In the face of a recession, should I buy a Y now or wait?

[Physicslawyer]

Absolutely do not buy this car.

(1) you want to have at least 3 to 6 months of expenses in an emergency fund
(2) $48k per year is less than the cost of this car, the most you should spend is half of your salary, or $24k at a maximum. Best case scenario would be 10%, or $400/month based on your stated income
(3) invest money into the market and save for college for your kids in a 529 plan

Again, this is insanity.

 

[Kairide]

Why don’t you ask a financial advisor or a friend for advice. This seems like a common sense question and if you aren’t smart enough to make it on your own, then you probably should have someone else responsible for your financial decisions.

 

[Sijray21]

Hello,

So I will have no emergency savings after paying taxes on a new Model Y. My wife and I after all expenses take home $4000 a month. We have been driving a 2015 Honda Accord for years and has 117k miles on it. We both work for the same company hand have a 2 and 4 yo.

Should we take the plunge buying a MY with a $1300/month payment? Thanks for any and all advice!

-Mac

what is/are 'after all expenses'? is the $4k just surplus that after investing, food, housing, utilities, subscriptions, etc? I don't understand how you wouldn't have an emergency fund/savings after paying just taxes on a new model Y.

 

[jcanoe]

Hello,

So I will have no emergency savings after paying taxes on a new Model Y. My wife and I after all expenses take home $4000 a month. We have been driving a 2015 Honda Accord for years and has 117k miles on it. We both work for the same company hand have a 2 and 4 yo.

Should we take the plunge buying a MY with a $1300/month payment? Thanks for any and all advice!

-Mac

No.

Pay off any consumer debt starting with the debt with the highest interest rate. This is probably your credit card(s).

Build up a 6 to 9 month cash reserve for emergencies such as loss of job, medical expenses not covered by insurance.

Continue to drive the Honda for the next 4 or 5 years. Honda vehicles routinely go over 200k miles and beyond.

EVs will continue to improve. Prices will stabilize and hopefully adjust to the market once supply increases. In the next few years there will be dozens of models available at all price points.

If you are feeling flush (have extra cash) invest some of the excess cash in Tesla stock.

 

[Cyberspeed]

ps. taking financial advice from random internet people is probably the bigger red flag here than one piece of your financial situation.

However you asked so here is my .02 : pay cash or do not buy. Do not buy stuff you cannot afford. Focus on staying employed and save till you can afford.

 

[nate704]

Recession/Inflation or not, if you can afford it, buy it. If not, don't buy it.

 

[Macgyverfever]

Thanks for the brutal honesty everyone! I'm listening.

$4000 is money free to be spent after mortgage, food, utilities, diapers, hair appointments, etc.

The credit card debt is my first to pay offs while I begin making payments and planned on paying off quick (I had to replace an oven and washer/dryer)

I sold my truck 3 years ago to get us ahead, and we did, and then my new plan is (well, lol after listening to you guys might be a 'was') to buy a Tesla for fun and dependability and drive it for as long as possible as a commuter-only (even after the battery degrades to ~80%).

I chose the performance edition with fsd. I'm 37 about to be 38 (is this what mid-life crisis feels like?)

I'm just tired of not having a second vehicle, smelling gas and oil, constantly having to pay for tune ups, oil changes, etc.

 

[Dennisis]

Thanks for the brutal honesty everyone! I'm listening.

$4000 is money free to be spent after mortgage, food, utilities, diapers, hair appointments, etc.

The credit card debt is my first to pay offs while I begin making payments and planned on paying off quick (I had to replace an oven and washer/dryer)

I sold my truck 3 years ago to get us ahead, and we did, and then my new plan is (well, lol after listening to you guys might be a 'was') to buy a Tesla for fun and dependability and drive it for as long as possible as a commuter-only (even after the battery degrades to ~80%).

I chose the performance edition with fsd. I'm 37 about to be 38 (is this what mid-life crisis feels like?)

I'm just tired of not having a second vehicle, smelling gas and oil, constantly having to pay for tune ups, oil changes, etc.

I’d get a Bolt or similar to start in your situation, then later move on. You’re young, no rush!

 

[schen72]

please god no. DO NOT BUY if you will have no emergency savings left.

I cannot agree with this more! You should not be buying any big ticket item if you don't have emergency savings. Your Honda at 117k can still run for quite a while. Granted, it won't be as nice or cool as a Y but having no emergency savings means you're one crisis away from financial disaster. Do NOT buy any new car until you have enough emergency savings to absorb the impact of a major event, such as job loss.

 

[NJEV-Don]

Thanks for the brutal honesty everyone! I'm listening.

$4000 is money free to be spent after mortgage, food, utilities, diapers, hair appointments, etc.

