Low Earner... Creative ways to own a Tesla Model 3?

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iamlucky13
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by iamlucky13 »

MortgageOnBlack wrote: Tue Aug 25, 2020 12:12 pm I appreciate all of the advice. I know in my heart this car is outside of my budget and chances are very high that I will have buyer's remorse after 6 months when I look at my account. Soon, I will compromise and "upgrade" to a used $7500-$10000 Toyota/Honda. Perhaps, periodic Turo rentals can help scratch the itch for now.
I agree with renting as a cost effective strategy. This makes driving a nicer car an expense more in the ballpark of a nice dinner or tickets to sporting event.
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ClevrChico
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by ClevrChico »

Creative: Get a second job and wait for a potential government incentive/rebate.

Or realize a car is just a car, and usually a big waste of money. :-)
Last edited by ClevrChico on Tue Aug 25, 2020 1:28 pm, edited 1 time in total.
fareastwarriors
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by fareastwarriors »

So are you getting married soon? Is wedding expense saved up already?
If your spouse brings another 75k to the picture, then your combined of income $150k is pretty dam good.

3 is a bit pricey for a "sedan" but it's not crazy more expensive than higher-end mid-level car/small SUV.
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Petrocelli
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by Petrocelli »

Hamberders wrote: Tue Aug 25, 2020 1:15 am If you don’t drive too many miles annually, lease one.
Do NOT lease a Tesla. The Tesla lease program is terrible.

I was looking at a Tesla Model 3 for my last car. I was also considering a Mercedes C300 Coupe.

Long story short: a Mercedes with a sticker of $50,500 leased for the same as the base Model 3 with a sticker of $38,000.
Petrocelli (not the real Rico, but just a fan)
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Watty
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by Watty »

MortgageOnBlack wrote: Tue Aug 25, 2020 12:12 pm I appreciate all of the advice. I know in my heart this car is outside of my budget and chances are very high that I will have buyer's remorse after 6 months when I look at my account. Soon, I will compromise and "upgrade" to a used $7500-$10000 Toyota/Honda. Perhaps, periodic Turo rentals can help scratch the itch for now.
That sounds a lot more reasonable. Be sure to check to see if your next car has ESC which seems to be a very good safety feature to have. It became required as standard equipment in 2012 so if you are looking at a car older than that it may not have ESC.

It was also in about 2012 that they started doing a new side offset crash test. A lot of cars did not do well in that test so the manufactures improved the designs to do better on that crash test.

Be sure to check to see if any car you are looking at has had the airbag recall done if it was needed. The last I heard some parts were still in short supply so it can take a while to get the recall work done.

It would also be good to at least double check to see what a comparable new Toyota or Honda would cost. I bought a new Corolla a few years ago because the used ones were too expensive to be a good deal. They depreciate so slowly that it can make sense to buy a new one instead of a used one if you will be keeping it 10 or more years. Toyota made a lot of their advanced safety features standard equipment in 2018 so there can be a significant difference between a 2017 and 2018 model when you dig into the details.
reln
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by reln »

MortgageOnBlack wrote: Tue Aug 25, 2020 12:33 am Two weekends ago, I finally drove a Tesla Model 3 (Turo rental)... I get the hype now! I'm completely sold on Tesla's mission and I want in! It's been 2 weeks and I can't stop obsessing about the car (maybe this will fade with time)

Problem is I'm a low earner (75k), 36 years old, retirement ~115k (vanguard index funds 80/20), 40k emergency fund, no debt other than 190k mortgage (15 years remaining, split with soon to be wife).

My parents and fiancee are in the justification phase for me pulling the trigger since I drive the oldest honda on the block. Perhaps, I am a bit too. All i know is that pulling the trigger on this would completely wipe my emergency fund (probably too high anyway right? :wink: j/k or maybe I'm not )

What creative ways can I make this a reality? Should I just accept my social class and keep driving my 91 honda? Maybe buy one and Turo it Out? Perhaps this is the start of my mid-life crisis.

Any ideas? I appreciate any insight. It's amazing to me that I would have never considered anything over $5k for a car, but yet I'm drooling over a $40k car now. Tesla definitely pulled some moves from Apple's playbook on this one.
I would say you're a low middle earner or a high low earner. But not a low earner.

But you can't afford a Tesla.
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mrspock
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by mrspock »

MortgageOnBlack wrote: Tue Aug 25, 2020 12:12 pm I appreciate all of the advice. I know in my heart this car is outside of my budget and chances are very high that I will have buyer's remorse after 6 months when I look at my account. Soon, I will compromise and "upgrade" to a used $7500-$10000 Toyota/Honda. Perhaps, periodic Turo rentals can help scratch the itch for now.
Much better decision. Keep in mind, $40k invested would grow to around $500k (@ 9% CAGR, 1.09^30 * 40k) by time you hit 65. Is it really worth having $500k less in your retirement savings for an electric car? That's $20k/yr in spending @ 4% safe withdrawal rate (SWR).

