Author Topic: Keep or sell second car (Tesla Model 3)  (Read 2622 times)

bwichner

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Keep or sell second car (Tesla Model 3)
« on: September 30, 2020, 11:25:24 AM »
hey folks, just joined this page earlier today after being a long time lurker.  Just read Your Money or Your Life and just finished up going thru the painful but valuable exercise of finding out where every last dollar has gone for the last 4 months.  Took awhile but I've got a much better idea now.  So we now have a few areas like groceries we are looking to reduce etc etc.  I'm not one to talk finances publicly so this does take some courage but looking for second opinion here (even I think I know what I need to do).

One of the big expenses we have are cars.  My wife and are working from home thru end of the year (covid restrictions at office).  We have been doing this since March which has been an adjustment but not end of the world.   I also, expect work from home will continue till things get back to normal (covid vaccine etc) which is likely not till middle of next year.

We make a good wage and are saving 50% right now so doing well there.  BUT, I think we can always do better.  My question is whether to keep second car or not when we are barely driving since working from home.  That second car is a 2020 Tesla Model 3.  It's a great car for all of the reasons you hear but its only been driven about 500 miles since March (only 7,000 miles total on the car).  I've got a loan on the car 5yr, 2.75%, payment is $730 / month and insurance is $70 / month.  We can 'afford' the payments and could even pay it off now but I go back and forth on keep or sell. 

Once we are back to work I will need a car but assuming that is June - that's another 9 months at $800/month on the Tesla ($7200) on a car we barely drive.  Also, work is only 7 miles away (thru town) so it also feels like overkill not to just ride a bike or ebike (very hilly) or get a cheap car or beater.  So long term my transportation costs would still be lower than the Tesla which also helps.

Appreciate your input!  Honestly, I think it would be wise to just sell the car, bank the money and do the bike or cheap car later and keep banking the extra.  Thoughts?
« Last Edit: September 30, 2020, 11:30:44 AM by bwichner »

MrThatsDifferent

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Re: Keep or sell second car (Tesla Model 3)
« Reply #1 on: September 30, 2020, 12:31:20 PM »
Trust your instincts and insights. You know what to do, be brave enough to follow through.

researcher1

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Re: Keep or sell second car (Tesla Model 3)
« Reply #2 on: September 30, 2020, 12:51:54 PM »
That second car is a 2020 Tesla Model 3.  its only been driven about 500 miles since March (only 7,000 miles total on the car).  I've got a loan on the car 5yr, 2.75%, payment is $730 / month and insurance is $70 / month.  We can 'afford' the payments and could even pay it off now but I go back and forth on keep or sell. 

Once we are back to work I will need a car but assuming that is June - that's another 9 months at $800/month on the Tesla ($7200) on a car we barely drive.  Also, work is only 7 miles away (thru town) so it also feels like overkill not to just ride a bike or ebike (very hilly) or get a cheap car or beater.  So long term my transportation costs would still be lower than the Tesla which also helps.

Appreciate your input!  Honestly, I think it would be wise to just sell the car, bank the money and do the bike or cheap car later and keep banking the extra.  Thoughts?
What is the make/model/year/mileage of your primary car?
What is the value of the primary car and do you have a loan on it?


teltic

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Re: Keep or sell second car (Tesla Model 3)
« Reply #3 on: September 30, 2020, 01:05:49 PM »
If you plan on getting another Tesla in June 2021; don't sell.  If you plan on downsizing and getting a cheaper car.  Do it!

Not sure what state you live in; but sales tax will hurt jumping out of a $30-$50k car to just buy it back in 9 months.

bwichner

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Re: Keep or sell second car (Tesla Model 3)
« Reply #4 on: September 30, 2020, 01:07:58 PM »
That second car is a 2020 Tesla Model 3.  its only been driven about 500 miles since March (only 7,000 miles total on the car).  I've got a loan on the car 5yr, 2.75%, payment is $730 / month and insurance is $70 / month.  We can 'afford' the payments and could even pay it off now but I go back and forth on keep or sell. 

Once we are back to work I will need a car but assuming that is June - that's another 9 months at $800/month on the Tesla ($7200) on a car we barely drive.  Also, work is only 7 miles away (thru town) so it also feels like overkill not to just ride a bike or ebike (very hilly) or get a cheap car or beater.  So long term my transportation costs would still be lower than the Tesla which also helps.

Appreciate your input!  Honestly, I think it would be wise to just sell the car, bank the money and do the bike or cheap car later and keep banking the extra.  Thoughts?
What is the make/model/year/mileage of your primary car?
What is the value of the primary car and do you have a loan on it?

2017 Jeep Grand Cherokee.  25k miles.  No loan.  Worth about $25k.

bwichner

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Re: Keep or sell second car (Tesla Model 3)
« Reply #5 on: September 30, 2020, 01:10:33 PM »
If you plan on getting another Tesla in June 2021; don't sell.  If you plan on downsizing and getting a cheaper car.  Do it!

Not sure what state you live in; but sales tax will hurt jumping out of a $30-$50k car to just buy it back in 9 months.

 Great point, Cincinnati, OH - sales taxes for car here is 5.75%.

researcher1

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Re: Keep or sell second car (Tesla Model 3)
« Reply #6 on: September 30, 2020, 01:14:25 PM »
2017 Jeep Grand Cherokee.  25k miles.  No loan.  Worth about $25k.
Is there a reason you'd rather keep the Jeep instead of the Tesla?

Why not sell the Jeep and pay off the Tesla?
It seems like it may be a better option...newer, fewer miles, doesn't require gas/oil changes, better for a 7 mile commute, ect.
« Last Edit: September 30, 2020, 01:17:18 PM by researcher1 »

bwichner

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Re: Keep or sell second car (Tesla Model 3)
« Reply #7 on: September 30, 2020, 01:20:48 PM »
2017 Jeep Grand Cherokee.  25k miles.  No loan.  Worth about $25k.
Is there a reason you'd rather keep the Jeep instead of the Tesla?