The credit card debt is my first to pay offs while I begin making payments and planned on paying off quick (I had to replace an oven and washer/dryer)

I sold my truck 3 years ago to get us ahead, and we did, and then my new plan is (well, lol after listening to you guys might be a 'was') to buy a Tesla for fun and dependability and drive it for as long as possible as a commuter-only (even after the battery degrades to ~80%).

I chose the performance edition with fsd. I'm 37 about to be 38 (is this what mid-life crisis feels like?)

I'm just tired of not having a second vehicle, smelling gas and oil, constantly having to pay for tune ups, oil changes, etc.

Even if you downscaled to a Long Range without FSD you’d save $16,000. It would make more sense.

 

[nate704]

I don't understand why you want the FSD while you are having tight budget. Buying an expensive new EV is already risky move in your case.

 

[Macgyverfever]

If I didn't have a 22,000 personal line of credit from my bank I probably would think twice.

I just don't want FSD to go up anymore than it already has.

This is probably going to sound stupid, but back in 2015 my brother and I had decided to buy a house even though I knew the company I worked for was probably going to fire me in a matter of months, but I knew we had to get the hell out of my parents house before we lived with them permanently lol. So we made it happen. I was fired 3 months later and no savings and a $586 a month truck payment. I didnt panic but knew I had to move my butt with a mortgage to pay, so I looked for another job and ended up finding one within weeks. Had I been at my parents still, I might have not been so motivated.

We sold that house for 100k profit split in 2018, met my wife, and everytime a fire came up that got in the way of my goals I put it out. Had an hvac worth 16k and and 8k credit card last year but knocked it out along with my wife from sydney's home visit (hasnt seen her fam in 3 years poor thing - damn you covid) by cash-out refinancing the home last September and droped the interest rate to 3% which only increased our monthly payment from $1966 to $2097 (not to mention I don't have a car payment nor have had one in a while).

The above isnt to brag believe me - I've been beat down too much by life and too tired to brag (and where does bragging get us, really?). I'm one of those psycho-motivated millenials that will show even a traditionalist in their prime what hard work actually means. I think for me its not about money anymore or how to survive. I just do and sacrifice all thats required of me and am ready to treat myself. But, maybe you guys are right. Trying not to sulk hahaha (single tear).

And fwiw sorry for confusion our total yearly salary is $115k I live in Tennessee.

 

[MileUnderDude]

If I didn't have a 22,000 personal line of credit from my bank I probably would think twice.

I just don't want FSD to go up anymore than it already has.

This is probably going to sound stupid, but back in 2015 my brother and I had decided to buy a house even though I knew the company I worked for was probably going to fire me in a matter of months, but I knew we had to get the hell out of my parents house before we lived with them permanently lol. So we made it happen. I was fired 3 months later and no savings and a $586 a month truck payment. I didnt panic but knew I had to move my butt with a mortgage to pay, so I looked for another job and ended up finding one within weeks. Had I been at my parents still, I might have not been so motivated.

We sold that house for 100k profit split in 2018, met my wife, and everytime a fire came up that got in the way of my goals I put it out. Had an hvac worth 16k and and 8k credit card last year but knocked it out along with my wife from sydney's home visit (hasnt seen her fam in 3 years poor thing - damn you covid) by cash-out refinancing the home last September and droped the interest rate to 3% which only increased our monthly payment from $1966 to $2097 (not to mention I don't have a car payment nor have had one in a while).

The above isnt to brag believe me - I've been beat down too much by life and too tired to brag (and where does bragging get us, really?). I'm one of those psycho-motivated millenials that will show even a traditionalist in their prime what hard work actually means. I think for me its not about money anymore or how to survive. I just do and sacrifice all thats required of me and am ready to treat myself. But, maybe you guys are right. Trying not to sulk hahaha (single tear).

And fwiw sorry for confusion our total yearly salary is $115k I live in Tennessee.

Worst case scenario you could do well as a Ride Share/Delivery driver if the impending economic decline did result in you or your wife being laid off or demoted.

 

[Daekwan]

It's honestly not that serious dude. At the end of the day, It's just a car. Stop thinking about all the other stuff and Ask yourself if you want to buy an $85K car right now? Unless you have a ridiculously high salary with guaranteed employment and/or a ton of cash to burn.. it's just not a smart decision. The easy answer is no.

Someone else suggested looking at the long-range version and skipping the FSD package (which is honestly a bunch of gimmicks anyways) and you can knock the price down a lot. So then the question becomes do you want to buy a $70K vehicle right now? And once again, unless you have a high salary and/or a ton of cash to burn.. it's still not a smart decision. Mainly because its honestly not a $70K vehicle. Its a $50K vehicle that has had the price increased by about $17,000 over the past year and the car is virtually the same product. The not-so-easy answer is still no.

