Tesla buying money guilt :-(

[Stranger Dings]

I was nervous as hell before getting my Tesla. It didn’t take long for me to get used to the new financial situation and I am delighted I made the jump.

Initially, it was like the financial equivalent of range anxiety, but after a short while I was used to it and glad I’d made the right choice.

 

[Jason71]

Just wondering how many of you out there are buying Teslas on normal incomes and do you feel guilty about it? I keep going back and forth between excitement at getting a Model 3 LR, and guilt/worry about it being a stupid financial decision.

My personal situation is that I'm a higher rate taxpayer, but only just. I am in my late-30s, have no kids (nor want any), am dating but not cohabiting. I don't have any debt except my mortgage, which is about 75% LTV on a 2-bed property in a reasonably priced area (so, not London!). I currently have a VW ID.3 that I just sold for £33k, and a motorbike that is worth between £15-18k that I'm intending to sell this summer as I've fallen out of love with motorcycling a bit. The money I'm getting for the car and bike will essentially pay for the Tesla, and my excuse for getting the Tesla is that it will combine the 'fun vehicle' factor of my motorbike with the day-to-day practical car factor of my ID.3 into one vehicle. I have about £50k in investments in an ISA, £5k emergency cash fund, and I'm saving/investing about 20% of my salary each month. I also pay into my workplace pension.

So part of me thinks, I can afford this. It will make me happy, life is short, why shouldn't I buy it?

But another part of me feels sick at the idea of blowing £50k on a car. I drive around my neighbourhood, which isn't an affluent area, and see very few new cars, let alone new cars as expensive as a Tesla and think, am I mad? I could take the £50k, add it to the £50k I have in investments, and pay off my mortgage in a few years probably. I have to admit, I couldn't sleep last night with all the worry going around my head that I'm being far too extravagant for my means in getting this car. Was wondering how everyone else justifies it? Or maybe you're all like "meh, I earn £200k per year working in the City... £50k is nothing to me", or "it's a company car, I'd never get it as a private buyer"...?

I also know that an obvious partial solution is to get the RWD version instead of the LR. But I'll still feel guilty about buying a £43k car too... Also, the performance of the dual motor forms part of my justification for buying the car (the motorcycle replacement bit), and I'm a real audio snob and missing out on the premium audio system would be something I'd regret every single day.

its not blowing 50K its only blowing the depreciation + whatever interest you could earn on the difference between the 50K and a cheaper car.
You can sell it anytime and re-coupe a large proportion of what you spent if necessary.

 

[C225]

I'm mid-30's on a good Salary (Just below high rate here in Scotland), only debt is Mortgage on a house about 70%LTV at minute. Single and no real prospect of having kids now but you never know i suppose

My attitude is and was at the time of buying was bugger it, most expensive car but i can afford it so why not can't take money with you. Same reason i take a couple big holidays each year (When allowed)

 

[Rooster6655]

A better way to think about this is in terms of actual cost over say 3 years, depreciation on Tesla's is nothing like the typical ICE car for several reasons but the major one being a set RRP which isn't hidden behind many dealer fees.

A simple cost example of my ownership over 2 years
Tesla
Cost £50k
Valued £45k
+ Fuel Savings 30k miles vs ICE £5k
=£0

ICE car example
£20k ICE
valued £14k
=-£6k

Another comparison would be to other EVs but I expect depreciation to be worse than a Tesla due to the dealership pricing factor

 

[Rooster6655]

But another part of me feels sick at the idea of blowing £50k on a car. I drive around my neighbourhood, which isn't an affluent area, and see very few new cars, let alone new cars as expensive as a Tesla and think, am I mad? I could take the £50k, add it to the £50k I have in investments, and pay off my mortgage in a few years probably. I have to admit, I couldn't sleep last night with all the worry going around my head that I'm being far too extravagant for my means in getting this car. Was wondering how everyone else justifies it? Or maybe you're all like "meh, I earn £200k per year working in the City... £50k is nothing to me", or "it's a company car, I'd never get it as a private buyer"...?

The neighbourhood thing is something I thought about before when I was thinking about buying an S but with the 3 it can be more justified especially now they are becoming more popular.

One thing to mention, as I am 10 years ahead of you, is really plan your pension, far more tax efficient than paying tax then investing in ISA or other savings. If you are just into higher rate maybe using pension to keep under that threshold.

Some wise words!

 

[gangzoom]

I am in my late-30s, have no kids (nor want any), am dating but not cohabiting.

We ordered our Tesla before our daughter was born as we knew if we waited we simply wouldn't be able to justify it. If you aren't planning kids you will have saved £1000/month nursery fees, any future school/Uni fees, and than the time/emotional commitment needed. What else are you going to spend ££££ on?

Money is purely a human abstract has no real meaning, but time waits for no one and you will never get it back. Its hard to me to think where the last few years have gone, but would having an extra £££££ in an ISA make me happier now versus memories/moments the car has delivered?? Not a chance!!!