Why not sell the Jeep and pay off the Tesla?
It seems like it may be a better options...newer, fewer miles, doesn't require gas/oil changes/ect, better for a 7 mile commute.
its a great question, idea is that we (wife and I) use the Jeep for (road) bike rack and hauling some stuff on the regular.  The Tesla doesn't easily do that.  Also, once we're back to work wife had planned to use for her 10 mile commute (I know its alot of car for that distance).  But again who knows when we're back to work,....Agree with you on the long term cost of electric car vs gas.  If I keep the Tesla I plan to keep along time so eventually would get some benefit from low / no maintenance cost.

Also, does paying off a car with a 2.75% rate make sense vs putting that $ into a mutual fund etc (VTSAX or similar)?  I know this is a totally separate topic also one I've toyed with as have many others.
« Last Edit: September 30, 2020, 01:24:11 PM by bwichner »

researcher1

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Re: Keep or sell second car (Tesla Model 3)
« Reply #8 on: September 30, 2020, 01:38:12 PM »
its a great question, idea is that we (wife and I) use the Jeep for (road) bike rack and hauling some stuff on the regular.  The Tesla doesn't easily do that.  Also, once we're back to work wife had planned to use for her 10 mile commute (I know its alot of car for that distance).  But again who knows when we're back to work,....Agree with you on the long term cost of electric car vs gas.  If I keep the Tesla I plan to keep along time so eventually would get some benefit from low / no maintenance cost.

Also, does paying off a car with a 2.75% rate make sense vs putting that $ into a mutual fund etc (VTSAX or similar)?  I know this is a totally separate topic also one I've toyed with as have many others.
Given that both of you plan to resume your weekly commute in 6-9 months, I would just keep both vehicles.
It doesn't make sense to get rid of one, only to turn around an buy something else in a few months.
This is especially true given the sales tax hit noted previously.

Regarding paying off the loan...
I personally don't like debt of any kind, especially not on a depreciating asset.  I wouldn't think twice about paying it off immediately.
It is a guaranteed 2.75% return on your money.
Besides, it is a false argument unless you have every spare penny invested.  You mention that you "could even pay it off now."
Is that with liquid funds in a checking/savings/emergency fund, or would you have to pull money out of the market to pay it off?
If the former, just pay it off and be done with it.

RetireAbroadAt35

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Re: Keep or sell second car (Tesla Model 3)
« Reply #9 on: September 30, 2020, 01:59:05 PM »
its a great question, idea is that we (wife and I) use the Jeep for (road) bike rack and hauling some stuff on the regular.  The Tesla doesn't easily do that.
Yeah but don't you think it could?  https://www.etrailer.com/hitch-2020_Tesla_Model+3.htm

Don't scoff.  I put a trailer hitch on my very small daily driver.  Carries two mountain bikes with ease and behind a Tesla, a very small trailer would probably carry more than a Grand Cherokee.  If I were choosing between the two, the only way I could see keeping the Cherokee is if I regularly drove into distant off-road areas.  The kind of stuff you'd have to modify even a Cherokee to do.  Short of that, I'd take that sweet electric motor any day over what is essentially a tractor with a padded interior for commuting.

jamesbond007

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Re: Keep or sell second car (Tesla Model 3)
« Reply #10 on: September 30, 2020, 04:05:11 PM »
I have a Mazda and a paid off 2019 Model 3. I would never sell my Tesla :) I know what you are thinking. Maybe try to save money by switching to Metromile insurance? If you don't drive, you don't pay much. Without knowing your full financial situation, it is hard to say. But you bought the card because can afford it and, hopefully, like it. If that is the case you are going to regret the sale next year when you can start going out etc. You don't want to buy another Tesla when that happens.

bwichner

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Re: Keep or sell second car (Tesla Model 3)
« Reply #11 on: October 01, 2020, 06:29:47 AM »
its a great question, idea is that we (wife and I) use the Jeep for (road) bike rack and hauling some stuff on the regular.  The Tesla doesn't easily do that.  Also, once we're back to work wife had planned to use for her 10 mile commute (I know its alot of car for that distance).  But again who knows when we're back to work,....Agree with you on the long term cost of electric car vs gas.  If I keep the Tesla I plan to keep along time so eventually would get some benefit from low / no maintenance cost.

Also, does paying off a car with a 2.75% rate make sense vs putting that $ into a mutual fund etc (VTSAX or similar)?  I know this is a totally separate topic also one I've toyed with as have many others.
Given that both of you plan to resume your weekly commute in 6-9 months, I would just keep both vehicles.
It doesn't make sense to get rid of one, only to turn around an buy something else in a few months.
This is especially true given the sales tax hit noted previously.

Regarding paying off the loan...
I personally don't like debt of any kind, especially not on a depreciating asset.  I wouldn't think twice about paying it off immediately.
It is a guaranteed 2.75% return on your money.
Besides, it is a false argument unless you have every spare penny invested.  You mention that you "could even pay it off now."
Is that with liquid funds in a checking/savings/emergency fund, or would you have to pull money out of the market to pay it off?
If the former, just pay it off and be done with it.

The $ is in emergency savings so it is liquid.  You make a good point on not having debt and "paying yourself"

bwichner

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Re: Keep or sell second car (Tesla Model 3)
« Reply #12 on: October 01, 2020, 06:31:09 AM »
its a great question, idea is that we (wife and I) use the Jeep for (road) bike rack and hauling some stuff on the regular.  The Tesla doesn't easily do that.
Yeah but don't you think it could?  https://www.etrailer.com/hitch-2020_Tesla_Model+3.htm

Don't scoff.  I put a trailer hitch on my very small daily driver.  Carries two mountain bikes with ease and behind a Tesla, a very small trailer would probably carry more than a Grand Cherokee.  If I were choosing between the two, the only way I could see keeping the Cherokee is if I regularly drove into distant off-road areas.  The kind of stuff you'd have to modify even a Cherokee to do.  Short of that, I'd take that sweet electric motor any day over what is essentially a tractor with a padded interior for commuting.

point well taken,....these look pretty high quality especially the stealth version

bwichner

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Re: Keep or sell second car (Tesla Model 3)
« Reply #13 on: October 01, 2020, 06:38:45 AM »
I have a Mazda and a paid off 2019 Model 3. I would never sell my Tesla :) I know what you are thinking. Maybe try to save money by switching to Metromile insurance? If you don't drive, you don't pay much. Without knowing your full financial situation, it is hard to say. But you bought the card because can afford it and, hopefully, like it. If that is the case you are going to regret the sale next year when you can start going out etc. You don't want to buy another Tesla when that happens.