For the compounding effect alone, the dollars you save in your 30s are worth way more than those in your 40s or 50s. Certainly enjoy life along the way, but try to find lower cost ways of doing this. Don't trade in your freedom for a dumb car, get your financial freedom/independence first, then go buy the toys. Ironically, by time you get there you'll probably find you don't even care for the toys anymore, because you have something far more valuable: financial freedom for the rest of your life.
SmallSaver
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by SmallSaver »

Hastur wrote: Tue Aug 25, 2020 1:29 am Little offtop.. 70% americans earn 50k and less, so how's your 75k make you a "low earner" ?
It's true that this puts OP in the upper 30% of incomes in the US, but that doesn't mean he (and I) don't feel like low earners. I make about the same, and while I'm certainly not complaining, it's extremely daunting to look at the cost of education, health care, housing, and a self-funded retirement on that salary. If we stick to the 3x gross income rule, how many of us live in places where that salary would afford a house? It certainly doesn't for me, and I live in one of the most rural states in the country (median home price in my area is $370k). I think a lot of folks with higher salaries & more assets (especially housing, mature retirement portfolios, and pensions) don't quite get what it's like to be starting out these days.
econprof
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by econprof »

MortgageOnBlack wrote: Tue Aug 25, 2020 12:12 pm I appreciate all of the advice. I know in my heart this car is outside of my budget and chances are very high that I will have buyer's remorse after 6 months when I look at my account. Soon, I will compromise and "upgrade" to a used $7500-$10000 Toyota/Honda. Perhaps, periodic Turo rentals can help scratch the itch for now.

This is the right choice, and you will thank yourself down the road when you have a more solid retirement.
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JoeRetire
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by JoeRetire »

MortgageOnBlack wrote: Tue Aug 25, 2020 12:33 am Two weekends ago, I finally drove a Tesla Model 3 (Turo rental)... I get the hype now! I'm completely sold on Tesla's mission and I want in! It's been 2 weeks and I can't stop obsessing about the car (maybe this will fade with time)
It will fade in time if you let it.
My parents and fiancee are in the justification phase for me pulling the trigger since I drive the oldest honda on the block.
YOLO! You deserve it. What's money for anyway? After all, the average age of your two cars would still be 10 years!

Slippery slope. Start overspending at the beginning of your marriage, it may never end.
What creative ways can I make this a reality?
Here's a creative way: After you have fully-funded your 401k each year, paid for all your bills, and perhaps fund a 529 plan for any upcoming kiddos, skip the vacation each year and put all the money toward your car. Once you have everything saved and nothing that else that needs funding - buy!
It's the end of the world as we know it. | It's the end of the world as we know it. | It's the end of the world as we know it. | And I feel fine.
friar1610
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by friar1610 »

TomatoTomahto wrote: Tue Aug 25, 2020 9:38 am I love my Model X and have a deposit on a CyberTruck. I love Tesla. DON’T BUY ONE. Your finances are not suitable. There are other options: Bolt, etc.

Good luck.
I have a friend in CA who has the Tesla bug, partly because he likes the idea of EVs and partly because he thinks Teslas are cool. He can easily afford one. But he has done the research and isn't comfortable with the availability of service/repair options in his area (San Diego/Coronado). I don't know a lot about Teslas but I understand they don't require much in the way of service. In spite of that, he's concerned it could be a major hassle for him if something goes wrong. The last I talked to him he was coming around to the idea of a Chevy Bolt - not nearly as sexy as a Tesla but, as he says, you can always find a Chevy dealer for repairs (and still have your EV.)

Have never looked into EVs myself so just reporting another person's thinking.
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Independent George
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by Independent George »

SmallSaver wrote: Tue Aug 25, 2020 2:29 pm It's true that this puts OP in the upper 30% of incomes in the US, but that doesn't mean he (and I) don't feel like low earners. I make about the same, and while I'm certainly not complaining, it's extremely daunting to look at the cost of education, health care, housing, and a self-funded retirement on that salary. If we stick to the 3x gross income rule, how many of us live in places where that salary would afford a house? It certainly doesn't for me, and I live in one of the most rural states in the country (median home price in my area is $370k). I think a lot of folks with higher salaries & more assets (especially housing, mature retirement portfolios, and pensions) don't quite get what it's like to be starting out these days.
About the only time I feel like a low earner (I'm at close to the same age and income as the OP) is when I'm on BHs; it's a good thing status here comes from boasting about how much money you don't spend...
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unclescrooge
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by unclescrooge »

White Coat Investor wrote: Tue Aug 25, 2020 8:12 am
MortgageOnBlack wrote: Tue Aug 25, 2020 12:33 am Two weekends ago, I finally drove a Tesla Model 3 (Turo rental)... I get the hype now! I'm completely sold on Tesla's mission and I want in! It's been 2 weeks and I can't stop obsessing about the car (maybe this will fade with time)

Problem is I'm a low earner (75k), 36 years old, retirement ~115k (vanguard index funds 80/20), 40k emergency fund, no debt other than 190k mortgage (15 years remaining, split with soon to be wife).

