Can I buy a new tesla?
Can I buy a new tesla?
Hello all, I am 35 years old with three small children married and would like some advice on a new car purchase. I very much am into electric cars. I would like to buy a new Tesla model S and would like your advice.
Some basic information from my end. We have about $1.2 million Split between house equity, taxable account, and retirement Accounts and cash. We have about 60 K in cash, about 350 in taxable. We have a minivan currently and a Toyota 4runner which is only five years old and very reliable. My plan will be to trade in the Toyota and purchase a Tesla out right in cash. It starts at $80,000. Income is 350 to 400 and is very reliable. What do you think?
Some basic information from my end. We have about $1.2 million Split between house equity, taxable account, and retirement Accounts and cash. We have about 60 K in cash, about 350 in taxable. We have a minivan currently and a Toyota 4runner which is only five years old and very reliable. My plan will be to trade in the Toyota and purchase a Tesla out right in cash. It starts at $80,000. Income is 350 to 400 and is very reliable. What do you think?
Re: Can I buy a new tesla?
$1.2M in net worth isn't at a level where I'd be comfortable even thinking about $80K cars. (I'm in the same neighborhood and have a hard time thinking about a Model 3 or Y, but to each his/her own.)
That combination of net worth and income also suggest you either only recently started making that level income or have a spending problem. Either way, another strike against buying a $80K car.
That combination of net worth and income also suggest you either only recently started making that level income or have a spending problem. Either way, another strike against buying a $80K car.
Re: Can I buy a new tesla?
The real question is do you need it or are you just scratching the Tesla itch?
- anon_investor
- Posts: 15122
- Joined: Mon Jun 03, 2019 1:43 pm
Re: Can I buy a new tesla?
Sounds like a terrible idea...
-
- Posts: 1320
- Joined: Thu Jul 18, 2013 9:06 pm
Re: Can I buy a new tesla?
I think the first response is a bit harsh. You can definitely afford it on your income, without a problem. It's the age old trade off question, right? You can have (reasonably) anything you want, but not everything. It will be a small hit to savings. You are doing very well (far better than me at your age). You need to keep that savings rate up (eg 30%). If you can do that, and the SO is on board, have some fun.
Re: Can I buy a new tesla?
reliable $350-400K income per year: get whatever car you want (<$150K) IF it makes you happy. sometimes you have to YOLO. but if you get it to keep up with the Joneses, then don't: only you know that.
Re: Can I buy a new tesla?
I'm in the market as well and have not considered the S or X because they are basically being replaced by the 3 and Y (newer tech, design, features, etc.).
Re: Can I buy a new tesla?
You can afford it - go for it! I prefer the 3/Y for their simplicity and better value, but S is a great car.
-
- Posts: 1594
- Joined: Mon Aug 24, 2020 5:44 pm
Re: Can I buy a new tesla?
Some but it costs much more and the performance is less (i.e. handling). Does the S have a 1-piece frame like the Y?
The S rides like a big boat compared to the M3.
Re: Can I buy a new tesla?
I wouldn’t do it, for a couple of reasons.
First, the model X has been problematic, so I’d wait until they figure out the doors.
Second, your in good financial shape, but not amazing financial shape.
Third, the longer you wait, the more great EVs will be on the market. Waiting benefits you.
I say this as an extremely happy Tesla owner.
First, the model X has been problematic, so I’d wait until they figure out the doors.
Second, your in good financial shape, but not amazing financial shape.
Third, the longer you wait, the more great EVs will be on the market. Waiting benefits you.
I say this as an extremely happy Tesla owner.
Re: Can I buy a new tesla?
Financially you'll be fine. You really should be asking your spouse, not us.
Re: Can I buy a new tesla?
We had about $300,000 worth of student loans which we paid off aggressively the first few years. That’s why the net worth is low. I think you’re spending is pretty reasonable. Thank you for the response02nz wrote: ↑Thu Feb 11, 2021 7:00 pm $1.2M in net worth isn't at a level where I'd be comfortable even thinking about $80K cars. (I'm in the same neighborhood and have a hard time thinking about a Model 3 or Y, but to each his/her own.)
That combination of net worth and income also suggest you either only recently started making that level income or have a spending problem. Either way, another strike against buying a $80K car.
Re: Can I buy a new tesla?
Yes, you can financially.
Re: Can I buy a new tesla?
What would you consider to be amazing financial shape?Normchad wrote: ↑Thu Feb 11, 2021 7:27 pm I wouldn’t do it, for a couple of reasons.