I fully expect this to happen,...the Model 3 is the favorite of all of cars I've had - tied only with my Wrangler which I got rid of for the Tesla.  I ditched the Jeep due to MPG and because it's lease ended etc so the Model 3 has it beat there by a long shot and saved me $100 a month on gas (back when I was driving to work before quarantine).  We've also got a free charger in the neighborhood so it's normally costing me $0 per month to charge unless I go out of town.

There are a few other cars like the Mazda 3 HB w manual or the Outback that I would be interested in at that later date that can be picked up in the $10-15k range with low miles all day long.

Jon Bon

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Re: Keep or sell second car (Tesla Model 3)
« Reply #14 on: October 01, 2020, 07:03:21 AM »
Sell the Tesla yesterday.

Have you seen the deprecation on EV's?

Now Tesla might be slightly better but in 3  years when the new model 3 gets 2x the range at 75% the price of the 2020 model you are going to be SOL.


Ecky

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Re: Keep or sell second car (Tesla Model 3)
« Reply #15 on: October 01, 2020, 08:01:52 AM »
Frankly these are both "car clown" vehicles from my perspective. A used Nissan Leaf and something like a Honda Fit or Toyota Matrix would have similar utility, the only reason I can think of for having these particular vehicles are if you enjoy having expensive, new cars.

K_in_the_kitchen

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Re: Keep or sell second car (Tesla Model 3)
« Reply #16 on: October 01, 2020, 02:33:31 PM »
Can you put a roof rack on the Tesla?  We drive a Mazda3 as our only car (4 adults, 3 are drivers), and we use a roof rack vs. adding a hitch and hitch rack.  We've had hitch racks on bigger cars, but the roof rack makes more sense with a smaller car.  Granted, we can only carry 3 bikes this way, but we don't need to carry more.  And really, the vast majority of our cycling -- road, gravel, and MTB -- is done out the gate.  We only carry bikes on the car when they need service and can't be ridden to the shop, or when going to races.

red_pill

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Re: Keep or sell second car (Tesla Model 3)
« Reply #17 on: October 01, 2020, 11:04:01 PM »
Sell the Tesla yesterday.

Have you seen the deprecation on EV's?

Now Tesla might be slightly better but in 3  years when the new model 3 gets 2x the range at 75% the price of the 2020 model you are going to be SOL.

This is like saying never buy a cell phone or computer because in a few years it will be obsolete.  Of course it will be.   But that won't matter because the range will still be more than sufficient for your purposes and it will still be mechanically sound.  Tesla for win!

Paper Chaser

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Re: Keep or sell second car (Tesla Model 3)
« Reply #18 on: October 02, 2020, 06:50:39 AM »
Sell the Tesla yesterday.

Have you seen the deprecation on EV's?

Now Tesla might be slightly better but in 3  years when the new model 3 gets 2x the range at 75% the price of the 2020 model you are going to be SOL.

This is like saying never buy a cell phone or computer because in a few years it will be obsolete.  Of course it will be.   But that won't matter because the range will still be more than sufficient for your purposes and it will still be mechanically sound.  Tesla for win!

I think the cell phone comparison makes sense, but I also think that spending a lot on an expensive phone (or any depreciating asset) is foolish when you can get similar performance for a lot less. Some dealers are selling brand new Chevy Bolts in the $20k ball park.
« Last Edit: October 02, 2020, 06:52:36 AM by Paper Chaser »

jamesbond007

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Re: Keep or sell second car (Tesla Model 3)
« Reply #19 on: October 02, 2020, 08:21:06 AM »
Sell the Tesla yesterday.

Have you seen the deprecation on EV's?

Now Tesla might be slightly better but in 3  years when the new model 3 gets 2x the range at 75% the price of the 2020 model you are going to be SOL.

This is like saying never buy a cell phone or computer because in a few years it will be obsolete.  Of course it will be.   But that won't matter because the range will still be more than sufficient for your purposes and it will still be mechanically sound.  Tesla for win!

I think the cell phone comparison makes sense, but I also think that spending a lot on an expensive phone (or any depreciating asset) is foolish when you can get similar performance for a lot less. Some dealers are selling brand new Chevy Bolts in the $20k ball park.

I am sorry but the Chevy Bolt is an awful car. Yes it is cheap electirc but I'd rather buy another ICE car instead of the Bolt.

JLee

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Re: Keep or sell second car (Tesla Model 3)
« Reply #20 on: October 02, 2020, 08:26:50 AM »
Sell the Tesla yesterday.

Have you seen the deprecation on EV's?

Now Tesla might be slightly better but in 3  years when the new model 3 gets 2x the range at 75% the price of the 2020 model you are going to be SOL.

Have you seen the depreciation (or lack thereof) on Model 3's?

Sell the Tesla yesterday.

Have you seen the deprecation on EV's?

Now Tesla might be slightly better but in 3  years when the new model 3 gets 2x the range at 75% the price of the 2020 model you are going to be SOL.

This is like saying never buy a cell phone or computer because in a few years it will be obsolete.  Of course it will be.   But that won't matter because the range will still be more than sufficient for your purposes and it will still be mechanically sound.  Tesla for win!

I think the cell phone comparison makes sense, but I also think that spending a lot on an expensive phone (or any depreciating asset) is foolish when you can get similar performance for a lot less. Some dealers are selling brand new Chevy Bolts in the $20k ball park.

