Justifying Tesla Purchase

[CLKGTR]

I really really like the car. Want it bad. Just having a difficulty time justifying the purchase.

Assuming I get the model 3 LR I have 2 options

1. $520/month for 3 year lease. No down. 10k mileage per year but I drive usually 20k miles a year

2. Purchase used one with low mileage outright. 38k for under 10k miles.

Only thing that goes against boglehead principle is that it
1) $350-450 in monthly insurance. It negates the gas saving vs ICE car.
2) High depreciation
3) Expensive to repair

Should I just pull the trigger? I drove bogleheads recommended cars like Rav4, Highlander, CRV and Pilot but they drive like a boat and most importantly, the autopilot feature is horrible. It cant keep the car in lane. I need this bad as I drive long distance often.

[jebmke]

Cars are consumption items, not needing justification.

[CLKGTR]

Cars are consumption items, not needing justification.

Ugh after being burned with german luxury suv purchase, I dont want to make the same mistake. At the same time, I dont want to drive a car Im not excited about.

[jebmke]

Once you get past the state of "basic, safe and reliable transportation for the specified requirements" there is no way to financially justify a car any more than there is a a way to justify paying more than, say $15 for a watch. It is a personal lifestyle and affordability choice. Nobody here can help you with that in my opinion because our preferences are not yours.

[MathWizard]

I really really like the car. Want it bad. Just having a difficulty time justifying the purchase.

Assuming I get the model 3 LR I have 2 options

1. $520/month for 3 year lease. No down. 10k mileage per year but I drive usually 20k miles a year

2. Purchase used one with low mileage outright. 38k for under 10k miles.

Only thing that goes against boglehead principle is that it
1) $350-450 in monthly insurance. It negates the gas saving vs ICE car.
2) High depreciation
3) Expensive to repair

Should I just pull the trigger? I drove bogleheads recommended cars like Rav4, Highlander, CRV and Pilot but they drive like a boat and most importantly, the autopilot feature is horrible. It cant keep the car in lane. I need this bad as I drive long distance often.

Add to #1 a surcharge in the registration that most states are applying to offset the loss of gas tax revenue. I'd include the cost
that you'd normally pay in federal gas tax for the amount you drive.
It may not happen, but that's how roads get maintained at the state and federal level .


Add to #3 long time in the shop. I've heard horror stories of months in the shop after an accident.

[sambb]

depreciation, insurance, tires take a lot of the financial benefit out of it
would consider if you want the car anyway, and if so, i would lease it, and accept that it isnt a financial decision
can turo or rent one for a week and then decide if you want it

[Ron Ronnerson]

You haven’t provided information about your finances (age, income, expenses, assets). Your 2nd sentence is that you “want this bad” while the last sentence is you “need this bad.” There’s a big difference between those things so I’d begin with identifying which category this purchase falls under first and foremost. Then provide financial details so feedback can be more informed.

[123]

I really really like the car. Want it bad. Just having a difficulty time justifying the purchase....

Maybe you need to rent one for a week or month to try them out and see if your interest persists. Sometimes a want goes away when you realize that it really isn't anything special. Might be a different story if you need it to join the Elon fan club.

[lazydavid]

Have you looked at any alternatives that you could lease (to capture the $7500 credit) and then purchase at the end of the lease? That would alleviate any concerns about mileage, but Tesla does not allow purchasing at the end of a lease agreement, so not an option there. Polestar 2/3, BMW i4, Hyundai Ioniq 5, Kia EV6 would all be great alternatives with more flexible lease options.

With your mileage, if you want a new Tesla, you should just buy it.

[CLKGTR]

Have you looked at any alternatives that you could lease (to capture the $7500 credit) and then purchase at the end of the lease? That would alleviate any concerns about mileage, but Tesla does not allow purchasing at the end of a lease agreement, so not an option there. Polestar 2/3, BMW i4, Hyundai Ioniq 5, Kia EV6 would all be great alternatives with more flexible lease options.

With your mileage, if you want a new Tesla, you should just buy it.

Damn thats a great idea. By doing that, I can capture $7500 credit and do buyout at the end.