My parents and fiancee are in the justification phase for me pulling the trigger since I drive the oldest honda on the block. Perhaps, I am a bit too. All i know is that pulling the trigger on this would completely wipe my emergency fund (probably too high anyway right? :wink: j/k or maybe I'm not )

What creative ways can I make this a reality? Should I just accept my social class and keep driving my 91 honda? Maybe buy one and Turo it Out? Perhaps this is the start of my mid-life crisis.

Any ideas? I appreciate any insight. It's amazing to me that I would have never considered anything over $5k for a car, but yet I'm drooling over a $40k car now. Tesla definitely pulled some moves from Apple's playbook on this one.
$75K is a low earner? That's more than the average household income in the US.

I certainly wouldn't own a Tesla of any kind if I only made $75K a year, had a mortgage, and had less than $200K. But it's your life and only you get to decide what is most important to you.

If renting didn't do it for you, why not look for a good used one? Here's one in my area for $30K: https://cars.ksl.com/listing/6638511?ad_cid=21
That's pretty high mileage. How much is a new Tesla battery?
harikaried
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by harikaried »

unclescrooge wrote: Tue Aug 25, 2020 5:36 pm
White Coat Investor wrote: Tue Aug 25, 2020 8:12 amHere's one in my area for $30K: https://cars.ksl.com/listing/6638511?ad_cid=21
That's pretty high mileage. How much is a new Tesla battery?
If you're suggesting high mileage indicates that the battery capacity has decreased, Tesla's fleet data from https://www.tesla.com/impact-report/2019 does indeed show 100k miles has about 7% range degredation and driving to 200k miles degrades another 3%.

But depending on what MortgageOnBlack actually desired from trying out a Model 3, getting an older S might not really satisfy. Elon Musk has guessed that a $25k Tesla could be made in 2021 and suggested new Tesla vehicles will have at least 300 miles range. Maybe next year there will be something OP desires, can afford and is willing to buy.

https://www.cnbc.com/2018/08/18/elon-mu ... ars--.html
https://insideevs.com/news/435523/musk- ... -is-300mi/
invest4
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by invest4 »

SmallSaver wrote: Tue Aug 25, 2020 2:29 pm It's true that this puts OP in the upper 30% of incomes in the US, but that doesn't mean he (and I) don't feel like low earners. I make about the same, and while I'm certainly not complaining, it's extremely daunting to look at the cost of education, health care, housing, and a self-funded retirement on that salary. If we stick to the 3x gross income rule, how many of us live in places where that salary would afford a house? It certainly doesn't for me, and I live in one of the most rural states in the country (median home price in my area is $370k). I think a lot of folks with higher salaries & more assets (especially housing, mature retirement portfolios, and pensions) don't quite get what it's like to be starting out these days.
We remember...vividly. Just keep pounding away...like a river through rock.
MortgageOnBlack wrote: Tue Aug 25, 2020 12:12 pm I appreciate all of the advice. I know in my heart this car is outside of my budget and chances are very high that I will have buyer's remorse after 6 months when I look at my account. Soon, I will compromise and "upgrade" to a used $7500-$10000 Toyota/Honda. Perhaps, periodic Turo rentals can help scratch the itch for now.
While I appreciate a nice car, I'm thankful they do not stir a deep desire in me. Good for you to know yourself and stay on the 'yellow brick road'. I would even offer you could look at a slightly lower price point ($6-$8K) and still find some great used cars.
Lee_WSP
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by Lee_WSP »

The problem isn't spending $40k on a car, the problem is that there are vastly cheaper alternatives that get the same job done.

If the only option was a $40k item (uninsured/out of network medical expense or college would be an example), then it's just a matter of budgeting the money.

Anyway, I'm just putting a slightly different perspective on the chorus of "don't do it!"
vasaver
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by vasaver »

Get a used Chevy Bolt - 14k-18k

https://www.autotrader.com/cars-for-sal ... Records=25

I have a used 2015 Nissan leaf - it has been great. The longer range and CCS high speed charging makes the Bolt the best value today.
cogito
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by cogito »

RichmondDad wrote: Tue Aug 25, 2020 11:51 am A few years ago I called an Uber which happened to be a Tesla (I don’t know what model/year). The driver said he was In the National Guard, wanted a Tesla and decided to be
Uber driver on nights and weekends until he had the car paid off...
This right here is the answer. We all know money is fungible, and that we are engaged in mental accounting. We also all know that OP cannot wisely afford a Model 3, nor is it a terrible idea since life is short and you are only young once. A reasonable position between the two is to make some kind of a sacrifice (part time job, tightening the belt at home, working overtime) to justify the purchase. It will make the bought product feel psychologically sweeter after said effort, and really put to the test how badly this luxury purchase needs to happen.
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MortgageOnBlack
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by MortgageOnBlack »

cogito wrote: Wed Aug 26, 2020 12:07 am
RichmondDad wrote: Tue Aug 25, 2020 11:51 am A few years ago I called an Uber which happened to be a Tesla (I don’t know what model/year). The driver said he was In the National Guard, wanted a Tesla and decided to be
Uber driver on nights and weekends until he had the car paid off...
This right here is the answer. We all know money is fungible, and that we are engaged in mental accounting. We also all know that OP cannot wisely afford a Model 3, nor is it a terrible idea since life is short and you are only young once. A reasonable position between the two is to make some kind of a sacrifice (part time job, tightening the belt at home, working overtime) to justify the purchase. It will make the bought product feel psychologically sweeter after said effort, and really put to the test how badly this luxury purchase needs to happen.

