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Brokedoc just became a little more broke...

Discussion in 'Personal Introductions' started by Brokedoc, Jun 18, 2017.

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  1. Brokedoc

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    Hi Guys,

    I'm a newbie here and just wanted to introduce myself and give a little backstory on my Tesla experience and decisions that may help some others waiting for a Model 3. This is gonna be a longer post so if you want to skip to certain sections, I'll put easier to see headings before sections. The important part about my math reasons for buying a Model X are at the end.

    About me:
    I'm a primary care internal medicine doctor on Long Island in the highly taxed state of New York. Primary care docs get paid the least and do the most amount of paperwork. Starter houses in my area are over 60 years old cost at least half a million and I'm trying to save for 2 kids that will hopefully be going to college in a few years. On top of that, docs in New York get paid less for the same task than most other docs in the country so hence my user handle Brokedoc...

    Elon Fanboy:
    I've been a fan of Elon Musk since his Paypal days. Being a brokedoc, I started a few other businesses on the side that align with my interests and hobbies and I use Paypal heavily and appreciate Elon's entrepreneurial spirit. I have followed his career from the highs at Paypal to the lows when he almost lost Tesla and SpaceX and back to the highs of today. If you have an interest in learning more about the balls of steel that Elon possesses, please read the excellent Bloomberg article https://www.bloomberg.com/graphics/2015-elon-musk-spacex/

    Elon though is much more than an entrepreneur. He is one of the few entrepreneurial social visionaries that exist. I think recent ones that are in this category are Bill Gates, Steve Jobs, Jeff Bezos, Larry Page, and Sergey Brin. These people are incredibly intelligent people who not only are successful but want to take their success and make the world a better place. They are disruptors not only in the business world but also in society. They aim to make a lasting impression on humanity long after everyone reading this has left the earth.

    Elon's first priority is not his shareholders. Similar to Jeff Bezos whose Amazon does not report significant profits or pay dividends, Elon has thus far reinvested his profits into achieving his long term goals. This is not good for shareholders that want to see a dividend or a huge cash hoard like Apple but it is great for the business to grow and expand and continue to be innovative and drive towards his social changes.

    Elon has already laid out his Tesla Master Plan Part Deux (revised from his last 10 year plan that was completely successful and on track). If you know his master plan, you already know what guides most of his Tesla decisions (see it here https://www.tesla.com/blog/master-plan-part-deux). I'm sure he has the possibility of accomplishing these new goals in less than the 10 years it took for part 1. What Elon did not include in his Master Plan was how his other efforts will transform society. Boring Co. SpaceX. Hyperloop. Elon will integrate all of these transportation modalities together to eliminate traffic, dramatically decrease commuting times, almost eliminate transportation related fatalities, significantly reduce environmental impact, reduce the time people waste commuting (by allowing you to be productive while "driving"), and completely change society.

    Imagine in 20 years to be able to leave your house with a Tesla roof and Powerwall that feeds power into the grid ever since powerplants were no longer needed when renewable energy reached critical mass. You hail a ride shared Tesla which then drives you to the nearest Boring Co. tunnel entrance to be loaded onto a sled that travels though a hyperloop to the nearest SpaceX facility for a quick suborbital business trip to Asia or your next vacation to the Moon or to Mars....
    ***It's coming.***

    My Tesla story
    I always wanted a Tesla since the Roadster was released but we all have a similar story...too much money...not practical... Then the S came out and it was like "Wow, that is I car I could really own. Too bad it's so much $, too bad the company is new. Too bad they have bugs with reliability. Then the company grew up a little more and the X came out and it was "THOSE DOORS ARE AMAZING!!! IT COSTS HOW MUCH?!?!?!"

    Finally the 3 was announced and I could actually afford it and all of the current models are 5 star safety champs and it looks gorgeous and....THE WAITING LIST IS HOW LONG!?!?!

    So I didn't wait in line at a store on reservation day because I had to work but I did put down a deposit that night. I figure I'm around 125k on the list. The next morning, my wife says, "You know, why is it that you get to drive the nice, fancy car?" 2nd deposit placed.

    A year later, not a single new leak about the Model 3 except for the "Part 2" announcement about autopilot which was a bit of a letdown for people salivating to know more about their future Tesla. Now we are a month from the official start of production and a Private VIP viewing only showed the same car that we saw over a year ago! I'm starting to feel like the kid in high school whose girlfriend is never ready to go to the next level...