That said it's your money and you deserve to spend it on whatever you'd like. So ultimately none of our advice matters. Personally, I'd sit on the fence for another year or two and see what's going to happen with the economy, looming tax credits, interest rates, etc. Keep driving the Accord you already have (gas prices have already fallen quite a bit) and most importantly keep saving money. At some point, you can ask the question again and that answer will probably change from no.. to yes. Or more likely will change to "why not".

 

[MayorSexyTown]

I vote dump the FSD and put a deposit on the Long range Model Y. In the months it’ll take to come in work on killing the credit card debt and rainy day fund. Also you might get the $7,500 back next year for tax credit. I’m 39 with 3 young kids and got Performance Y about 4 weeks ago. Incredible machine, I literally find things to do just to drive it. Budget for wall connector and install prior to coming in. I’ve had that for about 1 week and it gets rid of range anxiety as it charges so quick on 60 amp (48 amp usable) breaker.

 

[Macgyverfever]

I vote dump the FSD and put a deposit on the Long range Model Y. In the months it’ll take to come in work on killing the credit card debt and rainy day fund. Also you might get the $7,500 back next year for tax credit. I’m 39 with 3 young kids and got Performance Y about 4 weeks ago. Incredible machine, I literally find things to do just to drive it. Budget for wall connector and install prior to coming in. I’ve had that for about 1 week and it gets rid of range anxiety as it charges so quick on 60 amp (48 amp usable) breaker.

I have the charger already installed ;-(

 

[legendsk]

Put one on order, immediately. Think of it as buying a $250 lottery ticket, pricey, but with great odds. When it is ready for delivery you will have a much better idea about whether buying it is a good idea or not. Almost certainly there will still be enough demand for the car that you can accept it and sell it for a profit, or sell your place in line. Traditionally, car's are depreciating assets and poor investments. Tesla's currently and probably for the near future, are appreciating assets and with a locked in price during high inflation, you can't hardly get hurt.

In the meantime, start putting that $1,300 monthly payment away. Set up an investment account if you don't have one and start buying Tesla shares. It really doesn't matter what they cost, they are going to increase so much. If you get a VIN assigned in 6 months, you will have saved up $1,300 x 6 = $7,800 and learned that you can handle doing without $1,300 per month that you have been spending previously, (and whether you really want to or not). In 6 months your stock will be worth so much that you will likely reconsider investing in a car and want to continue buying Tesla stock.

By the time the VIN is assigned if you have been unable to save $1,300 per month, then you will know that you can't handle the car payment and must not try it. You will likely still be able to sell the car for a profit and get a few hundred or maybe even thousands for your $250 investment. If something drastic happens between now and then so you can't claim and sell the car or find a buyer, then you will lose the $250, but it will have been a grand adventure and you will have learned lots. Good Luck.

 

[Macgyverfever]

Thanks for the advice, everyone! You guys are awesome taking time out of your lives for my stupid question. I have until September to ruin my family's lives so we'll see how we go!

 

[Macgyverfever]

Put one on order, immediately. Think of it as buying a $250 lottery ticket, pricey, but with great odds. When it is ready for delivery you will have a much better idea about whether buying it is a good idea or not. Almost certainly there will still be enough demand for the car that you can accept it and sell it for a profit, or sell your place in line. Traditionally, car's are depreciating assets and poor investments. Tesla's currently and probably for the near future, are appreciating assets and with a locked in price during high inflation, you can't hardly get hurt.

In the meantime, start putting that $1,300 monthly payment away. Set up an investment account if you don't have one and start buying Tesla shares. It really doesn't matter what they cost, they are going to increase so much. If you get a VIN assigned in 6 months, you will have saved up $1,300 x 6 = $7,800 and learned that you can handle doing without $1,300 per month that you have been spending previously, (and whether you really want to or not). In 6 months your stock will be worth so much that you will likely reconsider investing in a car and want to continue buying Tesla stock.

By the time the VIN is assigned if you have been unable to save $1,300 per month, then you will know that you can't handle the car payment and must not try it. You will likely still be able to sell the car for a profit and get a few hundred or maybe even thousands for your $250 investment. If something drastic happens between now and then so you can't claim and sell the car or find a buyer, then you will lose the $250, but it will have been a grand adventure and you will have learned lots. Good Luck.

Sounds like a plan!

 

[MayorSexyTown]

I like Legendsk point of view. I got a new job so I could roll all my 401k into Tesla For long haul. Figured I’d rather invest in something I cared about vs some breadbasket of garbage I don’t. Might work, might not but at the end of the day I made the decision and own it.

Got tired of waiting for Cybertruck and pulled trigger on Model Y while I wait. Been following Tesla daily through Youtube videos and was concerned it wouldn’t live up to my expectations. Absolutely adore the car. Biggest issue for me is I HATE the turn signal stalk. Wife says I’m being too picky but it irritates still.