I am sorry but the Chevy Bolt is an awful car. Yes it is cheap electirc but I'd rather buy another ICE car instead of the Bolt.

What makes it awful? I liked mine.

Ecky

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Re: Keep or sell second car (Tesla Model 3)
« Reply #21 on: October 02, 2020, 08:40:25 AM »
I am sorry but the Chevy Bolt is an awful car. Yes it is cheap electirc but I'd rather buy another ICE car instead of the Bolt.

Sure, but is it $40,000 better? Or, 3x the price better? The answer is unique for everyone, but in my personal case I draw the line around $6,000 for a vehicle, considering what I can find used and what I consider "acceptable" to drive.

I could pick up a low-ish mile Ioniq PHEV for ~$10,000, and it would handle my daily commute on electricity only. That would be opulent luxury to me.

Paper Chaser

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Re: Keep or sell second car (Tesla Model 3)
« Reply #22 on: October 02, 2020, 09:01:50 AM »
Sell the Tesla yesterday.

Have you seen the deprecation on EV's?

Now Tesla might be slightly better but in 3  years when the new model 3 gets 2x the range at 75% the price of the 2020 model you are going to be SOL.

This is like saying never buy a cell phone or computer because in a few years it will be obsolete.  Of course it will be.   But that won't matter because the range will still be more than sufficient for your purposes and it will still be mechanically sound.  Tesla for win!

I think the cell phone comparison makes sense, but I also think that spending a lot on an expensive phone (or any depreciating asset) is foolish when you can get similar performance for a lot less. Some dealers are selling brand new Chevy Bolts in the $20k ball park.

I am sorry but the Chevy Bolt is an awful car. Yes it is cheap electirc but I'd rather buy another ICE car instead of the Bolt.

By what metric? I hear a lot more about Tesla quality issues than Bolt quality issues. The Bolt looks dorky and isn't as fast, but If all you need is cheap, electric transportation with very reasonable range, it's a fine tool for the job, and spending a ton more on a Model 3 makes the Tesla look like a vanity purchase.

JLee

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Re: Keep or sell second car (Tesla Model 3)
« Reply #23 on: October 02, 2020, 09:03:13 AM »
Sell the Tesla yesterday.

Have you seen the deprecation on EV's?

Now Tesla might be slightly better but in 3  years when the new model 3 gets 2x the range at 75% the price of the 2020 model you are going to be SOL.

This is like saying never buy a cell phone or computer because in a few years it will be obsolete.  Of course it will be.   But that won't matter because the range will still be more than sufficient for your purposes and it will still be mechanically sound.  Tesla for win!

I think the cell phone comparison makes sense, but I also think that spending a lot on an expensive phone (or any depreciating asset) is foolish when you can get similar performance for a lot less. Some dealers are selling brand new Chevy Bolts in the $20k ball park.

I am sorry but the Chevy Bolt is an awful car. Yes it is cheap electirc but I'd rather buy another ICE car instead of the Bolt.

By what metric? I hear a lot more about Tesla quality issues than Bolt quality issues. The Bolt looks dorky and isn't as fast, but If all you need is cheap, electric transportation with very reasonable range, it's a fine tool for the job, and spending a ton more on a Model 3 makes the Tesla look like a vanity purchase.

If you don't need/use the supercharger network, the Bolt is rather fantastic.

researcher1

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Re: Keep or sell second car (Tesla Model 3)
« Reply #24 on: October 02, 2020, 10:53:17 AM »
If all you need is cheap, electric transportation with very reasonable range, it's a fine tool for the job, and spending a ton more on a Model 3 makes the Tesla look like a vanity purchase.
But where do you draw the line with this mode of thinking?

The entire purpose of earning/accumulating money is ultimately to spend it.
If the OP is in good shape financially and meeting his saving/investing goals, shouldn't he spend what is left over as he sees fit?
Maybe his hobby/interest/passion involves cars.  There is nothing wrong with that if it bring him happiness.

Just because your priority is "cheap, electric transportation" doesn't mean his has to be.

jamesbond007

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Re: Keep or sell second car (Tesla Model 3)
« Reply #25 on: October 02, 2020, 10:53:40 AM »
Sell the Tesla yesterday.

Have you seen the deprecation on EV's?

Now Tesla might be slightly better but in 3  years when the new model 3 gets 2x the range at 75% the price of the 2020 model you are going to be SOL.

This is like saying never buy a cell phone or computer because in a few years it will be obsolete.  Of course it will be.   But that won't matter because the range will still be more than sufficient for your purposes and it will still be mechanically sound.  Tesla for win!

I think the cell phone comparison makes sense, but I also think that spending a lot on an expensive phone (or any depreciating asset) is foolish when you can get similar performance for a lot less. Some dealers are selling brand new Chevy Bolts in the $20k ball park.

I am sorry but the Chevy Bolt is an awful car. Yes it is cheap electirc but I'd rather buy another ICE car instead of the Bolt.

By what metric? I hear a lot more about Tesla quality issues than Bolt quality issues. The Bolt looks dorky and isn't as fast, but If all you need is cheap, electric transportation with very reasonable range, it's a fine tool for the job, and spending a ton more on a Model 3 makes the Tesla look like a vanity purchase.

Of course, YMMV. The seats are extremely uncomfortable for anything longer than a 30-minute ride. Next biggest issue is the charging network. I take my Model 3 everywhere 2000+ mile road trips. Gas savings are immense over the long term. I cannot even fathom doing that in any other EV due to the fear of running out of juice. I know these will be sorted out in the future but as it stands today, there is no comparison.

JLee

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Re: Keep or sell second car (Tesla Model 3)
« Reply #26 on: October 02, 2020, 11:01:43 AM »
Sell the Tesla yesterday.

Have you seen the deprecation on EV's?

Now Tesla might be slightly better but in 3  years when the new model 3 gets 2x the range at 75% the price of the 2020 model you are going to be SOL.

