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Subjective Question: Minimum Annual Salary to Buy Perf 85kWh w/options

Discussion in 'Model S: Ordering, Production, Delivery' started by rorystewart, Nov 22, 2012.

  1. rorystewart

    rorystewart Member

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    Me: Want to own this car but feel my annual income might be too low. I could technically afford it and still live my same life (albeit with far less $ going to savings), but I'm concerned about being judged by co-workers and peers as someone who spent more money on a car than he should at his income level.

    Subjective question for you: Assuming someone has no money saved, and is financing the entire car (Performance), what is the minimum annual salary that person should have in your opinion?
     
  2. Discoducky

    Discoducky Active Member

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    With all other thing being equal, its still a hugely loaded question, but ill bite: 60K

    Since its about half the total financed cost
     
  3. jerry33

    jerry33 S85 - VIN:P05130 - 3/2/13

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    That depends on how you finance it. Basically you do not want to be in a position where if something bad happens (RIF) you lose your car and/or house (assuming you're not renting). There is a thread here.
     
  4. napabill

    napabill Active Member

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    "what is the minimum annual salary"

    $0. But, of course, I'm retired!
     
  5. rorystewart

    rorystewart Member

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    Thx for sharing!

    Funny. I always thought that it was the opposite. Like your car should at least never be worth more than half of your annual salary. Thus 180K would be the bare minimum acceptable salary. As I think back about it, I cannot remember where I got that idea in my head though. This is one of the reasons I posted this thread. I am curious what the average opinion is on the matter.
     
  6. Velo1

    Velo1 Member

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    There are too many variables to answer specifically, such as current debt load, number of kids still on the payroll, etc., but 60k sounded a bit low to me. I'd say something closer to 75k.

    Toward co-workers or peers, just tell them you got huge tax credits, and there is the offset in annual expense for gas relative to your old car, minimal upkeep, etc. You know, just answer like a politician and use fuzzy math.

    Whatever you do, run the financial numbers and make an objective decision. Good luck
     
  7. rlawson4

    rlawson4 Member

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    I would say at least 3X the price of the car. Of course other spending matters as well. Just an opinion
     
  8. dsm363

    dsm363 Roadster + Sig Model S

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    I can't really give a number but feel that if you are financing the entire cost of the car because you have to that's entirely different than if you are financing the entire cost of the car because the rates are so low it works out better for you. A financial advisor who is familiar with your exact financial situation could provide better advice too.
     
  9. Zythryn

    Zythryn MS 70D, MX 90D

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    If financing, I don't see why you would upgrade to performance with all the options. Especially if concerned what others would think.
    It also depends a lot on why you are buying it.
    If you are buying it to stop damaging the next generation (either on environmental, financial, or national security) or to try to prevent deaths of soldiers being put in harms way, AND are not afraid to tell people, then I don't think there is any reason not to buy it.
    As a matter of fact, if you can swing it, many would say it is your patriotic/moral duty to do so.
     
  10. bosgig

    bosgig Member

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    Totally depends on your view towards financial margin of safety and your other debt and/or goals. Do you have a mortgage? Other debt payments? Risk to your job? Etc. So only you can answer this question. My advice: if you finance the entire thing, let's just call it $95,000 for lack of a better number (especially since the tax credit comes later) on a 5 year loan at 4%, you're looking at $1750/month. That's $21k/year. No way I'd do that on under $100k pretax. But that's me with my biases and preferences. Let's say you want your payment to be under 20% of your take home pay--I didn't work out the exact effective tax rate and I don't know your deductions, etc., but I'm guessing that's closer to $135k in pretax income. Personally I'd want the payment to be a lower percentage than that, but that's just an example. Just my two cents--again, depends on your comfort level with debt, job security, etc. Totally your call, as you know. I wouldn't worry about your co-workers. Just tell them you bought the stock the day of the IPO and have made some good dough off of it!
     
  11. Kevin Harney

    Kevin Harney Active Member

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    Of course YMMV but general rule of thumb is that your car payment should not be more than 25% of your take home pay.
     
  12. mknox

    mknox Well-Known Member

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    Since a lot of US oil is produced domestically, and the largest source of oil imports is from Canada, I hope those US soldiers aren't planning an incursion into Canada. Seriously, I never subscribed to the theory that these wars are all about oil, and I think it trivializes the work that the US military takes on to ensure the security and freedoms that we enjoy. As an American (living in Canada), especially on this day, I am thankful and grateful for the sacrifices these brave men and women make on our behalf.
     
