Model 3 or wait for Model Y and other questions

[daniel]

It sounds like the Y is more what you want. So my advice, if you can afford it, is to buy the Model 3 now, and in two (?) years when the Y becomes available in your region, trade up. My reason for this recommendation is that you get to drive electric for those two years.

OTOH, I always advise against buying any new car if you need to borrow to buy it. If you need to go into debt to buy a car but you need a car, buy a used econobox such as a Civic or Corolla. Or, in your case, since you have the Prius, stick with it until it dies or until you can afford a Tesla without having to borrow.

Full disclosure: I am passionately, intensely opposed to debt. Don't buy anything you cannot afford to pay for unless you absolutely need it, or it will pay for itself.

I drive a Tesla Model 3 with EAP and upgraded interior and I love it. It is a wonderful car.

 

[Vostok]

Full disclosure: I am passionately, intensely opposed to debt. Don't buy anything you cannot afford to pay for unless you absolutely need it, or it will pay for itself.

Well there is good debt and bad debt. Good debt is using it to buy an appreciating asset (e.g. house, maybe TSLA). Bad debt is using it to buy a car, since they rapidly drop in value the instant you take possession. As you say, unless you absolutely need to and have no other option.

 

[adee]

Well there is good debt and bad debt. Good debt is using it to buy an appreciating asset (e.g. house, maybe TSLA). Bad debt is using it to buy a car, since they rapidly drop in value the instant you take possession. As you say, unless you absolutely need to and have no other option.

I agree with the previous post (i.e., don't buy what you can't afford). I had fully paid a Model 3 SR+ and was about to take delivery in April 2020. However, due to changes in my circumstances at the beginning of the pandemic, I canceled my order and got my money back 100%. What other car companies would refund your money once you sign the contract. I put the Model 3 money into Tesla stock (TSLA) and today I can get a new Tesla with the capital gain. However, with TSLA's potential growth in the next 5 years, it is probable that the gain will again exceed the price of a new Tesla. Hence, I will probably finance the purchase this time and let TSLA pays for Tesla.

Anyway, going back to the original topic, I am now considering to get the Model Y since it seems so close, yet it is still uncertain. It can arrive next month or another year. The reason I want the Y is for the extra storage. I currently drive a wagon and really find the storage useful from time to time, so I may miss that with Model 3. However, I also want to take advantage of the low price and the NSW rebate for Model 3 SR+, so I might just go ahead with the 3. Ideally I like the LR but $3000 is a good incentive for me to go with SR+. I also think the price is at the lowest point today. When it was reduced to below $60K, AUD/USD was in the high .70s and now it is in the low .70s. The Model 3 SR+ is actually cheaper than Nissan Leaf e+ at $65K driveway with less range than the SR+. I won't be surprised if the price is increased again once the current batch is sold out.

Any advise whether I should wait for Model Y or get the 3.

 

[Chuq]

I hadn't noticed this thread before, but figured that given my current buying status I thought I'd contribute!

After reserving on day 1 (2016), I finally put in my order for a Model 3 SR+ on April 25 this year. It was really stretching the budget (1/3rd deposit, 2/3 financed over 5 years). I wanted the Model Y [closest equivalent capacity/functionality wise to the last car I had, a Mazda6 station wagon] but both the wait, cost, and likelihood of there even being an SR version at all were all against me.

However - only a few days after placing the order, I found that my state government had an election promise to implement a stamp duty waiver for EVs, so I put my order on hold (and a few weeks later, cancelled). Over the coming months, there were a number of other things that tipped the scales further in the direction of waiting for the Model Y: The government won the election, and the stamp duty waiver was implemented as promised; the Model 3 price dropped; my employer joined the Tesla Corporate Program; NSW and Vic instituted incentives for vehicles under $70k (although I don't live in either, it provided Tesla a reason to keep the Model Y starting price in that range); I was accepted into a trial which included a free 7 kW home charger; the first Model Y RHD country opened up and the SR was included, as well as the Australian importation and approval of the Model Y (again including the SR).

And while waiting for all these things to happen, I of course was able to save a bit more and increase my deposit amount (maybe as much as 1/2 the deposit amount now). And while I'm waiting, that deposit is offset against my mortgage so at least it's doing something worthwhile!

For the last 12 months the Leaf has been my only car, and it's been a struggle, but my plan is to keep the Model Y for a long time - as long as 10 years - so I think a few extra months now will be worth it in the long run.

I'm looking forward to being able to hold me and my three teen/soon-to-be-teen kids and cargo in comfort; perhaps doing some ridesharing (one weekend a month would cover the repayments!); glamping under the stars with a mattress in the back; and the big one, actually go on road trips again!

 

[daniel]

Well there is good debt and bad debt. Good debt is using it to buy an appreciating asset (e.g. house, maybe TSLA). Bad debt is using it to buy a car, since they rapidly drop in value the instant you take possession. As you say, unless you absolutely need to and have no other option.

