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I want to buy a Tesla and i was wondering what you guys think would be the best way to do it.

Discussion in 'Model S' started by yolotrip, Sep 1, 2019.

  1. yolotrip

    yolotrip New Member

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    So basically my question is this, Would it be a smarter choice to lease a car or get a loan from the bank and pay for the car outright and then pay back the loan on an agrees upon minimum amount?


    I am looking to get a new car soon and i have been contemplating this for some time now.


    Also idk if this matters or not but say if someone had a co-signer with perfect credit, would that help?
     
  2. hill

    hill Active Member

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    Save a boatload & buy used.
    .
     
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  3. aerodyne

    aerodyne Member

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    Hill +1...... Plus pay Cash
     
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  4. BlueOvalFan

    BlueOvalFan Member

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    I’ve only bought 2 brand new cars (trucks) off the showroom floor with zero miles. I’m so done with taking the depreciation hit that I only buy used now, albeit they are just a couple years used. As such I’d recommend a slightly used Tesla with full warranty still intacked. Save a boatload and get a CPO from Tesla.
     
  5. SoCal Buzz

    SoCal Buzz Supporting Member

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    A lease is not a cost effective way to drive a car, especially if you intend to keep it for ~5 years. I would buy used from private party if warranty is still intact, or spend about $5-7 K more for Tesla pre-owned with warranty. Try financing through a credit union or other bank if you buy from private party.
     
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  6. D.E.

    D.E. Uncorked

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    Your question doesn’t have a universally correct answer. You pay for the use of the car regardless. That’s depreciation.

    Lease: You pay for the use of the car, depreciation, and you pay for the money used to buy the car and rent it back to you. You have a fixed mileage allowance, extra miles are expensive. The term determines how long you have the car. If you have a business that requires travel, you can count the lease payments as a business expense usually. That means the government shares he cost of the lease in reduced taxes. People usually get a new car at the end of the lease period so you don’t wind up with older technology. You cannot modify the car. You know the value assigned at the end. Ending the lease early is usually very expensive. You don’t bother with selling or trading in a used car at the end. If the car is worth more at the end than the residual calculated, you may be able to keep the car, buying it at the calculated end value, then sell it and recoup the difference. Teslas often are worth less than the residual value due to price reductions and to advances in technology. When you turn it in, the car is expected to be in average condition for a car of that age. If the car is in superb condition, there’s no benefit. If the car is in worse condition, you’ll be charged the amount to bring it up to expected condition.

    Buy outright: You pay cash for the car. It’s yours. You save finance costs. Drive as far as you want, keep as long as you want. You can eventually sell it to get a new one with the new technology. You don’t know the value at any fixed interval in the future. It ties up your capital. You can buy new or used. You can modify it any way you like.

    Finance: You pay for the use of the money that is used to buy the car. You pay for the depreciation. You don’t tie up your capital but you pay someone else for the use of their capital. If you cannot buy outright, it’s a way to get the car without paying for it up front. It’s still an expensive way to buy a car. It’s your car at the end. If you finance for 5 years, you’ll owe more money than the car is worth (upside down) for most of the finance period so if you decide to sell early, you’ll need to pay that difference. Like leases, it can be expensive to get out early.

    Tesla doesn’t have a CPO program any more, they sell used cars. On the plus side they include a guarantee usually. On the minus side, you order the car, they ship it, and you are expected to buy the car when it arrives. You don’t have to, you can refuse it. If you get one that had free unlimited supercharging, Tesla will strip that from the car so you’ll get it without that advantage. If you buy from a person and the supercharging is transferrable, it transfers to you. You get the remainder of the warranty. Some options exist to buy additional warranty coverage but that has to be done by the original owner before transfer. It can be challenging to find out exactly what configuration a used car is. Things change often, premium packages change, included equipment changes. You need to be careful in finding out exactly what equipment the car has and whether things are included that are important to you.

    My feeling is that one should buy outright if possible. That implies one has the capital without compromising lifetime investing, savings, etc. But I’m old. Saving and investing are important to me. Buying a $100,000 car early in life costs much more in the way of total life savings than people expect. Getting a $25,000 car and investing the remaining $75,000 makes far more sense when looking at lifetime accumulation of assets. I think it’s nuts to go in the hole early in life for a car, regardless of how much one wants it, the lifetime cost will be there long after that car has been sold and forgotten. Buying an early expensive wasting asset is often a poor decision when looking at lifetime financial health. Still it’s your life so do what’s right for you.

