesla. We bought our M3 outright as the finance rates were much higher and I now have more confidence in Tesla residuals. It does tie up £50k, but at least I can't lose it on a risky investment! My share portfolio has already taken a savage beating over the last 12 months!
-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
Higher value EVs not eligible for £3,000 PiCG (grant) anymore!
- Thread starter kelvin 660
- Start date
Best man maths I've seen for a while, its normally the other way round....how much money I could make from £50k invested rather than spent on a car
.Its so tempting to go nuts with borrowing with the current crazy cheap money, 1.1% is available at present on additional mortgage loans. It almost feels like you are missing out by not borrowing for something/anything at present.
Strange times we live in, though the FOMO crazy on 'investing' reminds me of what the housing market was like in 2008 when I bought my first house.....we all know what happened next.
Well for me at least there is no way around to paying a deposit. My actual capital was 7k, so...Best man maths I've seen for a while, its normally the other way round....how much money I could make from £50k invested rather than spent on a car
Its so tempting to go nuts with borrowing with the current crazy cheap money, 1.1% is available at present on additional mortgage loans. It almost feels like you are missing out by not borrowing for something/anything at present.
Strange times we live in, though the FOMO crazy on 'investing' reminds me of what the housing market was like in 2008 when I bought my first house.....we all know what happened next.
Other options were:
1. Pay off existing loan by getting another loan - only got 5k interest offers from other lenders (borrow 25, pay 30 over 5 years) and keep existing car
2. Sell car, pay off loan, buy ICE second hand for 7k... Pay petrol/repair/tax
3. Sell car, buy more expensive Tesla, pay £5 more /mo than I did for the SR+ and have 5k interest over 6 years.
4. Sell car, buy another SR+, pay £150 less /mo than I did for the SR+ and have 4k interest over 6 years. Live with LFP and the regret from not getting LR.
5. Live without a car and invest 7k - who am I kidding, I cant live without a car.
Of course #3 was a no brainer.
With regards to making a bet on the resale value, yes exactly. Both lease and PCP companies are making money off you, so it will almost always be worse. You are basically betting that they will make a loss.... And you get to pay excess miles and not being able to upgrade the car...
On a side note, I already have a lot of investments. Enough for several cars. And I'm getting a loan anyway to not touch that, so there is that... Need that to pay off mortgage early and retire.
The only exception to this basic rule (and it used to be quite common practice a few years ago, but not so much today) is when manufacturers/dealers subsidise PCP and leases simply to move more cars. Tesla were doing it with low rate PCPs on MS/X for quite a long time. Mercedes, BMW also do a lot of heavily subsidised leasing.
Buying outright is usually the cheapest option overall, ignoring all the alternative *investment opportunities that most people don't really have the cash to put into
*The value of your investments can go down as well as up and you may get back less than you originally invested
The only exception to this basic rule (and it used to be quite common practice a few years ago, but not so much today) is when manufacturers/dealers subsidise PCP and leases simply to move more cars. Tesla were doing it with low rate PCPs on MS/X for quite a long time. Mercedes, BMW also do a lot of heavily subsidised leasing.
Buying outright is usually the cheapest option overall, ignoring all the alternative *investment opportunities that most people don't really have the cash to put into
*The value of your investments can go down as well as up and you may get back less than you originally invested
I also tend to work on the basis that the depreciation element only comes into the equation if/when you sell the car. The longer you can go without selling the better the calculation ... never sell it and suffer no depreciation as such. This, of course, requires us to be able to live with a vehicle that's no longer the latest model and is economical to repair over a long lifetime. Whether this will turn out to be a feasible approach with a Model 3 remains to be seen!
