Featured Sept 2021 Toyota Alternative Powered Sales Figures

I recently watched this... $816/mo car payment for 72 months... and he still thinks he is saving money on fuel and maintenance.

 

I was surprised too until the vehicle registration clerk explained that I only paid sales tax on the purchase price minus the trade in value. But that is unimportant:

• Go to Tesla.com and create a free account.
• Configure a Tesla that meets your requirements.
• Identify the ‘trade in’ vehicle.
• Get a final quote.

I bought mine in 2019 so there may be changes since then. Mostly painless.

Bob Wilson

 

What the frack? My TCO of my 2018 PP commuting 400 miles per week in a 9-month period was:

• $165 for electricity
• $225 for gas
• $810 for insurance
• $230 for registration
• $540 depreciation

All other costs and depreciation were realized at the time of sale since I had no paid maintenance performed before selling it. That works out to a grand total out of pocket cost of ~$0.12/mile.

 

My total cost for the 2020 PP LE for 10 months 4kmiles ownership was actually a net gain of ~$4000. Even after subtracting all the costs for fuel, electricity, insurance, registration, tax, maintenance, and accessories purchased, it ended up with a net gain of $0.44/mile. Yep, every mile I drove the car I was making $0.44.

Similarly, if I sell my current 2021 PP Ltd right now after 3 months 3kmiles, I would break even for the cost including fuel, electricity, insurance, registration, tax, maintenance, and accessories purchased, etc. Assuming I will receive a $4500 tax credit next year, that will be a pure profit. I could have never pulled off this feat if I traded my PP for a Tesla, even with the cheapest used M3.

 

You stated "all the", which is taken to mean a lot or many in that use. Twenty thousand Model S's sold last year. The Model 3 sells ten times as much. If you are seeing a lot of Model S's and X's, the over $90k ones, you are in a wealthy area, and maybe one with many older Tesla's. The S and X have been out several years longer, without much change in external appearance. The oldest have fake grills.

That's how it works in Pennsylvania.

 

Bob Wilson

 

There are a lot of the Model S driving around here. That's what I was talking about. Not so much a wealthy area, but a very high concentration of primarily Chinese immigrants. The exchange rate makes moving to the United States for them a bit like Americans moving to Central America. They find themselves suddenly wealthy, and they like Teslas.

 

I see mostly Model 3's here, with Y's starting to show up. The chances of seeing an S or X increase in NJ.

As for the prevalence of expensive trucks, auto loans longer than 5 years have been available for awhile now.

 

I can't bring myself to pay interest on a depreciating asset. Extending the period for which interest accrues is out of the question. At Toyota's 2.49% that's an extra $651 in interest on $50,000. I know I'm an exception rather than the rule.

 

I am with you for the most part, but if you find a great deal on an auto loan, why not extend payment while you earn more on the money invested. I did that on my first new car purchase in a long while when I purchased Gen3 Prius with 0% APR. There was no incentive to pay it off early. Then for the next two new car purchases (2017 and 2020 PP), I initially let the dealer finance the purchase to get the best deal they would offer, but quickly paid off the loan within a year. APR on those two loans paid off early was too high for me to keep for the long term. One was a larger loan at 2.99% and another was a smaller loan at 4.99%. I planed to do the same for the current 2021 PP with dealer financing at 3.99% but found a refinancing deal at 1.24%. Now, with that low rate, I'd rather keep the money in the investment account than pay it off the loan quickly. As long as my annual return on the investment is above 1.24%, I am ahead. Of course, the market can crush and I may regret the decision, but that is a part of calculated risk.

 

Your investments don't need to return 1.24% to break even. Your principal is declining every month on the loan, so their yield isn't 1.24% on the total cash price. On a 5-year loan at 1.24% the annualized yield is only 0.629%.

In other words, a hypothetical 60 month $25,000 loan at 1.24% will cost $25,796 total. Your $25,000 investment only has to make $796 over 5 years to break even, or 0.629% per year. You can find savings accounts paying more than that.

 

Thanks for doing the math for me. That number makes it even more attractive to keep the money in the investment account than paying off the loan sooner. Now, I have to wonder at what APR the auto loan is a bad financial decision compared to investing, provided that I have enough money to cover the entire loan amount.

It is not just for the auto loan. I did a similar calculation for the solar panel purchase and installation. Unlike automobile which just keeps depreciating, in this case, the solar panel is going to pay itself by providing monthly electricity. But according to my calculation, the same money invested and earning 8% is financially better than spending the money on the solar panels.

 

My current use and utility rates put me around a 13 year payoff for solar. Investments with that long of a commitment before realizing returns are too long for me.