First, the model X has been problematic, so I’d wait until they figure out the doors.
Second, your in good financial shape, but not amazing financial shape.
Third, the longer you wait, the more great EVs will be on the market. Waiting benefits you.
I say this as an extremely happy Tesla owner.
Re: Can I buy a new tesla?
1.3 million at 35 years old? Buy it, enjoy it. Ok to live a little.
Re: Can I buy a new tesla?
I keep hearing about the proposed restoration and expansion of the EV Tax Credit. See, e.g., https://taxfoundation.org/joe-biden-tax-plan-2020/. If you simply must get an expensive EV, why not would wait a year or two? I would kick myself if I bought one now and the tax credit was restored next year. My son would say, "But delayed gratification is so haaaaard!" But losing out on a $7500 tax credit would be even harder for the typical BH.
Depending on what state you live in, you might also want to take advantage of the incentives for installing a home charging station. If you already have solar, charging at home during off-peak hours is the way to go. Edmunds has a nice summary of the costs. https://www.edmunds.com/fuel-economy/th ... c-car.html The general consensus is tax credits for this will increase as well.
Depending on what state you live in, you might also want to take advantage of the incentives for installing a home charging station. If you already have solar, charging at home during off-peak hours is the way to go. Edmunds has a nice summary of the costs. https://www.edmunds.com/fuel-economy/th ... c-car.html The general consensus is tax credits for this will increase as well.
- anon_investor
- Posts: 15122
- Joined: Mon Jun 03, 2019 1:43 pm
Re: Can I buy a new tesla?
Re: Can I buy a new tesla?
Fair enough, thank you for your input.anon_investor wrote: ↑Thu Feb 11, 2021 7:43 pmTranslation you probably should wait until you have accumulated more. Your income is high but an $80k car is still 6.67% of your current total net worth and 19.5% of your liquid net worth.
Re: Can I buy a new tesla?
Does it fit with your goals?
Will you meet your savings goals for 2021 if you buy this car?
Once you are up and running, everything is a trade off. Only you can decide it this is a use of your resources that will further your goals.
Will you meet your savings goals for 2021 if you buy this car?
Once you are up and running, everything is a trade off. Only you can decide it this is a use of your resources that will further your goals.
Re: Can I buy a new tesla?
Exactly. Everyone has different values. What's the point in accumulating wealth if it's just numbers on a screen. You're really into electric cars, you can splurge on one as long as you're not remodeling the kitchen and buying vacation property at the same time.
Re: Can I buy a new tesla?
Where does the reliable income come from? Employment? What makes it so reliable?
Re: Can I buy a new tesla?
I bought a new 3 at a much, much, much worse financial situation compared to you. Its a terrible financial decision, but as many have said, sometimes there are more important things than just economics. It was a lot more meaningful to me than a car to get your from A to B.
That being said, unless you really want a *new* Tesla, consider a 1-3 year old one, especially if you are considering the base version. The refreshed base version is not significantly different from the older ones, aside from cosmetics. Its only the Plaid models that are significantly improved over past versions.
That being said, unless you really want a *new* Tesla, consider a 1-3 year old one, especially if you are considering the base version. The refreshed base version is not significantly different from the older ones, aside from cosmetics. Its only the Plaid models that are significantly improved over past versions.
Re: Can I buy a new tesla?
For your income, a net worth of $4M at age 40 would be amazing.cosine wrote: ↑Thu Feb 11, 2021 7:37 pmWhat would you consider to be amazing financial shape?Normchad wrote: ↑Thu Feb 11, 2021 7:27 pm I wouldn’t do it, for a couple of reasons.
First, the model X has been problematic, so I’d wait until they figure out the doors.
Second, your in good financial shape, but not amazing financial shape.
Third, the longer you wait, the more great EVs will be on the market. Waiting benefits you.
I say this as an extremely happy Tesla owner.
If you buy this, you will be fine financially. But honestly, you already have a cool car, so this one won’t really bring you a lot of incremental joy/utility, in my opinion. And a lot of Tesla owners would not want an X anyway, because it is so trouble prone, especially compared to a 4-runner.
It’s cool though no doubt. But if I were in your shoes, I wouldn’t spend that money on it right now. I’d wait. Lots of other cool options are just around the corner, hopefully.
Re: Can I buy a new tesla?