Yeah I was half joking, but £50k invested in these crazy times can go just about anywhere! I have a fair chunk invested in various EV related companies and it's a bit of a roller-coaster ride to say the least. But I'm looking long term with these. A £50k Model 3 should be still be worth around £25k in 4 years time, so that works out at around £520 per month. PCP is currently much higher (£6k deposit + £640 per month over 4 years). Lease is much closer at around the same £520 per month, but with £3k down and all the potential hassles of leasing.Best man maths I've seen for a while, its normally the other way round....how much money I could make from £50k invested rather than spent on a car
Mperkins28
Member
Not sure there is a ‘should’ with EVs, especially over 4 years and so much competition coming and prices falling. Prices climbed as interest in EV grew and supply was relatively limited, but they’ll starting to fall now as competitive grows and production become cheaper. A model 3 could be seen as the EV version of the petrol Golf - it’s not the most special car you can buy, it’s not the most practical given it’s boot, it won’t be the longest range in 4 years, but it is still a solid proposition, however a 4 year old golf is what, 10k? Will new EVs by then be in the 20-30k bracket making 4 year old ones 15-20k? That’s the gamble and the unknown you’re betting on
We can always do great man maths! I justified my leased Porsche on the basis it was less than my BMW and my wife's mini lease combined. So I made a saving! The maths excluded not having any equity in either on returning the cars so having to pay the deposit and then having to spend £12k on a second hand mini. However I saved £150 on that lease payment every month! At least until the accountant told me to get an electric car and save on the grant, company taxes and BIK. So even though I've never had a company car I am pleased I'm saving on BIK, not to mention I've got no car lease payments. I'll forget about the no equity in the Porsche for returning it early and have no idea why there is a £50k hole in the company bank! This is real man math I've saved a fortune now on my last 2 cars! Well at least in my mind.
Well they just went up by £3.5k yesterday. I'm pretty sure it will be worth more than £15k. But if it isn't then I'll just buy another new one for £25k if they are going to be that much cheaper by then. But I'm not at all convinced that prices will fall very quickly. Demand for batteries will be high and supply will be restricted. Tesla are ahead of the game in that respect and everyone else has to play catch-up. It's something I've looked at quite closely from an investment POV. At the end of the day £50k is not actually bad value for a 450 hp saloon with minimal running costs. It's more of a high end BMW 3 series competitor than a Golf and not everyone wants a hatchback.
Yeah, same with Model X. Very strong residuals. Surprised me too. It was the main reason I took a PCP on our MX. But it's now very much looking like I will be selling it at the end of the 4 year term (Feb 22) rather than handing it back as I originally thought.
The cheapest BMW 3 series ICE is £30k today. So even if Tesla is able to reduce production costs on their M3, surely it would be in the £30-35k as a ballpark given they’re a similar size vehicle?
Our original X would be over 4 years old now, if it sold £45k it would be cheapest X on Autotrader and will essentially equate to £650/month for a £75k car.
It'll be interesting to see how prices hold up, but given a brand new 6 seater X is knocking on £97k, a used one for £45k is quite a bit cheaper, the extra range of the newer cars are nice to have but not £45k worth, especially with the number of Superchargers now popping up all over the place.
Last edited:
Yep and Model 3s are competing with the upper end of the 3 series range, especially the LR and P models.
How much is a 4 year old 3 series? Quick look on AT and a 340i is about 20k. We can debate what we think they will or won’t be, it doesn’t matter really, it’s what you think that matters and you do the sums accordingly, you’ll either be right or wrong. MX prices have started to fall now but they’re just the example I have over supply and demand, there are relatively few 4 year old MX cars, in 3-4 years we’ll have lots of ipace, eqc, e-trons etc to chose from. Past performance is not necessarily an indication of future values as any P100D owner who bought before Tesla slashed 40k off the price will tell you
......and the 340i was just under £40k new list price 4 years ago, so that would be pretty much the same 50% depreciation I was guessing. You are right it is just a guess, but I don't think it will be far off the mark. Our MX is going to comfortably achieve that kind of residual over 4 years and that's on a £88k car. 4 year old examples are currently selling in the range of £50-55k. Well above the PCP GMFV which I thought was pretty generous back then.
Another way of looking at it is that Teslas are among the slowest depreciating cars on the whole market and I don't think that will dramatically change any time soon. I think it helps that they are not typically loaded with £10k+ worth of optional extras too (unless you buy into the FSD dream!) or massively discounted like most other comparable cars.
Last edited:
Similar threads