[cmr79]

OP, it doesn't make much sense to lease given your annual mileage. If you are spending that much time in a vehicle, it makes sense to spend a bit more overall and get the vehicle with the features (ADAS in this case) that you want. M3LR is not an overly expensive vehicle and should have costs in line with some of the others you mentioned, so this isn't really a luxury purchase assuming you need to get a new vehicle one way or another.

You can get a M3LR much cheaper than $38k. More like $25k if you are willing to get one from 2021-2022. If you only want the refreshed "Highland" M3LR from this year, it will be more in line with what you stated...but since the refreshed model isn't necessary to get the features you want, this would be the unnecessary/"luxury" part of your purchase that you would need to justify to yourself.

[Tyler Aspect]

I have a Model 3 standard range. Even when I am driving long distance I did not wish to have long range feature. After I have driven for 2 hours that is when I want to have a break, and might as well charge up. Dropping to standard range saves you $5000.

[CLKGTR]

OP, it doesn't make much sense to lease given your annual mileage. If you are spending that much time in a vehicle, it makes sense to spend a bit more overall and get the vehicle with the features (ADAS in this case) that you want. M3LR is not an overly expensive vehicle and should have costs in line with some of the others you mentioned, so this isn't really a luxury purchase assuming you need to get a new vehicle one way or another.

You can get a M3LR much cheaper than $38k. More like $25k if you are willing to get one from 2021-2022. If you only want the refreshed "Highland" M3LR from this year, it will be more in line with what you stated...but since the refreshed model isn't necessary to get the features you want, this would be the unnecessary/"luxury" part of your purchase that you would need to justify to yourself.

Highland is a must. Suspension and Ventilated Seat is so much better.

[logiclife]

Cars are consumption items, not needing justification.

Ugh after being burned with german luxury suv purchase, I dont want to make the same mistake. At the same time, I dont want to drive a car Im not excited about.

Burned how, curious

[cmr79]

OP, it doesn't make much sense to lease given your annual mileage. If you are spending that much time in a vehicle, it makes sense to spend a bit more overall and get the vehicle with the features (ADAS in this case) that you want. M3LR is not an overly expensive vehicle and should have costs in line with some of the others you mentioned, so this isn't really a luxury purchase assuming you need to get a new vehicle one way or another.

You can get a M3LR much cheaper than $38k. More like $25k if you are willing to get one from 2021-2022. If you only want the refreshed "Highland" M3LR from this year, it will be more in line with what you stated...but since the refreshed model isn't necessary to get the features you want, this would be the unnecessary/"luxury" part of your purchase that you would need to justify to yourself.

Highland is a must. Suspension and Ventilated Seat is so much better.

As long as you acknowledge that you are paying $13k for those upgrades. We can't justify that for you...those are generally not things that would be considered worth that much money otherwise. You spend a lot of time in the car, though, so if it's worth it to you and you can afford it, go ahead.

We all spend money on things that don't make financial sense; the biggest differences on Bogleheads vs the general population are usually that 1) we don't go into debt for this type of spending, and 2) we do it intentionally and with eyes wide open.

[cityscapex5]

Do you have a home charger? Factor the cost of that into your budget. If you're driving 20k miles per year the cost of public charging will negate any savings over gas.

[Young Boglehead]

Why not get a 2020ish one for like 20k?

[FinancetoMD]

My Model S Plaid is only $209 per month for insurance (full coverage, $500 deductible, and high coverage). I would think a model 3 would be cheaper.

[amd2135]

I’m also questioning those insurance costs. We pay ~$135 / mo. for full, low deductible coverage with all the bells and whistles for a MYLR. You may want to shop around for other quotes if you haven’t already.

[RJC]

We pay $65 a month for a 2021 MYLR with Erie and live in a HCOL area.

[Watty]

I drove bogleheads recommended cars like Rav4, Highlander, CRV and Pilot but they drive like a boat and most importantly, the autopilot feature is horrible. It cant keep the car in lane. I need this bad as I drive long distance often.

I hope this does not come across as being snarky but a bigger question is if you should be driving any car.