    Tesla's current US deliveries are rapidly approaching 200,000 and I'm watching my $15,000 tax rebate slip away ($7500x2). Tesla has already said that East Coast will get deliveries later and that AWD won't be available until next year (or late this year if Elon's lucky). Almost all projections are now pointing to Tesla crossing the 200k threshold in the 3rd quarter of this year. That means that the last $7,500 credit will be for cars delivered 3/31/18. The last $3,750 credit will be on 9/30/18.

    My path to the Model X
    So last week I saw a tweet about Tesla posting a whole bunch of CPO Model S for under $40k. "I can get a Model S for under $40k and move myself up in line for the Model 3 to help my chances that I can get the full tax credits! Where do I sign?" By the time I visited the CPO inventory page, many of the really cheap ones were sold. Looking at the rest, they were all high mileage, early VIN, no autopilot cars. Many were not in my area which is another $2k to transport. They don't qualify for tax credit. None were AWD. Things were looking less impressive...this is when sticker creep began.

    I looked at the new Model S 75D and started rationalizing. "So if I start with a base of $45k I would have spent for a high mileage CPO then add $5k for the AWD, $5k for AP2, $5k for the bigger battery then take away the $7,500 tax credit, the price isn't that much more but I get a MUCH NICER, new car with full warranty and latest everything and better resale value!" Then I figured my minivan is getting old and If I wanted to replace that, I'd need something that seats 7 and can tow but the X is too expensive, even if the doors are AWESOME. Just for day dreaming, I looked at the national inventory and I found an 75D X with all options except Ultra HiFi and it was selling at $7,500 off sticker because it was a demo with 600 miles on it. Demos get sold as untitled, new cars and still qualify for the $7500 tax credit! Rarely do Teslas sell at a discount this big for inventory units but I went to my local store to ask about it and find out where in the country it was because the site didn't show it. Fate must have been with me because that car was the demo for MY store.

    Model X to Model 3 math:
    After doing A LOT of math in my head, and making sure my wife wouldn't divorce me if I bought the car, I put down the deposit and I'll be picking it up on Tuesday. Divorce would have cost me more than the Model X!

    I'm getting $7500 price adjustment because it's a demo model. FYI - I was told that the end of the quarter is MUCH more aggressive for price adjustments on demos because Tesla still wants to make nice numbers for their shareholders...
    I'm getting $1000 referral discount and unlimited supercharging and hopefully Trev P and @Wise1919 can make it to the Model 3 Delivery Event. THANKS GUYS!
    I'm getting $7500 tax credit for this vehicle.
    I will be moved up in the model 3 line because I'm and existing owner and hopefully will help ensure that I get the full $15000 credit for my AWD model 3s.

    BONUS math
    IF I'm not in love with this car, I can always trade it in when my Model 3s get delivered (yeah...fat chance..). Because of the amount I'm saving above, it really takes the bite out of depreciation losses and I'm moving up in line for the model 3 to better guarantee that I get the full tax credit. Sure, the payments are high for this pricey vehicle but I figure if I trade it in, its almost like pre-paying some of the model 3s.

    Thanks for putting up with my extended tirade. I hope you enjoyed the story and I hope that my math helps others in my situation that may lose out on the full tax credit for their model 3s. IF ANYONE does choose to buy a model S or X and found that my reasoning helped them, PLEASE USE MY REFERRAL CODE http://ts.la/conan1542 so that you can also get the $1000 discount and unlimited supercharging. In addition, If I get the invite to the Tesla Semi-Truck in September, I'll give my +1 to TrevP if he wants to go!

    HAPPY FATHER'S DAY!!!
     
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    • Jayc

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      Welcome and congratulations. You are lucky you get to own a Tesla before most of us although some here already own either an S or X.

      It's good that you did the maths because most people don't do that before getting a car. However, value proposition is one of those things that is personal so will apply differently to each individual. In my case, even though I can stretch a bit and get a Model S now, I don't see the point in getting an S till I get my 3. The S is a bit too big and upmarket for my taste which would still be okay but I know it will be really difficult to justify replacing a set of 21' tires. Simple things but I know that these will things will become a headache after the initial period is over, that's just the way I work. Then I also know that there are aspects of the Model S that 3 will never be able to match and therefore, for those reasons taken collectively, getting a Model S now as an interim car simply does not make any sense to me. Get an S and keep it - now that makes more sense but even that, not for me unfortunately.
       