You hit the nail on the head for me. I do not want to be the richest guy in the graveyard. I do not want to be on my deathbed wishing I would have bought the damn Tesla. I also do not want to wish I would have invested $40k in Total Market on my deathbed either. #YOLO
1130Super
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by 1130Super »

Buy one and Rent it on Turo, its creative although it has some risks and pitfalls but then again you can’t be creative without taking risk. Boggle head community isn’t very keen on being creative.
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by 1130Super »

vasaver wrote: Tue Aug 25, 2020 11:55 pm Get a used Chevy Bolt - 14k-18k

https://www.autotrader.com/cars-for-sal ... Records=25

I have a used 2015 Nissan leaf - it has been great. The longer range and CCS high speed charging makes the Bolt the best value today.
Chevy bolt vs Tesla is like comparing fresh squeezed orange juice to Tang
mortfree
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by mortfree »

I would buy a scaled down version of the Tesla I like and display at home or office. Bonus points if it is a model kit and you can put it together yourself.

Otherwise I’m getting a brochure or magazine that has the picture of one I like and hanging that up at home or office.

I bought a 23k car on a 30k salary. It can be done.
flaccidsteele
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by flaccidsteele »

MortgageOnBlack wrote: Tue Aug 25, 2020 12:33 am Two weekends ago, I finally drove a Tesla Model 3 (Turo rental)... I get the hype now! I'm completely sold on Tesla's mission and I want in! It's been 2 weeks and I can't stop obsessing about the car (maybe this will fade with time)

Problem is I'm a low earner (75k), 36 years old, retirement ~115k (vanguard index funds 80/20), 40k emergency fund, no debt other than 190k mortgage (15 years remaining, split with soon to be wife).

My parents and fiancee are in the justification phase for me pulling the trigger since I drive the oldest honda on the block. Perhaps, I am a bit too. All i know is that pulling the trigger on this would completely wipe my emergency fund (probably too high anyway right? :wink: j/k or maybe I'm not )

What creative ways can I make this a reality? Should I just accept my social class and keep driving my 91 honda? Maybe buy one and Turo it Out? Perhaps this is the start of my mid-life crisis.

Any ideas? I appreciate any insight. It's amazing to me that I would have never considered anything over $5k for a car, but yet I'm drooling over a $40k car now. Tesla definitely pulled some moves from Apple's playbook on this one.
Didn’t your post describe how you can creatively own a Tesla? Use Turo

A couple paid for two Teslas by sharing them on the Airbnb for cars — here’s how they did it

How You Can Afford a Tesla Even If You're Not Rich
The US market always recovers. It’s never different this time. Retired in my 40s. Investing is a simple game of rinse and repeat
austin757
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by austin757 »

I would buy it. You're a young guy and still have time to put money away while still owning the car. You never know what the future holds, or how much time we have here. Good luck.
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Stef
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by Stef »

You are 36 years old. The price of this car isn't just 40k. Assuming 5% real return, buying this car now will rob your future self by 160k of retirement assets by the time you want to retire.
redmaw
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by redmaw »

It sounds like you are heading the right direction, away from the tesla, but i'll make a few points.

You are driving a 30 year old car that was likely 25% of the price of the tesla when it was new. Of course he tesla is much better. I would highly advise driving something else in the same price range, and a few things in a few lower price ranges to determine if the $ are worth it. Maybe its not really the tesla you really liked, but having a car that moves when you press the pedal... you can get that a lot cheaper than 40k.

Right out of college I paid close to 30k on a 54k salary. It hurt savings for a while, but things turned out fine. If you live frugally otherwise you can afford a more expensive car. I think you are in the range where you can afford most anything you want...but if you try for everything you want you will end up destitute.
harikaried wrote: Tue Aug 25, 2020 6:14 pm
unclescrooge wrote: Tue Aug 25, 2020 5:36 pm
White Coat Investor wrote: Tue Aug 25, 2020 8:12 amHere's one in my area for $30K: https://cars.ksl.com/listing/6638511?ad_cid=21
That's pretty high mileage. How much is a new Tesla battery?
If you're suggesting high mileage indicates that the battery capacity has decreased, Tesla's fleet data from https://www.tesla.com/impact-report/2019 does indeed show 100k miles has about 7% range degredation and driving to 200k miles degrades another 3%.

