Yes, it is. For Tesla it means, that they made up to their promise given when introducing the Model 3. Tesla has gotten a lot of critique after the Model 3 deliveries where much later than initially expected and the available versions much more expensive then the promised base price. Offering now a Model 3 for that base price should win them a lot of credibility back.
For the consumer it means, that the cheapest Tesla is now available for 35k vs. 42k vor the mid-range until today. Thats 7k less and make Tesla cars available to a larger audience. While I don't like how Tesla represents the prices with savings, the effective price gets close or below 30k, which is huge.
For electric cars overall it is also important. Tesla is the largest manufacturer of electric cars and the waiting times for the Model 3 are way lower than the competition. So this marks quite some progress in the availability of affordable electric cars.
It’s not the promise I’d signed up for. When I dropped my $2k reservation, it was for a $35,000 car, including a $7500 government rebate, or net $27500 (plus tax lic etc). Instead of delivering my car in the order the reservation was placed, (in that scenario, I’d get the full $7500 rebate), my reservation was reprioritized for Tesla’s bottom line. Would I have done the same thing in Elon’s shoes, sure, but just because they’ve delivered a $35,000 version, doesn’t mean I’m happy.
That’s fair, but then it’s not necessarily all about what you want. Part of it is helping invest in accelerating the world’s transition to sustainable energy. Personally I’m ok with that. ymmv.
How was your reservation $2k though? It makes me wonder if you are really a reservation holder, given that you got the amount wrong. Fake outrage?
I put down two reservations, at $1k each. So, my outrage is quite real. I intended to buy two $35k versions, after rebate at $27,500, that’s a better deal than any Honda Accord. And, I didn’t request my refund back because I believed in the vision. However, now I’m even more pissed, so I’ve made the refund request.
> Moreover, the 3 now costs less to own than Accords or Camry's
Over what time period? The $35k Tesla is the base model, and a base Accord looks to be $23k. And you can probably negotiate that down a little, which I doubt you can do with Tesla. That price difference buys you a _lot_ of gas.
Which are capped at the amount of your tax liability. So unless you owe $7k in taxes, you’re not getting the full credit. And the federal tax credit is going down to $1875 later this year.
Waiting times for the competition? What are you talking about?
I bought a Bolt EV off a dealer lot over a year ago, and the entire transaction took about 30 minutes. The car was $25,000 after incentives ($37K MSRP -> $35k Actual, 7.5k Fed Tax Credit, 2.5k State Credit). The Bolt can reliably go 240 miles on a charge, mine has had zero issues or service visits in 35k miles of driving. Also, it's made by GM which is a real car manufacturer, supported by thousands of dealerships and service centers across the country.
yes, I hate that nonsense. they’re trying to include rebates and gasoline savings. just show the damn price. it makes going through all the options mind numbing.
They've been doing that for a long time, trying to explain in TCO terms instead of sticker price. It can be somewhat misleading at times but I get the rationale.
>It can be somewhat misleading at times but I get the rationale.
“Somewhat misleading”? Acting as though money saved on gas reduces your purchase price somehow is just straight up lying. The car still costs $35k when you sign on the dotted line, gas costs don’t factor into that at all. If you want to talk how much it’ll cost you after n years of ownership, talking about gas costs is perfectly valid. Purchase price though?
Disagree. Electric vehicles have a very different cost structure than gas vehicles. For vast majority of buyers this will be their first electric vehicle and market education needs to be done. There's 90+ years of gas vehicle culture education to un-do here.
Total Cost of Ownership is a legit (and even preferred) way to represent cost in most industries. It's just not common in consumer purchasing. This is a variant of TCO. They provide a good calculator where you can figure it out.
I think there's room for discussion about how prominent you make the TCO calculator and the particular copy used in that. This is why I said it was somewhat misleading, because I think it could be better. But I definitely don't think it's lying, that's awfully black and white.
You don’t save any gas if the car is sitting in a service center for months waiting on repairs, which has happened to a lot of people. They should advertise the car at its sticker price. Any extra gas savings should be a bonus.
It’s lying because it’s not an apples to apples comparison. You can buy a similarly equipped Honda Accord for $10k less without all of the Tesla drama.
I really doubt the Accord would have the same acceleration or features as the M3. And it consumes a decent amount of gas which is more expensive than volts.
It's more of an apples+cart comparison. It seems shady because they can't know what kind of car you're coming from - so they average it (in their favor).
The federal government even publishes per mile total costs for most vehicles that makes it fairly trivial to do.
It’s a bullshit metric. They could honestly present the information in a way that looked good for them as well... or even use it as a cross sell for solar.
They do some BS about how much gas you will save and say that makes the car cheaper. It seems incredibly dishonest to me unless they actually let me customize that value for my current car and travel habits, as well as factoring aspects of the Model 3 that can be more expensive (e.g. maintenance)
The calculator only let's you set "miles driven/year" and the price of gas. Not mpg of current vehicle. So the results are the same regardless of whether I'm driving a Prius that gets 60mpg or an Abrams tank that gets 0.6 mpg. On top of that, the results will be even more meaningless if you currently own an electric car.
> The company says it is shifting all sales worldwide to online only, so you’ll no longer be able to buy a car in one of the company’s stores. By moving all sales online, Tesla says it will be able to lower the price of its cars by 6 percent, which is how it was able to finally get to the $35,000 price point.
> As a result of this change Tesla says it will be “winding down many of our stores.”
Yup, the availability of "nice feature for 2-4k more" really drags up the price. I started looking at $35k, ended up wanting the $47k.. but that's a $12k increase...
From what I was told at the dealer, the software range limit was only on the Model S produced during a certain span of time and now all long-range Teslas have larger batteries than their stock counterparts.
I don't think anyone will actually buy $35k model. They made it so undesirable that it's almost laughable. Reminds me of 2004 Honda Accord DX model with $16995 with roll-up manual windows, plastic hub caps and manual tranny that hardly anyone bought.
Most will opt for $40k premium model. Though 37k is much better value, it's missing the core features that tickle fancy of Tesla buyers.
Standard Interior Includes:
Manual seat and steering adjustment
Cloth seats and base trim
Basic audio
Standard maps and navigation
Center console with storage and 4 USB ports
Partial Premium Interior Includes:
12-way power adjustable heated front seats
Premium seat material and trim
Upgraded audio – immersive sound
Standard maps & navigation
LED fog lamps
Center console with storage, 4 USB ports and docking for 2 smartphones
Premium Interior Also Adds:
rear heated seats
Premium audio – 14 speakers, 1 subwoofer, 2 amps, and immersive sound
Satellite-view maps with live traffic visualization and navigation
In-car internet streaming music & media
Internet browser
Location-aware automatic garage door opener
> it's missing the core features that tickle fancy of Tesla buyers
Can you clarify what you mean here? I would think that the "core features that tickle fancy" would be things like autopilot, but that's an expensive add-on package regardless.
I drove a 1994 Honda Accord DX stick for 20 years. It had 247000 miles on the meter when the dash stopped working three years before I replaced it with a Chevy Spark EV. Great car, it was still on the original clutch although it was using a bit of oil.
Now I have a Model 3 Performance because it’s amazing, it’s what I was saving for driving the Accord all those years.
At only $2,000 more I doubt it has a better margin. I think they just want more buyers to be happier with their purchase, while still providing the $35k option they promised for those who prefer to stick strictly to that price regardless of features.
It wouldn't be surprising if the 240 mile range battery and the 220 mile range battery are actually the same part. (As I understand it, there is a trade-off between battery wear and what voltage you change and discharge to. So, the people with the "low capacity" battery may benefit by having a somewhat longer overall usable battery lifetime.)
If that's the case and the "bigger" battery costs nothing to Tesla, the $37k version has a higher margin if the enhanced interior features cost less than ~$2k.
Possible... that does make sense. It would definitely be smart to use the same parts if they can do it and give both cars good trade offs for the performance / wear. My hunch is though the other upgrades more than meet the $2k difference even when only considering Tesla’s own cost.
It probably does have a larger margin, you'd be shocked at how little it costs automakers to add some features / content. IIRC, an Escalade's interior costs ~$1,000 more to manufacturer than a Suburban's interior. The rule of thumb in trucks is that interior upgrades usually carry a 75%-90% margin for the manufacturer - in some cases, the lower trims actually cost more to build because they're such low volume configurations that the complexity in the supply chain / manufacturing process costs more than the savings of cheaper goods.
My experiences with other cars are the opposite. I've seen a lot of advertised prices that are not really what they want to charge you when you make it to the store to purchase.
My experience has been that when you actually go in to buy a car, you get a swath of arbitrary discounts to the MSRP, then you get a few other fees and especially taxes that bring it back up to the MSRP.
So I'd guess that there's also a component of the high MSRP + large standard discounts which is also making sure that you don't come in expecting to pay an advertised price, get aaaallllmost all the way through the process, get the final price with tax that is ~10%/several k$ higher, and then crap out there both because it is a real kick in the pants and you may not have the extra money.
Try buying a BMW with the $328/mo lease that they advertise every day. Tesla is waaaay less shady than any car maker. Their base model comes in with a LOT of features that other car makers will nickel and dime you to death. Example, LED lights.
You can only use Dark Patterns with a Twitter account?
Is this some kind of intentional irony or something? Social Login force-tied to a specific company is Dark Pattern #1 in my books.
Edit: They define "dark pattern" at the top of their site:
> Dark Patterns are tricks used in websites and apps that make you buy or sign up for things that you didn't mean to.
That's exactly with Login With Twitter is. The user is presented with a simple option for logging in, but then is tricked by giving their metadata and account info that will 'sign them up' to be analyzed and targeted by Twitter for whatever purposes. Yes the TOS is probably there on social login, but aren't Long TOSs that are prompted in the middle of a user flow also Dark Patterns, as no user is likely to read them?
Can't possibly take that site seriously.
Edit 2: The darkest pattern from their site:
> We aren't great at responding to email — Twitter is best.
not good at email, "Twitter is best" -> if we aren't publicly able to show how responsive we are, and what our answer is, its a much lower priority for us...?
That's not what they're doing - they aren't saying login with twitter - there is no login for darkpatterns - they just want you to spread the word using their alias and hashtags.
>Use Twitter to spread the word about Dark Patterns. It's the most effective way to put pressure onto companies to stop using Dark Patterns.
>Retweet, quote and favorite other people's tweets about Dark Patterns.
>@mention the offending brands and tell them what you think about their practices.
>When you see a Dark Pattern, take screenshots and tweet it. Mention @darkpatterns or use the hashtag #darkpattern.
>If you've got an example that doesn't fit into a tweet, you can use a platform like medium or imgur, then tweet it.
Yeah, that's really bad. I also think they shouldn't make you click to check each model to see what the range is. I should, at a glance, know that it's the $43,000 "long range" model that has as much range as my Toyota.
And range, for that matter. The # of miles you get off a tank of gas is not a highly-surfaced metric for vehicles. It's certainly not in the trim level name. You always have to dig into the detailed stats to find it.
Perhaps, but range is not a huge concern for most vehicles: Range rarely differs significantly between trim levels and all are generally 300+ miles.
Tesla's specifically dividing their trims by range, but chose to use "standard range", "standard range plus", "long range", etc. instead of just telling us the range. And their "standard" range is well below the standard range of an average car.
It is good for an electric car though. Do people really buy based on summary description, or do they use that to pick a starting place to learn more? It is a big purchase.
I am going to start advertising all my products as free, with a hidden qualifier that it's only free in the sense that you won't be purchasing something of equal or higher cost and so you're effectively saving money.
The actual price is literally right there on the screen. Potential gas savings is still a huge selling point to the market they're addressing (maybe not for you or I).
I'm not sure this qualifies as "shady" when everything is displayed within the same viewport.
The actual price is one place on the screen at the bottom in white text on grey with the fake prices on the prominently on the side in bold. Its shady.
They subtract gas savings, but don't add the destination fee or any state taxes. I kind of get the gas savings bit, but to selectively include savings and hide other fees is shady as hell in my opinion.
At least that's what it was like before; in Australia, the Model 3 configuration screen is apparently now stuck in an infinite redirect loop. It looks like it's unchanged, but I can't look at the page for more than a second.
>I'm not sure this qualifies as "shady" when everything is displayed within the same viewport.
It seems concerning that outright dishonesty in consumer-facing material for large purchases might reasonably be considered par for the course.
What an abject failure of industry leadership.
Good thing they weren't kind enough to include the amortized battery replacement costs or other differentials in operating costs, like a comparison between their repair and maintenance schedule to an industry average.
The vast majority of people buying a Tesla today will never need to replace the battery. The chemistry used in electric vehicle battery packs these days have much better longevity than what you see in most other lithium-ion cells.
Over the timespan in which you'd have to replace it, and given future cost reductions in battery production, it's probably the same as the total cost of maintenance for a petrol car. The cost of getting a petrol car to 100k or the 10 year mark isn't cheap. Even a Toyota is going to run you like $5k. A BMW or Benz, probably closer to $15k. If you buy a used BMW 3 series for $20k today and keep it for 10 years the cost of maintenance + gas will be well over $20k. A lot of people greatly underestimate the total cost of ownership for a petrol vehicle. Best case scenario is you have to replace every moving part that isn't the engine itself. Worst case scenario is you have the replace the engine too.
Actually, you'll probably never need to change the battery as "the latest data shows less than 10% degradation of the energy capacity after over 160,000 miles on Tesla’s battery packs" [0]. Even if it degrades like 50% by the time the rest of the car dies, there will probably start to emerge a market for the old batteries to use them for grid storage where kwh/weight does not matter as much so you might even get some of your money back.
I feel by the time you need the battery changed out, hydrogen fuel cel would be the new norm, and it will be not that difficult to retrofit an electric car to fuel cels.
Before, my impression of Tesla was that it's a company that has had some struggles but is genuinely trying to do a cool, useful, good thing.
After, my impression of Tesla is that it's incredibly shady and manipulative, and I have a great deal of anger at it because this page is disgustingly deceptive.
You've got to get a reasonable estimate of how much less likely I'm going to purchase a Tesla in the future, but before there was a nonzero chance I would, while in this moment I feel like I'll never purchase one. That's negative value, there.
Solely on the fact that they present an imagined "cost of ownership" as the price, yes.
It's deceptive enough--and 90% of people who saw that page would say that the costs of the cars are what's listed on the right column, which makes it deceptive--that it leaves a wildly unpleasant taste in my mouth. And, in my case, it's not even close to accurate: I don't own a car right now, and any purchase would be because I actively like a particular car. The "savings on gas" is a total lie, because I'll be spending nothing on gas anyway.
I find it annoying too, but it takes seconds to realize that’s not the actual price and the price is right there on the bottom. And you can’t really not understand what the real price is before placing the order.
It’s not an imagined cost of ownership for me, an actual owner, who just got $7,500 back and pay $7 for 300mi.
Interesting but after hearing the stories of waiting days and weeks for delivery and for service I think it is best to wait a year or two more to make sure they have all the kinks worked out.
The way they are selling these I would hope someone would be looking and clicking on that details button and really looking to make sure it is for them.