    Buy from an individual if you can get the warranty coverage you want included and if you want the best price.

    Buy from a non Tesla dealership if you must, Tesla frowns on this, the car probably went through an auction, and non approved repairs may have been cheaply done. If you know cars, that should help. Be cautious.

    So you want advice. I’d pay cash for the car you can afford. It might be new, or used. If you have a business, consider a lease. If you cannot afford the car, even used, then buy something else until you can save enough to afford the one you want. If you have kids, save for their educational expense first. People call cars “investments” but they aren’t, they are wasting assets. With rare exceptions, the car is worth much less when you sell it. Teslas are expensive to own. Taxes, depreciation, insurance, etc., far exceed any savings due to fuel. They are environmentally cleaner but there is high carbon cost in manufacture and the power has to be generated somewhere. Generating power with a solar array is probably the cleanest. It eats tires, those can be expensive. Repairs are rare but they can take a lot of time, months sometimes. Crash repairs often take many months. Lease payments, car payments, and depreciation accumulate whether or not you are driving the car. Teslas require specialized repair which is slow and expensive. It’s so expensive that a crashed Tesla may be totaled with relatively light damage. Travel is slower on trips. The battery needs charging and charging takes time en route. The actual route you take may be dictated by the available chargers. The range promised is an estimate. Range decreases over time as the battery ages. If a car has a range of 250 miles, for example, you won’t be able to go 250 miles between chargers. There’s a certain amount of overhead included in avoiding running out of power, you don’t want to run it to zero. And now Tesla may restrict the amount of charge you can get. The battery charges slower as you reach full charge so you are unlikely to charge to 100% on trips. Bigger batteries are always better. There are some battery configurations that should be avoided, the early 90KW battery packs for example. Check on insurance costs before purchase. Some companies may not insure some cars. Never ever buy a Tesla with a salvage title, no matter how cheap. Teslas don’t need routine maintenance, no oil changes, no tune ups. Well, there are things you can do, change the motor fluid but it isn’t usually necessary. You can drive it every day, plug it in every night, buy it tires every so often but otherwise not worry about the car. The car should go half a million miles, there’s very little that wears, no gas engine, no transmission.

    Naturally my car is the best. It’s a 2017 S75D, with real leather. The 100 KW batteries have more range and better performance, and they charge quicker. I have the autopilot, I like it.

    Tesla’s get software updates frequently. That means better features come along free and fairly frequently. Sometimes there’s a step back, particularly where autopilot is concerned. If you like cutting edge, Tesla is the car for you. If not, well give it thought. The 3 is probably a better option for anyone buying new, concerned with cost, and doesn’t need the space available in the other models. Tesla as a company is losing money. They cannot continue this forever.

    This should get you going. Double check everything anyone says before buying. If used, make sure all promises are fulfilled before you pay. Don’t take anyone’s word for anything if they profit by the promises they make. Verify. Good luck.
     
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  7. ewoodrick

    ewoodrick Well-Known Member

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    Tesla financing is the easiest way. Leasing means that you are paying someone else money for close to nothing. Financing through another location may be cheaper.
     
  8. aerodyne

    aerodyne Member

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    DE +100. Keeping my DD for 24 YEARS and counting allowed me to retire at AGE 53 and buy a used MS 85D for cash....
     
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  9. aerodyne

    aerodyne Member

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    D.E. is one of the best posts I have read for a prospective buyer of any newer car.

    I also agree, the best car is mine. Leather 2015 MS85D. I will be keeping it a long time....
     
  10. Ostrichsak

    Ostrichsak Active Member

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    Best way to do it? Don't. I post this in various forums (car and otherwise) over the years but if you have to finance a car you probably shouldn't buy it.

    I know many here will flame me and talk about not "tying up your liquid assets when money is so cheap to borrow" but the reality is that financing means paying money to a bank. Any money you pay to a bank is wasted money when you can get something to get you point A to point B for the cash you can scrape together. Then, apply this same "monthly payment" to a savings account and upgrade after a few years if you really feel you need to. What you'll likely discover is you don't "need" that fancy new car you thought you did.

