Buy a Tesla Model 3?

207 Replies

@Dulce Beltran

It’s a car, not an appreciating asset. It may, however, save you money and/or stress over the long term. I know my 3 saves me money and a TON of stress. In addition to that, the joy that I get from driving it is well worth the money.

Watching people waiting in line at gas stations reaffirms it. Letting the car negotiate rush hour traffic reaffirms it. Driving the safest car on the road reaffirms it. Your mileage may vary.

@Dulce Beltran don't buy it because it's an investment, unless you had already intended to otherwise buy a new car.

Also, Teslas have no soul. And didn't the fed credit just get dramatically reduced or removed for 2019? That's why Tesla is laying off tons of operations employees to reduce their sales price. 

Also, your Tesla model 3 is not qualified for special depreciation by section 179 deduction for capital expenses. Buy something over a gross-vehicle-weight rating of 6000lbs and you can depreciate it for 100% of its value in the first year. Get your income as a real estate professional below the QBI limits for small business owners and you get an additional deduction just for making below the following cutoffs:

20 percent tax deduction for small businesses

Small-business owners look to grab this 20 percent tax break
  • Certain entrepreneurs may be eligible for a 20 percent deduction on qualified business income, which they can take on their 2018 tax return.
  • Business owners with 2018 taxable income below $157,500 if single or $315,000 if married and filing jointly may qualify.

My 43k jeep grand cherokee was a 43k writeoff in 2018, and it got me just barely under the 315000 after depreciating and writing off a million other things... which got me another 63k in deductions. 106k in deductions was equal to over 30k off of my year end tax bill- I got that car for 13 grand. Not terrible. Still drive my civic most of the time though ;)

@Elliott Elkhoury

"And didn't the fed credit just get dramatically reduced or removed for 2019?"

It is being phased out for Tesla since they crossed the 200,000 vehicles sold threshold.

The federal income tax credit went down from $7,500 to $3,750 on January 1st.  It will go down again on July 1st to $1,875.  For Tesla's purchased after 12/31/2019, no more federal tax credits.

There been legislative effort to extend the credit past 200,000 vehicles...but there's also been legislative effort to do away with the credit...

If you are going to buy electric, Tesla is the only model worth considering. Every other manufacturer basically adapted a gas car to run electric. Nobody else has a software platform to operate their car. Tesla was ground up developed to be electric. Better batteries, better motors, operating system running it all and they have the supercharger network. Larger fleet on the road, so better feedback loop to fix problems. The Model 3 motors and batteries are better than the earlier stuff and they are retrofitting back into Model S and X.

As far as longevity, it is hard to say for sure, but there are Tesla that have logged over 450K miles. Tesloop has been running between LA and Vegas on a 2015 Model S and has put on 450K. They have had the battery replaced twice, both under warranty. I think they said total maintenance was $13K out of pocket so really good. The latest generation motors and batteries are said to be million mile rated. Of course Elon said that. Still they have clearly improved the design based on what they learned.

There is no more free supercharging, but it is still way cheaper to run, even if you pay for electricity. If you are trying to cost justify, punch up the actual savings. You will find even if you are a heavy gas user, it is hard to financially justify over used or even many new cars. A Toyota Corolla will get you 40MPG and costs a little over $20K. It is the same size as the Modle 3, which gives you 126MPGe and costs over 40K. Hands down the Model 3 is a better car in every measure, but ten year ownership cost for Corolla is less. 

The decision comes down to personal enjoyment as much as anything. I would probably not expect 20 years out of any new car you are buying. Even if it lasts that long, it is pretty hard to drive the same car that long. Especially if you are a Tesla owner because the way technology is evolving, their future cars will be pretty amazing. 

One final consideration as a realtor, driving a nice car has more value. If you are trying to sell expensive homes to clients, driving up in a beater isn't the image you want to convey. Driving up in a Tesla will likely spark conversation and you will even be giving some rides. There is value there too.

@Dulce Beltran You need a car anyways and if you can afford go for it.  I've been reading up a lot on Tesla as I want to get one myself.  I'm considering a cpo model S 15-16 as it has takend a hit for decpreciaton already. Happy driving!

Originally posted by @Elliott Elkhoury :

@Dulce Beltran don't buy it because it's an investment, unless you had already intended to otherwise buy a new car.

Also, Teslas have no soul. And didn't the fed credit just get dramatically reduced or removed for 2019? That's why Tesla is laying off tons of operations employees to reduce their sales price. 