Does anyone have a good real world average for current wait times for delivery and service? Also wondering what these are for the flyover states (midwest) where I am at vs the coasts.
Before, you didn't know about their meeting sleading (I'd call it lying) claims about autopilot?
Where they show a video about full autonomous driving, talk a lot about full autonomous driving and then at the very bottom of the page write in very small print that "some jurisdictions" may not allow that at this time? Where "some" means probably "every one except lawless states like Somalia or so".
Absolutely - I made a comment a few years ago around the Model S pricing when they compared it to a E or S class Mercedes.
The base price of a given vehicle is $35k, and then I'd spend either $1500/yr on fuel and maintenance o, or $500/yr on fuel and maintenance if it's - for example - electric, on top the of the base price.
Spending $1000 less per year does not magically mean the car is now $34k. If anything, the price has gone from $36.5k to $35.5k for that first year.
I don't even understand the mental gymnastics you have to do, or how ignorant you have to be to not understand that.
buying a $35,000 Tesla has the equivalent cost of ownership of buying a $26,950 ICE car. It's not a massive amount of mental gymnastics.
I definitely don't agree with Teslas practices of framing it that way, I'd rather they just show cost of ownership comparisons across a variety of cars. Especially since they can't even meet the demand they currently have, why resort to shady practices?
> buying a $35,000 Tesla has the equivalent cost of ownership of buying a $26,950 ICE car. It's not a massive amount of mental gymnastics.
But only if you arbitrarily include the difference in fuel costs, which makes Tesla look cheaper, and exclude the differences in insurance and maintenance costs, which make Tesla look more expensive.
I haven't owned an EV, so it sounds like you would know better than I would. It was my understanding that (1) liability coverage is cheaper for Teslas but comp/collision is substantially more expensive due to the high cost of replacement parts, and (2) maintenance/repairs for Teslas are infrequent but any repairs involving the battery are extremely costly.
Those things are all analyzed in these overall ownership models. That's the whole point the those things.
And of course you have to include full cost, ICE can not run without it, and most people want to drive their car.
Of course these are avg numbers and you have to do it with your personal driving numbers and how long you want to keep the car to get a more detailed picture of the cost.
However overall, pretty much all EV have a significant large part of up front cost to ownership cost so its totally fair to point that out.
That said, Tesla is of course a company and they are pressing this point to aggressive and that is irritating to many of us. The overall point they are making however, is backed up by the data.
Please note that Tesla doesn’t include any estimates of depreciation for their cars. If this was intended to be an accurate cost of ownership they should include that too. However, they don’t, especially for model 3, because they know it would make them look bad.
Except I can't buy a Tesla for 26,950. So calling that the price is a lie. No amount of gas I don't buy in the future is going to get me out the door with a Tesla today.
Except you are probably cross shopping with a Chevy volt (which also has $0 gas cost). You could use the same logic to justify lowering the listed price of a Prius because it uses less gas than an SUV.
People like to abuse and overuse the cliche about “drinking the Kool-Aid,” but this right here is a great example of when it is warranted. This feeling you’re having is the result of not having taken “crazy pills” in the first place; it’s the feeling of looking at a cult from the outside.
To be clear, I like the Model S and appreciate what Tesla has done to popularize EVs in some circles, but that’s not a ticket to be bonkers. Shady practices, obscene waits, hellish repair schedules, broken promises and a CEO who just can’t shut his mouth to save his life... it is very weird.
For many people (myself included), misleading communications practices seem to line up perfectly with Tesla's and Musk's overall image.
I love what they've accomplished in the field; the cars are genuinely very good; the exaggerations and outright lies are unnecessary and therefore infuriating to watch...
The offical website Model S price built in a deduction for an estimate of billable income you could make by working instead of waiting next to your car while you fill the gas tank.
Just did some napkin math and the potential gas savings number seems reasonable. (I expected it to be inflated and still think it's a dark pattern to include it.)
Model 3:
(50 kwh battery)
* (0.166 $/kwh for Los Angeles residential power)
/ (220 mi range)
= 3.8 $/100 mi of fuel
Average ICE sedan:
(3.00 $/gal average regular gas in LA)
/(30 mi/gal)
= 10 $/100 mi of fuel
If you drive 12000 mi in a year, it comes to about $4.5k in savings over 6 years. That drops a ton if you would have purchased a Prius or other hybrid though, and to zero w/ cheap Texas gas.
So it's a reasonable number if you're a Californian who would have bought a BMW instead of a Model 3. For everyone else, it's likely too high.
>That drops a ton if you would have purchased a Prius or other hybrid though.
Nicely done math. Based on Toyota etc.’s marketing claims I guess. In which case it might be around $6/100 miles (guesstimate) versus Tesla $3.8/100 miles.
On mobile at least it’s right at the bottom of the screen in a footer. But yeah, $10k in gas? Cute but the Prius doesn’t take $5k off the show price because it’s not an F150
Always something negative when it comes to Tesla. They finally delivered on their promise of a $35k model 3, which is a monumental achievement, and yet the top comment is about the website.
Haven't seen the desktop site, but on mobile the full price of $35k is clearly visible.
I agree that it is unnecessary and borderline misleading. They will display the amount you actually have to pay, though.
On the flip side: you don't have to deal with dealerships, which are _much worse_
You just configure the car, give your credit card information, and done. This is unlike most other manufacturers which, even if they do give you a quote, will then hand you off to shady salespeople.
They can take online payment from a bank account (such as after you’ve deposited a check from an auto loan) or they can take a physical bank draft (such as you would get from an auto loan) upon delivery. They drive the car to you either on a truck or on its own wheels, you do some paperwork, and 15 minutes later the delivery driver either hops in a Lyft or gets back in the semi truck.
I’m sure credit card would work too if you had a high enough limit but those are the other options.
Eh, no more shady than what standard dealerships do when they advertise that it's just $199/mo* and then there's some unusually high acquisition fee or an APR credit offset that applies to MSRP. Or when they offer you a 4yr/50k mile service agreement, but in the fine print it's actually a special dealership version of the service agreement that's essentially a coupon book tied to that dealership offered by some third party and good nowhere else. It's hard to buy a car without getting at least slightly cheated.
The price w/gas savings included at least makes it easier to compare against standard petrol vehicles.
It's kind of hard to rip on Tesla when the standard dealership model is nothing but shady advertising and sleazy sales tactics. They could get rid of the asterisk mark / learn more link and it would still somehow be more honest than going to any car dealership in the United States.
Sometimes I feel like Tesla gets judged in a vacuum. Kinda weird.
It actually understates the savings, since it only captures the Federal credit. CA gives out $2500 extra AND carpool stickers (admittedly more valuable than the tax credit)
To get both the HOV ("carpool") sticker and the $2500 California credit, your income has to be under "$150,000 for a single person, $204,000 for a head-of-household, and $300,000 for a joint tax return" as per https://cleanvehiclerebate.org/eng/income-eligibility
Interesting to point out that the $35k is the full price, which goes down when additional discounts are applied. If you get the short range model with no options, it starts out at $35k, then goes down all the way to $24,950 after including the $3,750 Federal tax credit, $2,000 New York EV rebate (clearly it's geolocating by IP address here), and "$4,300 estimated 6 year gas savings".
OK, so that last bit is BS, and it looks like there's a hidden $1,200 destination and doc fee, so the actual real price including tax breaks is $30,450 in NYC. Still not bad at all!
But including the federal tax credits and destination fee is fair I think. As far as I'm aware, no auto maker includes the destination/docs/handling fee in the MSRP. The Tesla fee amount is comparable to other automakers also (it's on the high side at $1,200; but it's not too different from Toyota's $930 and Honda's $920). Presuming your location due to geolocation is a bit too far (but that's debatable) since they didn't disclose that immediately up front.
I still think that $30,450 overall is a good deal, and I'd go for that if a car made sense for me at all (it doesn't though, being in NYC). It's just purposely confusing the way the price is manipulated downwards using questionable-at-best pricing practices.
It's annoying that they don't make it more clear that's what they are doing, but the gas saving is a real thing. I used to spent $120 a month on gas, that went to $45 a month of electricity, then I got on a Time of Use plan where electricity is cheaper at night and now my monthly "fuel" cost is $15.
"Actual Tesla owners report about a 5% drop in battery capacity by the 50,000 mile mark but after than, the rate of degradation drops considerably. On average, cars with 160,000 miles on them still have 90% of their battery capacity remaining. Projecting forward from the real world data available, a Tesla battery should still have 80% battery capacity after 500,000 miles of driving, the group claims. The vast majority of internal combustion engines would have stopped functioning long before then."
Assuming a conservative usage of 20k miles/year, it will take you 25 years to reach 500k miles.
Not really. Oil changes (in a car comparable in size to Model 3) cost me about 50 USD per 25000 km, or 15000 mi, indeed because the oil is synthetic and fulfills certain criteria. In any case it's a rather insignificant amount compared to fuel costs, especially with fuel taxes as they are. If oil change costs start to add up, there's a significant possibility of you doing something wrong (including the choice of vehicle).
Well first off I'd probably never run a 15k interval. Pretty sure that's beyond mfgr spec. We run 7k in our diesel on full synthetic. Stretching a maintenance interval seems pennywise and pound foolish.
You also have to consider how much your time is worth of you're changing it yourself to get that cost.
Either way it's an added cost(along with transmission, differentials, etc) that you just don't incur on EVs. Right now my maintenance schedule is brake fluid @40k and coolant @100k and tires, that's it.
You want to do oil analysis like the professional diesel mechanics do.
Most people don't need to change their oil anywhere near as often as the manufacturer specifies. Especially for large diesel engines, it's often fine to run them 3x-5x the interval, but you should do oil analysis and find out, instead of just using the rule of thumb ones the manufacturer gives you.
Heh, my car is on a 18,000 mile interval for the oil changes. It will also adjust based on how you drive it, it only asked for it's first service at 19,000 miles.
The point is that's amortized over the lifetime of the car though, and isn't an up front savings like a lower cost would be. If you're taking out a 6 year auto loan then it's the same effect, but if you're taking out a shorter loan or paying cash it's not.
Yes. Federal regulations require the destination fee be separate but equal -- listed separately, but the same regardless of where it's bought (and the actual shipping cost for that particular car). So if you buy from the factory, you subsidize a buyer in Hawaii or Alaska, etc.
Gas savings will vary by where you live and whether you have cheap gas and/or cheap electricity or expensive gas and/or expensive electricity. Even with expensive electricity though it's still cheaper than gas.
I agree that quoting a single figure here is misleading.
Certain tax credits apply even if you don't have enough liability. Like if you owe zero taxes for the year for some reason they will send you a check for the full credit amount. Not sure which category the EV one falls under though.
Yea your correct, theres refundable and non refundable tax credits, most are of the non refundable variety. It appears the ev tax credit is non refundable.
You appear to be conflating a credit with a deduction.
A deduction reduces the amount of income thats taxed. So for example if you're in a 25% marginal tax bracket, deductions are worth 25 cents on the dollar.
A credit reduces the amount of tax you owe, dollar for dollar. In addition, some credits are refundable, meaning that they're allowed to make your tax liability negative for the year, so you get benefit from them even if the credit is more than the taxes you would otherwise owe.
And to be clear, when I talk about the "tax you owe", I mean the total amount of money you need to have paid the IRS by April 15th, including payroll withholding, estimated tax payments, and so on, and not the size of check you need to mail to the IRS in early April.
Including the credits in the price used to be pretty shady, since you had to have a sufficient pre-credit tax liability to actually get the full benefit of the credit. (The EV credit is non-refundable, meaning that if you don't have a tax liability, you don't get anything from the credit.)
But the Trump Tax Bill lowered everyone's refunds (largely because the IRS lowered withholding during the year), so more people have a year-end tax liability, and those that did before the TTB now have a larger tax liability, ultimately meaning more people can now theoretically benefit from the credit.
Eligibility for tax credits is unaffected by witholding rates or how large your end-of-year refund or liability is. And anyone who can afford a Tesla is sure to be paying enough income tax to get the full value of the EV credit.
Exactly. If it's only an edge case where your customers can't benefit (some retirees might have insufficient taxable income, but that's about it), it's fair to include it.
Shouldn’t you have shown them how to incur a liability (retirement account conversions) then so they didn’t lose out on an otherwise non refundable credit?
Including the estimated gas savings is extremely misleading. I want to know how much the car will cost upfront, not how much I will save over some number of years.
And how do they determine the savings? If I am cross-shopping with a Chevy bolt, there won't be any gas savings... Surprised they put that on their, it really negatively impact my view of Tesla.
Sure, and that is still very misleading because they are bundling gas savings along with government incentives that you will get upfront. I expect the cost after estimated savings to be the actual cost I pay upfront, not the savings over some car I would never buy in the first place, and I don't think you should ever mix upfront cost with long term savings when listing prices. Very misleading.
They are underplaying this aspect of saving on the petrol. If we were in 1973 then it would be different, in today's world we are a Trump brain-fart away from a 1973 situation, for instance in Venezuela and what would happen if the Chinese and Russians decided 'we aren't playing any more'?
Sure the U.S. is now god-blessed with the fracking miracle but the gas savings is also an option to be independent of the big oil companies. That could be worth more than $$$ to prepper-mentality Americans.
The prices didn't even go up that much in 1973 but a lot of queues and rationing went on. The 55 mph speed limit came in. It was not happy times.
If Tesla were a bit more frank they would mention this independence aspect, as it is they don't want to scare the children. Nobody knows what petrol prices will be next month so there is no way anyone can put a figure on savings. That said there are plenty of people who have swapped to Tesla and have the electricity bills to prove that the advertised savings are real.
Toyota does a similar thing (at least around where I live). I had a week on both a new and used car purchase to return it (some caveats like dings and such).
One downside of how fast Tesla changes things is the poor people in charge of making sure all the assets & copy across all the various documents are all up to date. I don't envy that position!
The interesting part is "Shifting all sales online, combined with other ongoing cost efficiencies, will enable us to lower all vehicle prices by about 6% on average, allowing us to achieve the $35,000 Model 3 price point earlier than we expected. Over the next few months, we will be winding down many of our stores, with a small number of stores in high-traffic locations remaining as galleries, showcases and Tesla information centers."
It currently costs about $2.50 to manufacture a battery cell. There are 7,700 cells in a standard battery pack. That’s $19,250 in cells before battery pack assembly.
I don’t know how they are making money on this. I’m inclined to believe they’re losing money, or someone is somewhere in the line.
Maybe they expect those battery costs to decline rapidly in the near future?
Where are you getting the $2.50 number from? I'd imagine they're banking on cost savings via mass producing cells themselves, and improvements in the rest of their supply chain as demand for batteries goes up.
They manufacture their own batteries in their Gigafactory outside of Reno, NV. They make more Li Ion batteries than any other battery manufacturer. Their batteries cost less than $2.50.
I can’t easily find a description of how this partnership works, but I think “Panasonic makes batteries in Tesla’s building, and Tesla packs them together for use in their cars” is a better description.
