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insaneoctane
Well-Known Member
The smartest way would be buying a cheaper car!
The question is what responsible means. There`s enough people out there driving around in financed cars that are worth double their annual income.
In my personal opinion nothing about financing/loaning an expensive tool is "acting responsible" if there are cheaper options available
In the end it`s a lifestyle question.
Disposable income is defined as income after paying taxes (i.e. the actual income you get to take home).
voip-ninja
Give me some sugar baby
The smartest way would be buying a cheaper car!
The question is what responsible means. There`s enough people out there driving around in financed cars that are worth double their annual income.
In my personal opinion nothing about financing/loaning an expensive tool is "acting responsible" if there are cheaper options available
In the end it`s a lifestyle question.
I don't imagine too many people are getting approved for loans for cars that cost double their income.
What kind of bank is stupid enough to approve such a risky loan and what would the interest rate be?
The exception could be people who mooch off their parents and have relatively high paying jobs. Even then I doubt that's "plenty" of people. Someone driving $80K car that earns $40K a year? Doubt it's possible.
In every car forum the same thing happens, on one side the person who argues that anyone not paying cash is an idiot, on the other side the person who is car poor and trying to convince everyone that's just ducky and the rest of us in the middle looking around saying "WTF, how did we get here"?
SageBrush
REJECT Fascism
Judging by the poll, I think most people are considering discretionary income and for good reason.
Foxhound199
Member
Also judging by the poll, there are way more multi-millionaires buying this car than I had imagined.
SageBrush
REJECT Fascism
Perhaps, but these types of polls suffer from severe self-selection bias.
JeffK
Well-Known Member
I think people are interpreting the question differently. Some people might be counting any savings instead of actual monthly disposable income.
That's why I didn't ask what's the monthly loan payment
The price / disposable income doesn't care if you pay it full in cash, with 100% loan, or anything in between.I'm also planning to put some cash down, plus trade-in, so hopefully my monthly payment will be fairly low.
insaneoctane
Well-Known Member
I've seen this statement about how you must finance the pre-credit/rebate amount and am confused about the assumption. Why couldn't you just float the credit /rebates, finance the post rebate /credit amount? Not everyone might choose this option, but some certainly might.
The tricky thing about using discretionary income is that it can have different meanings, and often costs of transportation (like your car loan) are subtracted, so it's a bit tricky. I agree different people are probably answering the poll different ways.
JeffK
Well-Known Member
You can certainly pay the loan anyway you want. The final purchase price though, does not reflect the future credit. The future credit is also not guaranteed if they were to suddenly take away the EV tax credit.
It worries me when some people say they can only afford the car because of the EV tax credit or that they are saving money for the purchase price minus the tax credit, not even considering sales tax and other fees in addition to not even being able to claim the credit until they file taxes in the following year.
There are some people who even think the EV tax credit is like some instant rebate that they get at the time purchase.
insaneoctane
Well-Known Member
Hey, I like low car payments too, but I haven't been able to get my M3 configured the way I want it with a low payment
sperkin
Active Member
Defining "disposable income" for this poll is a challenge. I think using the term "monthly savings" or "amount available to be saved" would be better and allow people who have a car payment on a vehicle that the M3 would replace to assume that amount is part of the "savings" for purposes of this calculation. The problem with the idea above is it would treat retirement savings and college fund savings like expenses when the reality is someone could put those on temporary hold to make funds available for a car purchase.
Regardless of how people define "disposable income" I'm sure the results will be all over the map but concentrated into 1-2 categories close to each other.
Regardless of how people define "disposable income" I'm sure the results will be all over the map but concentrated into 1-2 categories close to each other.
By all the existing data, which is really not definitive, Tesla is unusual.
From Roadster to Model S and Model X there are been two huge modes one of which is not typical for cars costing as much as these three have. One mode is wealthy people, seen most obviously perhaps with P models but really throughout the line. The other is people with decidedly less wealth but a passion for the vehicles and the Tesla goals.
I suspect almost all of us who've travelled in our Teslas have observed that so suspect that bi-modal character is probably valid. The astounding reality is that these two groups are probably unlikely to be casual acquaintances, but at Superchargers and at events, including TMC Connect we're all enthusiastic together.
Model 3 will continue that tradition, I think, but will obviously have a much larger younger shift. Frankly, Model 3 will make us all much more fun than we may have been. I hope so.
As one of the few older owners myself I really hope to see more first time buyers to join the last time buyers. That's why I'm curious about Model 3 owner age distribution.
@SageBrush has it perfectly correct. Forum participants are outliers, statistically speaking, so we all represent an influential but small group. In marketing terms most of us are probably "influencers"; we're interesting to know about but most definitely aren't typical.
Foxhound199
Member
I'm not sure I understand at all. Say I know I need two things, a house and a car. So no matter what, I have one appreciating asset and one depreciating one, and for the sake of argument, let's assume it has to be the same house and car no matter my financing scenario. No matter what I do, I'm going to end up with $200,000 in loans, $100,000 in equity, and one asset that appreciates and one that depreciates. Now, whether that loan money is for the house or for the car and in what proportion seems irrelevant to me, save for the interest rate those loans are being charged at. Cars are usually charged at significantly lower interest rates (less than half) than mortgages.
Far from a strawman, I think perhaps your advice is good for those who have trouble understanding credit or financial planning. But if you think financing a car is always silly, the thousands of dollars I'll be saving by doing so beg to differ.
Tenor equalized car loans are always more expensive than are mortgages. However, car loans are often subvened so appear to be cheaper on the surface. The car dealer Finance and Insurance functions in the US make typically more than 100% of new car sales profit. The manufacturers/distributors very frequently subsidize loans rates.
Typically the best negotiating tactic in a dealership is to allow the F&I process to go as it does, contracting on the best stated sales price and ignoring loan quotes. With all that in hand then say you've decided to pay cash. If they will easily accept that offer then you can usually think you got a good finance deal. If not, force the point because you probably got a good sales price.
If that is not pleasing you can always buy a Tesla.
Negotiating leases is much harder.
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