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The 2 Best Days In a Plaid Owner’s Life
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Ostrichsak
Well-Known Member
It's crazy what some people think it a good deal, right? Zero down is only the part of the problem as even that is a band-aid for trying to mask a rapidly depreciating asset. Rather than people asking themselves what the TRUE cost of ownership of a new car is (depreciating and interest included) they simply think that putting more money down (aka paying more of the depreciation on the front end) is a better way.
On a balance sheet, the lost money on depreciation is the same... just a question of whether you're paying it up front or when you sell/trade the thing in. It's just easier for most to do it on the front (assuming they have it) because their emotions override the actual cost due to wanting the new shiny thing.
Leasing a car, any car, is NEVER a good financial decision for the "buyer" as there are far too many nuances within the #'s presented on the surface for the typical "buyer" to fully grasp. This is exactly why dealerships push people towards them by convincing them they know something that nobody else knows and are smarter for doing it.
As an example, if you negotiate a lease properly (and I'm not suggesting ANYONE lease, mind you) you should NEVER want to buy the vehicle at the end. Ever. If there's any value at all at the end of the lease, you negotiated the lease poorly for you. You agreed to too low of a residual value which means you just paid more monthly during the lease term. Your goal during a lease negotiation is to get the dealership to agree to the car being worth nearly the same price you bought it for three years earlier. They won't.
Even if they did they'd make it up with the cost-of-money factors on the back-end. It's all a shell game. This is why their primary goal is to get you talking monthly payment because there's so many ways they can change the #'s to make more money versus just the cash price. This is also why many dealerships now have a HIGHER cash price than financed price. They're not even trying to disguise it anymore and yet people still don't get it.
It's bad enough that most buyers don't understand that the dealers make more money on finance (summary: you agree to a certain percentage in writing and they shop this deal to dozens of banks and take the lowest bidder to create a delta that equals thousands if not tens of thousands of profit to them that you didn't even know about) then they do the sale of the car. With leasing, there's just far more opportunities behind the scenes to fool the buyer.
The monthly payment is lower though and suddenly the buyer can "afford" more car (if you could, you'd buy it outright and wouldn't need to finance it in the first place) and they hear how smart leases are so it all makes sense. The dealership invents new ways to take more money from the buyer all while making them think they're the smart one.
If you want to lease, I truly don't care. It's your money and you can spend it however you want. Just don't act like you're smarter by doing it because it makes you look like a complete moron rather than just saying "I wanted to lease a car and I don't care that it will ultimately cost me dramatically more" because that's the truth.
Source: in a past life, I worked in sales, fleet, sales management, finance and upper management for dealerships... in that order. The most money I made per hour worked in that list was finance. In a purely performance-driver industry, do you think they pay more money to those who aren't responsible for bringing in the most money? I've seen behind the curtain and it's pretty crazy how the machine is built to bilk people out of their money. Lots of it too.
Summary: If you truly care about building wealth you won't buy new vehicles and you'll NEVER finance a depreciation asset like a car, truck, motorcycle, RV, boat, etc. under any label. There's going to be some sensitive people triggered by my posts. Lots of people with delicate psyche can't accept that they were taken advantage of so they try to discredit the messenger in an effort to make themselves feel better about their purchase. They're wrong. I don't speak anything but the truth though and it's not opinion either. The math supports it all if you understand the numbers. Math isn't opinion based.
Ostrichsak
Well-Known Member
Making financial decisions based on 1% outliers isn't a very solid approach.
I made 250% return on my Lambo, and 300% return on my Lotus. Can you imagine being paid multiple 6 figures to drive around like a superstar in a Lambo! I love how that concept makes haters head's explode.
MikeChicago
Member
You are absolutely right. When I bought my Benz, that was in fact one of the selling points. It's a well made car and the depreciation was quite reasonable. The reason why I'd excuse Tesla's recent price drops is twofold. One, the were really returning back to pre-pandemic prices. At least to some degree. Two, anything that puts more EV's on the road and takes away from the sales of ICE vehicles is a win in my book.
Ostrichsak
Well-Known Member
I know but I was stating the obvious for those who genuinely see that stuff and believe it.
Case and point...
Congratulations. You profited off of a speculative market that's hugely risky... especially because it's involving depreciating assets. Even if you're not financing them (most do and leave the interest out of their equation along with sales tax, registration, maintenance and all sorts of line items to make the math make sense) the opportunity cost on that amount of liquidity has to be calculated. It never is.
The other thing that is never factored in is a Q-factor for risk. It's a large multiple with something like exotic cars because there's so many risks involved. Can you make money? Sure. By your clams, you're proof of it. I've done it too so I know it can be done. Suggesting this somehow applies to ALL new cars though (especially dime-a-dozen mass produced cars like what's being discussed here) and that anyone who challenges the thought is just a "hater" has to be one of the most idiotic things I've read this year. So I guess another congratulations is in order for the double accomplishment. Two gold stars for you.
I can put the same quarter mil in an index fund and double it over 6.5-7 years (with even conservative estimates going back nearly 100 years) on what is essentially the lowest Q-factor available (taken over a longer timeline). Your move is more risky so it better come with more reward or it's just what we call dumb. Acting like you know something others don't is only impressive to people you don't care to impress.