If so, I would expect at least some of that better margin will flow into Panasonic’s pockets (what part, I wouldn’t dare even guess)
The problem is that the battery IP is owned by Tesla at least in part. So its not Panasonic producing Panasonic batteries in a Tesla building but rather its Panasonic building Tesla batteries in Tesla building. Panasonic could not just sell these same batteries to others.
That’s not correct. Panasonic owns the IP for these batteries.
They have a contract with Tesla to produce for them, but Tesla’s demand is so high they can’t produce enough. Production is 24/7. Even if Panasonic wanted to they couldn’t sell to anyone else. I don’t know what kind of price negotiations they have, but current battery production is not profitable. This I know.
Also, Panasonic just partnered with Toyota to produce batteries for all their EV’s.
Additionally, the Gigafactory is just 1 battery production location. Panasonic has many. Some in the USA, and others in Asia. They sell their batteries to many companies. Just not the same ones they’re making for Tesla.
Given that Tesla says they can deliver a $35k model 3 to you in 2 weeks, I'd say they better be able to produce enough. Perhaps we'll see that delivery window slowly increase.
Don't they just need to keep leasing them more space at the factory? What's the bottleneck there?
There are currently 4 steps in the manufacturing process, with a final inspection at the end. They have about 35 production lines in total, and will likely have over 60 when they finish. New lines will have higher output.
They run two 12 hour shifts a day, 7 days a week.
The bottle neck is MRO at the moment. Material costs are a factor, but I know nothing about that.
In the space of 3 years they implemented these 35 lines. Getting them up and running to meet the demand and timelines required massive investment, and cost savings measures were sidelined.
They’re just not beginning to figure out ways to cut costs in order to achieve profitability.
I don’t know if Tesla has a contract that dictates the cell price, but I know Panasonic production is not profitable at the moment. They will be, hopefully in the upcoming years.
Their battery production is the most state of the art. Not only the battery technology, but the manufacturing process. It’s unparalleled by a long shot. The scale is breathtaking. Around 3.5 million cells a day with a target over 10 million.
From what I know, bottle necks are costs. High equipment manufacturing costs, and high maintenance costs.
It looks like at the cell level, they're close to $100/kWh and expect to be there at the pack level by 2020.
> In a rare disclosure of Tesla’s battery prices, Musk said in June that his company’s costs for battery cells—the small cylindrical components of its battery packs—had dropped to $110 per kilowatt hour (kWh) and would reach $100 per kWh by the end of 2018. That compares with an average price of about $127 per kWh industrywide.
I mean that maybe if the bond owners see that Tesla is (really?) about to deliver the 35k model they'll opt less for cash and more for stocks? (therefore Tesla would have less problems with liquidity)
No. The only factor is the convert price vs the stock price. If the stock price is lower, they will just take the cash and buy the stock on the open market at a better price.
Tesla had to do this. They've filled the order backlog of customers who were willing to pay more than $35K. They still have many on the list who are only willing to pay the original $35K. So it's sell at $35K, cut production, or park the unsold cars in a lot. Happens all the time in automotive.
Big question is, does Tesla make a profit at that price?
$8K more for 50% more battery. Or $24K for an entire large battery. Big markup there.
Both of your $NK more numbers include a whole lot more than just battery changes. (Including a whole additional engine and better performance in the +$23k model.)
I don't think they currently had to do this, they have just started delivery in Europe and China and there is significant demand for the higher priced models so that they could continue to do this.
I see it more as them wanting to show again that they could build up a huge order backlog as that something that pretty much no other car company can do. That would help them with the market and potential future loans.
Demand has collapsed in the US for model 3 and looks incredibly weak in Europe and China at this point. There is no reason for this across the board price cut other than weak demand.
It’s general consensus but here’s an article for example that suggests less than 20,000 Europe orders and hundreds in China. Of course we won’t know for sure until Q1 earnings but it’s a safe bet
And as a follow up, insideevs just posted February’s numbers: 5750 model 3. That’s down from 6500 in January and over 25,000 in December and 18,000 in November.
Well insideevs just posted the February sales numbers which are absolutely terrible. 5750 model 3s sold, down from around 6500 in January and 25,000 in December. That’s a collapse and that’s why they’re slashing prices now, even though there’s no evidence they can get the margins low enough to make a profit on this car.
Well we won’t know until they post Q1 results but they said yesterday they’re expecting a loss now, downgrading from initial plans to post a tiny profit. General consensus is that the halving of the federal tax credit drove down Q1 demand significantly.
I've been on plenty of machine learning projects and have seen the boss make promises that the engineers are expected to keep. This is exactly what it looks like. The outcome is always overfitting a simulation or data set somewhere so that it looks like it's working, but the real world performance ends up being worse. Unless the engineers get stubborn and declare themselves to have failed (which can actually happen).
But in the projects I did, it was some dumb sales recommendation system. These people are doing it with self driving cars.
If anyone outside of the US wants to see this page without the frustrating immediate redirect that you get after it has done its GeoIP lookup, you can use this URL:
"To achieve these prices while remaining financially sustainable, Tesla is shifting sales worldwide to online only. You can now buy a Tesla in North America via your phone in about 1 minute, and that capability will soon be extended worldwide. We are also making it much easier to try out and return a Tesla, so that a test drive prior to purchase isn’t needed. You can now return a car within 7 days or 1,000 miles for a full refund. Quite literally, you could buy a Tesla, drive several hundred miles for a weekend road trip with friends and then return it for free. With the highest consumer satisfaction score of any car on the road, we are confident you will want to keep your Model 3.
Shifting all sales online, combined with other ongoing cost efficiencies, will enable us to lower all vehicle prices by about 6% on average, allowing us to achieve the $35,000 Model 3 price point earlier than we expected. Over the next few months, we will be winding down many of our stores,"
"At the same time, we will be increasing our investment in the Tesla service system, with the goal of same-day, if not same-hour service, and with most service done by us coming to you, rather than you coming to us. Moreover, we guarantee service availability anywhere in any countries in which we operate."
If anyone has ever had to cancel a car sale you’ll realize how much of a hassle it truely is to “return a car”
Your credit report will show a loan even after it’s been cancelled for weeks.
I once cancelled financing for a car due to it not being as described. Started looking for a new car and found it.
Got denied for a loan because my score showed a 60k loan with 0 payments made. It took almost 2 months to fully remove it from my report and start with a clean state
In summary, Tesla is essentially saying “you can’t test drive it but if you don’t like it you can cancel your car search for a few months and ding your credit score for nothing”
This is like mattress stores that give you a “free trial”, they know the resistance to actually doing ending your “trial” is crazy high
It's not Tesla's "fault", but it's cutting corners in a bizarre way for the auto sales industry. I don't want to risk $35K+taxes/fees and get an Aldi shopping experience.
I think they both deserve credit, in reality returning a 30 thousand dollar object is never going to be smooth.
The finance has already written you a check, they’ve already done all this leg work.
You’ve already driven it, if you’re purchasing it in earnest you might have already invested in charging infrastructure for your home, a whole laundry list of friction.
Then there’s what happens to the car you returned.
I wouldn’t want to be the guy stuck with a car that went through multiple 1000 mile “test drives” with Tesla’s reconditioning track record of delivering cars with toe nail clippings in the seat rails
(traditional dealers do have offers like this from time to time, but it’s exceedingly rare they’ll actually let you keep the car for more than a few hours, and most importantly they don’t require you to buy the car first, they’ll take a deposit or let you rent the car)
That's not true, though. You can still go to a Tesla dealer and test drive one. You can't necessarily test drive the exact model that you would buy but that's exactly the edge case that the new return policy is meant to address.
Where did they say they're closing all their stores? All they said was that they were moving sales to online only. They'll still have service centers and other physical locations unless there's a source somewhere that says they're closing all physical locations...
This kind of comment isn't helping. There is also Turo, a service where you can rent various cars including different Teslas. Pricier than normal rentals but not a bad investment if it helps someone make the right choice for them.
I remember the “salesperson” talking about how quiet it was as wind noise whistled through the cabin like we were in a Corolla. The A4 I was driving at the time was immensely quieter at highway speeds but I nodded and played along.
I’m convinced the aspirational status of Teslas means people who haven’t experienced actual luxury vechicles are buying into the hype that Tesla is somehow peak luxury, or even deserves to be called luxury outside of pricing (especially when you compare a Model S to it's price-mates)
Which leads to hyperbolic statements like this one.
For an absolute base model. Most of the models start in the mid 20s, and you can find a $33,000 Civic (as in one that's available to buy, not "I clicked every single option in the Build menu") easily enough.
I have a Model S and I used to own several BMWs. Honestly, what luxury does an entry level BMW or Audi even provide ? BMW 3 series is a joke with it 4 cylinder engine, soft handling, and a tiny screen where you have to visit the dealer to get a map update. Teslas are way more luxurious in the sense that they provide a 21st century car.
To the average base model buyer a 4 cyl means nothing when it’s paired with a silky smooth transmission, soft handling is a plus, the “tiny” (very crisp and responsive) screen is modern, and I’ll take wireless CarPlay over Tesla's Bluetooth integration any day.
And for the rest of us there’s the 340i which is still only as expensive as what was the only Model 3 you could buy before 2pm today...
First off I don’t know what you mean when you keep saying “bought on down payment”...
Second one of my cars is 4 series, I don’t own a 3 series. And it’s a 440i which is faster and more luxurious than a comparable Model 3. And I can put the roof down when I feel like it.
Depends on where you are I guess. In Sweden the Model 3 is significantly more expensive than an A4. And while they haven't announced the price of the new cheap Model 3 yet I will be very surprised if it comes in under twice the price of a Civic
You have a valid point about inexperienced owners but the car (more premium Model 3s) has been favorably compared with a BMW M3 in a similar price range, by people who know premium cars well, and they have called it a toss-up just on driving feel alone. Which has a totally different character in the two cars but both fantastic. That’s without even taking into account cost of ownership, auto pilot features, safety, beast mode AWD, or energy sustainability.
If you do take even some of those factors into account, it’s a no brainer.
For wind noise it’s not the best, but in many other aspects it’s far ahead.
More favorably compared by who? I’ve sat in model 3,s, and x, and when compared with similar priced BMW or Mercs, there is a massive difference in interior luxury and comfort. Seriously, go and experience being inside a 100k 7 series bmw to a 100k model s. It’s like night and day in comparison. The Tesla’s always feel cheap in comparison. The handling, road noise, luxury features, seat comfort, etc are all inferior in Tesla cars.
Also, Tesla know this themselves! Elon admits that Teslas are overpriced and that current buyers are subsidizing future buyers as they scale up. Also, a friend of mine used to be the manager of a major Tesla delivery center. He said the quality control was terrible and they had tons of cars with paint and panel issues. In fact he said bad paint jobs was one of their biggest source of problems.
A friend took me for a drive in their model 3 recently. At one point we hit around 130mph, and it was the smoothest and quietest ride I’ve ever had at the speed.
That being said the BMW 7s I’ve been in were all from the early 2000s, but I never found any other car to be as quiet as a Tesla.
Yea, that's a good point. It was... well, had a lot of features. Some of them worked. Some of the time. And plenty of sensors to let you know when they weren't. Except when the sensors were the thing that was bad.
You are comparing cars 15(!) years apart. I'm sure that pretty much every car today is a considerably nicer experience than a model T ford, but that's hardly a fair comparison :D
Yeah they don't have years because they update them all the time, incrementally. They still are each made in a certain year. If you drove it a couple years back, things have moved forward since your conclusions were locked in your mind.
>I remember the “salesperson” talking about how quiet it was as wind noise whistled through the cabin like we were in a Corolla.
One slightly weird thing is that because there is no engine noise (other than a slight whine on heavy acceleration) all those other road noises become more noticeable and it seems noisier.
I agree with the luxury vehicle thing, especially on the S. Mine had the seal between the window and the front door literally fall off at one point early into ownership.
I got mine for two main reasons: the acceleration is great fun in the "performance" models and I don't have to deal with buying gasoline. It's also a pretty damn safe car, which is nice when I take the kids somewhere.
There are some nice tech features (like being able to summon the car from a tight parking spot) that feel luxurious too, but I agree that they badly need to work on fit and finish for a $150K price point car.
Most luxury cars have almost zero engine noise inside the cabin. Also at speeds over 20mph, wind noise is louder than engine noise outside the vehicle, so electric cars aren’t really quieter than ICE except in parking lots.
That’s not always the case. It depends on the luxury car. I visited a Masarati dealer, and their selling point against a Model S was that the engine was loud. (“You want a car that that sounds like a car. You want to hear that purr and and feel that rumble. You can’t get that with a Tesla.”)
Same thing happens with luxury sports cars. I test drive Ann F-Type, and the damn thing comes a button to make your car louder. The call it “active exhaust” or something. It basically shoots gasoline into the exhaust so the car backfires. It’s basically rolling coal for rich people. The car was so loud, it was hard to have a conversation. I hated it.
Those are sports cars. They don't compete with a Model 3 or Model S. They compete with the Tesla Roadster. Have you ever been in one? You can't hear each other at all it's so loud.
Maseratis have a signature sound, that's one of their core selling points. If you remove that, you are left with a mediocre quality car with insane depreciation.
And you know, for a car/technology company I find it odd they don't do any sort of active noise cancellation. Especially when they pin themselves on making luxury electric cars.
Agreed. I had a 2016 A4. Went to Austin for a conference, was in a 2016 Model S. Road noise was better in the Audi.
And in my current car, compared to a friend's new S? No comparison, mine is far quieter, despite being a V8 (Jaguar XJ) thanks to in cab active noise cancelling and others.
I have a Q7, $20k cheaper than the X and far nicer; Tesla can’t even get CarPlay. If I am paying $100k+ for a car and it has less connectivity to my devices than a KIA, that’s a problem. During the time I own the Q7, the gasoline expense isn’t going to exceed the markup for the X. I like Musk’s vision, but Teslas are the Honda Civic of the Silicon Valley crowd.
But you’re part of the problem, not part of the solution so... but yeah the Q7 is nice. BTW no problems whatsoever with device connectivity with the Model 3. And the X is a moving target; it’s improved all the time so past experience does not indicate the current situation.
Buying overpriced luxury cars ICE or EV is not making anyone part of any solution.
If you want to be part of the solution go find an old, safe, (it’s 2019, a 10 year old car can finally in the “modern era” of safety, AEB and all) vehicle that has amortized the insane ecological costs required to make a new car
That's the noise of outside + wind. The materials used for insulating external noise add non negligible weight to the car. You can make it quieter, but at the cost of reducing MPG (or MPAh?) :(
I tell people that the parts of the car that make it a car are excellent, and the parts of the car that make it luxury need some help. That being said, I've bought two Teslas so far with absolutely no regrets.
One of the reasons I will likely never own a Tesla is because I have driven all of them...including the limited edition Roadster (courtesy of an old boss that liked collecting fast, shiny things). Other than the impressive acceleration, the handling and ride other ride tangibles of every Tesla model is below-average for both its price point and its class.
I spent hours on the phone talking to these people when they realized my closed loan was still affecting my ability to get a car and they went up and down trying to get someone to fix it.
Maybe they were just typing in numbers into a computer and hitting transfer but they’re still people doing a job.