Whether an asset will appreciate or not is subject to the vagaries of the market. I would strongly advise against going into debt to buy stock or real estate other than a personal home. Debt is (IMO) acceptable when it's to buy something necessary for work (a car for transportation, tools needed for a job, etc) or other necessities. A place to live is a necessity, so borrowing to buy a house is acceptable. But debt is never good. The best it can be is acceptable. Again, this is my opinion.

I know somebody who bought a second home, not to live in, but to rent out, saying that "real estate never goes down." This was shortly before the sub-prime debt crisis when the bottom fell out of the real estate market. This person lost a lot of money.

I had a relative who was always in debt, running credit cars up to the max, and was always stressed out over money. This person always had more stuff than I did, but was never happy. I had less stuff, but no debt, and therefore no worries.

 

[positiv]

Any advise whether I should wait for Model Y or get the 3.

This is a bit of a silly question because outside of the different body shape, they are the same car. So your answer depends on whether you'd prefer a sedan or a crossover/suv.

If you want a SUV: Wait
If you want a sedan: Buy

 

[Max_G]

I can relate to the pain WRT to waiting for a MY or buying a M3... but for other reasons.
I can buy the car outright, but need to reduce my tax burden, hence, require the expense.
With the diverse shortages, global supply chain issues, energy crisis, etc. plus the MY delivery in the US chaining from 4 weeks to April next year (yes we get the RHD form Shanghai, but hey have rolling power outages and supplier issues), has me worried that I won't get a MY this financial year. Hence, my thinking to get a M3 now, order a MY, and when it becomes available sell the M3.
I will make that call this week. There is too much uncertainty in the world ATM.

 

[strdst]

Well there is good debt and bad debt. Good debt is using it to buy an appreciating asset (e.g. house, maybe TSLA). Bad debt is using it to buy a car, since they rapidly drop in value the instant you take possession. As you say, unless you absolutely need to and have no other option.

Disagree. Debt is a tool, like a hammer it can be good or bad depending how it's used.

It can be used to increase purchasing power or hedge against inflation, or simply for opportunity cost. Buying a car on finance is not a bad financial decision (depending on your circumstances). For example, 2.9% finance on Tesla is better than anywhere else, I can make more than 2.9% over the life of the loan and come out ahead than if I'd paid cash.

This obviously depends a lot on personal circumstances, but it's a little over simplistic to say debt to buy a car is bad in my opinion.

 

[EcoCloudIT]

Disagree. Debt is a tool, like a hammer it can be good or bad depending how it's used.

It can be used to increase purchasing power or hedge against inflation, or simply for opportunity cost. Buying a car on finance is not a bad financial decision (depending on your circumstances). For example, 2.9% finance on Tesla is better than anywhere else, I can make more than 2.9% over the life of the loan and come out ahead than if I'd paid cash.

This obviously depends a lot on personal circumstances, but it's a little over simplistic to say debt to buy a car is bad in my opinion.

Agreed, I do a lot of km’s in my car… if I saved and saved and saved to eventually buy a Tesla outright and in the mean time used a crap box I would spend more on the petrol than the Tesla repayment….not all debt is bad.

 

[paulp]

Disagree. Debt is a tool, like a hammer it can be good or bad depending how it's used.

It can be used to increase purchasing power or hedge against inflation, or simply for opportunity cost. Buying a car on finance is not a bad financial decision (depending on your circumstances). For example, 2.9% finance on Tesla is better than anywhere else, I can make more than 2.9% over the life of the loan and come out ahead than if I'd paid cash.

This obviously depends a lot on personal circumstances, but it's a little over simplistic to say debt to buy a car is bad in my opinion.

Debt can be a good tax deduction (ask your accountant first), and my investments all earn way more than current car interest, so debt in that environment makes good sense.

 

[paulp]

Whether an asset will appreciate or not is subject to the vagaries of the market. I would strongly advise against going into debt to buy stock or real estate other than a personal home. Debt is (IMO) acceptable when it's to buy something necessary for work (a car for transportation, tools needed for a job, etc) or other necessities. A place to live is a necessity, so borrowing to buy a house is acceptable. But debt is never good. The best it can be is acceptable. Again, this is my opinion.

I know somebody who bought a second home, not to live in, but to rent out, saying that "real estate never goes down." This was shortly before the sub-prime debt crisis when the bottom fell out of the real estate market. This person lost a lot of money.

I had a relative who was always in debt, running credit cars up to the max, and was always stressed out over money. This person always had more stuff than I did, but was never happy. I had less stuff, but no debt, and therefore no worries.