I took the AARP safe driving course a few years ago to get an insurance discount and one section in it was how to know if it is time to stop driving. There are people that are trained to go out driving with you evaluate your driving ability and let you know if you should stop driving.

If your insurance cost are so high because you have already had some accidents or tickets that could be a sign it is time to stop driving.

If you are on the cusp of needing to give up driving then leasing a car would be a bad idea since you might have a long time left on a lease when you need to stop driving.

[knowledge]

You're being quoted $5k/yr for insurance? There's got to be a glitch there. My Model 3LR is $100/mo.

Why not get a 2020ish one for like 20k?

Where? If this was true, I'd be happy to trade down from my 2022 and pocket the difference.

[er999]

Buy it if you want, but pay cash. So either buy used or wait and save more for a new one.

[kappy]

Some questions:
- what kind of “long distances” do you travel?
- do you qualify for the tax credit?
- can you afford to pay cash?

I ended up with a standard range refresh Model 3 earlier this year because 99% of my driving is under 200 miles and I can do that at 80 mph easily without supercharging. I also don’t qualify for the tax credit so the additional cost of the LR was definitely not worth it. They now have a RWD LR that’s priced between the SR and AWD LR. It gets the tax credit and is actually cheaper than the SR if you qualify.

20k miles per year and leasing just don’t go together. Pay cash or get their 1.99% financing offer.

[02nz]

Only thing that goes against boglehead principle is that it
1) $350-450 in monthly insurance. It negates the gas saving vs ICE car.
2) High depreciation
3) Expensive to repair

1. That's nuts
2. So buy used
3. That's what insurance is for

[joebruin77]

I have a 2018 Tesla Model 3 Performance and my wife drives a 2022 Ford Mustang MachE GT. Based on my experience, here are some things to consider:

1) Given that you drive a lot every year, are you driving on long road trips? If so, I would definitely go for the Tesla over any other EV. The Tesla Supercharger network makes long road trips very easy and comfortable. Any other car can be potentially frustrating and anxiety provoking (lots of stories of non-Tesla high speed chargers being much more limited and often broken). Yes, some brands are getting access to the Tesla Supercharger network, but only to SOME of the Superchargers. Many of the busier Superchargers are Tesla only. And the old V2 Superchargers can only be used by Teslas. So if you want maximum charging availability for long road trips, get the Tesla.

2) Make sure you live near a Tesla Service Center. Overall my Tesla has been very reliable over the 6 years I have owned it. But I have needed a couple minor repairs. I am glad my nearest Service Center is only 10 minutes away. I would hate it if it was a 2 hour trip just to get the car serviced.

3) Make sure you have access to a level-2 EVSE and can charge at home. That way, you can top of the battery every time you come home. And home charging is a lot cheaper than Supercharger charging. As for the cost of installing an EVSE, check with your local power utility. They often offer rebates. My utility gave me a $500 rebate which covered the cost of the EVSE, so I only had to pay an electrician for the installation. And the costs to install an EVSE are tax deductible.

4) You will save money on car maintenance. Over the 6 years I have owned my Tesla, I have spent a fraction for maintenance compared to my old ICE car. Plus Tesla offers mobile service. My routine maintenance, such as changing the air filter, checking the brake fluid, and rotating the tires has been done by Tesla mobile service in my driveway. And their costs for this are very reasonable. My last maintenance service for this "home visit" was around $100.

[HooCares]

Have you looked at any alternatives that you could lease (to capture the $7500 credit) and then purchase at the end of the lease? That would alleviate any concerns about mileage, but Tesla does not allow purchasing at the end of a lease agreement, so not an option there. Polestar 2/3, BMW i4, Hyundai Ioniq 5, Kia EV6 would all be great alternatives with more flexible lease options.

With your mileage, if you want a new Tesla, you should just buy it.

Damn thats a great idea. By doing that, I can capture $7500 credit and do buyout at the end.

Tesla will not let you buy out the lease at the end.

[hunoraut]

FYI if you choose to buy a new Tesla, ask any existing owner for a referral, it gives you a $1000 discount!

It’s literally 3 taps on the owners phone to generate a link that the purchaser can use.