I wouldn’t feel to good taking someone’s information, going over the process with them then having them call back in a week to tell me never mind we have to do it all over again.
That's not the full story though. When delivering to dealerships they are often delivered in a more efficient manner, so the per unit cost of delivery is lower.
Even if that wasn't the case when you go to a dealership that delivery cost is part of the price. Claiming the car is $35,000 when it's literally impossible to buy it for that is a bit misleading.
They don't charge you extra if you live farther away, though. The delivery fee is charged to you whether they deliver it to the dealership or to your house.
Yeah that’s a Tesla trick to make their cars look cheaper than they are. It’s deceptive. When I buy a gasoline power car, I don’t figure the cost of gas into the purchase price of the car.
It also wrongly assume that you can charge it at home. I only have access to street parking in London. I would need to register to various charging provider in order to be able to keep a car reasonably topped up without having to go to the supercharger at the beginning of a journey.
The price of the monthly subscription(s) alone is a very significant proportion of my gas consumption (I'm a leasure only driver, I do maybe 5000 miles per year, the bulk of it is done in 4 to 5 road trips)
In Spain, the standing cost of a residential electricity contract that is sufficient to charge a Tesla (i.e. above the regular Spanish 3000W default contract) is similarly a significant portion of the gas price.
It's cheaper to Tesla if they "deliver" it at their factory. I took delivery of my Tesla at the Fremont factory. was still forced to pay full delivery fee. insane.
Sorry, that's not true at all. There's often A LOT of wiggle room.
Insider Tip: The internet desk is usually separate from the floor desk at your average dealership. When you know exactly which car you want to buy, negotiate through the internet desk only at several dealerships. But be prepared to walk if they try to pull a bait & switch when you show up to purchase.
The problem with your insider tip is that everyone, dealer included knows about it. I hate when people say be prepared to walk when most of us don’t have a million dealerships to visit. Sure if you’re in Southern California you can visit 6 Honda dealers and waste 1-2 days. You’ll get the quoted price and then they’ll try to stick you the next time you come in. Consumer is at a huge disadvantage here because dealers know they have limited time. It’s no secret dealers make you wait forever so you grow impatient and agree to their bullshit. Some of us don’t want to deal with that kind of crap.
This person has a point. We should put a thin layer of collective consumer organization (regional, statewide, national, global, or some other user-defined organization) that's programmatically (smart-contract-based) guaranteed to hunt for better bulk deals with the supplier within certain convenience parameters (e.g. "I want to buy mine within the month"). If these were open-source programs (ideally run in trustless blockchain envs) then the competition to create a popular one would undercut their middleman profits to optimally-tiny percentages due to arbitrage.
As it stands, we are an unorganized mob who the middlemen and manufacturers are squabbling over and each making a profit. But it's becoming pretty clear we'll be able to program the middlemen cheaper/better in the near future (or services can just offer direct-online shopping), so should that remaining profit go to the manufacturer or the consumer? Tesla's being pretty generous now (or appears to be), but future (and present) direct online shippers may benefit greatly from the organizational imbalance. This is the same argument for collectively-purchased (government) healthcare, I believe.
(And yes, companies obviously should be compensated according to their risk and willingness to invest at scarce times - Tesla certainly deserves big praise from many angles - but examining this relationship from a societal standpoint and collectively bargaining for the end consumer (advocating for the poorest of us) is important too)
Well, in this case, there is no middleman. And, with Tesla, there never has been AFAIK. So not sure if applicable. But assuming a general statement, I have to bite...why smart contract?
I may be a weird consumer but whenever I buy something expensive I always think about the unrelated things my money is paying for. So for example when I visit a car dealership I notice the big land footprint, the shiny offices, and well dressed salespeople—and I think to myself how much of my car purchase is going towards the upkeep of this crap, none of which I like or want.
If I want to learn about the car, I'd much rather access the manufacturer's website and read/watch independent reviews.
If I want to test drive a car I'd be willing to travel further to test drive one directly from the manufacturer. Or better still, just don't test drive it at all—you won't learn anything in an hour that you couldn't learn from a reviewer. The true character of a car usually takes a week or more to surface.
If I want to buy a car, I'd much rather buy it directly from the manufacturer and either pick it up from a central depot (to save money) or have it delivered directly to my home and detailed on my driveway (for a fee based on distance).
My experience with test drives is that you immediately know if you like the car or not. Reviews have never really made sense to me, most reviewers seem to talk about stuff I just don't care about.
The only problem is that dealers usually only have cars with the most popular engines available, so you often can't actually try the car you want to buy...
Interesting. My experience is that if I want some idea of how I'll feel about the car in a year, a test drive of less than a week gives me almost no data.
Personally? yeah, I think renting a car is the way to go, if you want to evaluate how you will feel about the car later. A 20 minute test drive, to me, is like laying on a mattress for 20 minutes in a store and expecting to know what it will feel like to sleep on.
An important part of choosing a car is ergonomics. I like to rest my arms on the door and middle console armrests while driving, but my brand new (expensive) SUV, bought sight unseen, comes just short of being able to do this, which bothers me a little every day. Obviously these things differ from person to person, so yeah, next time I'll probably go for a test drive first.
Find a reviewer that has a similar body size to you. There's literally hundreds of car reviewers on youtube, there will be plenty who will have the same ergonomic structure to you.
Remember: you're not special. You're just another meat bag that fits within a bell curve of normalness.
Edit: to the one person who voted me down, I was wrong. You aren't a meat bag, you are special.
I feel the same. I’ve had stronger urges to buy a car I rented than one I test drive for 10 minutes. You just never get the same level of familiarity, the little quirks and knowing how your body feels after an extended multi-day drive if you simply test drive at dealer. I like to have my cars for a week at the minimum before I can confidently form a strong opinion in regards to purchase.
I wouldn't mind car dealers if they actually offered a useful independent service. When I go to buy a camera the person in the store can explain the pros and cons of Canon vs Nikon vs Fuji vs Sony and let me try them all next to each other. Why can't I go to a car dealer and have them explain the pros and cons of Honda vs Toyota vs Nissan and let me compare them right there in the store.
I trust the guy at my local camera store to explain the pros and cons of a Canon vs a Fuji, I obviously don't expect they guy at my local Honda dealer to explain the pros and cons of a Honda vs a Toyota.
Rule of thumb for life: Never ever get advice about what to buy from the person selling it, unless that person has literally no incentive whatsoever, or if the purchase is extremely low risk (e.g. low item cost or hassle-free returns policy).
Camera stores is a great example. The vast majority of salespeople know how to convince you that a product suits your needs, but would have very little clue what is important to get the best outcome. They're not photographers—or if they are, chances are they're no more of a photography expert than you.
Perhaps the worst is "high end" hi-fi salespeople. These slick operators are great at convincing you to buy the unnecessarily expensive product and the criminally overpriced accessories. Unfortunately for the customer, most of the things that matter in making a good system aren't sold in a cardboard box with a big profit margin, so you'll never hear about them from a hi-fi salesperson.
I always thought it was weird that we negotiate a price with new car purchases. I do negotiate hard on my cars (and on behalf of family) and I hate the process. It's stupid. I'd much rather the manufacturer nominate a fixed price and not allow any negotiation at all. Then the manufacturer would be forced to pick a price that competes with the market.
There are only a few things that excite me more about a Model 3 than electric cars from established brands (particularly the upcoming Kia Niro EV) and a big one is the sales process.
There are no haggle dealers and have been no haggle brands from time to time. One problem is that the people who like and think of themselves as driving a hard bargain don’t like the inability to do so
Those that truly do know how to work the system should be able to get a better deal. Subsidized of course by those who are not good at it. Or who don't care.
Or a store should be selling goods at the same price to all consumers, instead of giving some consumers preferential pricing over others if they know the right hand-shake.
Consumer price discrimination isn't something that should be occurring.
For those people who like to drive a hard bargain, they can do what everyone does with every other expensive commodity—wait for the time when sales numbers are dropping off and take advantage of sharper prices.
After all I'm not saying that car makers can't have "deals" but the price of any new car for sale—on special or a regular—should be published and not negotiated.
When you buy a laptop from HP, do you negotiate with the web form? If you went into an HP store (assuming there was one), would you negotiate with them there?
When we make large purchases from HP, Dell, Microsoft, you're damn right we negotiate the rates and get discounts. If you're making a purchase that is a large percentage of your budget, you'd be stupid to not try.
When you're buying one laptop, of course not. You're talking a $3000 purchase vs a $40,000+ purchase. You negotiate on cars, because getting a thousand or two off is a huge deal for a lot of people.
The "No haggle" thing that Tesla is doing works fine for their $60,000-$120,000 cars. People spending that kind of cash on a car are probably not going to bat an eye at an extra thousand or two. Anybody spending that much money on a car isn't buying it because they have a limited budget, and are not trying to maximize their value.
I don't think it's going to work as well on their lower priced cars. People who don't have a $50-60k budget for a car don't have tons of money to throw around.
Don't you think it's silly that paying sticker price is considered paying extra?
Haggling is stupid. Cars are usually overpriced because the expectation of haggling is priced in. I'd rather Tesla put a $35K price tag on their Model 3 knowing that's exactly what I'll pay than put a $38K tag knowing that I'll try to haggle it down to $35k.
A random citizen buying a single car isn't comparable to a corporation negotiating a volume discount.
What you call “law” is mandate established by car dealers by buying off politicians. This is one of the most disgusting monopolistic snake oil business that had little chance of surviving otherwise for so long. Musk is doing great favor to all of us by showing them middle finger and letting them know that they can’t hide behind their purchased politicians.
Honest question, where do Tesla owners take their cars for repairs if there are no dealerships? I always thought the dealership laws were pretty consumer friendly in this way. I can find dealerships and independent shops to have my cars repaired pretty much anywhere in the country.
Tesla doesn't let anybody else fix their cars. So you have to take it to their... what, repair center?
I wonder what an efficient car delivery service could cost?
A car transporter carries 11 cars and can drive say 500 miles per day at a cost of $500 per day (including driver, fuel, and vehicle rental).
If the average delivery distance from factory to customer is 1500 miles, then transport cost works out to $136. Add to that the 'last mile delivery' which is probably going to involve a $20 per hour employee driving to the customers premises, doing a 2 hour training and handover process, and catching an uber home. Call that 4 hours, or $80 + $30 for the Uber.
Total delivery cost with an efficient delivery network could be $246.
Assume a 20% 'failure rate' (ie. where the customer rejects the car), and in those cases double the cost (returning the vehicle) and fold it into the amount the other customers have to pay, and you arrive at $369
What about profit for the delivery company, a receptionist, insurance, marketing, web developer, logistics software, accountants ... the delivery company need to operate profitably as well.
> A car transporter carries 11 cars and can drive say 500 miles per day at a cost of $500 per day (including driver, fuel, and vehicle rental).
That feel to me awfully low. Can you be more specific on how you get to $500 for all that? Renting a car can cost me more than 100$ a day for similar distances. I can't imagine 11x that would cost less than half of it and on top of that include the wage of someone that have to drive full time.
That's barely his cost and doesn't consider anything else (administrative and etc..). I feel like it would be closer to 1500$ a day.
Because everybody in a country pays the same price. Just because some people live near by the factory or want to make an event out of it doesn't mean they get it cheaper. I believe all car companies do this (I had to pay a delivery fee when I got my BMW at the factory). Not sure whether it is a law though.
I don't think that's actually true. My Volvo was around ~$5k cheaper (plus free plane tickets to Sweden) when I picked it up from the factory. This also takes into account the complimentary shipment to my local dealer in the United States. I've been told that BMW has a similar European Delivery program.
Hi fellow Volvo OSDer. It truly is a wonderful program.
But there's a difference between the OSD MSRP discount. (i.e. buying off the OSD price sheet) and the standalone "Destination Fee" line item. Further, even though Volvo ships the car back to the the states for free for you, it's up to the dealership (and potentially your negotiation skills) whether they still add that destination fee to the final bill.
If your dealer is adding delivery or prep fees to your Volvo OSD, talk to Corporate. That's a big no-no in the program. Doesn't stop some dealers from doing it however. If I recall correctly, the only fees they can add are processing fees if they handle the DMV paperwork on your behalf.
In my case I did pay a delivery fee picking it up from the factory. They did make a small event out of it of course, it being presented on a turn-table show like floor etc, but other than that it was mostly waiting and then fueling up as the first thing because the car is basically running on fumes when you get it. I did not have to pay my dealer anything of course. That would have cost something extra possibly.
I have never once paid a delivery fee for a new car. I do not know anyone who has bought a non-luxury car that has paid a delivery fee for a car.
OTOH, I do know many people who paid delivery fees for customized luxury cars. The $35k Model 3, however, is not a luxury car and is barely customizable, even to the extent of available add-on packages.
Oh yes you have. Every dealer everywhere charges a "Destination Fee." That is what you pay for delivery to the dealer's. That line item for the price of the car is non-negotiable. There is wiggle room on MSRP etc.
This was the first google result that came up for "car destination fee" :- A "destination charge" is a fee that the manufacturer charges to deliver a vehicle from the factory to the dealership, and that is passed on by the dealer to the consumer; it is not included in the MSRP of the vehicle. Destination charges are typically not negotiable.
...and yet I managed to knock the price down by 5K and 2K off MSRP when I bought my last 2 vehicles. So this destination charge is often a moot point with regular car brands/dealers.
You may be doing that thing where you assume parent, and indeed everyone, is in the same country you are in, subject to the same laws, regulations, and traditional rorts.
Why would anyone want to negotiate individual line items rather than just negotiating on the final bottom-line price? Why would I care if I'm reducing the destination fee or the actual price? What difference does it make to me?
The line items usually come up when negotiating the final price. It’s hard to avoid discussing the details unless one party has a string negotiating position and highly values minimal communication.
As to why you’d want to: if you ask someone to quote bottom line, and they do, then you can start picking their line items apart to go lower. Or if you quote high, you can use line items as justification for it to some buyers.
> then you can start picking their line items apart to go lower
But why? If I want a lower price I don’t care where they have to shave it from to do that do I? I don’t care about how they’ve arrived at a price or how it’s accounted for if I just want it be lower.
I say I want that price to be lower in order for me to buy and they say yes or no depending on if it’s worth it for them.
Based on your last sentence, you might be ending negotiations too early. An early “bottom-line” ultimatum leaves money on the table because the details haven’t been fully considered by the other party, so (in auto sales) the seller hedges with a higher price.
A more thorough discussion can bring down the offer they are willing to accept. You don’t have to care about the details to use them in a negotiation.
I don’t get it - asking ‘can you reduce line item n by x’ is exactly the same thing as ‘can you reduce the bottom line by x’, except the former asks them to do something they may not be able to do (that’s how this conversation started - the delivery fee) and the latter lets them achieve what you want any way they’re able to.
So why would you ever use the former approach? It’s strictly worse.
> I don’t get it - asking ‘can you reduce line item n by x’ is exactly the same thing as ‘can you reduce the bottom line by x’
"Can you reduce bottom line by x" is like saying, "the documentation is a bit vague, can you improve it please?"