No you are completely wrong. I have developed significant commercial real estate over the years using nothing but debt, and its earned me a fortune. I’m now without debt. Use debt wisely, make good choices, invest at the right time. Sell at the right time and in product that people want but cant get, and you’ll make a fortune.

 

[GrimRe]

100% agree @paulp ... you'll never go bankrupt by not leveraging yourself but you'll also never get wealthy. Every person with a sizeable portfolio of investments (property, shares, businesses etc) will have at some point leveraged themselves (i.e. gone into debt) in order to more quickly own the asset and compound the gains over a longer period. As long as these gains outpace the interest on the debt and you can service the loan repayments there is no limit to how much money you can make. For every success story such as yourself, there would be at least as many people who have lost everything with one really bad levered investment that brought down everything else.

I think that investing and to a larger extent money in general is a deeply personal affair. Its built up based on what we experience in our lives and so every single person has their own unique perspective on what's a good investment. I don't see any harm in promoting a super conservative approach to finances especially if you've witnessed what can go wrong. This can at least serve as cautionary tale to others in order to balance out some mega aggressive types chasing a lot of net wealth increase quickly.

Personally, I believe people should take the unacceptable outcomes off the table first no matter the premium. If you cannot lose your house then you must make investment decisions that cannot possibly lead to that outcome even if it means taking no additional debt. For everything else, understand the possibilities of a certain outcome and have a plan when and if it occurs. If you need to very rapidly de-lever yourself, understand which holdings to liquidate first and when this action should be triggered.

Having a plan of buying at the right time, selling at the right time and always have the liquidity available to service your lifestyle and debt obligations is not a full formed plan. You need to understand what you will do if any of those things goes wrong because they absolutely will at least once in your investing career.

 

[paulp]

I recieved a single piece of advice a couple of decades ago. Just one sentence and from a very successful migrant that arrived with nothing.
”only have debts that someone else is paying off for you”

 

[GrimRe]

I recieved a single piece of advice a couple of decades ago. Just one sentence and from a very successful migrant that arrived with nothing.
”only have debts that someone else is paying off for you”

That may have been wise words in 1960s Australia but not necessarily today. Who's to say buying NFTs today isn't the equivalent to buying CBD commercial real estate in 1961?

 

[daniel]

100% agree @paulp ... you'll never go bankrupt by not leveraging yourself but you'll also never get wealthy.

And for every person that gets wealthy this way, a thousand go bankrupt. Really successful enterprises are rare. Most start-ups fail. And most wealthy people don't get that way through debt. Most wealthy people inherit it, marry into it, or steal it.

 

[paulp]

And for every person that gets wealthy this way, a thousand go bankrupt. Really successful enterprises are rare. Most start-ups fail. And most wealthy people don't get that way through debt. Most wealthy people inherit it, marry into it, or steal it.

my wealth is not through inheritance, marriage, or theft. I know a significant number of people in the same circumstance. I’ve worked incredibly hard for every dollar and importantly I‘ve made many very sensible financial decisions involving debt that I could control using the skills and knowledge that I have. I’ve made sacrifices and endured the tough times.The only reason to fail is refusing to seek assistance when you simply dont have the skill

 

[daniel]

my wealth is not through inheritance, marriage, or theft. I know a significant number of people in the same circumstance. I’ve worked incredibly hard for every dollar and importantly I‘ve made many very sensible financial decisions involving debt that I could control using the skills and knowledge that I have. I’ve made sacrifices and endured the tough times.The only reason to fail is refusing to seek assistance when you simply dont have the skill

I do not doubt that you worked hard and made sacrifices, etc. Note that I didn't say that all wealthy people inherited , married into, or stole it. I said most. And the people who truly work the hardest and endure the most hardship are among the poorest. In North Dakota I worked in an office that provided services to migrant farm workers. These people do back-breaking work from sun-up to sun-down in the intense heat of summer for very low pay and under bad conditions.

The extremely rare person who scrabbles from poverty to wealth should recognize that luck (being at the right place at the right time) and education (which the poorest are denied either by social policies or by circumstances) play an enormous role in their success.

 

[EcoCloudIT]

I recieved a single piece of advice a couple of decades ago. Just one sentence and from a very successful migrant that arrived with nothing.
”only have debts that someone else is paying off for you”

Hahaha, which includes the renters and and the ATO (reducing my massive tax obligations)….like or loath it property investing in this county works for people with high incomes looking for ways to reduce it….

 

[EcoCloudIT]

And for every person that gets wealthy this way, a thousand go bankrupt. Really successful enterprises are rare. Most start-ups fail. And most wealthy people don't get that way through debt. Most wealthy people inherit it, marry into it, or steal it.

Totally a load of bull, I am self made and have done by leveraging good debt in/out at the right times….

 

[cafz]

Totally a load of bull, I am self made and have done by leveraging good debt in/out at the right times….

That may be so, but I don't see how it shows anything about "most".