Also, your Tesla model 3 is not qualified for special depreciation by section 179 deduction for capital expenses. Buy something over a gross-vehicle-weight rating of 6000lbs and you can depreciate it for 100% of its value in the first year. Get your income as a real estate professional below the QBI limits for small business owners and you get an additional deduction just for making below the following cutoffs:

20 percent tax deduction for small businesses

Small-business owners look to grab this 20 percent tax break
  • Certain entrepreneurs may be eligible for a 20 percent deduction on qualified business income, which they can take on their 2018 tax return.
  • Business owners with 2018 taxable income below $157,500 if single or $315,000 if married and filing jointly may qualify.

My 43k jeep grand cherokee was a 43k writeoff in 2018, and it got me just barely under the 315000 after depreciating and writing off a million other things... which got me another 63k in deductions. 106k in deductions was equal to over 30k off of my year end tax bill- I got that car for 13 grand. Not terrible. Still drive my civic most of the time though ;)

keep in mind with section 179 recapture comes into play.. when I bought my first brand new airplane.  its was 455k.. I wrote off 90% first year.. so that sheltered 400k of income that year or just under 200k in tax I would have sent to uncle same that year..  But when I went to sell the plane I had recapture.. so I sold this one in the down turn of 2010 and thankfully had loss's to off set recapture.  

that one can sneak up on you..   

Originally posted by @Elliott Elkhoury :

@Jay Hinrichs you and that plane haha. Definitely something harder to NOT re-sell. Something as simple as a 40-50k vehicle can just be kept for a while though. Or "gifted".

with planes you just keep moving up..  section 179 is one of the main reasons you see private jet sales.. other wise everyone would just be flying a 1985 Cessna citation U can score on of those for 1 million..  

If you can afford it, get it. 

I personally don’t love the 3 or the S. Have driven both a good amount and IMO the interior sucks compared it’s ice competitors. 

Now that’s all relative. I am much pickier with my cars. I’m a car nut. I notice minor things, like the interior trim on the door, more than most people do. 

Also, reliability is generally good, but they are a newer company that has a lot of growing pains. If you get into an accident, don’t be surprised at a 3-6 month wait to get your car back. I’ve had exotics repaired quicker than my friend had his model S repaired. 

@Jay Hinrichs I don't know if my taste will ever be that expensive. I've watched my income increase at a strong pace the last few years and I might spend 20$ more on a bottle of whiskey than usual once a month.. but that's about it lol. Poor kid at heart here- give me a good gym to spend my evenings in and a couple comfy chairs in my backyard and all is well. Still have my buddies living at my place and paying my mortgage. Maybe when family time comes around some years ahead that will change- but I'll still get married to a frugal lady lol.

Still hate paying taxes though. Love how you can basically write off your whole life when you're self employed. Especially in this business, where advertising, business gifts, travel, and depreciation are everywhere to be found.

Originally posted by @Syed H. :

If you can afford it, get it. 

I personally don’t love the 3 or the S. Have driven both a good amount and IMO the interior sucks compared it’s ice competitors. 

Now that’s all relative. I am much pickier with my cars. I’m a car nut. I notice minor things, like the interior trim on the door, more than most people do. 

Also, reliability is generally good, but they are a newer company that has a lot of growing pains. If you get into an accident, don’t be surprised at a 3-6 month wait to get your car back. I’ve had exotics repaired quicker than my friend had his model S repaired. 

 I have heard that on the repairs..  thank fully those are rare events like having fire insurance on your house.. 

@Syed H. I've never met a car nut that wants a Tesla. I'm with you. Their target audience is the Techie, or someone who buys into the concept of premium practicality. The money is invested in the technological components but the car feels and looks extremely cheap and dinky otherwise.

Originally posted by @Elliott Elkhoury :

@Jay Hinrichs I don't know if my taste will ever be that expensive. I've watched my income increase at a strong pace the last few years and I might spend 20$ more on a bottle of whiskey than usual once a month.. but that's about it lol. Poor kid at heart here- give me a good gym to spend my evenings in and a couple comfy chairs in my backyard and all is well. Still have my buddies living at my place and paying my mortgage. Maybe when family time comes around some years ahead that will change- but I'll still get married to a frugal lady lol.

Still hate paying taxes though. Love how you can basically write off your whole life when you're self employed. Especially in this business, where advertising, business gifts, travel, and depreciation are everywhere to be found.

 People spend money on what they enjoy. And that’s how it should be. 

If you enjoy cars, spend it on cars. If you enjoy travel, spend it on travel. If you enjoy just saving money, well that’s just sad. We only live one life and you can’t take it with you.

I know I yearly probably spend what some people make in a year on travel. I also spend way too much on my sports cars, but don’t care too much about my daily driver. Unfortunately, I have expensive passions. Not a big spender on clothes and other stuff, but to each his own.

The issue becomes when people spend just to impress other people. They buy a massive house, a leased German car, and spend every penny they earn to show they live this lavish lifestyle. Now with social media it’s become even worse. People don’t enjoy their vacation, they just take pictures of it to post on IG. 