But depending on what MortgageOnBlack actually desired from trying out a Model 3, getting an older S might not really satisfy. Elon Musk has guessed that a $25k Tesla could be made in 2021 and suggested new Tesla vehicles will have at least 300 miles range. Maybe next year there will be something OP desires, can afford and is willing to buy.

https://www.cnbc.com/2018/08/18/elon-mu ... ars--.html
https://insideevs.com/news/435523/musk- ... -is-300mi/
tesla seems to have a casual relationship with the truth..I wouldn't trust the degradation numbers. What does % degradation mean? who is checking there numbers? how would you prove them wrong, what would be the consequences. .I would take anything coming from them with a big grain of salt.
michaeljc70
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by michaeljc70 »

75k is a not a "low earner". As someone above alluded to if your soon to be wife works your household income is/will probably be double or more than the average. The total cost of the car is likely to be more than $40k. There are no more federal incentives for Teslas, they charge for any color other than black, there are sales taxes, etc. Though you probably won't wind up living under a bridge because you bought a Tesla, it wouldn't be the frugal/Boglehead thing to do for you at this time.

As a side note, you can read on here and elsewhere how people had accidents and couldn't get their Tesla fixed for many months. Maybe this rarely happens....but it could really hit you if it does. Can you afford to keep a backup car or to rent a car for months?

I've seen, tried and experienced a lot of things in life that I wanted but I couldn't afford (at least on a perpetual basis). Giving in to this might put you on a path to "needing"/wanting a lot of other things.
rakamaka
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by rakamaka »

Nothing can stop you from self destructing(financially) when you "fall in love" with a car. 10K Versa or 50K Tesla car.
All other things are justifications of a purchase made to satisfy self intelligence. (Which include dealer is my friend, car gets better milage, no one have it around 3 blocks from home, electric is cheaper than gas, etc etc and so on)

At the end of first three months, every car is just a four wheels, brakes and steering wheel, taking you from point A to B.
trinc
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by trinc »

Prius Prime ?

Tim
rakamaka
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by rakamaka »

trinc wrote: Wed Aug 26, 2020 9:42 am Prius Prime ?

Tim
RAV4 prime? same cost as Tesla 3.
Independent George
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by Independent George »

I just want to reiterate the point that there is a LOT of car between a '91 Honda and a Model 3. You can easily upgrade your car (and your quality of life) without breaking the bank, and still get an even better Tesla in 4-5 years.
xerxes101
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by xerxes101 »

Check out Carvana, they have a lot of used Tesla model 3s for sale. You could buy a decent one for around 30K (likely 2018 mid range, black*). Put down $5,000 and finance the balance for 4-5 years. With the low interest rate environment right now, I believe you will be able to own one for a reasonable monthly payment. Also, Carvana lets you drive it for a week and if you don't like it you could turn it in for a full refund. If you are creative with your finances, you could possibly do a mortgage refi right now and not even feel the pinch of the monthly payments on your car.

*black-colored ones were "free paint" back then, Tesla offers white ones as free paint on new models now...trying to keep the entry price as low as possible for you :)
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by michaeljc70 »

xerxes101 wrote: Wed Aug 26, 2020 10:35 am Check out Carvana, they have a lot of used Tesla model 3s for sale. You could buy a decent one for around 30K (likely 2018 mid range, black*). Put down $5,000 and finance the balance for 4-5 years. With the low interest rate environment right now, I believe you will be able to own one for a reasonable monthly payment. Also, Carvana lets you drive it for a week and if you don't like it you could turn it in for a full refund. If you are creative with your finances, you could possibly do a mortgage refi right now and not even feel the pinch of the monthly payments on your car.

*black-colored ones were "free paint" back then, Tesla offers white ones as free paint on new models now...trying to keep the entry price as low as possible for you :)
The cheapest 2018 I see on Carvana is $38k. Add in tax and in most states you're over $40k. Doesn't seem like a good car to buy used.
xerxes101
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by xerxes101 »

michaeljc70 wrote: Wed Aug 26, 2020 10:41 am
xerxes101 wrote: Wed Aug 26, 2020 10:35 am Check out Carvana, they have a lot of used Tesla model 3s for sale. You could buy a decent one for around 30K (likely 2018 mid range, black*). Put down $5,000 and finance the balance for 4-5 years. With the low interest rate environment right now, I believe you will be able to own one for a reasonable monthly payment. Also, Carvana lets you drive it for a week and if you don't like it you could turn it in for a full refund. If you are creative with your finances, you could possibly do a mortgage refi right now and not even feel the pinch of the monthly payments on your car.

