Tesla Dream
June 3, 2017 2:16 PM Subscribe
I need to buy a car. Everyone with a Tesla S raves about it. It's apparently the most enjoyable ride ever devised. And I'd be fine with the electric limitations. Problem: I'm nowhere close to being able to afford it (I have savings, but iffy income). Yet I've devised a justification! Please talk me out of it!
I can buy a normal car (new or used) that depreciates sharply, or I can get a Tesla and sell it for nearly the purchase price in a few years (then switch to a cheaper Tesla 3, or personal helicar, or micro-rent autonomous vehicles from Google fleet). It might cost less in the end to invest in the Tesla (leaving aside opportunity cost; I wouldn't invest amid this political volatility, anyway).
It can't be that easy, can it?
Main downside I can see: when Tesla 3 arrives (in quantity), and/or other disruptive things happen to the auto scene, my Tesla S may depreciate more than expected, as lots of owners sell for the same reason. Still surely can't depreciate as sharply as an Accord or Camry, though (for one thing, there's not that many of them out there).
Other downsides: expensive repairs, expensive insurance.
I'm not going to buy a Tesla. This is all fantasy. But please indulge me, by dissuading me from my pretend purchase!
I can buy a normal car (new or used) that depreciates sharply, or I can get a Tesla and sell it for nearly the purchase price in a few years (then switch to a cheaper Tesla 3, or personal helicar, or micro-rent autonomous vehicles from Google fleet). It might cost less in the end to invest in the Tesla (leaving aside opportunity cost; I wouldn't invest amid this political volatility, anyway).
It can't be that easy, can it?
Main downside I can see: when Tesla 3 arrives (in quantity), and/or other disruptive things happen to the auto scene, my Tesla S may depreciate more than expected, as lots of owners sell for the same reason. Still surely can't depreciate as sharply as an Accord or Camry, though (for one thing, there's not that many of them out there).
Other downsides: expensive repairs, expensive insurance.
I'm not going to buy a Tesla. This is all fantasy. But please indulge me, by dissuading me from my pretend purchase!
It sounds like you have good instincts. Ejs said it best and said it all - get a used car and only as much car as you can pay with cash.
I agree, it's hard these days to resist the siren call of the shiny new thing. The hidden persuaders of Madison Avenue (and Infinite Loop) are very good at what they do.
To lash yourself to the mast of fiscal responsibility, get a copy of The Millionaire Next Door and read it cover to cover.
* Any new car loses a third of its value when you drive it off the lot - electrical or conventional. A late-model low-mileage used car is your best value.
** It sounds like you are itching to splurge a little. Do it - but maybe with $600 instead of $60k.
posted by metaseeker at 2:51 PM on June 3, 2017 [3 favorites]
I agree, it's hard these days to resist the siren call of the shiny new thing. The hidden persuaders of Madison Avenue (and Infinite Loop) are very good at what they do.
To lash yourself to the mast of fiscal responsibility, get a copy of The Millionaire Next Door and read it cover to cover.
* Any new car loses a third of its value when you drive it off the lot - electrical or conventional. A late-model low-mileage used car is your best value.
** It sounds like you are itching to splurge a little. Do it - but maybe with $600 instead of $60k.
posted by metaseeker at 2:51 PM on June 3, 2017 [3 favorites]
Your logic is like, crazy faulty. You're basing this on the premise that you're going to be able to sell the S at near cost but this is entirely unknowable, far beyond the one scenario you've come up with.
I mean there's a logical contradiction in the very first sentence of your reasoning--if you're selling your Tessa to upgrade to some magical new shit (that is also cheaper) why the fuck would anyone else want to buy your old outdated tech for what you originally paid??
posted by danny the boy at 3:12 PM on June 3, 2017 [19 favorites]
I mean there's a logical contradiction in the very first sentence of your reasoning--if you're selling your Tessa to upgrade to some magical new shit (that is also cheaper) why the fuck would anyone else want to buy your old outdated tech for what you originally paid??
posted by danny the boy at 3:12 PM on June 3, 2017 [19 favorites]
To put a finer point on it: your plan is to own something until such time that a cheaper, better replacement of that thing becomes available--but you expect everyone else to continue wanting the old thing because... they don't know about the new thing?