I have a Ferrari California, I have a Tesla, other EVs and another gas car I use at the track.  Each car does certain things well.  Dont knock until you actually own one and know what’s good and bad about it.

Originally posted by @Syed H. :
Originally posted by @Elliott Elkhoury:

@Jay Hinrichs I don't know if my taste will ever be that expensive. I've watched my income increase at a strong pace the last few years and I might spend 20$ more on a bottle of whiskey than usual once a month.. but that's about it lol. Poor kid at heart here- give me a good gym to spend my evenings in and a couple comfy chairs in my backyard and all is well. Still have my buddies living at my place and paying my mortgage. Maybe when family time comes around some years ahead that will change- but I'll still get married to a frugal lady lol.

Still hate paying taxes though. Love how you can basically write off your whole life when you're self employed. Especially in this business, where advertising, business gifts, travel, and depreciation are everywhere to be found.

 People spend money on what they enjoy. And that’s how it should be. 

If you enjoy cars, spend it on cars. If you enjoy travel, spend it on travel. If you enjoy just saving money, well that’s just sad. We only live one life and you can’t take it with you.

I know I yearly probably spend what some people make in a year on travel. I also spend way too much on my sports cars, but don’t care too much about my daily driver. Unfortunately, I have expensive passions. Not a big spender on clothes and other stuff, but to each his own.

The issue becomes when people spend just to impress other people. They buy a massive house, a leased German car, and spend every penny they earn to show they live this lavish lifestyle. Now with social media it’s become even worse. People don’t enjoy their vacation, they just take pictures of it to post on IG. 

or kills themselves taking selfies on top of cliffs or waterfalls..  we all have our things.. and then we have our women and they have their things :)

I am a car guy, so my reaction is to get what you like to drive.  The Teslas are fun and sensible and something I've been wanting to get for a long time because they're the cheaper option long-term unless you're your own mechanic and there's killer tax breaks all over for them.  I'm just waiting for the truck!

@Syed H. my money buys me time, sir. The stuff I choose to do with that time is coincidentally rather inexpensive. 

Loved the idea of a sports car until just recently, but when I actually came about a significant amount of funds my relationship with money changed & I like to keep things muted a bit. If you've got a recommendation for a good sleeper I'll take it! I don't like drawing attention to expensive things which I own, and it's hard to hide a car.

Originally posted by @Elliott Elkhoury :

@Syed H. my money buys me time, sir. The stuff I choose to do with that time is coincidentally rather inexpensive. 

Loved the idea of a sports car until just recently, but when I actually came about a significant amount of funds my relationship with money changed & I like to keep things muted a bit. If you've got a recommendation for a good sleeper I'll take it! I don't like drawing attention to expensive things which I own, and it's hard to hide a car.

 Yeah I’m all about paying for convenience/time. Would not rather waste my time doing things like laundry. 

It’s not as hard to hide your car as you think lol. My daily is a regular car. That’s what I drive in front of my contractors and tenants. I do not take my exotic out in front of them. I also don’t post pictures of cars on fb/ig. I only drive the sports cars when I actually have free time & I’m not traveling, which is a rare 2-3 days/month and maybe 1-2 track days/season. 

@Dulce Beltran I own and love my Chevy Bolt. It is so much fun to drive! I also put up a 7.4 kw solar power system on the shop next to my house to power it. With all the federal and state rebates, it’ll work out to the same cost of a very cheap Kio Rio or something like that in the end. No one here has mentioned yet that you’re doing the environment a favor, there’s value in that, and that it takes people like you and me adopting the technology to convince others to do so. Here in the PNW, most or our electricity comes from hydropower, so my car is almost entirely greenhouse free (yes, I know, the salmon are suffering). It’s money well spent in my mind.

There is a real play with exotic cars in terms of investment, but I don't know if you truly come out ahead since you have to pay a lot of maintenance and upkeep with it.  I think it is just a mirage.  Treat any money you make from a car as bonus, not an investment.  You will feel so much better about it.

* I bought my California because that car has a potential to go up in value, but that hasn't happened yet and probably wont until some celebrity starts driving it.... *

Can your Tesla produce a monthly cash flow of $300 from renting it?

I think there is a website for this type of thing, where you can rent your own vehicle and have some additional income.  Not sure about renting a Tesla Model 3 thought.  It sounds that vacancy will be high.  

Originally posted by @Josue Vargas :

Can your Tesla produce a monthly cash flow of $300 from renting it?

I think there is a website for this type of thing, where you can rent your own vehicle and have some additional income.  Not sure about renting a Tesla Model 3 thought.  It sounds that vacancy will be high.  

turo is the sight and the model 3 is very popular.. people want to test drive them before they buy them

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