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      • Brokedoc

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        @Jayc: Thanks for the welcome. The S really is a big car, especially for the UK and Europe. My math was really more for those in the U.S. that can benefit from the Tax Credits. Our plan was to get the 3s cheap and eventually pass them to our kids as used first cars. They are the most valuable things in our lives and I believe that Teslas are the safest cars ever designed.

        Another piece of math that I didn't include in my original post: As soon as the U.S. tax rebate disappears, one or 2 things will happen:
        A) sales/demand will immediately drop as happened in UK and other countries recently when their tax incentives expired.
        and/or 2
        B) residual value on used/CPO may increase because there will no longer be a tax advantage to buy new over used and those that buy new will be paying a higher effect sales price which may trickle down to higher residual values.

        I expect B to be the case so hopefully my plunge into the X will have less downside financial risk.
         
      • Michael Russo

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        Hearty welcome to the forum... really happy you could do this (maybe not so broke after all ;)) and particularly not get s divorce!! :D
        Enjoy... :rainbow::rainbow:
         
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        • Brokedoc

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          I traded in my 15 year old minivan and I'll be eating instant ramen noodles until everything is paid off. Patients were wondering why they were driving nicer cars than me...
           
        • MrF

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          As a fellow Model 3 waiter, I found your perspective and ideas quite interesting. You sure got lucky with that Model X!

          Did Tesla really take your minivan in trade? (I have something similar myself!)
           
        • Brokedoc

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          yep. It was a fully loaded 2004 Toyota Sienna LTD AWD with 108k mi. They gave me $3k. KBB says dealer trade around $4500. I took it. Wasn't worth the grief to sell it on my own. Tesla doesn't do resales of non-Tesla vehicles. They take pics and throw it out to their network or wholesalers and give you a quote in a few hours after they get bids in.

          I understand that a lot of people may not be able to go and buy an X like I did but my ideas about the various tax credits should apply to many. I'm sure there will be several 1st gen Models S CPOs with high miles available under $40k if you are patient and act quickly when they come up. They come with 2 yr/100k total miles warranty which isn't bad and you would still get moved up in the model 3 line. If you want to spring for a little more, there are new inventory cars like a 2017 Model S 60 in Chicago that has AP2 hardware and is going for $67k. (I LOVED the EV-CPO site to bring all the Tesla inventory together and easily searchable) After the $7500 tax credit and the $1000 referral discount, you could net out a new Model S for under $60k and move up in the model 3 line and send Trev and me to Fremont for the Semi-Truck reveal!

          Another mathy thought that I forgot to enter in my initial post:

          IF I choose not to keep one of my Model 3s when the time comes, I imagine I can still buy it, pocket the $7500 tax credit and resell it to someone who has not preordered. If you haven't preordered a 3 yet, there's almost no chance of seeing the tax credit so they will be paying full price anyway. Only now, they would get it sooner. This whole expiring tax credit thing changes the regular math of buying and reselling and depreciation. I imagine the Model 3 resales in the beginning will be VERY overpriced.
           
        • MelindaV

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          and hope you don't get audited. The credit is not valid for vehicles sold.
           
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          • Brokedoc

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            @MelindaV:
            I just read the Tax Credit law. I'm not an accountant but it seem to me that the credit indeed does not apply to vehicles purchased for resale. Once the vehicle is registered and put into personal use, the credit may be claimed. There is no stipulation that the car must be used for you for any specific time. If you total the car the minute you drive it off the lot or don't like it and sell it a month later, you can still claim the tax credit. At least, that's how the law reads to me...

            IIRC, when the Model S came out, many were resold at higher prices even after being driven for many months. I think the existence of cheaper Model S will limit the price premium of the early Model 3s but the long waiting list almost guarantees a healthy resale premium in the beginning.
             
          • MelindaV

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            yes, but if you are saying your intension is to sell it 6 months before you receive it, that is not being purchased for your personal use.
             
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            • Brokedoc

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              I'm just throwing out the math for various scenarios. Everyone's situation is different. I don't think anyone has made any decisions yet about a car we don't have any firsthand experience with. 400,000+ people put down $1000 only with a picture and a vision.
               

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