"Can you reduce line item n by x" is like saying, "there's no way the user could possibly intuit that the sampling period may be truncated to precisely hit the target value after the specified duration. Given that the programming language itself has no specification, this longstanding behavior must be explained clearly in the user docs."
Which response do you suppose will be more likely to lead to an improvement in the docs? It's probably the one that shows evidence you know your domain and how to assess quality there.
Of course, that analogy is the dream. In reality the car salesperson will come back with the reduced line item but with adjustments somewhere else. And it's hard to keep track of because, for example, how would an increase in the down payment affect your idea of the "total bottom line?"
This would be like a developer countering by saying, "Ok, but to clarify that section of the docs I added threading to the event loop." And then every single developer suddenly becomes some kind of darkworld saboteur, and you finally give in by saying, "I guess this is just how software gets made..."
Just look at the total-cost-of-ownership. As long as I can afford the down payment and I can afford the monthly payment then I just want to reduce the total-cost-of-ownership for the car I want. In other words I want the dealer to optimise for that variable and as long as they meet my constraint for affording the down and monthly payments then I don't care how those vary as long as the optimisation goal is met.
Line itemisation is very silly for cars. All I need to know is how much does it cost me to get the car. I don't care that some of that money goes to person A and some of it to person B. Irrelevant to me!
> In other words I want the dealer to optimise for that variable and as long as they meet my constraint for affording the down and monthly payments then I don't care how those vary as long as the optimisation goal is met.
But you would have already told them, "As long as I can afford..." So they'll spend the entire exchange trying to optimize for the maximum amount they think you can afford. They can try to convince you they've optimized when they really haven't, and they can try to pick a vehicle of a lower quality and persuade you that the price drop is the optimization.
If your response to every trick is to respond, "No, please try again to optimize for TCO," they'll eventually interpret your behavior as the equivalent of an ad-blocker. Then they'll either persuade you to reveal more data or move on to a customer who negotiates on their terms.
I don’t understand how you think it’s any different - you ask ‘can you reduce the price for the paint finish’ and I ask ‘can you reduce the bottom line price’. In both cases it’s the same reduction in their profit margin. Why do a dance around which line item it supposedly comes off?
Because they will say no to your question and yes to jancsika’s question. We’ve given you some reasons why rhetorical/persuasive skill and willingness to work to find an angle on a negotiation improves the results.
There is a difference simply because the results are different, whether due to the need to save face, behavior psychology, sales training, or more intangible factors.
Just to be clear-- in reality the game is rigged by the dealership and salesperson such that it is extremely likely one will pay too much for the vehicle. Or at least the sale will not be optimized for TCO. And that is regardless of whether one plays the salesperson's game or tries to "beat the game."
What I'm saying is that either OP will accidentally give away information at the outset that virtually guarantees overpayment-- "Here's what I can afford"-- or robotically repeat a fair price calculated ahead of time and request TCO optimization until they are thrown out of the dealership.
It'd be like going to a shell game and requesting to pay $7 so your kid can have 10 guesses at where the shell is. Then when they ignore you, start asking what's wrong with that, I mean, those are the odds, no? I've even rounding up for that pure profit. Why wouldn't someone with a big crowd of good faith players want to accept that?
Oh no, I definitely have never paid a delivery fee. I am one of those weirdos that reads the entire sales contact before signing.
You have to be pretty bad at negotiating to be hit with a delivery fee since in my neck of the woods, aka SoCal, most dealers will waive that for everyone.
I’m curious to know where you are. I think it’s twice that where I am (California). Is this just another way for dealers in different states charge different prices, while maintaining some semblance of uniformity?
I recalled this wrong — I looked at the sticker for my car 3 years ago and it was $795. I think $500 was for my previous vehicle, and that was a long long time ago :)
Eh... Delivering multiple cars over a short distance by loading them up on a flatbed or car hauler just doesn't make any sense. Tow trucks will always be more expensive than calling a taxi. Especially given that this is basically a textbook example of the travelling salesman problem. And I don't mean computing a route is hard, I just mean that in practice while there's overlap between destinations for a sparse set of e.g. 10 destinations spread evenly over some area around a hub it's not like being able to go between destinations directly makes it 10x shorter. Trucks are expensive to maintain and operate, much more so than a regular passenger car. Trucks also can't deliver as easily or to as many places as a person driving it. If someone lives down a dead end road that's extremely inconvenient for the truck whereas it's a non-issue for someone driving.
Car haulers don't make sense for sparse local deliveries.
You will never be the first driver of a car, even if it comes straight from the factory to your front door. Every car gets test driven after assembly before it gets sent out, though they might not have the odometer turned on.
I know someone who had a huge problem with Tesla over this. The issue was the Tesla contract wanted my friend to take ownership of the car, and thus responsibility as soon as it left Tesla. For obvious reasons, that's not something anyone should do. They had quite a bit of back and forth until Tesla changed the wording. I'm not sure if they did it universally though.
Then Tesla registered the car improperly and took months to correct.
Most Tesla owners I talk to say the same thing, they love the car and hate everything else about dealing with Tesla. I can't imaging removing dealerships is going to make this any better with customers.
Yes, and that's completely reasonable, but then it's misleading for their promotional copy to say:
>and then return it for free.
which implies that there's no financial loss on your end.
They should at least have phrased it in terms of "and you're only out the initial delivery fee".
Edit: I don't know what the actual status is. One commenter mentioned a delivery fee that's separate from the headline price; I was just going off the earlier discussion.
See edit -- was just going off the implication from the immediate discussion and couldn't easily verify the relevant T/C. I would have deleted the comment but it was too late.
they roll it into the sticker price, as one of 2000 items in a truck is a pretty low shipping fee. one of 5 cars in a trailer, on the other hand, the per-item cost is very high.
The credit system absolutely does force itself upon us. Your alternatives to the credit system are cash and I’m guessing layaway. Not to mention the things that require good credit but aren’t exactly a loan.
It's not a human right, but being denied or briefly inconvenienced of financial services certainly for most people considered a downgrade in their capability to operate in a modern society. One of the big things that separate haves from have nots is the availability of financial services.
Were you denied a loan from the same institution that issued the first one? I can't imagine a credit union turning down the same customer they just approved because 'computer says no.'
I'm not sure that Tesla is saying you can't test drive it. There are other ways to evangelize the car and let people test drive it, ones that don't involve massive rents in premium retail spaces. Toyota brings the Mirai to my local Farmers Market, for example.
They could easily organize such events for the Teslas.
The first loaner confirmed they couldn’t even process a new loan while the old one was in limbo. They even put my case in for special review and apparently part of the wait was ensuring the check wasn’t being used.
I even tried going with a different finance company to secure the exact car I wanted (it was an excellent offer I had driven the dealer to) and they came back with a flat no.
Huh, interesting. My Credit Union was willing to finance a loan for a new vehicle while waiting for any documentation that the existing auto loan was totalled. They just said "Make sure that you have the settlement check to us within 60 days, please", and that I paid off the remaining $1,200 "in a timely manner".
I can confirm the same. Had 16k loan that was being paid by Liberty Mutual due to their driver totalling my car. Check was in flight and my Credit Union processed close to a $30k loan for a new car.
I’m guessing it’s different in the case where the check has already been cashed and the loan has been secured (ie. they have a title)
In my case they hadn’t secured the loan yet. I doubt they’d be so flexible even if the car had been totaled as I drove it off the lot without the loan being secured.
I would be happy to be given this chance in Europe, I would order right now, but at double the price and limited availability we have other problems to deal with.
"In summary, Tesla is essentially saying “you can’t test drive it but if you don’t like it you can cancel your car search for a few months and ding your credit score for nothing”"
Where do they say that? On the site is a big "Test drive" button which goes to https://www.tesla.com/drive which, I asume, will let me test drive a Tesla. Without Buying.
You won’t be able to test drive _the specific car you are buying_ before committing to purchasing it. You’d only be able to test drive another instance of that model, but not the specific one you’d be committing to for X years. This deprives you of the ability to, e.g., avoid purchasing a particular instance of a vehicle that has some annoying defect or flaw.
That's industry standard, isn't it? Who test drives specific new cars before buying? Would you be as okay with buying a new car after is was test-driven by several random strangers?
Have you ever purchased a car through a dealership? When you buy a car off the lot, chances are good many people have test driven it, and unless you have zero anxiety about the purchase, you were one of those people
When I requested a test drive in a state with no dealerships I was directed to a store out of state.
These stores will no longer exist.
The messaging is also very clear, sometimes it’s ok to read between the lines...
We’re closing stores where you test drive + we’re pushing returns hard in the marketing = we want to move past test drives
This is a new annocument, other parts of the site don’t even have the right mileage and days for returns last I checked, give them some time before the site is consistent with the new reality
Tesla doesn't have "dealerships" (which are not owned by the manufacturer), only "stores." The places you're thinking of are the places they're closing. Apparently they will keep some of them open, but they will be considered "galleries" rather than actually selling anything.
Seems like a US-centric problem, in the UK the 'credit score' is completely worthless and different for each credit agency (there are three main agencies).
Loans, mortgages, etc. are based on your whole credit history, and if you take out a loan it will be marked on your history and when you cancel it within the 14-day cooling off period the credit history will be updated to say it's closed.
Unless you're doing this multiple times in six months or so, it won't affect anything (maybe your credit score might go down a bit when you take out the loan but it goes back up after a few months when it's updated again normally - but a this credit score doesn't mean anything it doesn't matter).
Those investments are not zero risk though. I don’t disagree with the general point but suggesting you should take a loan if the rate is less than the S&P return for the past year is questionable.
Nothing is zero risk, including owning a car; include the risk in your calculation. Your time frame is not one year, but typically 3-5. If your loan is at 2%, you don't need your stocks to hit 8% every year. You need them to be no worse than 2% p.a. over the entire period of your loan. That's significantly smaller risk than the risk of stocks not performing at your expectation of much higher return.
On average, the S&P 500 has historically returned roughly 9.8% annually. In 2017, the S&P 500's total return was over 19.7%. But for 2018, it was minus 6.2%.
You could easily achieve similar returns in an S&P 500 index fund.
I have my LEAF financed because it has a zero interest rate loan. I will end up paying that loan off shortly, because the loan is forcing me to carry collision and comprehensive insurance that I wouldn't otherwise buy, especially now that the car is 4 years old. (Dropping that will increase my exposure a small amount, so the difference between that increase in exposure and what insurance costs me is essentially the financing cost.)
So many people with not enough financial sense parrot this stuff and it’s mind boggling.
This is not the mentality that gives someone good returns on their money so I’m forced to assume people who say it can’t afford the cars they’re talking about.
If you have cash and you are not financing then you doing something wrong. Your cash will almost always provide much better returns than car loan interest.
> If anyone has ever had to cancel a car sale you’ll realize how much of a hassle it truely is to “return a car”
Why is it supposed to be easy? If it were easy you'd have too many people buying a car "for the weekend", costing the company money and driving up prices for everyone.
> "financing for a car" ... "ding your credit score"
To my mind the mere fact that someone would borrow money at all to buy _a car_ is a huge red flag against their creditworthiness / financial responsibility.
But I keep reading online that people who otherwise seem pretty sensible do this as a matter of course. Is it possible that living in a city with functioning public transport has sheltered me to the point of naivety? That is to say, is having a car really so essential to holding down a job and accessing services in most of America (etc.) that taking out a loan to acquire a car becomes a necessary evil?
> That is to say, is having a car really so essential to holding down a job and accessing services in most of America (etc.) that taking out a loan to acquire a car becomes a necessary evil?
Yes, it is, and it really sucks that we in Amercia designed so many of our towns and even cities this way.
The Auto Loan industry is huge. I would be surprised if more that 20% of the population could pay 35000 cash. Most people less that 40 barely have a liquid cash of 50K. To pull out 35K and regrow that remaining 15K back to 50K would take a year for someone making 100K. Instead you could take a loan which typically go for 3% for good credit, and keep that 50K in a high interest bank account (2% or more) and pay essentially a few hundred dollars over four years to make sure you have cash available for a true emergency. Why risk that. Obviously you could argue that someone with only 50K liquid cash shouldn't buy a 35K but that is not how our economy works. A few hundred bucks so you aren't broke is not crazy. Additionally in most of the country a car is essential to live, especially in suburbs and small communities. Everyone could buy a 15K corolla but everyone wants the cooler thing
> Most people less that 40 barely have a liquid cash of 50K.
If you're talking about the US, this is the greatest understatement I've seen in some time. I don't have a very good source handy, but for the median American under 40, try more like "$1,000".
Given your healthcare system and the potential costs of being ill combined with having such a low amount of savings / safety money. Losing your job could potentially terrifying in the US.
How do people live what that level of stress continunally?
I could lose my job tomorrow and live for 4-5 years on savings and I'm not comfortable with that amount and occasionally find myself worrying about my financial situation.
> How do people live what that level of stress continunally?
Financial literacy is low, and financing is available on everything. Just tell the person that they can buy something with no money down and you're halfway to making the sale.
>How do people live what that level of stress continunally?
They have no other choice. Education is far too expensive to better yourself and train for a better career, everything is designed to suck every possible penny from those with less money than average, and if you don't work your ass off to pay what you can, you die on the street because we have no safety net. Being poor is a treadmill. If you were born poor and don't get absurdly lucky, you can look forward to being poor forever and passing that great experience onto your possible children.
> Instead you could take a loan which typically go for 3% for good credit, and keep that 50K in a high interest bank account (2% or more) and pay essentially a few hundred dollars over four years to make sure you have cash available for a true emergency.
A 35K car loan at a net of 1.5% (3% - 2% + marginal tax rate on 2%) will cost over a thousand dollars over 4 years.
> is having a car really so essential to holding down a job and accessing services in most of America (etc.) that taking out a loan to acquire a car becomes a necessary evil?
US public transit is really bad outside of major urban areas. In the (medium-sized) city I live in, the only public transit is an unreliable bus service that only covers a few areas of the city with really limited routes. We don't really have taxis, either, and there's enough sprawl that you can't bike to places easily, so your options are to either use uber/lyft for everything and hope you can get a ride reliably, or buy your own car.
Median household income in the US is only around $60k/year [1], which makes it pretty difficult to afford a car without some form of loan. If you save up pretty far in advance, and buy a cheaper used car, it's probably doable, but most people don't want to do that (and if everyone tried to do that, used car prices would likely go up to almost the price of a new car anyway).
If you’re objecting to having a car at all... yeah I’d say that’s naivety from only living in a city.
Otherwise I’d say that’s the short sighted financial sense.
I was borrowing at a rate that was barely costing my anything in finance charges and gaining the opportunities having that much cash open for investment or other expenses gives me.
I don’t see a reason to buy a car in cash if you can get a good enough rate...
What?! You are naive. Or trolling. Or both. Car loans are much lower than S&P compounded gains. Why would you want to pay everything down while you can put it elsewhere and earn?
> ... [to] borrow money to buy _a car_ is a huge red flag ...
Hi Jeff
Just a polite reminder that a) there's nothing wrong with financing, it's essential to the buildup of the US and b) the average US citizen doesn't have the same income distribution that the average HN reader does.