So although we wouldn't spend even £30K on a brand new car now with house renovations looming, we have zero regret of buying our Tesla for what seem liked a horrific amount of £££££ years ago .

 

[AutomaticMan]

Thanks everyone, you've made me feel a bit better! I think I just woke up in a "oh god, what am I doing, I should invest this money not spend it!!" cold sweat last night I need the guilt part of my subconscious to get with the programme on all this. Though I suppose I have given myself the best chance of getting the answer I really want by asking the question on a Tesla forum... if I x-posted this to a 'bangernomics' forum I may get different views! haha

I suppose I see a lot of friends around my age with similar salaries driving cheap cars and wonder what I'm doing. But those friends usually have a bunch of kids so live in much bigger houses. Though, still, a house is an appreciating asset so a more sensible investment than a car. But even so, there are downsides to not having kids of no-one to come visit me in the care home in my final years, so I guess I should take advantage of having the positive side of having more money to spend on luxuries in my 30s.

And of course, you're all absolutely right that I'm not setting fire to £50k and it will still retain some of its value. I guess I'm just thinking, if in 4 or 5 years it has lost half its value that is a huge chunk of money gone. And that £25k burned might actually be £35k burned if I'd invested it over that period instead. Though, that said, before deciding to buy the Tesla I already had an ID.3, and if I had stuck with that I'd have lost £15k if it lost half its value anyway.

And from what people seem to be saying I'm this thread, maybe I'm being pessimistic about Tesla depreciation? But I do plan to add miles to the thing! What I love to do is long road trips in Europe. Had previously done those on the motorbike, but the Tesla will be the vehicle of choice for it now. So as well as normal day-to-day mileage, my Tesla will be getting a few long distance trips added to the odometer as well!

One thing to mention, as I am 10 years ahead of you, is really plan your pension, far more tax efficient than paying tax then investing in ISA or other savings. If you are just into higher rate maybe using pension to keep under that threshold.

Oh yes, I absolutely do need to look into this. I'm actually not over the threshold yet, but will be in a couple of months due to a (confirmed) pay rise that I've been awarded in work. So I know looking again at overpaying into my workplace pension is something I need to research and run the numbers on.

I'd be more concerend about some lout deciding to key the car, and would maybe keep sentry on .

Haha... well yes, it is a concern! I mean, my neighbourhood isn't rough or anything, it's just a normal suburban new build-y sort of development. Young families with sensible cars rather than wealthy people with expensive cars let's say. Nevertheless, I'm planning to get a security camera with a floodlight covering my driveway, so I don't have to keep spending the electricity keeping Sentry Mode running all the time while my car is at home

 

[pgkevet]

Just wondering how many of you out there are buying Teslas on normal incomes and do you feel guilty about it? I keep going back and forth between excitement at getting a Model 3 LR, and guilt/worry about it being a stupid financial decision.
.....

There's a lot of ways of looking at stuff but whatever you do the one consistent thing is that government will screw you sooner or later
In my thirties, I wouldn't have considered blowing that sort of percentage of earnings on a car. In my case the decision was to go self-employed, build up a good business and shove excess loot into assorted pensions and savings. Of course, you have to live long enough to finally reap some benefit whilst parting with large sums of your hard-earned in taxes and fees.
The fact that a 3 holds its second-hand price at the moment doesn't mean it will continue to do so. Elon stuffed my S's value by reducing price and bringing in new changes - he could easily decide to do something similar with a techno breakthrough on the 3 or Y.

OK so contemporary values appear (to the outsider) to be live now and live large and worry later. But the better reality with a spare £50K would be a cheap second-hand its-just-transport and use that cash to pay off mortgages before rates go up or (probably better while rates are low) to upgrade to a better house or add value to the one you have with extensions.

 

[C225]

Exactly, i should add about my experience is despite most in my work also having expensive cars, and my previous cars being mainly new Mercedes i am constantly berated for being too rich and i must be earning too much to be able to afford a car like a Tesla. Even though it works out hardly any more expensive in the long run than a similar spec ICE. But everyone is different and has different priorities so do what you can afford and be happy and just ignore any comments people may make.

I suppose I see a lot of friends around my age with similar salaries driving cheap cars and wonder what I'm doing. But those friends usually have a bunch of kids so live in much bigger houses. Though, still, a house is an appreciating asset so a more sensible investment than a car. But even so, there are downsides to not having kids of no-one to come visit me in the care home in my final years, so I guess I should take advantage of having the positive side of having more money to spend on luxuries in my 30s.

 

[pdk42]

Given the low running costs and high residuals of the Tesla, I think you're making quite a decent financial decision. If you have the cash and need a car then forget about the capital costs and think of the total cost of ownership. On that basis, a Tesla is a smart move (if owning any car could ever be a smart move financially).