If the current S is holding value it's because there's not a significant difference between existing model years AND because new supply is constrained. Like even if we completely ignore other Tesla models and other car companies, you're betting on Tesla never releasing an updated S or significantly increasing production--which is... not reasonable.
posted by danny the boy at 3:24 PM on June 3, 2017 [1 favorite]
If the current S is holding value it's because there's not a significant difference between existing model years AND because new supply is constrained. Like even if we completely ignore other Tesla models and other car companies, you're betting on Tesla never releasing an updated S or significantly increasing production--which is... not reasonable.
posted by danny the boy at 3:24 PM on June 3, 2017 [1 favorite]
Related to what danny the boy is trying to say, economies of scale on battery production (the bulk of the car price) are kicking in with the new factories. In three years a similar car could be significantly cheaper, which is going to kill resale value. Plus, if batteries don't get cheaper, Tesla's future may very well be in question, which won't help resale value either.
Aside from the financial issues, the car itself may not be as awesome as you think it is.
I looked at leasing one about a year ago and test drove it. It is really fast, but it's not particularly comfortable and it has kind of a cheap feeling interior. I tried to justify it to myself as a toy, but the problem was that it was a toy that I would have had to use as my daily driver and if I wasn't going to be happy in it stuck in traffic I just didn't see the point.
posted by NormieP at 3:25 PM on June 3, 2017 [3 favorites]
Aside from the financial issues, the car itself may not be as awesome as you think it is.
I looked at leasing one about a year ago and test drove it. It is really fast, but it's not particularly comfortable and it has kind of a cheap feeling interior. I tried to justify it to myself as a toy, but the problem was that it was a toy that I would have had to use as my daily driver and if I wasn't going to be happy in it stuck in traffic I just didn't see the point.
posted by NormieP at 3:25 PM on June 3, 2017 [3 favorites]
Total Elon fan boy here but the practicalities are just not there yet, no real long term track record and no not everyone full on raves. Great second car if it fits your budget easily. Consider something that's probably 90% of what you like, say a Pirus.
posted by sammyo at 3:26 PM on June 3, 2017 [2 favorites]
posted by sammyo at 3:26 PM on June 3, 2017 [2 favorites]
I had some pretty intense Tesla-lust five or so years ago. I got over it by buying a RAV4 EV, the unwanted love child of Tesla and Toyota, which features a 40kWh first-gen Tesla Model S drivetrain unceremoniously crammed into a... pretty standard RAV4.
Back in 2013, if you said to someone that you were interested in an electric car, they would look at you with the kind of wide-eyed apprehension that you would get if you told someone, say, that you were thinking of buying a timeshare. Tesla lust had not hit the general population, electric vehicles were still seen as a boondoggle, and so Toyota had these limited-edition frankencars sitting on the lot that despite being pretty neat, they had trouble explaining and couldn't get off the lot.
For a brief time, they sold them, after tax benefits and incentives, for roughly the same price as a normal RAV4. And I bought one. It's all-electric! It's zippy! It gets decent 100-mile range! It's kind of weird! Sure, service will be awkward moving forward - neither Tesla or Toyota really want anything to do with this car - but ours has nearly 60k on the odometer and it's still going strong.
There's a bunch of them coming off of lease, so if you live near San Francisco or Los Angeles, you can pick one up fairly cheap and get the all-electric Tesla driving experience, with none of the frills, for the cost of a fairly normal used car! No, it's not an investment, but if you live in California, for the right person, it's not a bad buy either.
posted by eschatfische at 3:34 PM on June 3, 2017 [6 favorites]
Back in 2013, if you said to someone that you were interested in an electric car, they would look at you with the kind of wide-eyed apprehension that you would get if you told someone, say, that you were thinking of buying a timeshare. Tesla lust had not hit the general population, electric vehicles were still seen as a boondoggle, and so Toyota had these limited-edition frankencars sitting on the lot that despite being pretty neat, they had trouble explaining and couldn't get off the lot.