The median price of a car in the us is $35K [1] and the median household income is $59k [2]; For most families in the US the car is absolutely essential for work, life (kids) and basic necessities of life. The median American has less than $5000 in a savings account. This is especially bad for marginalized minorities [3]. It's practically impossible for most Americans to walk in and buy a car with straight up cash, and even if they could, I would consider that unwise.
Back to debt: there's nothing wrong with debt, and some of the smartest richest people I know use debt carefully to manage cash flow.
Not to counter you, but why would a low-income household consider buying a new car? A properly maintained ten year old car these days is normally quite reliable and safe.
Not a fool proof way, but when you buy, say, a $10 000 car, you should budget some thousands for repairs. Then if it breaks down soon after and it's too expensive to repair, your downside is $10 000, which is how much your $40 000 new car would depreciate in a very short time. If you don't have especially bad luck, this doesn't happen for every second hand car you own, but the depreciation is guaranteed to happen for every new car.
They would not. When I was a teen, my parents had a joint income of just about $100k (definitely not low-income). When I began working, I got their hand-me-down '97 Accord. Bought for $3000 in '04, the car lasted 8 years before we sold it for $1500.
Great value for money, and it had a relatively classic look that belied its price. That's the kind of car I intend to buy again in the future.
It generally makes little to no sense to pay cash for a car. Auto financing is cheap, and so there is is significant opportunity cost if you don't invest the money instead into something that appreciates. Also, inflation.
I just bought a car this week and got a loan because the lender gave me $3,000 for borrowing from them. I have to wait 45 days before I'm allowed to pay it off, but there's no penalty for doing so.
I have a 0% interest rate for 7 years on my other car. That's literally free money.
If your investment vehicle can’t make up missing out on a couple of grand of “haggling” (highly dependent on a myriad of factors by the way) then you need to seek out better ones.
The average new car is around 35k. 35k with 7 years of returns even with extremely conservative investments should very handily make up for any lost bargaining power at purchase.
> Is it possible that living in a city with functioning public transport has sheltered me to the point of naivety?
Yeah, I think so. Financing is pretty much standard in America when you make the decision to buy a new vehicle (and many times, when buying a used vehicle).
The median amount American citizens have in savings is just over $5k:
I find it hard to argue for getting a car loan when the car's value is above a certain amount. Certainly if the car provides value greater than it is worth (i.e., ability to provide mobility to/from employment location) but a Tesla is more in the "luxury" category.
Sooo many people saying this not understanding that tying up 60 thousand dollars in a depreciating asset in one go when interest rates are hovering a little above 2% shows a certain level of financial illiteracy that is not conducive to getting good returns on your money.
If 'finantial literacy' is an issue, why would these people (or anyone else for that matter) buy a new car? They are taking the massive first year depreciation hit.
People parrot this too, someone has to buy new cars for old cars to exist.
Buying a new car lets you take advantage of warranties, free maintenance on some brands, having new tech years ahead of what’s otherwise availble (if you’re interested in that), not worrying about a questionable history (I’ve seen cars seriously damaged by driving habits in hundreds of miles of driving by abuse), and a myriad of other factors.
At the end of the day money is not just for hoarding. You can want to buy a new car as a treat, or a reward, and still do it a financial literate way.
Financial literacy != only spending money in the most utilitarian and minimal way possible, otherwise we’d all eat rice and legumes and live in shoeboxes to show how “financially literate” we are.
> not worrying about a questionable history (I’ve seen cars seriously damaged by driving habits in hundreds of miles of driving by abuse)
This is especially true with sports cars.
At one point I was considering buying a Nissan GT-R. I could get a brand new one for $120K, or a 5 year old one with 35k miles for a hair under $70k. You'd think the used one is a no brainer! But we're talking a car with ~550 horsepower, something someone could quite likely have been taking to a race track on a regular basis, putting untold amounts of wear on the engine and drive train.
I admit $50k is a lot to pay for peace of mind, but when you're like me and own a car until it dies, I like to know how it's been treated, and being the only owner is the only way to know that.
You’re like the 3rd person to say this and I have to assume you’re not that good with money if you think tying up 60 thousand dollars in a car when interest rates are at 2 percent makes sense.
There’s a level of financial knowledge that’s just dangerous enough to hurt you, and I’d say this is it.
Yet here we are, one of us is having problems with credit, because they took a 60K loan on a luxury item and then decided they didn't like it. What was your next big loan for?
If you want to test drive a Tesla, I recommend going to a supercharger, finding someone with a car configured like what you're interested in, and talking to that person.
Even after hundreds of thousands of Model 3s have been sold, I still get nods from other Tesla drivers and chat with people at superchargers.
How often are vehicles returned before zero payments? It sounds like you had that case on a vehicle before this where presumably you could have test drove the car.
This move makes sense to me. They're able to shave off thousands of dollars for each buyer. Presumably most people aren't returning cars immediately or if they really care about checking the car they rent one for a day instead of the limited test drive from the dealer. So I think most buyers will think it's worth it to save a couple thousand at the cost of having a slightly harder return process.
The car was 400 miles away. I had the check in hand when I went down to see it and it wasn’t as described simple enough.
You’re essentially saying people should fork out hundreds to test drive a Tesla (that’s the going rate for rentals unless you’re saying they hunt down someone to just give them a car) or buy it sight unseen, neither of which is reasonable for a mainstream buyer when you start talking about the “affordable” Model 3 this change supposedly allows.
I also don’t get what you mean by buyers saving a couple of thousand. They’re still paying delivery fees and such.
Tesla could delay executing the loan for the first week to avoid the inconvenience you describe. Typical dealers want to execute the loan immediately because accepting a return is extremely rare, but for Tesla it's part of the business model to avoid needing a dealership in the first place, so it would make sense to set up the accounting in a way where the loan is locked in but not executed until the return period is over.
I’m assuming you’re talking about dealer provided financing because in my case the loan had to be “executed” to get the car.
I was issued a check for the amount of the car, and while the check had never been cashed canceling the check and loan and having it removed from my CR took weeks
I'm not an expert on the details, but I'm guessing that is a "legacy" finance issue. No reason why a contract couldn't be designed that treated the first week and the rest of the finance term differently, where the buyer agreed to both, and the return was greatly streamlined.
I think the biggest issue with a typical car loan is that the market value of the car decreases after it's driven off the lot, so Tesla must have some plan for dealing with that aspect of the first week returns. My guess is that they are declaring a vehicle "new" if it has under 500 miles on it, and they include the distance the car may be driven for delivery in that 500 mile "new" buffer. Thus if you take the car on a weekend getaway and return it with under 500 miles on it, it is still new (by definition) or at least as new as the Tesla that was driven 450 miles from a distribution center to a customer's door.
Normal dealers sell vehicles all the time that have been "demos" for sales people and may have a few hundred miles on them. They typically sell them for a bit below invoice, but a mint condition vehicle with < 500 miles is new as far as most people are concerned.
It's possible that Telsa is doing something more clever than the above, but if not that's a fairly low cleverness way of accomplishing it. There is probably a mileage limit that one must stay under in the first week to be eligible for a return.
Turo refused to rent to me because I don’t have any recent US driving/insurance history for their insurance scoring. Never had a problem at any other normal car rental place.
I don't think this model makes sense for the long term. Eventually there will be enough competition that Tesla will need to go through an actual Sales/Marketing process like every other product.
But as long as they have a huge wait list for cars, and huge numbers of people who are willing to pay for cars without testing them this makes sense.
My response to your question is "Why should I (a preorder customer) pay a premium for Tesla's business model that allows YOU to do a test drive?"
Until the demand of the wait list customers has been fulfilled, catering to the HARD SELL customer is actually making my experience worse and more expensive.
It's more than a 20 minute test drive. You get to keep the car for a while, park it, load/unload it, try out car seats in it, etc. It is very informative compared to a dealership test drive.
Hmm. Not this time, but in 2015 when I bought an Audi, they let me have the vehicle (once I showed I was serious about buying/considering the vehicle, but without money or signature anywhere) from Friday evening til Sunday afternoon. Only thing they said was "Don't drive it to California and back, please" (from Seattle).
If you want to try a bunch of cars since you are undecided you might pay extra compared to now, since other brands won’t give you a discount and you still paid for the Tesla test drive.
If there's a 5% chance you'll buy a Tesla, the math still adds up to where you're better off spending $100 to test drive it over a free test drive and paying $2100 more for the car.
You're being downvoted, but honestly this is great advice. I recommend this to anyone that can do this when buying any car - it's so much better to live with the car you're thinking of buying for a day or two to see what it's actually like. Are the seats comfortable on a long drive? How good is the visibility really? How well does it fit in your parking spot/garage? What's it like to drive on your favorite road? You can't really answer any of these questions with a 10 minute test drive with the salesman right next to you.
A friend did this one year. He sold his old car, commuted to work on public transit M-F, and rented a different car every weekend, whether he felt like driving somewhere or not.
Rentals are cheaper on the weekend, and he got to try all sorts of cars. He started with the ones he was most interested in buying, but since he was for ing himself to rent different things, he tried convertibles, sub-sub-compacts, minivans, even a pickup.
When he finally was ready to buy, he had enjoyed a quirky period of trying different things, and was now very sure of exactly what he wanted.
I tried it myself for a summer, even rented an oversize SUV for a climbing trip. And I loathe driving SUVs, but hey, if it’s just for the weekend...
Yet all you (we) need to do is find a friend/colleague with a Model 3 and go to lunch/test-drive together. In fact, I would value my friend's frank opinion over a slimy car salesman's one.
Would you prefer to buy a Tesla at a traditional dealership, which offers short test drives and the usual "service" of a dealer and pay a premium of 2-3k for this service? If yes, then there is a business model for independant dealers buying cars at Tesla and selling them at their own conditions.
I agree with you, at least for a big ticket item like a car. But Turo exists, so you can test drive pretty much any non-exotic car in any major metro area, for a somewhat reasonable price. That's what we did before we bought a Model 3, as official test drives weren't available yet.
What I like about this on a strategic level, it opens up opportunities to (later) have a whole sub-economy of dealerships who offer additional services. Everybody can order online directly, but if you want to be the middleman you may can, but you have to earn it. Everybody with a good idea for a store can compete.
The delivery fee is refunded? If not it's a $1200 test drive. If you have to finance the car, your lender will not refund any initiation, application, or early termination fees. So again it's not a free test drive. Not the same thing. Free for Tesla, maybe, not the consumer.
you are lucky with two months. in germany it took me over 2.5 years with a lawsuit to return a new car which did had a water lack also after 3 repairs.
With pay-as-u-go rental apps/services becoming reasonably common, it might be worthwhile leaning on this to take care of test driving. Similarly priced cars here go for €10 an hour. I'd try it just for curiosity, and I have no immediate intentions of purchasing a Tesla (or anything).
If you are looking at the iron-ore-2-consumer chain of auto manufacturing for meaningful savings, it's hard to ignore the factory-2-consumer steps. Ultimately, that's a useful efficiency.
Now... "cutting out the middle-man" has a history of being much harder than it looks. You'll be following a well ridden path lined with skeletons. Just look at the factory-2-consumer markups on food, clothes...
Still... I think it's worth trying. If test drives are the bottleneck, it should be solveable somehow.
The 35k will probably drag their margin down but they will still sell luxury models they will spend most of 2019 trying to get the margins up. The deftly want to keep it over 20% as having the high gross margin has always been on of their main claim to fame as nobody else can do that with EV right now.
I'm going by what I've seen of people receiving orders in the last few months, over what time has it improved? If you buy one now, will the fitment compare to (for example) GM by the time it is delivered? How likely is the paint to be scratched all the way through to the base coat on delivery?
I want to believe that they can make these things right, but honestly I can not have that much faith in them given what I've seen.
There are a lot of haters and short sellers out there and they can be especially vocal, so I’d just say take what you’ve seen online with a grain of salt.
Exhibit A: Notorious Tesla hater and shortseller[0]; deceiving us all with his pesky rulers and loupes.
Sarcasm aside, I'm inclined to be charitable to Tesla, but quality issues abound with every generation of Tesla products; and while things have improved, they are behind the industry in many areas.
Yeah they are behind in some areas, and WAY ahead in others. If people go in with their eyes open, and their priorities straight, they'll be fine. But one point that seems to get lost is that the reported quality issues have gotten way better.
That car in the video is I'll admit quite ridiculous -- I'm guessing it is an anomaly though. My car had nothing like that and I did inspect it carefully on delivery (I guess this guy did not). I don't think anyone is forcing you to take delivery if you get an insanely scratched car like that, but certainly it's fair to expect that a car company would not try to deliver such a scratched car in the first place. I just don't think it represents the normal experience these days.
I own a TM3, Long Range, Premium Interior, Enhanced auto pilot. The best part of this announcement for LR owners is that the range will be bumped to 325 miles for new and existing cars!
that out of the way, well it is about time. it is nice to see, I still don't agree with how they present the cost on their website but I am at the point that I think it will take regulations to fix that. Telsa seems immune to criticism on that front. I am in the camp of, truth in advertising.
Now, the value of the premium interior took a sizable hit. the remaining advantages are heated rear seats, more speakers for the stereo, satellite maps with live traffic, streaming media, and the internet browser.
so my question is, did I pay for life of the car satellite traffic and streaming? there have been hints that this was not the case. the rear heated seats and extra speakers certainly don't make up $2500 in value but if there is lifetime satellite maps with traffic that would be a selling point.
on a side note, the other area besides advertising pricing that Tesla needs to be called out on is providing parts to repair existing cars. The nightmare still exists for many owners with some being without their car for over six months.
Nope. Even Bluetooth audio is pretty basic (can't browse folders on your phone from the console).
People say there is no need for carplay because the cars built in stuff is so much better, but I'd bet that in 10 years time, the console will stop receiving updates, but phones will keep getting better...
I've tried arguing with people about it and you get the usual from Tesla fanboys from it's way better to theres no way they could put carplay/android auto on the interface. It's nonsense, really. I want to use my phone with its interface. Rest of the car I'm sold on but that's a real pain point for me they need to work out.
I'd be interested to know if tesla's have the hardware to support carplay. Being able to stream 60fps video over USB with a custom protocol isn't trivial.
There are opensource projects [1] to implement android auto, so perhaps if someone runs that on a modded tesla, and gets a bunch of youtube views it might embarrass tesla into implementing it properly.
It's so shady that they are closing down their stores and have no one to answer questions about when spare parts for damaged cars are going to arrive. I detect a pattern of ducking from questions about keeping their current cars on the road.
Wonder how the move to close many of their stores would play out 5 years down the line. Is the idea that now there enough cars out there for people to experience through friends and colleagues? Seems like a very unconventional move (conventional for Tesla).
Also it appears Autopilot is now a $3K add-on (vs $5K previously). And the full self-driving is back at an additional $5K and includes some of the features that previously existed in AP.
Tesla charges a non-negotiable $1,200 "Destination & doc fee" which in CA is not a fee. It is not state mandated, and is just pure profit for dealerships that charge it (explaining why the amount varies wildly per-dealership).