This is like saying never buy a cell phone or computer because in a few years it will be obsolete.  Of course it will be.   But that won't matter because the range will still be more than sufficient for your purposes and it will still be mechanically sound.  Tesla for win!

I think the cell phone comparison makes sense, but I also think that spending a lot on an expensive phone (or any depreciating asset) is foolish when you can get similar performance for a lot less. Some dealers are selling brand new Chevy Bolts in the $20k ball park.

I am sorry but the Chevy Bolt is an awful car. Yes it is cheap electirc but I'd rather buy another ICE car instead of the Bolt.

By what metric? I hear a lot more about Tesla quality issues than Bolt quality issues. The Bolt looks dorky and isn't as fast, but If all you need is cheap, electric transportation with very reasonable range, it's a fine tool for the job, and spending a ton more on a Model 3 makes the Tesla look like a vanity purchase.

Of course, YMMV. The seats are extremely uncomfortable for anything longer than a 30-minute ride. Next biggest issue is the charging network. I take my Model 3 everywhere 2000+ mile road trips. Gas savings are immense over the long term. I cannot even fathom doing that in any other EV due to the fear of running out of juice. I know these will be sorted out in the future but as it stands today, there is no comparison.

I didn't have much issue with the seats, but yes they generally don't have great reviews -- I believe the newer years have different seats (2019 or 2020+).  The charging network issue is the same that literally every EV out there except Tesla has -- it doesn't make the Bolt awful.

There's actually only been one case where my driving habits required fast charging (both for the Bolt and the Model 3), and that was when I was delivering the Bolt out of state to its buyer (two drivers, up / back).  Now I'll hit a supercharger if I'm low and it's nearby because I have free miles remaining, but my normal driving doesn't require it at all.

As a car it's fine - I'd much rather drive a Bolt than a Fit / Corolla / Civic / etc.

Car Jack

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Re: Keep or sell second car (Tesla Model 3)
« Reply #27 on: October 02, 2020, 11:33:22 AM »
If you had paid cash for the Tesla, I could see struggling over this.  For an $800 a month debt payment, sell it.  This is the time to do it. 

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Re: Keep or sell second car (Tesla Model 3)
« Reply #28 on: October 02, 2020, 01:24:49 PM »
Once we are back to work I will need a car but assuming that is June - that's another 9 months at $800/month on the Tesla ($7200) on a car we barely drive.  Also, work is only 7 miles away (thru town) so it also feels like overkill not to just ride a bike or ebike (very hilly) or get a cheap car or beater.  So long term my transportation costs would still be lower than the Tesla which also helps.

I've been ebike commuting a flat 25 miles (roundtrip) a day for about a year now and I love it. When I occasionally have to drive to work, it makes me sad and I miss my bike commute. If you think riding an ebike to work is something that could work for you I'd really encourage you to look into that. Even if you bought a something like a used Fit or Prius to keep as a backup for when you needed to drive, you'd still be saving a ton of money every month.

bwichner

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Re: Keep or sell second car (Tesla Model 3)
« Reply #29 on: October 02, 2020, 02:53:37 PM »
If you had paid cash for the Tesla, I could see struggling over this.  For an $800 a month debt payment, sell it.  This is the time to do it.

True, I didn't mention it in original post but I think it is relevant since you mention cash vs finance.  Earlier this year I did sell my Tesla stock - normally I'm into boring mutual funds all day long (VTSAX, VOO etc) but rolled the dice.  With the TSLA earnings I cleared enough to pay off the car outright.  Some say I should have let it ride but honestly I'm not into doing the individual stock game. 

So in theory I could pay cash for the car - some days I think I could still sell the car and be in EVEN better shape between the $ from the stock and lower or no car payment.  However, with the regular 5-7% rate of return it still better than the 2.75% interest rate.

bwichner

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Re: Keep or sell second car (Tesla Model 3)
« Reply #30 on: October 02, 2020, 03:00:45 PM »
If all you need is cheap, electric transportation with very reasonable range, it's a fine tool for the job, and spending a ton more on a Model 3 makes the Tesla look like a vanity purchase.
But where do you draw the line with this mode of thinking?

The entire purpose of earning/accumulating money is ultimately to spend it.
If the OP is in good shape financially and meeting his saving/investing goals, shouldn't he spend what is left over as he sees fit?
Maybe his hobby/interest/passion involves cars.  There is nothing wrong with that if it bring him happiness.

Just because your priority is "cheap, electric transportation" doesn't mean his has to be.

Yes, I'll be honest here.  Prior to the Tesla I come from the "even more impractical sports car" side of things so I do have a soft spot for that part of the Model 3.  We have worked hard to get to a 50% savings rate so that does feel good.  Honestly, the Tesla payment didn't feel terrible when the car was actually being driven when I wasn't working from home due to quarantine. 

I do appreciate the argument for a 100% functional "appliance" approach to cars.  We're FI in 5-7 years so there is the part of me who want's to get there faster and the other part still feels good about that.  Currently, we're after a reduced grocery bill, cell bill and some other odds and ends that should get us another few % of savings rate.

bwichner

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Re: Keep or sell second car (Tesla Model 3)
« Reply #31 on: October 02, 2020, 03:01:33 PM »
Once we are back to work I will need a car but assuming that is June - that's another 9 months at $800/month on the Tesla ($7200) on a car we barely drive.  Also, work is only 7 miles away (thru town) so it also feels like overkill not to just ride a bike or ebike (very hilly) or get a cheap car or beater.  So long term my transportation costs would still be lower than the Tesla which also helps.

I've been ebike commuting a flat 25 miles (roundtrip) a day for about a year now and I love it. When I occasionally have to drive to work, it makes me sad and I miss my bike commute. If you think riding an ebike to work is something that could work for you I'd really encourage you to look into that. Even if you bought a something like a used Fit or Prius to keep as a backup for when you needed to drive, you'd still be saving a ton of money every month.
 