[GT99]

My Model S Plaid is only $209 per month for insurance (full coverage, $500 deductible, and high coverage). I would think a model 3 would be cheaper.

Yeah, I was going to say my Model 3 SR is about $185 per month and I've got a couple speeding tickets on my record.

OP should definitely shop the insurance around.

[NYCaviator]

I really really like the car. Want it bad. Just having a difficulty time justifying the purchase.

Assuming I get the model 3 LR I have 2 options

1. $520/month for 3 year lease. No down. 10k mileage per year but I drive usually 20k miles a year

2. Purchase used one with low mileage outright. 38k for under 10k miles.

Only thing that goes against boglehead principle is that it
1) $350-450 in monthly insurance. It negates the gas saving vs ICE car.
2) High depreciation
3) Expensive to repair

Should I just pull the trigger? I drove bogleheads recommended cars like Rav4, Highlander, CRV and Pilot but they drive like a boat and most importantly, the autopilot feature is horrible. It cant keep the car in lane. I need this bad as I drive long distance often.

Why would you even consider a lease if you drive double the allotted annual mileage?

And why not just purchase new?

You haven’t posted your finances, but I get the impression from the tone of your post that you’re questioning whether you can afford it. If that’s the case, you should look at something cheaper. Nothing worse than being saddled with debt on a quickly depreciating asset or getting a nasty surprise when you go to turn your lease in and realize you owe a lot of fees.

[bhzmark]

I have a 2018 Tesla Model 3 Performance and my wife drives a 2022 Ford Mustang MachE GT. Based on my experience, here are some things to consider:

1) Given that you drive a lot every year, are you driving on long road trips? If so, I would definitely go for the Tesla over any other EV. The Tesla Supercharger network makes long road trips very easy and comfortable. Any other car can be potentially frustrating and anxiety provoking (lots of stories of non-Tesla high speed chargers being much more limited and often broken). Yes, some brands are getting access to the Tesla Supercharger network, but only to SOME of the Superchargers. Many of the busier Superchargers are Tesla only. And the old V2 Superchargers can only be used by Teslas. So if you want maximum charging availability for long road trips, get the Tesla.

2) Make sure you live near a Tesla Service Center. Overall my Tesla has been very reliable over the 6 years I have owned it. But I have needed a couple minor repairs. I am glad my nearest Service Center is only 10 minutes away. I would hate it if it was a 2 hour trip just to get the car serviced.

3) Make sure you have access to a level-2 EVSE and can charge at home. That way, you can top of the battery every time you come home. And home charging is a lot cheaper than Supercharger charging. As for the cost of installing an EVSE, check with your local power utility. They often offer rebates. My utility gave me a $500 rebate which covered the cost of the EVSE, so I only had to pay an electrician for the installation. And the costs to install an EVSE are tax deductible.

4) You will save money on car maintenance. Over the 6 years I have owned my Tesla, I have spent a fraction for maintenance compared to my old ICE car. Plus Tesla offers mobile service. My routine maintenance, such as changing the air filter, checking the brake fluid, and rotating the tires has been done by Tesla mobile service in my driveway. And their costs for this are very reasonable. My last maintenance service for this "home visit" was around $100.

This is a perfect summary and great advice.

I would also suggest that if finances are tight, while a Tesla will always save you money on a per mile driven basis, if you need to further save money, try to get a used Tesla from a friend who is upgrading to a newer Tesla. The used prices are a great deal now.

[CLKGTR]

Some questions:
- what kind of “long distances” do you travel?
- do you qualify for the tax credit?
- can you afford to pay cash?

I ended up with a standard range refresh Model 3 earlier this year because 99% of my driving is under 200 miles and I can do that at 80 mph easily without supercharging. I also don’t qualify for the tax credit so the additional cost of the LR was definitely not worth it. They now have a RWD LR that’s priced between the SR and AWD LR. It gets the tax credit and is actually cheaper than the SR if you qualify.

20k miles per year and leasing just don’t go together. Pay cash or get their 1.99% financing offer.

My commute is a short 10 min drive but I usually make road trips that is about 200 miles one way.

