Your M3 price vs. your disposable income

Hmm fun and interesting thread. Subbing to see how peoples ratios come out

 

We supposed to factor in the tax credit, like configuration cost minus tax credit and state rebate?

 

No nothing from OPs post tmu

 

You might want to be more specific about how you want to define "disposable income" for this poll.

Investopedia defines it here: Disposable Income as (Income - Taxes), with no factoring in of cost of living.

Others, I imagine, would interpret this differently and subtract all sorts of things.... housing, food, utilities, healthcare, childcare, etc. But that aligns more with "discretionary income". Discretionary Income

 

I didn't factor in the tax credit as it plays no part in the purchase or resulting loan price.

 

I spend or save all my money, none of it is "disposable"

 

Perhaps someone is confusing Model 3 buyers with Model S buyers...

(This is James Cameron, and yes, he owns a Model S)

 

What if you're planning to make a fairly large down payment and possible other lump sum payments along the way?

 

I´d never ever loan/finance/lease something. I always buy cash.
And what I can`t afford to buy cash is something I consider not affordable in general for me.

 

I sure wish I could afford a house with just cash...

Some of us are not rich or old enough to have saved money forever and yet we still want nice things.

 

How was that hip-hop song? "get rich or die tryin"
But yes, I guess a house as a real long term investment makes financing ok.

For a car however.....

 

Ignore. After all, you then have to (or probably want to) replete the savings from your future discretionary income.

A bigger unknown is trade-in allowance or avoidance of buying a different car, but we should ignore that too to KISS.

Fwiw, I think exactly this way in terms of my use of discretionary income. The people who are choosing 50-100 months are pretty much saying that all of their discretionary monthly income is directed towards the car. That is commitment! It is also behavior I avoid if it means spending future money I may not have if my income stream changes for the worse.

 

Personally, I feel a car forum isn't the right place to compare incomes. But that's just me.

 

For my last car I got a loan with 0.9% APR.

I could've paid cash, but at such a low rate it would've been foolish since I could invest that money in the meantime instead.

 

Remember that Model 3 buyers will be similar to BMW 3 series so the distribution will be multi-modal.
I won't guess exactly the population of modes but:

1- some will have the 3 a a third, fourth or... car among whom many will substantially exceed the Model 3 price in monthly after tax income.
6-9- second largest cohort generally in multi-car households.
10-15- a large cohort will be in this range, probably an absolute majority of sales regardless of MSRP.
18-24- third largest cohort, often with leases and long term loans
>24- not many, but where it happens most will be actually owned by other people with higher incomes.
>36 zero. There will not be sub-prime for new Model 3. Later on there could be for used ones. Nobody will get any reasonable loan that much exceeds 25% of net income. It won't be zero actually but it will round to zero.

That said there are quite a few people who are asset rich, income poor. These people tend to be cash buyers, just like the first group, but income calculations aren't too relevant for them.

It will be fascinating to see the age distribution for Model 3.

Thus far Tesla ownership has been far more diverse than the price would suggest. I expect Model 3 will surprise us too. After all, they are Teslas.

 

What's smarter: Get a 30yr mortgage and save up to buy your car with cash, or get a 15yr mortgage and finance a car at <2.00% APR?

You can manage your finances however you want, but I never quite understand the people who feel the responsible use of credit is akin to devil worship or something.

 

Lol. This guarantees when you are old enough you still won't be paying cash.

 

You are setting up a straw-man, but the view you do not hold says this: use credit for appreciating assets. Examples might include a home, an education, or a business. The flip side says to avoid using unrealized future income to enjoy today since it reduces your future more than the benefit today due to opportunity costs and the risk of losing the future income stream.