Agree on the e-bike!

researcher1

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Re: Keep or sell second car (Tesla Model 3)
« Reply #32 on: October 02, 2020, 03:01:39 PM »
with the regular 5-7% rate of return it still better than the 2.75% interest rate.
Except in the years when it is NEGATIVE 5%-7% rate of return.

bwichner

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Re: Keep or sell second car (Tesla Model 3)
« Reply #33 on: October 02, 2020, 03:03:49 PM »
Sell the Tesla yesterday.

Have you seen the deprecation on EV's?

Now Tesla might be slightly better but in 3  years when the new model 3 gets 2x the range at 75% the price of the 2020 model you are going to be SOL.

This is like saying never buy a cell phone or computer because in a few years it will be obsolete.  Of course it will be.   But that won't matter because the range will still be more than sufficient for your purposes and it will still be mechanically sound.  Tesla for win!

I think the cell phone comparison makes sense, but I also think that spending a lot on an expensive phone (or any depreciating asset) is foolish when you can get similar performance for a lot less. Some dealers are selling brand new Chevy Bolts in the $20k ball park.

I am sorry but the Chevy Bolt is an awful car. Yes it is cheap electirc but I'd rather buy another ICE car instead of the Bolt.

By what metric? I hear a lot more about Tesla quality issues than Bolt quality issues. The Bolt looks dorky and isn't as fast, but If all you need is cheap, electric transportation with very reasonable range, it's a fine tool for the job, and spending a ton more on a Model 3 makes the Tesla look like a vanity purchase.

So far no quality issues on the Model 3 - granted on had it for 10 months so NO cars should have quality issues in that amount of time.  What you drive (or pedal) is unique to everyone of course but I'd rather go for an older Outback or Mazda 3 before the Bolt.

blingwrx

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Re: Keep or sell second car (Tesla Model 3)
« Reply #34 on: October 02, 2020, 05:48:59 PM »
I would keep the Tesla Model 3 and sell the Jeep.

The pandemic is temporary, they might even call you back into the office early next year which isn't too far off. I would totally say go down to 1 car even if you both end up going back to the office next year. After buying an e-bike I rarely drive now, only if I need to do a Costco run or haul the kids somewhere. Otherwise all smaller errands and daily commutes can be done with it, sometimes it's faster than driving if you live in a big city, there's no time wasted with traffic or looking for parking with an e-bike. Other times if weather is good and there's no rush I ride a regular bike and get some exercise, saves some money on a gym membership.

If you can make it work with a small hitch, do it, but also keep in mind if you family might grow bigger in the near future will the Tesla sedan still work for you?

SUV's usually use a lot of gas especially if it's just a short city commute. You'll save a lot more in the long run with the EV.

On the other hand the Model 3 has very little depreciation off the lot so you might not lose all that much on selling it. If it had the standard 39% off the lot depreciation like most cars I'd definitely say don't sell as that's a big loss to take but a 10% loss isn't the end of the world if you can save a big chunk of change on monthly payments.

Since you say you've always driven pricier sports cars it's going to be hard to drop down to a beater with less than 5k, those will also be a lot slower than you're use to and may have a ton of maintenance and old car noises. You might even change your mind later and decide you want another Tesla, so that would definitely be a big waste of money selling it now to rebuy in a few years.

Pay off the car if you have money that's liquid and not being invested, but if you think you can do better than 2.75% then go invest it and keep the payments.


Paper Chaser

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Re: Keep or sell second car (Tesla Model 3)
« Reply #35 on: October 02, 2020, 06:30:39 PM »
If all you need is cheap, electric transportation with very reasonable range, it's a fine tool for the job, and spending a ton more on a Model 3 makes the Tesla look like a vanity purchase.
But where do you draw the line with this mode of thinking?

The entire purpose of earning/accumulating money is ultimately to spend it.
If the OP is in good shape financially and meeting his saving/investing goals, shouldn't he spend what is left over as he sees fit?
Maybe his hobby/interest/passion involves cars.  There is nothing wrong with that if it bring him happiness.

Just because your priority is "cheap, electric transportation" doesn't mean his has to be.

Sure. If the Tesla represents mindful spending and OP understands the extra costs I'm cool with keeping it. We all splurge on something. But it sounds like OP has his "fun/lifestyle vehicle" in the Jeep. If he were super passionate about the Tesla, he probably wouldn't be here (a personal finance blog dedicated to reducing expenses) asking if he should sell it.

It sounds like this is OPs daily driver/commuter. When I posted that, OP had never mentioned anything about the Tesla that they like that a Bolt couldn't do as well. If OP loves the Tesla driving experience and uses the acceleration frequently, or they like the way it looks, or they simply prefer a vehicle from a "luxury brand" then they should keep the Tesla for sure. But it really sounds like they just want an EV with decent range to use as a commuter. If he wants to keep the Tesla for any reason it's no skin off my back, but nobody had mentioned yet that he could sell the expensive, un-needed car now and then buy a new tool to get the same job done much cheaper if/when the need arises in the future.
« Last Edit: October 02, 2020, 06:39:00 PM by Paper Chaser »

bwichner

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Re: Keep or sell second car (Tesla Model 3)
« Reply #36 on: October 16, 2020, 07:32:28 AM »
Thanks everyone for taking the time to comment!  Much appreciated.

researcher1

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Re: Keep or sell second car (Tesla Model 3)
« Reply #37 on: October 16, 2020, 08:05:10 AM »
Thanks everyone for taking the time to comment!  Much appreciated.
So what did you decide to do?

Jon Bon

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Re: Keep or sell second car (Tesla Model 3)
« Reply #38 on: October 19, 2020, 08:28:44 AM »
I forgot about this one. However,

2017 Bolt MSRP was ~ $40,000.

Today KBB says around $15,000. So even with the tax credit deprecation was ~$5,000 a year.

Sell the EV.