For a brief time, they sold them, after tax benefits and incentives, for roughly the same price as a normal RAV4. And I bought one. It's all-electric! It's zippy! It gets decent 100-mile range! It's kind of weird! Sure, service will be awkward moving forward - neither Tesla or Toyota really want anything to do with this car - but ours has nearly 60k on the odometer and it's still going strong.
There's a bunch of them coming off of lease, so if you live near San Francisco or Los Angeles, you can pick one up fairly cheap and get the all-electric Tesla driving experience, with none of the frills, for the cost of a fairly normal used car! No, it's not an investment, but if you live in California, for the right person, it's not a bad buy either.
posted by eschatfische at 3:34 PM on June 3, 2017 [6 favorites]
We have a BMW i3 with the "sell it in 3 years" intent, because it's got the range extender, which means we can only get the green carpool stickers (expire in 2019), not the white ones.
However, we know that electric car technology is gonna change a lot in those 3 years, which means "sell it for anything near what you bought it for" is a pipe dream. Cars are an expense, and depreciate hard. And a Tesla will depreciate as much as anything, because how much of that car is all the cool compute? And how fast does computer power depreciate?
And, yeah, for all of the hype about "autopilot" mode, other vendors have lane following and ACC. And it's only gonna get better in the next 3 years. Yes, electric cars are fun and cool and it's really hard to go back to driving an internal combustion engine after you drive one, but there are much cheaper electrics out there.
posted by straw at 3:46 PM on June 3, 2017
However, we know that electric car technology is gonna change a lot in those 3 years, which means "sell it for anything near what you bought it for" is a pipe dream. Cars are an expense, and depreciate hard. And a Tesla will depreciate as much as anything, because how much of that car is all the cool compute? And how fast does computer power depreciate?
And, yeah, for all of the hype about "autopilot" mode, other vendors have lane following and ACC. And it's only gonna get better in the next 3 years. Yes, electric cars are fun and cool and it's really hard to go back to driving an internal combustion engine after you drive one, but there are much cheaper electrics out there.
posted by straw at 3:46 PM on June 3, 2017
Response by poster: 1. My depreciation comment is not out of nowhere. Tessa S does not depreciate. Never has as Tesla has improved the car, nor as other EVs have come on market. They hold rock steady (otherwise I'd be all over a used one). As I note, however, past performance is certainly no guarantee of future results.
2. It's not that I want an EV, generally. It's that Tesla S is special. I've read quite a lot.
posted by Quisp Lover at 4:50 PM on June 3, 2017
2. It's not that I want an EV, generally. It's that Tesla S is special. I've read quite a lot.
posted by Quisp Lover at 4:50 PM on June 3, 2017
I am an EV expert. Lease new, buy used.
Buying a Tesla Model S with the expectation of selling it three years from now for anything close to the purchase price is utter foolishness. And then you have to consider the problems with the Model S, including the fact that it's a HUGE car and unwieldy as a result, little things break on it all the time, and service visits takes forever (do you expect to actually use your car, or have it sit in the shop for MONTHS?)
Seconding the BMW i3; it's a great car, and actually more fun than the Tesla. You just have to get over the looks -- it's supremely ugly when viewed from straight on, front or back, largely due to the skinny tires.
If you can wait until the fall, you can expect to see short-range EVs like the BMW i3 get discounted. The Chevy Bolt EV is forcing the rest of the market to discount.
The Chevy Bolt EV itself is a great option, but I would wait until the 2018 cars are out this fall, giving GM a chance to fix the seats and fix the glaring omission of adaptive cruise control.
Everything you ever wanted to know about EVs is here: http://ElectrifyAtlanta.com
posted by intermod at 4:53 PM on June 3, 2017 [7 favorites]
Buying a Tesla Model S with the expectation of selling it three years from now for anything close to the purchase price is utter foolishness. And then you have to consider the problems with the Model S, including the fact that it's a HUGE car and unwieldy as a result, little things break on it all the time, and service visits takes forever (do you expect to actually use your car, or have it sit in the shop for MONTHS?)