Google it. It is NOT required anywhere, and all cars I've ever bought, I've gotten the dealership to pay it.
nope, but they also allow me to negotiate. I cannot negotiate with tesla.com
Also, 1.2k is a LOT of fee! Boardwalk and Momentum (two large dealerships here in norcal) both try to charge doc fees around $400, not 1.2 kilodollars!
The best (and perhaps only positive) dealership experience I've ever had was when I bought my 1997 Saturn. Saturn was, at the time, no haggle, no negotiation.
Sorry, but that's BS. You have never gotten a dealer to take doc fee off the price. That would be illegal and no dealer is going to do that. Negotiate the price of the car lower? Yes. Take doc fee off. No way. By law, dealers HAVE to charge the same doc fee to every buyer. They may not have to charge doc fee, but if they do, it's the same for everyone, no exceptions.
If on some crazy change you actually got the dealer to line item doc fee as $0 on the contract, than they could be in a ton of trouble.
What other fees can a dealer charge on a new vehicle?
Dealers may charge buyers a document preparation service fee not to exceed $65 (or $80 if a Business Partner Automation (BPA) program participant). This fee is not required or collected by the department.
If you have a really old car that is polluting a lot, it makes sense to give an incentive to retire it rather than selling it and keep it on the streets. I think in my country the incentive is for cars older than 12 years, nobody will destroy a new ICE car to get $5,000 when you can get much more by selling it.
740 comments
[ 3.0 ms ] story [ 347 ms ] threadFor the consumer it means, that the cheapest Tesla is now available for 35k vs. 42k vor the mid-range until today. Thats 7k less and make Tesla cars available to a larger audience. While I don't like how Tesla represents the prices with savings, the effective price gets close or below 30k, which is huge.
For electric cars overall it is also important. Tesla is the largest manufacturer of electric cars and the waiting times for the Model 3 are way lower than the competition. So this marks quite some progress in the availability of affordable electric cars.
How was your reservation $2k though? It makes me wonder if you are really a reservation holder, given that you got the amount wrong. Fake outrage?
That's huge.
Over what time period? The $35k Tesla is the base model, and a base Accord looks to be $23k. And you can probably negotiate that down a little, which I doubt you can do with Tesla. That price difference buys you a _lot_ of gas.
It’s not exactly the same as a price cut.
I bought a Bolt EV off a dealer lot over a year ago, and the entire transaction took about 30 minutes. The car was $25,000 after incentives ($37K MSRP -> $35k Actual, 7.5k Fed Tax Credit, 2.5k State Credit). The Bolt can reliably go 240 miles on a charge, mine has had zero issues or service visits in 35k miles of driving. Also, it's made by GM which is a real car manufacturer, supported by thousands of dealerships and service centers across the country.
Run by true Scotsmen, I'm sure.
New Prices
Cheap Interior
Standard Range (220mi) - $35k
Partial Premium Interior
Standard Range Plus (240mi) - $37k
Premium Interiors
Mid Range (264mi) - $40k
Long Range (325mi) - $43k
Dual Motor Long Range (310mi) - $47k
Dual Motor Performance (310mi) - $58k
* Prices above include potential incentives and gas savings. Learn More
Weird.
“Somewhat misleading”? Acting as though money saved on gas reduces your purchase price somehow is just straight up lying. The car still costs $35k when you sign on the dotted line, gas costs don’t factor into that at all. If you want to talk how much it’ll cost you after n years of ownership, talking about gas costs is perfectly valid. Purchase price though?
Total Cost of Ownership is a legit (and even preferred) way to represent cost in most industries. It's just not common in consumer purchasing. This is a variant of TCO. They provide a good calculator where you can figure it out.
I think there's room for discussion about how prominent you make the TCO calculator and the particular copy used in that. This is why I said it was somewhat misleading, because I think it could be better. But I definitely don't think it's lying, that's awfully black and white.
You don't get to SUBTRACT the cost of gas from X.
You can compare X to some other car's (Y + Gas).
Didn't think so.
Or the cost of installing a 240 line to your garage?
Hmmm.
It's more of an apples+cart comparison. It seems shady because they can't know what kind of car you're coming from - so they average it (in their favor).
The federal government even publishes per mile total costs for most vehicles that makes it fairly trivial to do.
It’s a bullshit metric. They could honestly present the information in a way that looked good for them as well... or even use it as a cross sell for solar.
> As a result of this change Tesla says it will be “winding down many of our stores.”
Buried lede here
Most will opt for $40k premium model. Though 37k is much better value, it's missing the core features that tickle fancy of Tesla buyers.
Standard Interior Includes:
Partial Premium Interior Includes: Premium Interior Also Adds:Two of those I don't care about, and the manual transmission is a big win for me, so yeah, I'm with you.
Can you clarify what you mean here? I would think that the "core features that tickle fancy" would be things like autopilot, but that's an expensive add-on package regardless.
If I had ~40k burning a hole in my pocket I'd get the base spec with the big battery and all the self driving bells and whistles.
I can see the most basic model with the biggest battery being popular with the kind of people who buy an accord and put 200k on it over 8yr.
Now I have a Model 3 Performance because it’s amazing, it’s what I was saving for driving the Accord all those years.
If that's the case and the "bigger" battery costs nothing to Tesla, the $37k version has a higher margin if the enhanced interior features cost less than ~$2k.
It'd be like if I got to go in to a hiring offer and was able to demand a million dollars a year so that any lower salary seemed like a value.
Also the same with the advertised monthly leasing prices that you see on commercials - all subject to credit and other circumstances.
So I'd guess that there's also a component of the high MSRP + large standard discounts which is also making sure that you don't come in expecting to pay an advertised price, get aaaallllmost all the way through the process, get the final price with tax that is ~10%/several k$ higher, and then crap out there both because it is a real kick in the pants and you may not have the extra money.
Only $LOW/Month*
* After large amount upfront.
This is shameful and should be called out. Price is not the same thing as cost of ownership.
Is this some kind of intentional irony or something? Social Login force-tied to a specific company is Dark Pattern #1 in my books.
Edit: They define "dark pattern" at the top of their site:
> Dark Patterns are tricks used in websites and apps that make you buy or sign up for things that you didn't mean to.
That's exactly with Login With Twitter is. The user is presented with a simple option for logging in, but then is tricked by giving their metadata and account info that will 'sign them up' to be analyzed and targeted by Twitter for whatever purposes. Yes the TOS is probably there on social login, but aren't Long TOSs that are prompted in the middle of a user flow also Dark Patterns, as no user is likely to read them?
Can't possibly take that site seriously.
Edit 2: The darkest pattern from their site:
> We aren't great at responding to email — Twitter is best.
Yikes.
>Use Twitter to spread the word about Dark Patterns. It's the most effective way to put pressure onto companies to stop using Dark Patterns.
>Retweet, quote and favorite other people's tweets about Dark Patterns. >@mention the offending brands and tell them what you think about their practices.
>When you see a Dark Pattern, take screenshots and tweet it. Mention @darkpatterns or use the hashtag #darkpattern.
>If you've got an example that doesn't fit into a tweet, you can use a platform like medium or imgur, then tweet it.
Tesla's specifically dividing their trims by range, but chose to use "standard range", "standard range plus", "long range", etc. instead of just telling us the range. And their "standard" range is well below the standard range of an average car.
I'm not sure this qualifies as "shady" when everything is displayed within the same viewport.
At least that's what it was like before; in Australia, the Model 3 configuration screen is apparently now stuck in an infinite redirect loop. It looks like it's unchanged, but I can't look at the page for more than a second.
It seems concerning that outright dishonesty in consumer-facing material for large purchases might reasonably be considered par for the course.
What an abject failure of industry leadership.
Good thing they weren't kind enough to include the amortized battery replacement costs or other differentials in operating costs, like a comparison between their repair and maintenance schedule to an industry average.
CapEx and OpEx are different animals.
Oh, wait, cloud. Server leases. I guess we do it all of the time.
Its still going out of your pocket, if its one or the other.
[0]: https://electrek.co/2018/04/14/tesla-battery-degradation-dat...
After, my impression of Tesla is that it's incredibly shady and manipulative, and I have a great deal of anger at it because this page is disgustingly deceptive.
You've got to get a reasonable estimate of how much less likely I'm going to purchase a Tesla in the future, but before there was a nonzero chance I would, while in this moment I feel like I'll never purchase one. That's negative value, there.
It's deceptive enough--and 90% of people who saw that page would say that the costs of the cars are what's listed on the right column, which makes it deceptive--that it leaves a wildly unpleasant taste in my mouth. And, in my case, it's not even close to accurate: I don't own a car right now, and any purchase would be because I actively like a particular car. The "savings on gas" is a total lie, because I'll be spending nothing on gas anyway.
It’s not an imagined cost of ownership for me, an actual owner, who just got $7,500 back and pay $7 for 300mi.
The way they are selling these I would hope someone would be looking and clicking on that details button and really looking to make sure it is for them.
Does anyone have a good real world average for current wait times for delivery and service? Also wondering what these are for the flyover states (midwest) where I am at vs the coasts.
Where they show a video about full autonomous driving, talk a lot about full autonomous driving and then at the very bottom of the page write in very small print that "some jurisdictions" may not allow that at this time? Where "some" means probably "every one except lawless states like Somalia or so".
The base price of a given vehicle is $35k, and then I'd spend either $1500/yr on fuel and maintenance o, or $500/yr on fuel and maintenance if it's - for example - electric, on top the of the base price.
Spending $1000 less per year does not magically mean the car is now $34k. If anything, the price has gone from $36.5k to $35.5k for that first year.
I don't even understand the mental gymnastics you have to do, or how ignorant you have to be to not understand that.
Unless I'm taking crazy pills? Someone please correct my logic otherwise.
I definitely don't agree with Teslas practices of framing it that way, I'd rather they just show cost of ownership comparisons across a variety of cars. Especially since they can't even meet the demand they currently have, why resort to shady practices?
But only if you arbitrarily include the difference in fuel costs, which makes Tesla look cheaper, and exclude the differences in insurance and maintenance costs, which make Tesla look more expensive.
And of course you have to include full cost, ICE can not run without it, and most people want to drive their car.
Of course these are avg numbers and you have to do it with your personal driving numbers and how long you want to keep the car to get a more detailed picture of the cost.
However overall, pretty much all EV have a significant large part of up front cost to ownership cost so its totally fair to point that out.
That said, Tesla is of course a company and they are pressing this point to aggressive and that is irritating to many of us. The overall point they are making however, is backed up by the data.
To be clear, I like the Model S and appreciate what Tesla has done to popularize EVs in some circles, but that’s not a ticket to be bonkers. Shady practices, obscene waits, hellish repair schedules, broken promises and a CEO who just can’t shut his mouth to save his life... it is very weird.
I love what they've accomplished in the field; the cars are genuinely very good; the exaggerations and outright lies are unnecessary and therefore infuriating to watch...
So it's a reasonable number if you're a Californian who would have bought a BMW instead of a Model 3. For everyone else, it's likely too high.
Nicely done math. Based on Toyota etc.’s marketing claims I guess. In which case it might be around $6/100 miles (guesstimate) versus Tesla $3.8/100 miles.
Haven't seen the desktop site, but on mobile the full price of $35k is clearly visible.
(with longer range than Model 3)
You linked to the Bolt-with-a-b, but said Chevy Volt-with-a-v.
Certainly the Bolt is comparable to the Model 3; the Volt not so much.
I picked up my Bolt for 30,900 in December of last year. (w/ fast charging option)
On the flip side: you don't have to deal with dealerships, which are _much worse_
You just configure the car, give your credit card information, and done. This is unlike most other manufacturers which, even if they do give you a quote, will then hand you off to shady salespeople.
I must just be out of touch.
I’m sure credit card would work too if you had a high enough limit but those are the other options.
It's completely unethical.
I guess computers should be considered free given that they enable so much productivity.
The price w/gas savings included at least makes it easier to compare against standard petrol vehicles.
It's kind of hard to rip on Tesla when the standard dealership model is nothing but shady advertising and sleazy sales tactics. They could get rid of the asterisk mark / learn more link and it would still somehow be more honest than going to any car dealership in the United States.
Sometimes I feel like Tesla gets judged in a vacuum. Kinda weird.
* Not sure if the low range model 3 is software limited.
OK, so that last bit is BS, and it looks like there's a hidden $1,200 destination and doc fee, so the actual real price including tax breaks is $30,450 in NYC. Still not bad at all!
But including the federal tax credits and destination fee is fair I think. As far as I'm aware, no auto maker includes the destination/docs/handling fee in the MSRP. The Tesla fee amount is comparable to other automakers also (it's on the high side at $1,200; but it's not too different from Toyota's $930 and Honda's $920). Presuming your location due to geolocation is a bit too far (but that's debatable) since they didn't disclose that immediately up front.
Quite a few cars/trucks run synthetic these days which can really start adding up.
"Actual Tesla owners report about a 5% drop in battery capacity by the 50,000 mile mark but after than, the rate of degradation drops considerably. On average, cars with 160,000 miles on them still have 90% of their battery capacity remaining. Projecting forward from the real world data available, a Tesla battery should still have 80% battery capacity after 500,000 miles of driving, the group claims. The vast majority of internal combustion engines would have stopped functioning long before then."
Assuming a conservative usage of 20k miles/year, it will take you 25 years to reach 500k miles.
You also have to consider how much your time is worth of you're changing it yourself to get that cost.
Either way it's an added cost(along with transmission, differentials, etc) that you just don't incur on EVs. Right now my maintenance schedule is brake fluid @40k and coolant @100k and tires, that's it.
Most people don't need to change their oil anywhere near as often as the manufacturer specifies. Especially for large diesel engines, it's often fine to run them 3x-5x the interval, but you should do oil analysis and find out, instead of just using the rule of thumb ones the manufacturer gives you.
I agree that quoting a single figure here is misleading.
Small typo: $3,750
A credit is literally cash (assuming you have enough liability to cover it).
is not the same thing as:
"Tax credits reduce the amount of income tax you owe"
The former is a deduction. The latter is a credit. It's really that simple.
[1]: https://www.libertytax.com/tax-lounge/electric-car-and-vehic...
A deduction reduces the amount of income thats taxed. So for example if you're in a 25% marginal tax bracket, deductions are worth 25 cents on the dollar.
A credit reduces the amount of tax you owe, dollar for dollar. In addition, some credits are refundable, meaning that they're allowed to make your tax liability negative for the year, so you get benefit from them even if the credit is more than the taxes you would otherwise owe.
And to be clear, when I talk about the "tax you owe", I mean the total amount of money you need to have paid the IRS by April 15th, including payroll withholding, estimated tax payments, and so on, and not the size of check you need to mail to the IRS in early April.
so you can use a vpn/vps/etc to get the rebate?
But the Trump Tax Bill lowered everyone's refunds (largely because the IRS lowered withholding during the year), so more people have a year-end tax liability, and those that did before the TTB now have a larger tax liability, ultimately meaning more people can now theoretically benefit from the credit.
I do this for a living. I have plenty of clients who saw little to no benefit from the EV credit because their tax liability was not large enough.
And how do they determine the savings? If I am cross-shopping with a Chevy bolt, there won't be any gas savings... Surprised they put that on their, it really negatively impact my view of Tesla.