I dont qualify for tax credit which makes me feel like Im losing out on a deal.

I can afford for cash.

[cmr79]

Can you charge at the destination during your road trips?

[logiclife]

Can you charge at the destination during your road trips?

Not sure what you mean by destination but you will be routed through superchargers as you go through your your journey

[cmr79]

Can you charge at the destination during your road trips?

Not sure what you mean by destination but you will be routed through superchargers as you go through your your journey

OP said that though his commute is short, he drives one way 200 miles on road trips frequently...this was the post immediately prior to mine. If he can charge at his destination during those road trips, he could get the M3 standard range and wouldn't even have to use a supercharger on those 400 total mile road trips. The question is whether OP can save money by buying the SR instead of LR.

[logiclife]

Ah, got it thanks for clarifying.

Good point you raise.

[CLKGTR]

Can you charge at the destination during your road trips?

Living in a snowy region, I want AWD as well.

[lws]

We don't attempt to justify lifestyle purchases.
Buy the item if you like it.
Happy driving.

[cmr79]

Can you charge at the destination during your road trips?

Living in a snowy region, I want AWD as well.

Having directly compared AWD on all season tires with 2WD on snow tires in winter conditions, if this is a concern I would strongly consider either getting a second set of wheels with snow tires or, alternatively if you don't have space to store those or don't want to deal with the hassle, get a good set of all weather tires like Michelin CrossClimate 2s as your first replacement tire set. Far more safety benefit vs all wheel drive.

Note that this is another area where something I would perceive to be a want, rather than a need, is limiting your options and increasing the amount you need to spend. It is a slippery slope, but if you can afford the vehicle comfortably, it doesn't really matter.

[eric321]

Have you tried GM's supercruise? Its much better than the assisted driving features for toyota/Honda. It might make the long distance bearable with likely better insurance and fixability. Supercruise is available on Ice cars which might be a better fit for your driving patterns.

[MrBobcat]

Cars are consumption items, not needing justification.

Ugh after being burned with german luxury suv purchase, I dont want to make the same mistake. At the same time, I dont want to drive a car Im not excited about.

IMO all cars fall into that category +/- 3 months after owning them, but that just may be me.

[Wwwdotcom]

Have you tried GM's supercruise? Its much better than the assisted driving features for toyota/Honda. It might make the long distance bearable with likely better insurance and fixability. Supercruise is available on Ice cars which might be a better fit for your driving patterns.

Is super cruise really worth the $25 a month? I've found the toyota prius cruise to be nice since it is standard.

[Eno Deb]

Only thing that goes against boglehead principle is that it
1) $350-450 in monthly insurance. It negates the gas saving vs ICE car.

Shop around. I paid a little over $120/month at Progressive when my Model 3 was new. Some insurance companies don't like dealing with Tesla and charge inflated prices.

2) High depreciation

I haven't followed the prices recently, but if true that obviously speaks in favor of buying a pre-owned car.

3) Expensive to repair

That is true in case of an accident, but OTOH the regular maintenance cost is really low. No oil changes, much less complex mechanics, brake pads last forever due to regen braking etc. The only things I ever paid for are tires and a replacement low-voltage battery for ~$100. If you live close to a Tesla service center it's really convenient, since they usually send someone to your home or workplace for minor service items like this.

Should I just pull the trigger? I drove bogleheads recommended cars like Rav4, Highlander, CRV and Pilot but they drive like a boat and most importantly, the autopilot feature is horrible. It cant keep the car in lane. I need this bad as I drive long distance often.

There is no doubt that it's a very fun car to drive due to the instant and smooth acceleration without making a big fuss. You'll want L2 charging at home; the cost can vary substantially depending on how much wiring is required to install it. It can range from $250 for just the mobile charger if you have a dryer outlet in your garage to thousands if you need to route a lot of cabling through the house to get power to your parking spot or have to upgrade the panel. Don't expect too much from Tesla's autopilot. It still has various issues such as occasional "phantom braking", and the optional "full self-driving" package is very expensive and borderline fraudulent (they are nowhere near true autonomous driving). I have driven various other cars that have lane-keeping assist features easily as good as Tesla's autopilot.

