Here’s how I’m going to get a Tesla

Space MountainPhoto courtesy of Joe Penniston

I’m not a “car guy”. I understand that there’s an aesthetic about “acceleration” and “handling”, and how a car “feels”, but I’ve always just wanted one to get me from A to B in relative comfort and without breaking down.

When I was a teenager, my friend told me about a new kind of car. It was half-engine, half-battery, so it was super fuel-efficient. In addition, it did this thing where when you pushed the brake, it took that energy and used it to charge the battery.

It sounded both totally awesome and also the most obvious thing in world. Why didn’t all cars do this, I asked myself? (I still do.)

The car, of course, was the Toyota Prius. And while I was not exactly pining for one, it was on my aspirational wish list from that day on.

15 years later, I bought one, and I now drive with something approaching teenage pride.

I have no plans to get rid of this car, of course. My mechanic asked me how long I intend to keep it, and I responded, effectively until it does this:

That said, with the Tesla in the news as of late, I’m starting to think about the future.

What’s a Tesla?

For those who live under a rock, Tesla makes all-electric cars. They have a few models out, though most people just call every car they make “a Tesla”.

Tesla Model S

Tesla Model S

Teslas are designed by Silicon Valley, not Detroit, so they have a very different feel and relationship to technology, and as such attract a different type of buyer.

The best description of owning a Tesla, of course, was the excellent comic by The Oatmeal. Go read it.

Teslas have as much cachet as one can have in a vaguely mass-market car. I say “vaguely” because the current models are all north of $60,000, some reaching low 6 figures. That’s not something that’s ever going to reach the masses.

Which is why it was pretty exciting that the new Model 3 was just released. With a base price of $35,000, it’s something in the vague ballpark of a car that’s affordable to the masses.

Actually, no. $35,000 for a car is insane.

But, for purposes of comparison, the Prius, when it went on sale in 2000, was listed at $20,000, approximately $30,000 today. At either value, that was a completely fantastical, ridiculous number to a teenager (me). It might as well have been listed as $13 squillion; it would have come to the same thing.

But let’s say that I wanted to start an action plan to get a Tesla. How would I approach it?

Wait

The first rule of cars: never buy new.

If you disagree, the other rule is: never buy new.

New cars are a terrible investment. The average car loses around a tenth of their value the moment you “drive it off the lot”. After three years, the average car has lost half of its value.

Tell me again why buying a new car is a good idea? Because it’s shiny? Because it “won’t break down”? Please.

Now, some cars retain their value more than others. This generally has to do with reliability, rarity, and cachet. For example, when I bought my Prius, it was valued at approximately 50% of its original value, but it was much older than three years.

So my first task is to do nothing and wait until many years have passed since the cars were released. At least three years, probably more like 10.

Wait some more

The newer the car, the rarer it is. Also, the more kinks that need to be worked out.

So will I ever buy a first-year Model 3, even if someone handed me a pile of cash?

No.

Save up

This is perhaps the most boring part of the whole thing: I’m not going to buy a Tesla, or any car for that matter, until I have the money to pay for it. Car financing is for suckers.

Assuming the 50% depreciation I mentioned above (which was for an 8 year old car), that means that the car is going to be somewhere in the $17-$20,000 range. That’s a ton of money to me now, but over time, it might not be.

Right now, I’m probably looking at a 10-15 year timeline before a purchase is likely to be imminent.

So I could save $1,500-$2,000 a year to save up for this, depending on my timeline. That may seem like a lot, but it’s less than $300 a month. Which is, after all, not unlike the payments to that people make when they finance a car. Except I won’t be financing.

Tesla 2030?

Just because I’m interested in buying a magical space car, doesn’t mean I’m going to make poor financial decisions to make it happen. If I did that, it would be due to either impatience (not a trait I aspire to have) or image (since something shiny and new is often for the benefit of others).

I’m not seriously planning to start saving up for one now. I have too many other priorities. And that might never change. And even if it did, it doesn’t feel like I’ll be in a position to afford it anytime soon.

But then again, it doesn’t feel like I’m going to be a millionaire, and yet, on this path we’re taking together, we’re pretty much assured of it. And I never expected to be able to buy my Prius either when I was a teenager.

So stick with me here, as I may be celebrating my purchase of a Tesla…in 2030.

But enough about me. Do you want a Tesla? If not, what’s your aspiration? How are you planning on paying for it?

Mike Pumphrey

Mike Pumphrey

I'm the founder and author of Unlikely Radical, a site to help people succeed with money, achieve their goals, and live intentionally.

I offer a free phone consultation to anyone who is interested in changing their financial narrative. Are you ready? Click here for details.
Mike Pumphrey

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Posted on August 3, 2017