StashingAway

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Re: Keep or sell second car (Tesla Model 3)
« Reply #39 on: October 19, 2020, 09:01:45 AM »
This seems like a great spot to throw a bunch of stuff at you!

What Iíve learned with the MMM journey so far: Hedonic adaptation is very real. You get used to the luxury that you own and itís hard to give it up. So for those reasons, I hesitate to ask you to throw it all away at once, less you get disinterested and go back to the spendypants lifestyle.

The car thing is hard for some people, because in North America cars are tied to your identity. You judge yourself and others based off the car that is driven. If you are big into outdoor sports, it feels really weird to own a 2005 Hyundai Accent. Not because of the utility that you actually get from it, but from the lifestyle appearance that it gives.

Iíd be willing to be that I haul more gear, mountain bikes and construction equipment (and on more trails) in my 2009 Pontiac Vibe than your wife does in the Cherokee. Itís not one that I would bet my life on, but I use the heck out of that thing and it doesnít complain one bit. If I were on fire roads all the time Iíd want something with more ground clearance, but a Gr. Cherokee doesnít really even have that much cabin space.

But this doesnít really work if you feel like youíre sacrificing for it. I like to gamify it. I love showing up to Home Depot and fitting more stuff in my car than people throw in the backs of their F-150ís. I can fit 8í boards in there with no passengers. Itís about the mindset changeÖ and that takes time. First absorb it and as soon as you feel like it would be fun to downsize, thatís when you go for it! The trick is to think about all of the stuff that you gain by loosing the Jeep or Tesla (or both) and downsizing.

My maintenance is absurdly low. I paid $8K cash five years ago for this thing. It looks OK and would be fine to valet park, but itís no princess which means that I donít mind if it gets dinged up a little bit. Itís a great little tool and all of the important bits are humming along quite well. But thatís fun for me. My wife likes the aftermarket heated seats that I put in.

And my car, an econo box from 2009, has a 110V electric socket in it. Thatís insane to me. It really is a driving living room.

TL;DR- if you are in the right mindset, you will genuinely be happier getting rid of the rolling depreciation luxury living rooms and downsize and start commuting by bike. Do it on your own terms and like others said, donít sell now just to buy again this summer. I personally would love to haul bikes around on a Model 3. Take it in steps one at a time and enjoy the journey. In a few years you may be surprised at how far you've come by having fun saving money.

bwichner

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Re: Keep or sell second car (Tesla Model 3)
« Reply #40 on: October 19, 2020, 10:18:05 AM »
I forgot about this one. However,

2017 Bolt MSRP was ~ $40,000.

Today KBB says around $15,000. So even with the tax credit deprecation was ~$5,000 a year.

Sell the EV.

Yes this is true for the Bolt, however Tesla have been doing much better on resale value.  for example a 2018 Tesla Model 3 mid range (closest to my car) retailed for $42,900 (not including $1875 tax credit) so about $41k.  KBB is saying private party is $36-39k.  Still about $2500 per year which feels like alot even though better than most.
« Last Edit: October 19, 2020, 10:19:57 AM by bwichner »

bwichner

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Re: Keep or sell second car (Tesla Model 3)
« Reply #41 on: October 19, 2020, 10:39:02 AM »
Thanks everyone for taking the time to comment!  Much appreciated.
So what did you decide to do?

Iíve decided to keep the car for now.

bwichner

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Re: Keep or sell second car (Tesla Model 3)
« Reply #42 on: October 19, 2020, 10:42:41 AM »
This seems like a great spot to throw a bunch of stuff at you!

What Iíve learned with the MMM journey so far: Hedonic adaptation is very real. You get used to the luxury that you own and itís hard to give it up. So for those reasons, I hesitate to ask you to throw it all away at once, less you get disinterested and go back to the spendypants lifestyle.

The car thing is hard for some people, because in North America cars are tied to your identity. You judge yourself and others based off the car that is driven. If you are big into outdoor sports, it feels really weird to own a 2005 Hyundai Accent. Not because of the utility that you actually get from it, but from the lifestyle appearance that it gives.

Iíd be willing to be that I haul more gear, mountain bikes and construction equipment (and on more trails) in my 2009 Pontiac Vibe than your wife does in the Cherokee. Itís not one that I would bet my life on, but I use the heck out of that thing and it doesnít complain one bit. If I were on fire roads all the time Iíd want something with more ground clearance, but a Gr. Cherokee doesnít really even have that much cabin space.

But this doesnít really work if you feel like youíre sacrificing for it. I like to gamify it. I love showing up to Home Depot and fitting more stuff in my car than people throw in the backs of their F-150ís. I can fit 8í boards in there with no passengers. Itís about the mindset changeÖ and that takes time. First absorb it and as soon as you feel like it would be fun to downsize, thatís when you go for it! The trick is to think about all of the stuff that you gain by loosing the Jeep or Tesla (or both) and downsizing.

My maintenance is absurdly low. I paid $8K cash five years ago for this thing. It looks OK and would be fine to valet park, but itís no princess which means that I donít mind if it gets dinged up a little bit. Itís a great little tool and all of the important bits are humming along quite well. But thatís fun for me. My wife likes the aftermarket heated seats that I put in.

And my car, an econo box from 2009, has a 110V electric socket in it. Thatís insane to me. It really is a driving living room.

TL;DR- if you are in the right mindset, you will genuinely be happier getting rid of the rolling depreciation luxury living rooms and downsize and start commuting by bike. Do it on your own terms and like others said, donít sell now just to buy again this summer. I personally would love to haul bikes around on a Model 3. Take it in steps one at a time and enjoy the journey. In a few years you may be surprised at how far you've come by having fun saving money.

I agree.  I've been interested in fast cars since I was young - even got me headed into the field of Engineering.  Having "fun" cars surely comes at a cost and one that has been tough to restrain lol.  For the time being we're working on optimizing some others areas of our spending which will also make a big dent to our savings rate.  The hardest part was "finding every cent" which I've now done with all of this time during quarantine.  This has allowed us to calibrate our expectations and pick an area or 2 at a time to focus to do better / save cost etc.