*black-colored ones were "free paint" back then, Tesla offers white ones as free paint on new models now...trying to keep the entry price as low as possible for you :)
The cheapest 2018 I see on Carvana is $38k. Add in tax and in most states your over $40k. Doesn't seem like a good car to buy used.
See this one https://www.carvana.com/vehicle/1466437 only has 18K miles and it is around 37K...I believe OP should be able to find one that he likes for 35K easily...I agree that the ideal situation would have been to buy a Model 3 back in 2018 with a $7500 tax credit, but unfortunately that train left the station long time ago.
vasaver
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by vasaver »

1130Super wrote: Wed Aug 26, 2020 2:41 am
vasaver wrote: Tue Aug 25, 2020 11:55 pm Get a used Chevy Bolt - 14k-18k

https://www.autotrader.com/cars-for-sal ... Records=25

I have a used 2015 Nissan leaf - it has been great. The longer range and CCS high speed charging makes the Bolt the best value today.
Chevy bolt vs Tesla is like comparing fresh squeezed orange juice to Tang
And Tang made it to space first:-). I hear there are many roads to Babylon and the Bolt fits nicely in the budget.
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by michaeljc70 »

xerxes101 wrote: Wed Aug 26, 2020 10:53 am
michaeljc70 wrote: Wed Aug 26, 2020 10:41 am
xerxes101 wrote: Wed Aug 26, 2020 10:35 am Check out Carvana, they have a lot of used Tesla model 3s for sale. You could buy a decent one for around 30K (likely 2018 mid range, black*). Put down $5,000 and finance the balance for 4-5 years. With the low interest rate environment right now, I believe you will be able to own one for a reasonable monthly payment. Also, Carvana lets you drive it for a week and if you don't like it you could turn it in for a full refund. If you are creative with your finances, you could possibly do a mortgage refi right now and not even feel the pinch of the monthly payments on your car.

*black-colored ones were "free paint" back then, Tesla offers white ones as free paint on new models now...trying to keep the entry price as low as possible for you :)
The cheapest 2018 I see on Carvana is $38k. Add in tax and in most states your over $40k. Doesn't seem like a good car to buy used.
See this one https://www.carvana.com/vehicle/1466437 only has 18K miles and it is around 37K...I believe OP should be able to find one that he likes for 35K easily...I agree that the ideal situation would have been to buy a Model 3 back in 2018 with a $7500 tax credit, but unfortunately that train left the station long time ago.
If for around $37k you mean $37,990...okay. That is $38k to me.
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bottlecap
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by bottlecap »

A midlife crisis is for someone who is 45 and got married and had kids by 25. Not for a 36 year old living the single life.

My rule is never buy a car you've fallen in love with unless you can pay cash and not blink. Being in love means reason takes a back seat. Don't let reason take a backseat in financial decisions unless the money truly doesn't matter.

Just posting this means paying for a Tesla is making you blink. And you're clearly in love.

JT
inbox788
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by inbox788 »

bottlecap wrote: Wed Aug 26, 2020 11:30 am A midlife crisis is for someone who is 45 and got married and had kids by 25. Not for a 36 year old living the single life.

My rule is never buy a car you've fallen in love with unless you can pay cash and not blink. Being in love means reason takes a back seat. Don't let reason take a backseat in financial decisions unless the money truly doesn't matter.

Just posting this means paying for a Tesla is making you blink. And you're clearly in love.

JT
Rules are different in the tech world. His career may be over in a few years!
Ageism in Tech: Is Your Developer Career Over after you Turn 40?

Mark Zuckerberg infamously told an audience at Stanford, “I want to stress the importance of being young and technical. Young people are just smarter.”
https://www.codemotion.com/magazine/art ... er-age-40/

Some kids blow a fortune with their first job buying a dream car, and that might be enough to get it out of their system for a while. Other get hooked and continuously support expensive car habits, sometimes beyond their means or giving up other important things. There are worse addictions, and OP seems to have a realistic view.

Clearly, a new car costs more than a used car, but if you can justify a new car, then here's some help to make the choice. Remains to be seen how the estimates pan out.

Tesla Model 3 Cost of Ownership Slightly Cheaper Than a Camry
https://loupventures.com/tesla-model-3- ... n-a-camry/

Here's an example of how one fellow made out. YMMV.

The Cost Of Owning A Tesla After 200,000 Miles
https://cleantechnica.com/2019/05/25/th ... 000-miles/
michaeljc70
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by michaeljc70 »

inbox788 wrote: Wed Aug 26, 2020 12:26 pm
bottlecap wrote: Wed Aug 26, 2020 11:30 am A midlife crisis is for someone who is 45 and got married and had kids by 25. Not for a 36 year old living the single life.

My rule is never buy a car you've fallen in love with unless you can pay cash and not blink. Being in love means reason takes a back seat. Don't let reason take a backseat in financial decisions unless the money truly doesn't matter.

Just posting this means paying for a Tesla is making you blink. And you're clearly in love.

JT
Rules are different in the tech world. His career may be over in a few years!
Ageism in Tech: Is Your Developer Career Over after you Turn 40?

Mark Zuckerberg infamously told an audience at Stanford, “I want to stress the importance of being young and technical. Young people are just smarter.”
https://www.codemotion.com/magazine/art ... er-age-40/

Some kids blow a fortune with their first job buying a dream car, and that might be enough to get it out of their system for a while. Other get hooked and continuously support expensive car habits, sometimes beyond their means or giving up other important things. There are worse addictions, and OP seems to have a realistic view.