  13. Zythryn

    Zythryn MS 70D, MX 90D

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    Please don't get me wrong. I in no way think that all wars we fight are strictly for oil. But I do believe some of our soldiers and citizens are put in harms way to protect and keep calm oil producing regions.
    Why do we have the Navy stationed in the straights of Hormuz?
    Why do you think we invaded Iran when the annexed a little tiny country which just happens to produce a huge amount of oil?
    Are, maybe to 100% for oil, but even partly due to oil is too much expense in money and lives.

    As for our trade deficit, I would rather, if we are going to loose money, that it go to Canada. But I would far rather have a healthy trade balance where we didn't have a deficit
     
  14. Zextraterrestrial

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    Well, my highest pay(family) is/ will be this year, and very close to the price of my model S, if not a little less due to the P and all (damn u Tesla)

    edit: war is stupid period
     
  15. CapitalistOppressor

    CapitalistOppressor Active Member

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    Lol.. maybe it's his patriotic duty to buy the 60kWh or 85kWh. But the Performance model? It is *definitely* the only choice for a true red blooded American.. :cool:

    - - - Updated - - -

    In response to what income is required to purchase a Performance model? With sound household finances a lot of folks even making $50-60k could make the payments.

    That said, I think it would be a horrible decision to make. When you buy an expensive car you are also buying expensive liability. That means, higher insurance costs and potentially devastating insurance deductibles for every scratch, parking lot dent and cracked windshield (to say nothing of a devastating accident). The cost of new tires alone (which you will replace with breathtaking frequency) is shocking, even if you are making a six figure salary. Do you seriously want to get into a situation where you are driving around your $100k car, with bald tires, dings, scratches and registration that's 6 months out of date because of unanticipated costs being piled on top of the hefty financial strain of the monthly loan payments?

    And I'm not even mentioning the risk of some horrible design flaw where the battery spontaneously, and explosively, combusts and leaves a smoking crater in your driveway, and you are left with having to fill in the hole yourself as a bankrupt Tesla gets liquidated. Even if we set aside the wingnut scenario's, there could be some recall that crushes Tesla and leaves you with nothing.

    Plus, the money you spend on any car over basic econobox transportation is just a sunk cost. In the case of a $100k car, it will be worth something like $10-15k in 6-8 years. Unless you think you can drive it (and maintain it) for 30 years that's a huge amount of money that could have made a substantial impact on your retirement.

    Basically, I think the old rule applies here. If you are wondering what the cost is, it's probably too much.
     
  16. Omer

    Omer Member

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    I think no savings might be a bigger issue than income. Unless you are in a position where you have personal attributes that allow you to feel secure with no savings (ie you are finishing up your engineering PHD from Stanford in a field that's causing a huge bidding war among all the Valley tech firms for your services), I personally wouldn't consider any Tesla at all. If the desire for a Tesla is for environmental reasons, a Leaf or Volt can be leased in your area with CA incentives for $200 - $350 / month.

    Either way, living in SF, cost of living is significantly higher than other areas of the country which should also play a roll in your income/purchase equation.
     
  17. mknox

    mknox Well-Known Member

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    There are so many factors beyond income, with cost of living being the biggest IMHO. I'm at a point in my life where the kids are through college, the mortgage is paid off, I have good retirement savings and pension plans in place, a second income propery and so forth. My salary is good, but probably not even close to what some on these forums make, but with my cost of living expenses so (relatively) low, buying a Model S is easily do-able.
     
  18. Johann Koeber

    Johann Koeber Member

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    I find it interesting to read this thread.

    Money means a lot of different things to different people.

    To me a car is not an asset, but a liability. It does not put money in my pocket, nor does it appreciate in value (ok maybe very log term, but for the moment).

    It is a liability because it takes money out of my pocket.

    So - I will not borrow to buy liabilities. I borrow ONLY to buy assets. More rules apply.

    My three rules for buying cars (take this a little tongue-in-cheek)

    1 never finance, save up first
    2 never spend more than 6 months of your net income on a car
    3 its perfectly ok to get a Model SP as long as you stick to rules 1 and 2

    I have seen so many people get into financial difficulties because of too much spending - not worth it. Not for a motor vehicle - not even a tesla.
     
  19. PRJIM

    PRJIM Member

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    While in principle I agree with this, it may make sense to finance in some circumstances. In the US it is possible to obtain financing for a vehicle at an interest rate of around 1%. It may make sense to finance at these low interest rates, as it is cheaper than using your own money.
     
  20. Kevin Harney

    Kevin Harney Active Member

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    I said 25% earlier but this article puts it at 10% to 15% for ALL of your total automotive expenses !! Yikes....
     

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