StashingAway

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Re: Keep or sell second car (Tesla Model 3)
« Reply #43 on: October 19, 2020, 11:30:59 AM »
I agree.  I've been interested in fast cars since I was young - even got me headed into the field of Engineering.  Having "fun" cars surely comes at a cost and one that has been tough to restrain lol.  For the time being we're working on optimizing some others areas of our spending which will also make a big dent to our savings rate.  The hardest part was "finding every cent" which I've now done with all of this time during quarantine.  This has allowed us to calibrate our expectations and pick an area or 2 at a time to focus to do better / save cost etc.

Honestly, I loved having fun vehicles- jeep, miata, motorcycles- and am glad for the experience of working on them. But my life is way more meaningful now that I'm not spending weekends cleaning carbs or swapping out U-joints. I didn't really understand how much of my universe surrounded them. And bicycles are way less intrusive to work on as a hobby (and just as fun for me!). I still get my kicks by working on neighbor's vehicles for them (and the added high of helping someone out). And reading about the magic appliances that are popping out of the EV world. It took several years for me to "kick the habit", but I have much more flexibility and freedom - financial and physical - by re-prioritizing and re-imagining what cars are. They're tools to me now, not much different than a table saw or kitchen stove or (my weakness) vacuum cleaner. They're fascinating in terms of engineering but are less of a lifestyle definition.

bigblock440

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Re: Keep or sell second car (Tesla Model 3)
« Reply #44 on: October 19, 2020, 03:06:40 PM »
Completely depends on what your goals are and how much of your life you're willing to trade for it.  If you keep it though, definitely don't pay it off early, put that payment into the market.




edit: spelling
« Last Edit: October 22, 2020, 08:02:49 AM by bigblock440 »

Optimiser

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Re: Keep or sell second car (Tesla Model 3)
« Reply #45 on: October 19, 2020, 04:03:09 PM »
I agree.  I've been interested in fast cars since I was young - even got me headed into the field of Engineering.  Having "fun" cars surely comes at a cost and one that has been tough to restrain lol.  For the time being we're working on optimizing some others areas of our spending which will also make a big dent to our savings rate.  The hardest part was "finding every cent" which I've now done with all of this time during quarantine.  This has allowed us to calibrate our expectations and pick an area or 2 at a time to focus to do better / save cost etc.

Honestly, I loved having fun vehicles- jeep, miata, motorcycles- and am glad for the experience of working on them. But my life is way more meaningful now that I'm not spending weekends cleaning carbs or swapping out U-joints. I didn't really understand how much of my universe surrounded them. And bicycles are way less intrusive to work on as a hobby (and just as fun for me!). I still get my kicks by working on neighbor's vehicles for them (and the added high of helping someone out). And reading about the magic appliances that are popping out of the EV world. It took several years for me to "kick the habit", but I have much more flexibility and freedom - financial and physical - by re-prioritizing and re-imagining what cars are. They're tools to me now, not much different than a table saw or kitchen stove or (my weakness) vacuum cleaner. They're fascinating in terms of engineering but are less of a lifestyle definition.

I remember when I first found MMM, wondering if it would even be possible for me to not always desire to have fun cars. I am happy to report that I am now much further down that path. I didn't even drive my Miata all summer and found just as much enjoyment, maybe more, from biking as much as possible. I don't fully understand how the change has come about, but I am definitely going to be better off financially as a result.

bwichner

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Re: Keep or sell second car (Tesla Model 3)
« Reply #46 on: October 21, 2020, 06:47:15 AM »
I agree.  I've been interested in fast cars since I was young - even got me headed into the field of Engineering.  Having "fun" cars surely comes at a cost and one that has been tough to restrain lol.  For the time being we're working on optimizing some others areas of our spending which will also make a big dent to our savings rate.  The hardest part was "finding every cent" which I've now done with all of this time during quarantine.  This has allowed us to calibrate our expectations and pick an area or 2 at a time to focus to do better / save cost etc.

Honestly, I loved having fun vehicles- jeep, miata, motorcycles- and am glad for the experience of working on them. But my life is way more meaningful now that I'm not spending weekends cleaning carbs or swapping out U-joints. I didn't really understand how much of my universe surrounded them. And bicycles are way less intrusive to work on as a hobby (and just as fun for me!). I still get my kicks by working on neighbor's vehicles for them (and the added high of helping someone out). And reading about the magic appliances that are popping out of the EV world. It took several years for me to "kick the habit", but I have much more flexibility and freedom - financial and physical - by re-prioritizing and re-imagining what cars are. They're tools to me now, not much different than a table saw or kitchen stove or (my weakness) vacuum cleaner. They're fascinating in terms of engineering but are less of a lifestyle definition.

Totally agree on getting the car fix by helping others out with their cars and keep them running.  I've been able to keep myself from buying a second "fun car" - S2000 or Jeep etc but still get out to cars shows and other events.  Took me awhile to realize its just as much fun if not more to know someone with a cool car but not have to pay for or maintain it.  Kind of like going to a museum and admiring the art but no need to "own" any.

I've been thru the experience of owning a sports car pre-Tesla and it was a massive time suck with trying to always keep it clean and running "just right".  Even despite all of my efforts the car still wasn't reliable so I got rid of it and couldn't be happier. 

Love the idea of bikes as a hobby.  I enjoy riding / adventuring on my road bike over the years especially this year since we've been working from home since March and have commute time back.  It's been fun to learn how to do my own maintenance thanks to the power of YouTube. 

bwichner

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Re: Keep or sell second car (Tesla Model 3)
« Reply #47 on: October 21, 2020, 06:49:16 AM »
Completely depends on what your goals are and how much of you're life you're willing to trade for it.  If you keep it though, definitely don't pay it off early, put that payment into the market.

Yes, that is the current plan.  I recently read Your Money or Your Life - this was eye opening about how much life one "trades" for stuff.  Currently, piling more into the market vs paying off.