Agreed. I think this is a terrible financial decision. I don’t necessarily think it will hurt me too much in the long run. But it does seem pretty painful to have to spend $80,000 on a car especially since I’ve been living with the bh mentality of the last five years.Callisto wrote: ↑Thu Feb 11, 2021 8:06 pm I bought a new 3 at a much, much, much worse financial situation compared to you. Its a terrible financial decision, but as many have said, sometimes there are more important things than just economics. It was a lot more meaningful to me than a car to get your from A to B.
That being said, unless you really want a *new* Tesla, consider a 1-3 year old one, especially if you are considering the base version. The refreshed base version is not significantly different from the older ones, aside from cosmetics. Its only the Plaid models that are significantly improved over past versions.
I’m having a hard time figuring out whether or not this will actually increase my life satisfaction or not.
The most important things for me are vacations, spending time with family, and working because I want to work not because I have to work. I don’t think purchasing this car will alter any of those.
The most important things for meWorking when I want to be able to work. Also vacations are a big thing for us. We don’t spend money on basically anything else.
Re: Can I buy a new tesla?
As a reminder, proposed tax credits are off topic. Speculation about future legislation is prohibited by forum policy, see: Unacceptable TopicsPlano wrote: ↑Thu Feb 11, 2021 7:42 pm I keep hearing about the proposed restoration and expansion of the EV Tax Credit. See, e.g., https://taxfoundation.org/joe-biden-tax-plan-2020/. If you simply must get an expensive EV, why not would wait a year or two? I would kick myself if I bought one now and the tax credit was restored next year. My son would say, "But delayed gratification is so haaaaard!" But losing out on a $7500 tax credit would be even harder for the typical BH.
Depending on what state you live in, you might also want to take advantage of the incentives for installing a home charging station. If you already have solar, charging at home during off-peak hours is the way to go. Edmunds has a nice summary of the costs. https://www.edmunds.com/fuel-economy/th ... c-car.html The general consensus is tax credits for this will increase as well.
This forum is focused on investing that is directly actionable to personal investors. We don't hold debates on conjecture.Politics and Religion
In order to avoid the inevitable frictions that arise from these topics, political or religious posts and comments are prohibited. The only exceptions to this rule are:
- Common religious expressions such as sending your prayers to an ailing member.
- Usage of factual and non-derogatory political labels when necessary to the discussion at hand.
- Discussions about enacted laws or regulations that affect the individual investor. Note that discussions of proposed legislation are prohibited.
- Proposed regulations that are directly related to investing may be discussed if and when they are published for public comments.
The whole point of the policy is to (1) eliminate contentious disagreements that result from these discussions and (2) keep investors from making bad decisions. Proposed legislation changes many times between the time it's introduced and signed into law.
The best approach is to make your decision about current law. When the law changes, make your decision at that time.
-
- Posts: 438
- Joined: Fri Apr 23, 2010 12:14 am
Re: Can I buy a new tesla?
As you can tell from the different responses, some say you should hold off, buy a cheaper EV, and save your money. Others have said you can afford it if you want it. Ultimately, that financial decision is up to you. I don't think you are making a horrible mistake if you get it. You are, IMO, in the grey zone and one could make an argument either way.
I have a performance Model 3 and it is the best car I have ever owned. That said, I would never buy a Model X. Because of the problem-prone falcon wing doors, the Model X was rated as one of the least reliable cars by Consumer Reports.
In general, I like the Model S, but Tesla just did a major redesign to the interior. As you are probably aware, they took away the normal steering wheel and put in a formula-1 yoke like steering wheel. I am not sure if I would like it. They also took away the signal stalk and even the gear shifter. The car is supposed to make an intelligent guess about what direction you want to go in. I have to try it before I make a final judgment, but I am not sure I would want to drive a car with a yoke like steering wheel and no stalks for turn signals or gear selection. And even if you do like the redesign, I would never buy a new Tesla right after a major redesign. The first few hundred if not thousand people who get the new Model S will likely deal with lots of bugs. You may want to go for a used Model S to not only save a bit of money but to go with the older, more reliable technology. If you really want the new one, I would wait a year or two so all the bugs are worked out before you get your new Model S.
I have a performance Model 3 and it is the best car I have ever owned. That said, I would never buy a Model X. Because of the problem-prone falcon wing doors, the Model X was rated as one of the least reliable cars by Consumer Reports.
