I keep finding articles online that say you shouldn't spend more than 20% of your monthly income on car expenses. With this rule, I am far from being able to afford a Model 3. But the thing is is that I can pay off the estimated loan, insurance, and electricity costs only 6 days into the month. I live with my parents, and don't spend money on things I don't need. And even if I lived elsewhere, I would still have plenty of money left over each month.
Another thing, a ~$20,000 Honda Civic would cost me $250 less per month than a Model 3 (including insurance / gas). Taking the $3,750 tax credit into account, I would save $750 going with a Model 3 over a Civic over the first year of ownership, which is wild to think about.
I also cannot get approved for a loan, and I dont understand why. The loan payment would be hypothetically paid off within 4 days of the month.
Am I just an idiot thinking that a Model 3 is easily affordable for me?
You mention that you live with your parents, and can pay the loan and insurance with 6 days of income if you were to get a loan. One mistake you are likely making is, do you actually intend to live with your parents for the entire time you will have a loan on that car? My bet is "no"... although the younger generations are staying at home in general longer than older generations did.
Thats actually smart... mooch off your parents as long as you can, and save money. There could be a few reasons you couldnt get the loan, but given that you live at home and "dont spend money on things you dont need" its likely you have little to zero credit. Having no credit is pretty much as bad as having bad credit, when it comes to larger purchases.
Thats one reason I got my son a credit card at 18 (helped him get a secured credit card with his own money, with a 500 deposit and a 250 limit) and showed him how credit works from a monthly payment standpoint etc. After a year, at 19, he got an unsecured credit card and did what I mentioned, which is USE the card but pay off the balance every month (thus avoiding interest charges).
Anyway, if you have no credit, you are going to need someone to co sign, OR put down a large down payment. Thats the other path forward. If you put down 30% on the car, you could likely get the loan.. but the interest rate may not be favorable. Your BEST bet would be to finance a used car, maybe something with a 10k or less price, and pay that off in a couple of years or less. If you do that, you will likely be able to get a new car on your own at the end of that, provided you dont have any late payments.
Since you live at home, sit down and talk to your parents about credit (making an assumption here that your parents might have more experience with credit than you do, which may or may not be the case). Its much better for you to buy that cheaper used car on your own, than ask your parents to co sign for an "expensive" car. Many people dont understand what co-signing actually is (the co signer is promising to pay if you cant). Unless the co signer can absolutely afford to pay for the item 100% on their own in addition to their regular expenses, they should not consider co signing for anyone... even family.
I didnt get my first "new from the dealer" car until I was in my late 20s. If I was in your shoes, I would stay at home, save money longer, and if I really wanted that tesla, I would budget to put at least 30% down on it, and save till I could do that.