Seconding the BMW i3; it's a great car, and actually more fun than the Tesla. You just have to get over the looks -- it's supremely ugly when viewed from straight on, front or back, largely due to the skinny tires.
If you can wait until the fall, you can expect to see short-range EVs like the BMW i3 get discounted. The Chevy Bolt EV is forcing the rest of the market to discount.
The Chevy Bolt EV itself is a great option, but I would wait until the 2018 cars are out this fall, giving GM a chance to fix the seats and fix the glaring omission of adaptive cruise control.
Everything you ever wanted to know about EVs is here: http://ElectrifyAtlanta.com
posted by intermod at 4:53 PM on June 3, 2017 [7 favorites]
They hold rock steady (otherwise I'd be all over a used one)
Huh? Tesla themselves sell used Model Ses at pretty substantial discounts. A 2013 85kWh that's nicely equipped currently sells for $47,500 on Tesla's site. That car sold for $80k+ in 2013. That's pretty typical depreciation.
posted by eschatfische at 5:01 PM on June 3, 2017 [7 favorites]
Huh? Tesla themselves sell used Model Ses at pretty substantial discounts. A 2013 85kWh that's nicely equipped currently sells for $47,500 on Tesla's site. That car sold for $80k+ in 2013. That's pretty typical depreciation.
posted by eschatfische at 5:01 PM on June 3, 2017 [7 favorites]
They hold rock steady (otherwise I'd be all over a used one)
Yeah, I don't know where you're getting this from. I've seen some sources that claim that they depreciate slower than other cars in that segment, but that's about it. When I was shopping for a Tesla a year or so ago I was offered a store demo model with low milage at a significantly reduced price.
Even Tesla's own leasing calculator (found here) seems to figure the residual value after three years at a bit above 50%. I looked at the source code of the calculator and saw that the base residual amount they use is 50% and then have some modifiers that bump it a little bit depending on the desirability of their models.
posted by NormieP at 5:14 PM on June 3, 2017
Yeah, I don't know where you're getting this from. I've seen some sources that claim that they depreciate slower than other cars in that segment, but that's about it. When I was shopping for a Tesla a year or so ago I was offered a store demo model with low milage at a significantly reduced price.
Even Tesla's own leasing calculator (found here) seems to figure the residual value after three years at a bit above 50%. I looked at the source code of the calculator and saw that the base residual amount they use is 50% and then have some modifiers that bump it a little bit depending on the desirability of their models.
posted by NormieP at 5:14 PM on June 3, 2017
Response by poster: What's the oldest I should consider re: a used BMW i3 (with range extender)? Definitely want the adaptive cruise control (autopilot is a big draw for me with Tesla)
I last checked Tesla depreciation a year ago. Things seem to have changed.
posted by Quisp Lover at 5:15 PM on June 3, 2017
I last checked Tesla depreciation a year ago. Things seem to have changed.
posted by Quisp Lover at 5:15 PM on June 3, 2017
There was an article in the NY times about accidents involving cars rented through Getaround which mentioned a Tesla owner who made more each month from his rentals than the car payment.
The downside is that his car was in a bunch of accidents and eventually totaled.
posted by vespabelle at 5:50 PM on June 3, 2017
The downside is that his car was in a bunch of accidents and eventually totaled.
posted by vespabelle at 5:50 PM on June 3, 2017
From personal experience with people who own one, it's a great car and they love it, no problems.
But your plan makes no sense. A new car is not an investment, it's the opposite. If you really want to splurge and lose less money then, as intermod said, Lease new, buy used. I know people with way more money than I'll ever have who follow this rule.
posted by bongo_x at 6:02 PM on June 3, 2017
But your plan makes no sense. A new car is not an investment, it's the opposite. If you really want to splurge and lose less money then, as intermod said, Lease new, buy used. I know people with way more money than I'll ever have who follow this rule.
posted by bongo_x at 6:02 PM on June 3, 2017
Best answer: The early depreciation-free days of Tesla were reliant on pent-up demand coupled with low output from a small-time manufacturer. The same thing happened when the new Minis came out, but eventually they were able to build enough for anyone who wanted one and they're just regular used cars now.