In general, I like the Model S, but Tesla just did a major redesign to the interior. As you are probably aware, they took away the normal steering wheel and put in a formula-1 yoke like steering wheel. I am not sure if I would like it. They also took away the signal stalk and even the gear shifter. The car is supposed to make an intelligent guess about what direction you want to go in. I have to try it before I make a final judgment, but I am not sure I would want to drive a car with a yoke like steering wheel and no stalks for turn signals or gear selection. And even if you do like the redesign, I would never buy a new Tesla right after a major redesign. The first few hundred if not thousand people who get the new Model S will likely deal with lots of bugs. You may want to go for a used Model S to not only save a bit of money but to go with the older, more reliable technology. If you really want the new one, I would wait a year or two so all the bugs are worked out before you get your new Model S.
-
- Posts: 575
- Joined: Tue Sep 24, 2019 6:11 am
- Location: australia
Re: Can I buy a new tesla?
I agree. If current assets - current liabilities > cost of new tesla then financially there isn't any obvious obstacle. Even if unable to sell the toyota for some reason, just liquidate part of the taxable portfolio. Exchange cash for car. Done.
Much discussion seems to be answering an entirely different question "should you buy a new tesla?" or "should i buy a new tesla?" or "should a theoretical spherical boglehead 30 years from retirement with a net worth of $50k and $60k annual income buy a new tesla?" which are much more contentious topics.
-
- Posts: 438
- Joined: Fri Apr 23, 2010 12:14 am
Re: Can I buy a new tesla?
Oh, I forgot to add. Make sure you live within a reasonable distance to your local Tesla Service Center. Because the cars are so advanced, you can't go to a local mechanic. I would never buy a Tesla if I lived more than 30-40 min away from the nearest Tesla service center.
Re: Can I buy a new tesla?
On the surface, looks like you can easily afford it. But you didn't mention expenses so it's hard to give a definitive answer.
-
- Posts: 1730
- Joined: Tue May 27, 2008 10:48 am
- Location: West Coast
-
- Posts: 3527
- Joined: Sat Mar 04, 2017 4:28 pm
- Location: Western Washington
Re: Can I buy a new tesla?
Even Dave Ramsey's rule, which is relatively arbitrary and conservative, says you can afford one (total cost of all cars < 50% of annual income).
Personally, I don't really like making decisions like this based strictly on income or current savings. When considering a major expense that is not a necessity, I would prefer to take a bigger picture look at what your budget needs to be - for anticipated future expenses and your target age for financial independence, how much do you need to be saving each year, and does this purchase cause you to miss that target?
The first part of that therefore is making sure you have a decent idea what your long term financial goals are and what is needed to meet them.
For an item with a long usable life like a car, it may be reasonable to treat the expense as spread over multiple years to compare to your budget, but while be honest with yourself about what other major expenditures might overlap the time frame you are using to justify the purchase.
That is how I have approached my own car shopping, and I try to stay conservative with my returns expectations, since those have a big effect on how quickly I reach my target.
Personally, I don't really like making decisions like this based strictly on income or current savings. When considering a major expense that is not a necessity, I would prefer to take a bigger picture look at what your budget needs to be - for anticipated future expenses and your target age for financial independence, how much do you need to be saving each year, and does this purchase cause you to miss that target?
The first part of that therefore is making sure you have a decent idea what your long term financial goals are and what is needed to meet them.
For an item with a long usable life like a car, it may be reasonable to treat the expense as spread over multiple years to compare to your budget, but while be honest with yourself about what other major expenditures might overlap the time frame you are using to justify the purchase.
That is how I have approached my own car shopping, and I try to stay conservative with my returns expectations, since those have a big effect on how quickly I reach my target.
Will they be driving it in a vacuum on a frictionless infinite flat plane? In that case, probably yes, since an ICE car will not function in a vacuum...pseudoiterative wrote: ↑Thu Feb 11, 2021 8:36 pm should a theoretical spherical boglehead 30 years from retirement with a net worth of $50k and $60k annual income buy a new tesla?"
-
- Posts: 4816
- Joined: Wed Sep 09, 2015 4:44 pm
Re: Can I buy a new tesla?
Can you? Yes.
Should you? That's very much a personal decision.
Should you? That's very much a personal decision.
-
- Posts: 7
- Joined: Thu Apr 19, 2018 8:44 pm
Re: Can I buy a new tesla?
We're not that far off in stats. I would not be willing to spend $80k on a new car at that NW. I also have the Tesla itch. I've joked around with my wife numerous times when she asks what I want for my birthday... "A Tesla!". It's all in jest, especially since we get very limited utility out of our vehicles now (working from home and all errands are very close in proximity). If anything, I would be willing to buy a Model 3. I tell her maybe several years down the road.