    Before you know it, you'll have enough cash saved up that you can pay cash for a Tesla but by then, through becoming more financially wise to be able to save money, you likely won't want to. You'll discover how important it is to keep saving and not financing and working towards financial independence. If you do decide to buy one you'll shop for months for a quality used car that has already taken the depreciation hit. Why save for years only to lose it all in depreciation in a year? Makes no sense financially.

    The only way that makes sense is if you allow emotion to make your buying decisions which is how most Americans manage their finances and also why most Americans have crippling debt and no retirement or savings.

    I know most probably have stopped reading this because it's not what they want to hear but if one person gets all the way through it and it triggers a little light bulb over their head it was worth my time. I had to learn the hard way and had I had someone earlier in life giving me this sage wisdom I'd be in far better financial situation than I am today.

    I cringe when I see people talking about financing/leasing brand new $150k+ cars because I realize something they don't: they're paying the bank a massive amount of money in terms of interest for the privilege to lose $100k in depreciation over the next 3-4 years. It's a lose lose situation that only serves the banks and car manufacturers/dealers.
     
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  11. Bodyhauler

    Bodyhauler Member

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    I bought my '16 S 90D through Tesla used. Original sticker price was 107,500, but I paid just under 60% less for it. Tesla serviced it, fixed a few items, ie: replaced tire with a leak, fixed a faulty sensor. They even repaired some scratches on the hood that was not visible on line when purchased. It was like a new car when I got it and it has run fantastically.
    I would suggest buying used and saving a ton of money.
    Even if it's not the newest and latest model, it is still way ahead of most other cars on the road!
     
  12. SalisburySam

    SalisburySam Supporting Member

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    @D.E. +1. Lots of great advice there. Also consider paying cash for any depreciating asset (TV’s, cameras, automobiles, appliances, most jewelry, some housing, etc.). Any sort of financing just ups the cost for something that is increasingly worth less.
     
  13. D.E.

    D.E. Uncorked

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    The worse part is the calculation of the time value of money and what such an expenditure early does to lifetime wealth accumulation. It’s well worth looking into time value of money calculators just to see what savings and investment will do, why it is so important to start early, and what early expensive purchases do to the wealth accumulation curve. These decisions and others you make while young make a huge difference in whether one can retire, retire early, or perhaps never retire at all. If one plans and invests well, he’ll likely be able to afford to pay cash for a Tesla later in life as a many have. My wife thinks the key to retiring early is “one house, one spouse”. I’d add a time value of money calculator to that list. When one sees a Tesla purchase as not a $100,000 purchase, but several times that in eventual cost, it puts things in proper perspective. Cars will come and go. 30 years from now, the Tesla purchased today will be a dim memory. The money, though, that’s still gone, and the lifetime of money it could have generated is gone. Eventually people get old. The money they’ve accumulated is important. It lets one pay for kids and grandchildren’s college so they are not mired in lifetime debt, it buys expensive cars, and it pays for expensive family vacations.

    OK, enough, I know. You aren’t my kids. You don’t want geezer advice. I understand. And that car is so fast, and beautiful, and it smells so good. And you are making the money, you can afford the payments. You only live once. You can’t take it with you. You work hard, you deserve it. You have to drive something. You are saving the planet.

    It’s easy to rationalize oneself into a lifetime of debt. So before taking my advice, talk to some geezers. Talk to a bunch of them. Then decide for yourself which type of geezer you want to be, because geezerdom is coming for you, as it does for all of us. It’s relentless. You can be the comfortable one with no financial worries, or you can be that greeter at Wal-Mart.
     
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  14. Ostrichsak

    Ostrichsak Active Member

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    We are 100% in agreement. The only debt we have today is our home and we're rapidly paying that down. In a few years or so we'll be 100% debt free and then the serious investing on our future can begin.

    Funny that your wife says that because all of our friends say we're doing well because of "DINC" or Dual Income, No Kids. I won't lie, that helps from a financial standpoint but it's hard for me to feel bad for their lot in life when they buy new carS annually and trade million dollar homes nearly as frequently. They then sit back and wonder where it all went and blame the kids.

    The bottom line is you can be financially independent on a modest income so long as you're smart about it just like you can be in debt until the day you die on a six figure income. It doesn't come down to what you got but how you spend it... or more importantly, don't.
     

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