Electric cars are going to be very similar to any other consumer electronics item soon enough. The early years lagged on the innovation scale because they had just started building them. But, as more manufacturers start demanding batteries, innovations are going to take off and the original Model S could look like a Pentium III in a few years.
GM isn't sexy, but they fucking know how to build cars. The Bolt is going to shake the market up before you know it.
posted by hwyengr at 6:33 PM on June 3, 2017 [1 favorite]
Electric cars are going to be very similar to any other consumer electronics item soon enough. The early years lagged on the innovation scale because they had just started building them. But, as more manufacturers start demanding batteries, innovations are going to take off and the original Model S could look like a Pentium III in a few years.
GM isn't sexy, but they fucking know how to build cars. The Bolt is going to shake the market up before you know it.
posted by hwyengr at 6:33 PM on June 3, 2017 [1 favorite]
One thing to factor into your decision-- Teslas are extremely popular on Turo and rent at a premium. You can rent it out for a week a month and pay almost the entire payment.
posted by empath at 7:02 AM on June 4, 2017
posted by empath at 7:02 AM on June 4, 2017
Another option is to get a Bolt. They're surprisingly decent cars, for being a Chevy, and also quite roomy for the size. It should satisfy most of the gadget lust at a much lower price. I'd suggest an e-golf, but their range is barely more than a Leaf and the performance sucks compared to even the Bolt.
I'm totally with you on trying to figure out a way to afford a Model S, but a well optioned Model 3 might be worth waiting for instead. In a few short months things will be much clearer in terms of what exactly it will end up looking like and what it will do to the resale of the Model S and other EVs.
posted by wierdo at 5:16 PM on June 5, 2017 [1 favorite]
I'm totally with you on trying to figure out a way to afford a Model S, but a well optioned Model 3 might be worth waiting for instead. In a few short months things will be much clearer in terms of what exactly it will end up looking like and what it will do to the resale of the Model S and other EVs.
posted by wierdo at 5:16 PM on June 5, 2017 [1 favorite]
Re your "What's the oldest I should consider re: a used BMW i3 (with range extender)? ". You don't have a whole lot of option there, it hasn't been around that long. We bought a 2014 lease return last year, I think it was about $33k with ~10k miles on it, with the ACC, the nice trim, and the backup camera. The ACC doesn't like driving into the sun in late afternoon/early evening, or areas with lots of speckled shadows. I believe that the 2016 ACC has a "just be cruise control" mode, that the 2104 doesn't.
Other than that, the main difference is that the battery pack on the new one has more capacity. You can upgrade the 2014 one to the new one for on the order of $8k, but that's only worth doing once the battery wears out, which should be another 7-8 years minimum.
The huge flaw of the Bolt is the lack of ACC. I can't believe GM fumbled that one.
posted by straw at 1:03 PM on June 6, 2017 [1 favorite]
Other than that, the main difference is that the battery pack on the new one has more capacity. You can upgrade the 2014 one to the new one for on the order of $8k, but that's only worth doing once the battery wears out, which should be another 7-8 years minimum.
The huge flaw of the Bolt is the lack of ACC. I can't believe GM fumbled that one.
posted by straw at 1:03 PM on June 6, 2017 [1 favorite]
Response by poster: The problem with the 3, weirdo (not a judgement), is that "S" owners concede that fit/finish ain't great. I'm not sure "like an 'S' but made cheaper" will play to strength!
posted by Quisp Lover at 9:21 PM on June 6, 2017
posted by Quisp Lover at 9:21 PM on June 6, 2017
This thread is closed to new comments.
Also, where do you get the idea that you'll be able to sell a Tesla for near to the purchase price in three years? That premise has not been properly established.
Finally, as you point out yourself, the yearly cost of operation will be high. Recouping the purchase price in a couple of years will be cold comfort when you're skipping meals and your phone service is shut off thanks to your car insurance and maintenance expenses.
A car is perhaps the worst thing on which to splurge! Get a used Accord or Camry and be grateful every day that you're not yoked to an electric white elephant.
posted by ejs at 2:31 PM on June 3, 2017 [25 favorites]