Do you have any other big expenses coming up? A possible move, or college savings? If you have those under control and you will get utility out of the vehicle, I cannot deny that you can afford it regardless of what I said above.
Do you have any other big expenses coming up? A possible move, or college savings? If you have those under control and you will get utility out of the vehicle, I cannot deny that you can afford it regardless of what I said above.
Re: Can I buy a new tesla?
Much poorer people than you make much worse financial choices. You will be fine either way so long as this is your only major splurge.
This is the only thing I'd say to dive deep into. It doesn't sound like the purchase is insignificant so it should bring you proportional utility to the cost.
Re: Can I buy a new tesla?
If you have to ask a forum, I would say no. I think it should be obvious to you and your spouse that you can before you do so.
Re: Can I buy a new tesla?
People come here and complain about things in the $1-$9 range. Coming to a forum for an $80k purchase seems to make sense to me. OP, a Model 3 has the same interior space as a Model S so why not save a few bucks and go that direction?
Re: Can I buy a new tesla?
It's clear that you can afford it assuming your income isn't catastrophically affected in the future.
It is good to think about why you want a Tesla as opposed to a different electric car. Is there something specific about the features you want that other brands don't have? Is it the coolness factor? There is no wrong answer here but just something to muse over.
It is good to think about why you want a Tesla as opposed to a different electric car. Is there something specific about the features you want that other brands don't have? Is it the coolness factor? There is no wrong answer here but just something to muse over.
-
- Posts: 1730
- Joined: Tue May 27, 2008 10:48 am
- Location: West Coast
Re: Can I buy a new tesla?
Agree on both accounts. If you are on the fence due to the cost, why not aim for a Tesla priced more like 50-60k?
Re: Can I buy a new tesla?
Have you looked at the Taycan? I'd get that in your position. We have a short time on this rock - make it enjoyable.
-
- Posts: 10843
- Joined: Thu Oct 15, 2015 3:53 pm
Re: Can I buy a new tesla?
I'm amazed at some of the comments that they are not doing that great, they are doing okay, etc. They have $1.2M net worth at age 35! That is more than most Americans will ever have. That is more than some Americans will make in their lifetime!
OP, buy the Tesla if you want it.
OP, buy the Tesla if you want it.
Re: Can I buy a new tesla?
Yes you can do it. High income should cover it.
Re: Can I buy a new tesla?
I hate to be a wet blanket, but if you do buy a Tesla, don't let this happen to you:
https://patch.com/california/mountainvi ... d-problems
I know this stretch of highway 101 well and have driven it many times.
As I see it, the driver thought he could just sit back and play video games, as if he were a passenger on a train or airplane, and not pay attention to the operation of his vehicle.
Be careful.
https://patch.com/california/mountainvi ... d-problems
I know this stretch of highway 101 well and have driven it many times.
As I see it, the driver thought he could just sit back and play video games, as if he were a passenger on a train or airplane, and not pay attention to the operation of his vehicle.
Be careful.
Financial decisions based on emotion often turn out to be bad decisions.
-
- Posts: 267
- Joined: Mon Jul 14, 2014 3:37 pm
Re: Can I buy a new tesla?
Income and savings say you can afford it. Get it, enjoy it. YOLO.
-
- Posts: 1028
- Joined: Fri Mar 29, 2019 1:02 am
Re: Can I buy a new tesla?
This. Maybe people should step back a bit before they post, have a bit more perspective. They have 1.2 million USD and a steady combined income of 350k per year minimum! So long as this isn't the start of a mega buying spree, they are fine.michaeljc70 wrote: ↑Fri Feb 12, 2021 11:03 am I'm amazed at some of the comments that they are not doing that great, they are doing okay, etc. They have $1.2M net worth at age 35! That is more than most Americans will ever have. That is more than some Americans will make in their lifetime!
OP, buy the Tesla if you want it.
Enjoy the car, OP. Just whatever you do, don't get a boat...
Asset Allocation: VT
-
- Posts: 352
- Joined: Wed Aug 19, 2015 9:09 pm
Re: Can I buy a new tesla?
Of course you can afford it. However, I have friends with all makes and models of Teslas going back to the old Lotus chassis roadster. Personally, I’d rather have the paid off 4Runner regardless of NW But if it’s really your thing, then enjoy!
Re: Can I buy a new tesla?
If you enjoy it then buy it. You're not really stretching the finance, don't be the richest guy in the grave yard