Clearly, a new car costs more than a used car, but if you can justify a new car, then here's some help to make the choice. Remains to be seen how the estimates pan out.

Tesla Model 3 Cost of Ownership Slightly Cheaper Than a Camry
https://loupventures.com/tesla-model-3- ... n-a-camry/
True on working in tech...depending on your role.

The cost of ownership can probably be manipulated to say whatever you want. That is for a certain number of miles (~13k) per year, at a certain electricity cost, keeping the vehicle 5 years. Electricity costs vary by multiples throughout the US (CA paying 2-3 times more than I do), insurance costs also widely vary. I drive less than half the miles in this "study". If you tend to keep cars a long time, the residual values tend to converge more. I am not saying that the cost of ownership of a Model 3 couldn't be lower than a Camry, but I'd compare my situation (electricity, insurance, miles driven, etc.) to the study (and whether you even think the study is completely valid).

Loup Ventures (author of this) operates as a venture capital firm according to Bloomberg and invests in Tech related companies (maybe Tesla?).
fyre4ce
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by fyre4ce »

I will echo what others have said that this is probably not a smart move. You have other higher priority uses for the money - saving for retirement, paying down mortgage, starting a college fund for future children, etc - that will give you a lot of flexibility and options later in life. I generally recommend no more than 25% of gross household income in total value of household cars, and this Tesla would be in excess of that. ($40k = 53%, $30k = 40%, not including spouse's car). Before you make a purchase like this, take the time to write out a lifelong financial plan, including income, savings, expenses, and retirement. Make conservative assumptions about raises and investment performance, and use real data for spending. Look at the plan with and without the Tesla and see what the difference is.

If you still want the Tesla after the above exercise, then make it a financial goal. Cut spending in areas you can, and prioritize saving $500-1000 per month into a Tesla fund. It's okay if you invest it aggressively (eg. 100% VTSAX as was suggested), this will give you the shortest average time to reach your goals, although runs the risk of a market crash that will delay the purchase by years. In 2-3 years, your fund balance, cost of a used Tesla that you'd still enjoy, and your desire may intersect to make the purchase possible. This will also give you a cooling off period to make sure this is a purchase that will give you lasting enjoyment rather than just scratching a fleeting itch. If you decide at the time you don't want one that badly, then the money can be repurposed with no harm done.

Whatever you do, don't finance a Tesla now, while you're all hot and bothered about it. You'll make an emotional decision and may find in a year that the car feels more like an albatross around your neck rather than the exciting purchase you expected. Those large monthly payments will also be a major drag on your budget and wealth-building power. Saving up and paying cash is the best way to handle a purchase like this.
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by Strummer »

I own a Model 3. It's a great car, by far the best I've ever owned. I think you should hold off.

The financial reasons have already been spelled out by several people here, but I think you should consider something else, too. Tesla's whole strategy has been to introduce new, lower-priced vehicles over time. In three years, who knows what they'll be offering — especially if there's a significant advancement in battery technology.

You could always take a compromise approach — sock away as much as you can for a couple years and then make your decision. At the very least, with the way the price to technology ratio is going, you'll end up with a better Tesla for your $40K than you'd be able to buy today.
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by mmmodem »

"Low Earner" hahaha. I get it. Some of the salaries here on Boglehead make my head spin too. I am also a low earner making $100k. I was probably making about $75k when I was 36 and staring at the then cheapest 40 kWh Model S retailing for $50k.

I came up with a variety of ways to buy it including supercharging at the Fremont factory every day so I would never have to pay for electricity. I would also drive Uber and rent out my car. In the end, it didn't work out. I kept watching the used car market . The oldest Model S can be had as low as $24k for a 2012 with 100k miles. I can afford it at this price but it's getting pretty old. I'm not a fan of the 3 but the Y presses my buttons. Hopefully, with the lower starting price, I can find an affordable used one. See you in 5 years in our brand new used Tesla bought cheap because we are low earners. :beer Good luck, OP.
inbox788
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by inbox788 »

Strummer wrote: Wed Aug 26, 2020 1:08 pm I own a Model 3. It's a great car, by far the best I've ever owned. I think you should hold off.

The financial reasons have already been spelled out by several people here, but I think you should consider something else, too. Tesla's whole strategy has been to introduce new, lower-priced vehicles over time. In three years, who knows what they'll be offering — especially if there's a significant advancement in battery technology.

You could always take a compromise approach — sock away as much as you can for a couple years and then make your decision. At the very least, with the way the price to technology ratio is going, you'll end up with a better Tesla for your $40K than you'd be able to buy today.
I didn't upgraded my computer last year because everyone said something faster and cheaper is coming out this year, and it did, but now everyone is saying next year there's an even faster and cheaper one, so I'll revisit the question again next year.

Some fortunate early Tesla 3 adopters have negative depreciation, at least for a short period. Lots of weird things distort the market, and things don't always wind up as intended. New cars are being bought in Sweden and other countries to qualify for the incentives and moved to Norway for the additional benefits.
Norway has the world’s highest rate of electric car ownership in the world, partly thanks to long-term perks such as free or discounted road tolls, parking and charging points, which boost the appeal of second hand models unwanted elsewhere.