 

[Sparkeur]

Wish I’d bought TSLA shares. Perhaps it not too late…

Never too late. I thought that when I bought at 300 last year. Buy the next time Musk says or does something daft enough to drop the price for a week or so and you have a fair chance of being in profit this time next year.

 

[HenryT]

Much sensible comment on this thread, the main point being your £50k hasn't gone, its just been re-allocated. V likely much of it could be recovered if needs be, given the way used Tesla prices have been going.

@AnthonyLR made an interesting comment upthread (and @Sparkeur just now too) notwithstanding your attitude to risk, do your own research and other disclaimers, you might want to consider looking at Tesla shares if you haven't already. Long term, it could well mitigate any concerns you have about depreciation on your car and at best could pay for your next Tesla.

Obviously, not a recommendation and the usual recommendation to take advice if you need it stands.

 

[DM206433]

constantly berated for being too rich and i must be earning too much to be able to afford a car like a Tesla

Interestingly since getting the Tesla i've had this off quite a few people, even though they never really said anything when I had other cars not far off the same price, like the Audi S4, etc. I don't know if its jealousy or genuine concerns, either way I choose to ignore them

 

[yessuz]

I actually did shitload of various excel sheets in order to calculate my position.

a week of considerations and so on

 

[AutomaticMan]

But the better reality with a spare £50K would be a cheap second-hand its-just-transport and use that cash to pay off mortgages before rates go up or (probably better while rates are low) to upgrade to a better house or add value to the one you have with extensions.

Yeah, well this is what I'm wrestling with. I could get a cheap banger for now, take that money and be close to being able to pay off my mortgage when my current tracker runs out. Or even if I'm not quite able to pay it off fully, be able to pay off so much of it that interest rates don't hit me too hard however much they go up.

But then, the counter-argument, as others say is that I won't have lost all of the £50k, and can get a lot of it back if I need it to pay down the mortgage rapidly by selling it again.

Much sensible comment on this thread, the main point being your £50k hasn't gone, its just been re-allocated. V likely much of it could be recovered if needs be, given the way used Tesla prices have been going.

@AnthonyLR made an interesting comment upthread (and @Sparkeur just now too) notwithstanding your attitude to risk, do your own research and other disclaimers, you might want to consider looking at Tesla shares if you haven't already. Long term, it could well mitigate any concerns you have about depreciation on your car and at best could pay for your next Tesla.

Obviously, not a recommendation and the usual recommendation to take advice if you need it stands.

Hmm... I've never been brave enough to invest in a single company before! All my investments are in the Vanguard Global All Cap tracker. I've always felt like betting on the stock market as a whole is safer than betting on a single company. Not sure I'd ever move all my investments to a single company, but maybe I'd think of selling off a small percent of them to invest in a company that I believe in and increase my risk profile a bit.

 

[DM206433]

All my investments are in the Vanguard Global All Cap tracker.

I'm quite risk-averse so I do the same (VWRP ETF specifically), however I put a little cash into a couple of other companies which I consider to be speculative/higher risk. Biggest two have been Tesla and Rivian for me. Tesla has obviously done well, Rivian is a very long term bet. In any case, I personally think you're doing it right with the Global tracker.

 

[PITA]

What motorcycle do you own that would fetch £15k to £18k if sold as second hand?

I have a couple of bikes still, so was curious

 

[Sparkeur]

I've always felt like betting on the stock market as a whole is safer than betting on a single company.

It most certainly is and wise advice. However, risk means different things to different people. A balanced portfolio ( whether £1000 or £1,000,000) of investment means you can put 95% (or whatever) into 'safe' long-term stock trackers and then play with 5%. I decided to buy TSLA (along with other single stocks) when I bought my car - because I believe in the company. I also invested into quality stocks which plummeted at the beginning of Covid. Much like the question on this thread (deciding to buy a Tesla), I looked at my overall position, weighed up the pros and cons as I saw them and took what I thought was a good decision, which is of course, very specific to each of us.

 

[ajbrun]

On a serious note, if you've got the £50k in investments plus a cash emergency fund, then spending a bit on a car is relatively risk-free as far as I'm concerned. What else are you going to spend all of this cash on?

This was basically my thinking. Back in 2020, I had a small amount of liquid cash just doing nothing in a bank account. Later that year I invested it and it's grown since. I've now got enough invested to purchase a vehicle out right, but I'm aiming to still go down the loan route to allow my investment to continue to grow. It's the same reason I stopped overpaying on our mortgage - it's an appreciating asset.

Bottom line - whilst a car loan will slow me adding to my investing account, the growth of it should still be there if the worst case were to happen and funds were required.

 

[AutomaticMan]

What motorcycle do you own that would fetch £15k to £18k if sold as second hand?

I have a couple of bikes still, so was curious

2018 Honda Goldwing DCT Looking at Autotrader, they seem to be going for the upper end of that estimate. But mine is an import from the US (was living in the US when I bought it, and brought it over to the UK with me), and while it is almost the same as the UK spec, I'm assuming I'm going to have to accept less for it for that reason.