[lazydavid]

You'll want L2 charging at home; the cost can vary substantially depending on how much wiring is required to install it. It can range from $250 for just the mobile charger if you have a dryer outlet in your garage to thousands if you need to route a lot of cabling through the house to get power to your parking spot or have to upgrade the panel.

Unless the dryer outlet is very new, I'd add a bit to this estimate for a replacement receptacle. Preferably a Hubble, Bryant, or Leviton specifically designed for EV chargers. Though dryers can draw high current, it's usually just for a minute or two at a time, as the heating element cycles on and off. EVSEs will draw the circut's full rated power (40A continuous on a 50A circuit) for hours on end. If the connection is not extremely solid, this can generate heat and potentially even cause a fire. $50-60 for the outlet plus maybe $80 to install if you're not comfortable with DIY, is a good investment in safety.

[RickBoglehead]

A lease option for half the mileage you drive makes zero sense. Get an option for the mileage you do drive...

Other arguments for justifying a Tesla purchase:

1) You like bland, egg-shaped, design.
2) You enjoy chanting "one of us, one of us".
3) Your favorite bird is the lemmings.

[cmr79]

3) Your favorite bird is the lemmings.

Just FYI, a lemming is a rodent, not a bird.

[sc9182]

There are sites for leasing suggestions/ADVICE (lol @RickBH), one of which comes to mind: leasehackr - check its forums.

If you are going to lease high-end vehicles., might as well pay may be: 25 cents/mile excess charges on one $100k + msrp car is pittance of depreciation (as compared to owning it and suffering depreciation cost yourself

Some manufacturers/leases provide depreciation on Maintenance service packages (MB comes to mind) - when taken at lease signing time. Say, on 3-year 50k miles package costs about: $5000 — it’s typical depreciated cost be 50% — so you only end up paying $2500 worth if done at lease time. (there is usually no refund though

As for Tesla - if you like Autopilot (and pretty good at monitoring its driving, and a few of its small quirks) — you won’t go back to any other Autopilots.

But, if you are driving enthusiast and passionate about driving - you know where to chase it with “punishingly higher depreciations”, especially with your annual miles (and rather high insurance costs)

[ThankYouJack]

A lease option for half the mileage you drive makes zero sense. Get an option for the mileage you do drive...

Other arguments for justifying a Tesla purchase:

1) You like bland, egg-shaped, design.
2) You enjoy chanting "one of us, one of us".
3) Your favorite bird is the lemmings.

Why the angst and constant trolling when it comes to Tesla? What do you drive now and what cars have you owned?

[Strummer]

1) $350-450 in monthly insurance. It negates the gas saving vs ICE car.
2) High depreciation
3) Expensive to repair

I highly recommend getting quotes from a variety of insurance companies. I've driven a Model 3 long range for over 6 years and found much lower rates through the company affiliated with Costco. If you're a Costco member, this may be the way to go.

As for your other two issues, if you buy used, you'll avoid the worst part of the depreciation hit. Re: repairs, my experience has been that Tesla service, on the one occasion when I've needed it, was less expensive than I expected (and the repair was done in my driveway, which was pretty convenient).

I'm no longer a fan of the company's CEO but I still think the cars are great. Fortunately, I've never expected fully autonomous self-driving capability, no matter how many times Elon said it was coming within the next year, LOL.

[Eno Deb]

Unless the dryer outlet is very new, I'd add a bit to this estimate for a replacement receptacle. Preferably a Hubble, Bryant, or Leviton specifically designed for EV chargers. Though dryers can draw high current, it's usually just for a minute or two at a time, as the heating element cycles on and off. EVSEs will draw the circut's full rated power (40A continuous on a 50A circuit) for hours on end. If the connection is not extremely solid, this can generate heat and potentially even cause a fire. $50-60 for the outlet plus maybe $80 to install if you're not comfortable with DIY, is a good investment in safety.

True, it's a good idea to check what state the contacts in the outlet are in. On the other hand, dryer plugs aren't cycled often, so if the existing outlet is a good quality model it can be in good shape even after decades. I use an old (10-30) outlet and it works just fine.