The government also exempts electric vehicles from taxes on traditional vehicles that are very high in a country which does not have its own fossil fuel car industry to lobby against them. Rebates offered by other countries are another part of the equation.
https://www.reuters.com/article/us-auto ... SKCN1R20HN

California has a strange incentive for low income folks to help them buy new hybrid or electric cars. What's next, subsidies for luxury goods? You'd think even with the rebate, if you have low income, it would be hard to own a new car, but if you flip it, it may cost little or you might get lucky. Rinse, repeat. Don't think that was the intent.
https://dcap.communityhdc.org/
tim1999
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by tim1999 »

lightheir wrote: Tue Aug 25, 2020 7:03 am I don't own a Model3 or Tesla yet, but I have it fully funded and ready to go.

I literally bought $10k of TSLA stock over a year ago, and it appreciated enough to pay for the car itself. Not saying this is replicable now that the stock is sky-high, but that's about as solid and low-cost a way to do it before as you could get and was eminently within your income range.
I know two people at work who seriously did this as a strategy to afford the car - they bought Tesla stock a couple of years ago with the idea that they could pay for the car with the appreciation. I know one bought the car recently.
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by Jags4186 »

Personally, I’d set a goal to save $40,000 outside of your normal savings and investing. By the time you reach that goal a much cooler car will be available for $40k and then you can decide at that point to purchase it.
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by tibbitts »

Jags4186 wrote: Wed Aug 26, 2020 1:55 pm Personally, I’d set a goal to save $40,000 outside of your normal savings and investing. By the time you reach that goal a much cooler car will be available for $40k and then you can decide at that point to purchase it.
I don't think that's reasonable. "Normal savings and investing" will provide for a "normal" car, and we can argue if that would be a $25k or $30k or whatever car. The amount in addition to save would be the difference in price between a "normal" car and a more expensive car than you would buy based purely on functionality.
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by phxjcc »

Independent George wrote: Wed Aug 26, 2020 10:11 am I just want to reiterate the point that there is a LOT of car between a '91 Honda and a Model 3. You can easily upgrade your car (and your quality of life) without breaking the bank, and still get an even better Tesla in 4-5 years.
This.

In a loaner 2020 Lexus ES (the Lexus Camry) for two weeks and cannot believe the tech uplift over a model year 2010 LX.

...and no, I don't recommend it; the WORST seats. Toyota should be ashamed of themselves.
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by Jags4186 »

tibbitts wrote: Wed Aug 26, 2020 2:50 pm
Jags4186 wrote: Wed Aug 26, 2020 1:55 pm Personally, I’d set a goal to save $40,000 outside of your normal savings and investing. By the time you reach that goal a much cooler car will be available for $40k and then you can decide at that point to purchase it.
I don't think that's reasonable. "Normal savings and investing" will provide for a "normal" car, and we can argue if that would be a $25k or $30k or whatever car. The amount in addition to save would be the difference in price between a "normal" car and a more expensive car than you would buy based purely on functionality.
The OP is currently driving a 1991 Honda worth around $300. I would posit he is not currently in the habit of saving for a normal car as he has been driving a 30-year-old car. Therefore to move up from a $300 car to a $40,000 car, he needs to save $40,000.
Kelrex
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by Kelrex »

Dopamine is a b$&ch.

Like any high though, you will never ever again be able to recreate that first hit. Sorry, but your best time with that Model 3 is already behind you.

When assessing the possible value of this car to your life, make sure to account for that. It won't be that same thrill day in and day out, that's an impossible thrill to chase. However, the hedonic adaptation will be very real, and this level of car probably won't be a one time purchase either. It's not one 40K car, it's more like a lifetime of 40K+ cars once you adapt to that as your standard.

So account for the depreciation of thrill, then account for the hedonic adaptation, then look at what's leftover, give that sensation an economic value and compare it to literally every other thing of that value that you could possibly want and see if it comes out ahead in terms of preference.

In the meantime, test drive some other cars and get a better sense of what your options are and what their relative values are.

I used to have my expensive "dream car", but personally, it didn't do enough for me long term to ever want to repeat the experience, so I've stuck with econocars since. I just bought a 2018 compact hatchback for about 10K, and compared to my older previous car, it has so many nice features, it really scratches that "new fun car" itch despite me being able to afford something much more expensive.

As a result though, I didn't flinch shortly after at buying a really nice e-bike for myself and a full suspension mountain bike for my SO, which combined with my car still come up to half the cost of your Model 3.

My advice? Go out and have fun test driving a bunch of different options. Get a feel for what's out there, what various levels of performance feel like and cost, and calibrate your system instead of making a massive purchase decision based off an enormous dopamine hit from a single luxury experience.
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Re: Low Earner... Creative ways to own a Tesla Model 3?

Post by RJC »

How much does your soon-to-wife make? If she's a high earner, then go for it.
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