Why not take that same $250k and go to Vegas and put it all on a number on the roulette wheel? Your upside is far greater since you're choosing to ignore the risk. So much loot! C'mon baller, do it! You won't.
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CapeOne
Active Member
I don't think it's unreasonable for people to complain that their MS Plaid lost (much) more in value than they expected due to Tesla dramatically lowering prices. These types of complaints happen in other industries too. Sometimes companies may try to appease buyers who paid "top dollar" by offering them some sort of freebie, gift card, rebate coupon, etc. but that sort of company response can't and shouldn't be expected.
Of course, on the positive side, the cost to buy a new MS Plaid is much lower too which can take a lot of the sting out of the lower than expected resale...at least if you're looking to buy the same car again.
CapeOne
Active Member
Yes, some option prices have changed too. The price of FSD had been as much as $15k but is now $12k.
MikeChicago
Member
He didn't get duped... he took the best offer he could get. That's how market prices work. What you think he should have gotten isn't what the market, at this point in time, is willing to support. If he didn't do any "shopping" around, I would see your point. He did and he made it clear he didn't want to do private sale.
I had a bad Model Y and lost good amount of money on it. I did the same thing. To me, getting few thousand more wasn't justifying spending hours dealing with people coming to test drive it, advertising it, doing all those things. The time I saved is more valuable to me.
Ostrichsak
Well-Known Member
This person gets it. This is the reality and what has been clearly stated since day one by Tesla.
I suspect that this most recent wave of entitled cry babies crying about the value of the cars is people like Lambo guy here who saw what they felt was an opportunity to "make bank bro!" and reserved a Plaid thinking they'd flip it for 2x after delivery. I know because I saw the listings for north of $200k around the time of launch. Comical. That didn't last long though, as we all now know.
People who 1) understand finances and actually care wouldn't buy new cars anyway or 2) understand and are willing to invest in order to help help push the segment to sustainability. IMHO Tesla leans way too much into this latter group but that's entirely separate conversation to this one.
Good one. Look-up how much it costs per year to own that gold foil engine bay car. Also, I'm pretty sure it didn't go for 150K when it was new.
johnnycnote
Member
Good for you with the outliers! Let see how that works out with what us non-bougie people buy
MikeChicago
Member
Good point, but I still didn't buy it. Paying $15k or $12k for something that literally doesn't exist, may never materialize, and will be disabled if you "abuse" it doesn't make sense to me personally.
When I knew I needed a loaner, I’d state that in the service request, mark it for an early morning appt and at least a week out. Worked the couple times I requested it. (That was a couple years ago.)
Yeah it seems plaid owners with 19’s have had far fewer issues.
Ostrichsak
Well-Known Member
I do think it's unreasonable for people to complain. They knew they were going to lose money when they bought it. That's how new cars work. If you truly cared about the massive depreciation hit you wouldn't be buying new in the first place. Now I'm expected to feel sorry for them because the massive depreciation was a tad higher than they predicted? Nope. NOW You care about the financial aspect? Shouldn't have exposed yourself to that kind of risk in the first place if you weren't financially prepared to absorb the potential blow. It's nobody's fault but their own.
What's next, people who invested in TSLA who lost money demanding a free Model 3? It's no different because both knew on the front end what they were signing up for and the potential risks.
If they didn't, then they shouldn't have taken on a six figure investment like that. Rate of new vehicle depreciation is NEVER a guarantee. Sure you can make solid educated guesses based on past performance but it's NEVER a guarantee. The number fluctuates and could go up or down, just like the stock market. You don't want to be exposed to the unknown like that? That's fine. Don't sign up.
This whole expectation of freebies and handouts is absurd and selfish. Now I have to pay more for my next car because your car went down in value? What kind of selfish childish thinking is that? Get outa here with that socialist talk!
You final point is they key. Just like homes, the market goes up... the market goes down. It's all relative. Your home is worth more in an up market but you'll pay more for the new home you replace it with. It's all relative. Everyone knows this. Nobody complains. But with cars, somehow that goes out the window.
Jayskywalker21
Member
So if they all offered him $1 would you say he didn’t get duped? He missed out on anywhere from 15-20k in a sale. Even 53k is a SUPER lowball which is why this is even a conversation. We’re not talking a few thousand. Idk about him and idk about you. But to me if I could’ve gotten 15k more on a sale or EVEN 10. I’ll wait a few more weeks or a month to do so. He’s rich we get it. Doesn’t matter to him but don’t lie and say he didn’t get shafted. Those wholesale buyers usually shaft customers across the board not just on Teslas
For example had an Rs7, my trade to carmax/carvana was around 39-41k. I wanted to get a P100D the car I have now. I took my time it was maybe 1-2 weeks of work max and found a dealer to at least buy it for just over 50k and traded it for a P100D. Took advantage of the tax break when it was time to register the car saved $4000 and got 10k more for the trade
Correct me if I’m wrong but he could’ve even traded his car into MB and got the tax break as well for trading in his car. Which is another thing he also missed on
As long as the OP feels better, who cares? You don't have to look very far to find horror stories about Mercedes less than great reliability and maintenance costs (don't ask me how I know), but I am sure Teslas can be a PITA IF you have significant issues. I have to assume the OP pushes his/her cars harder than most as well.
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