It lists 35k up front, and then lists estimated payment after incentive secondary.
Sure the U.S. is now god-blessed with the fracking miracle but the gas savings is also an option to be independent of the big oil companies. That could be worth more than $$$ to prepper-mentality Americans.
The prices didn't even go up that much in 1973 but a lot of queues and rationing went on. The 55 mph speed limit came in. It was not happy times.
If Tesla were a bit more frank they would mention this independence aspect, as it is they don't want to scare the children. Nobody knows what petrol prices will be next month so there is no way anyone can put a figure on savings. That said there are plenty of people who have swapped to Tesla and have the electricity bills to prove that the advertised savings are real.
It's an interesting policy regardless. In sounds like it's pretty much 'no questions asked'. Any experiences with this?
The interesting part is "Shifting all sales online, combined with other ongoing cost efficiencies, will enable us to lower all vehicle prices by about 6% on average, allowing us to achieve the $35,000 Model 3 price point earlier than we expected. Over the next few months, we will be winding down many of our stores, with a small number of stores in high-traffic locations remaining as galleries, showcases and Tesla information centers."
I don’t know how they are making money on this. I’m inclined to believe they’re losing money, or someone is somewhere in the line.
Maybe they expect those battery costs to decline rapidly in the near future?
What do you think?
https://electrek.co/2018/11/20/tesla-gigafactory-battery-cel...
If so, I would expect at least some of that better margin will flow into Panasonic’s pockets (what part, I wouldn’t dare even guess)
They have a contract with Tesla to produce for them, but Tesla’s demand is so high they can’t produce enough. Production is 24/7. Even if Panasonic wanted to they couldn’t sell to anyone else. I don’t know what kind of price negotiations they have, but current battery production is not profitable. This I know.
Also, Panasonic just partnered with Toyota to produce batteries for all their EV’s.
Additionally, the Gigafactory is just 1 battery production location. Panasonic has many. Some in the USA, and others in Asia. They sell their batteries to many companies. Just not the same ones they’re making for Tesla.
Don't they just need to keep leasing them more space at the factory? What's the bottleneck there?
There are currently 4 steps in the manufacturing process, with a final inspection at the end. They have about 35 production lines in total, and will likely have over 60 when they finish. New lines will have higher output.
They run two 12 hour shifts a day, 7 days a week.
The bottle neck is MRO at the moment. Material costs are a factor, but I know nothing about that.
In the space of 3 years they implemented these 35 lines. Getting them up and running to meet the demand and timelines required massive investment, and cost savings measures were sidelined.
They’re just not beginning to figure out ways to cut costs in order to achieve profitability.
I don’t know if Tesla has a contract that dictates the cell price, but I know Panasonic production is not profitable at the moment. They will be, hopefully in the upcoming years.
Their battery production is the most state of the art. Not only the battery technology, but the manufacturing process. It’s unparalleled by a long shot. The scale is breathtaking. Around 3.5 million cells a day with a target over 10 million.
From what I know, bottle necks are costs. High equipment manufacturing costs, and high maintenance costs.
Space isn’t the issue. They have plenty of space.
I know the Gigafactory battery production intimately. I can tell you they don’t cost less than $2.50 per cell at the moment.
> In a rare disclosure of Tesla’s battery prices, Musk said in June that his company’s costs for battery cells—the small cylindrical components of its battery packs—had dropped to $110 per kilowatt hour (kWh) and would reach $100 per kWh by the end of 2018. That compares with an average price of about $127 per kWh industrywide.
Wikipedia[1] says there are 2,976 in the mid-range pack and 4,416 cells in the long range pack.
If the short range has perhaps 2500, that's $6250
[1]https://en.wikipedia.org/wiki/Tesla_Model_3
And it looks like 4,400 in the Model 3
https://3.tesla.com/model3/design?redirect=no works for me to prevent this behaviour.
https://www.businessinsider.com/tesla-to-pay-march-convertib...
I mean that maybe if the bond owners see that Tesla is (really?) about to deliver the 35k model they'll opt less for cash and more for stocks? (therefore Tesla would have less problems with liquidity)
Big question is, does Tesla make a profit at that price?
$8K more for 50% more battery. Or $24K for an entire large battery. Big markup there.
I see it more as them wanting to show again that they could build up a huge order backlog as that something that pretty much no other car company can do. That would help them with the market and potential future loans.
https://seekingalpha.com/article/4239396-tesla-weak-model-3-...
https://insideevs.com/tesla-model-3-s-x-sales-february-2019/
[citation needed]
Driving up 101 daily, I see truck after truck loaded with European-specced Model 3s heading towards the port of San Francisco.
https://insideevs.com/tesla-model-3-s-x-sales-february-2019/
- Recognize and respond to traffic lights and stop signs.
- Automatic driving on city streets.
Option Selected: $5,000
But in the projects I did, it was some dumb sales recommendation system. These people are doing it with self driving cars.
If those features ship before 11:59PM Pacific time on December 31st, I’ll be surprised.
(And I say this as a fan who owns two of the things.)
https://3.tesla.com/model3/design?redirect=no#battery
Shifting all sales online, combined with other ongoing cost efficiencies, will enable us to lower all vehicle prices by about 6% on average, allowing us to achieve the $35,000 Model 3 price point earlier than we expected. Over the next few months, we will be winding down many of our stores,"
Bold
Also does Tesla still have Tesla branded "service shop" to do car delivery/return/refund/service?
If anyone has ever had to cancel a car sale you’ll realize how much of a hassle it truely is to “return a car”
Your credit report will show a loan even after it’s been cancelled for weeks.
I once cancelled financing for a car due to it not being as described. Started looking for a new car and found it.
Got denied for a loan because my score showed a 60k loan with 0 payments made. It took almost 2 months to fully remove it from my report and start with a clean state
In summary, Tesla is essentially saying “you can’t test drive it but if you don’t like it you can cancel your car search for a few months and ding your credit score for nothing”
This is like mattress stores that give you a “free trial”, they know the resistance to actually doing ending your “trial” is crazy high
The finance has already written you a check, they’ve already done all this leg work.
You’ve already driven it, if you’re purchasing it in earnest you might have already invested in charging infrastructure for your home, a whole laundry list of friction.
Then there’s what happens to the car you returned.
I wouldn’t want to be the guy stuck with a car that went through multiple 1000 mile “test drives” with Tesla’s reconditioning track record of delivering cars with toe nail clippings in the seat rails
(traditional dealers do have offers like this from time to time, but it’s exceedingly rare they’ll actually let you keep the car for more than a few hours, and most importantly they don’t require you to buy the car first, they’ll take a deposit or let you rent the car)
They were not saying, everyone who drives one will want to buy one.
You can also steal one and drive it around for a bit if you don't mind.
I remember the “salesperson” talking about how quiet it was as wind noise whistled through the cabin like we were in a Corolla. The A4 I was driving at the time was immensely quieter at highway speeds but I nodded and played along.
I’m convinced the aspirational status of Teslas means people who haven’t experienced actual luxury vechicles are buying into the hype that Tesla is somehow peak luxury, or even deserves to be called luxury outside of pricing (especially when you compare a Model S to it's price-mates)
Which leads to hyperbolic statements like this one.
And even so, the comparison of Teslas to other cars just highlight the absurdity of their MSRPs relative to the luxury they deliver.
I’m assuming you mean Model 3 is the size of a Civic or similar so it competes with them.
I mean technically sure, but the pricing doesn’t reflect that!
Until today it cost as much as an A4 at A3 levels of room, and honestly maybe not even A3 levels of luxury.
Now you can pay for a Model 3 with no heated seats for a price that no “normal” Civic reaches.
I mean it ties with a Type R! That’s a sports car that you might compare to a what, 60k Model 3 Performance trim?
And for the rest of us there’s the 340i which is still only as expensive as what was the only Model 3 you could buy before 2pm today...
Second one of my cars is 4 series, I don’t own a 3 series. And it’s a 440i which is faster and more luxurious than a comparable Model 3. And I can put the roof down when I feel like it.
Third, why did you make an alt for this?
If you do take even some of those factors into account, it’s a no brainer.
For wind noise it’s not the best, but in many other aspects it’s far ahead.
Also, Tesla know this themselves! Elon admits that Teslas are overpriced and that current buyers are subsidizing future buyers as they scale up. Also, a friend of mine used to be the manager of a major Tesla delivery center. He said the quality control was terrible and they had tons of cars with paint and panel issues. In fact he said bad paint jobs was one of their biggest source of problems.
A friend took me for a drive in their model 3 recently. At one point we hit around 130mph, and it was the smoothest and quietest ride I’ve ever had at the speed.
That being said the BMW 7s I’ve been in were all from the early 2000s, but I never found any other car to be as quiet as a Tesla.
What do you mean year, Teslas don’t have model years because you’re always getting the most improved car
-Tesla “salesperson”
One slightly weird thing is that because there is no engine noise (other than a slight whine on heavy acceleration) all those other road noises become more noticeable and it seems noisier.
I agree with the luxury vehicle thing, especially on the S. Mine had the seal between the window and the front door literally fall off at one point early into ownership.
I got mine for two main reasons: the acceleration is great fun in the "performance" models and I don't have to deal with buying gasoline. It's also a pretty damn safe car, which is nice when I take the kids somewhere.
There are some nice tech features (like being able to summon the car from a tight parking spot) that feel luxurious too, but I agree that they badly need to work on fit and finish for a $150K price point car.
Same thing happens with luxury sports cars. I test drive Ann F-Type, and the damn thing comes a button to make your car louder. The call it “active exhaust” or something. It basically shoots gasoline into the exhaust so the car backfires. It’s basically rolling coal for rich people. The car was so loud, it was hard to have a conversation. I hated it.
And in my current car, compared to a friend's new S? No comparison, mine is far quieter, despite being a V8 (Jaguar XJ) thanks to in cab active noise cancelling and others.
If you want to be part of the solution go find an old, safe, (it’s 2019, a 10 year old car can finally in the “modern era” of safety, AEB and all) vehicle that has amortized the insane ecological costs required to make a new car
I tell people that the parts of the car that make it a car are excellent, and the parts of the car that make it luxury need some help. That being said, I've bought two Teslas so far with absolutely no regrets.
More power to you, literally.
Oh boo hoo. Finance does a little more work.
I feel for the people doing the refurbishing, sure. They're probably squeezed to death non-union wage labor.
But the Pinstripes in finance? The likelihood the work they do for your loan involves "legs" at all is nil.
I spent hours on the phone talking to these people when they realized my closed loan was still affecting my ability to get a car and they went up and down trying to get someone to fix it.
Maybe they were just typing in numbers into a computer and hitting transfer but they’re still people doing a job.
I wouldn’t feel to good taking someone’s information, going over the process with them then having them call back in a week to tell me never mind we have to do it all over again.
https://www.dmv.org/vehicle-history/odometer-fraud.php
...also, there's a $1,200 delivery fee. Is this the new "restock fee"? it is conveniently left out of the marketing materials.
edit: This was an honest question, and instead of downvoting, perhaps you could enlighten me?
They are certainly pitching the idea that "buy and return" is the new "test drive". So the question is "Do you have to pay the delivery fee?"
Even if that wasn't the case when you go to a dealership that delivery cost is part of the price. Claiming the car is $35,000 when it's literally impossible to buy it for that is a bit misleading.
The price of the monthly subscription(s) alone is a very significant proportion of my gas consumption (I'm a leasure only driver, I do maybe 5000 miles per year, the bulk of it is done in 4 to 5 road trips)
In Spain, the standing cost of a residential electricity contract that is sufficient to charge a Tesla (i.e. above the regular Spanish 3000W default contract) is similarly a significant portion of the gas price.
But he added that franchise-dealer opposition would be a violation of interstate commerce, and that is unconstitutional.
"Good luck with that," Musk said.
Sounds like Musk likes to pick and choose the laws he follows.
Source: https://www.businessinsider.com/tesla-is-eliminating-most-of...
Next time try buying a Honda or a Subaru. There's almost no wiggle-room in price.
Honda in the past. They may not move as much, but they definitely move.
Insider Tip: The internet desk is usually separate from the floor desk at your average dealership. When you know exactly which car you want to buy, negotiate through the internet desk only at several dealerships. But be prepared to walk if they try to pull a bait & switch when you show up to purchase.
As it stands, we are an unorganized mob who the middlemen and manufacturers are squabbling over and each making a profit. But it's becoming pretty clear we'll be able to program the middlemen cheaper/better in the near future (or services can just offer direct-online shopping), so should that remaining profit go to the manufacturer or the consumer? Tesla's being pretty generous now (or appears to be), but future (and present) direct online shippers may benefit greatly from the organizational imbalance. This is the same argument for collectively-purchased (government) healthcare, I believe.
(And yes, companies obviously should be compensated according to their risk and willingness to invest at scarce times - Tesla certainly deserves big praise from many angles - but examining this relationship from a societal standpoint and collectively bargaining for the end consumer (advocating for the poorest of us) is important too)
I may be a weird consumer but whenever I buy something expensive I always think about the unrelated things my money is paying for. So for example when I visit a car dealership I notice the big land footprint, the shiny offices, and well dressed salespeople—and I think to myself how much of my car purchase is going towards the upkeep of this crap, none of which I like or want.
If I want to learn about the car, I'd much rather access the manufacturer's website and read/watch independent reviews.
If I want to test drive a car I'd be willing to travel further to test drive one directly from the manufacturer. Or better still, just don't test drive it at all—you won't learn anything in an hour that you couldn't learn from a reviewer. The true character of a car usually takes a week or more to surface.
If I want to buy a car, I'd much rather buy it directly from the manufacturer and either pick it up from a central depot (to save money) or have it delivered directly to my home and detailed on my driveway (for a fee based on distance).
The only problem is that dealers usually only have cars with the most popular engines available, so you often can't actually try the car you want to buy...
Personally? yeah, I think renting a car is the way to go, if you want to evaluate how you will feel about the car later. A 20 minute test drive, to me, is like laying on a mattress for 20 minutes in a store and expecting to know what it will feel like to sleep on.
Remember: you're not special. You're just another meat bag that fits within a bell curve of normalness.
Edit: to the one person who voted me down, I was wrong. You aren't a meat bag, you are special.
I trust the guy at my local camera store to explain the pros and cons of a Canon vs a Fuji, I obviously don't expect they guy at my local Honda dealer to explain the pros and cons of a Honda vs a Toyota.
Camera stores is a great example. The vast majority of salespeople know how to convince you that a product suits your needs, but would have very little clue what is important to get the best outcome. They're not photographers—or if they are, chances are they're no more of a photography expert than you.
Perhaps the worst is "high end" hi-fi salespeople. These slick operators are great at convincing you to buy the unnecessarily expensive product and the criminally overpriced accessories. Unfortunately for the customer, most of the things that matter in making a good system aren't sold in a cardboard box with a big profit margin, so you'll never hear about them from a hi-fi salesperson.
There are only a few things that excite me more about a Model 3 than electric cars from established brands (particularly the upcoming Kia Niro EV) and a big one is the sales process.
Consumer price discrimination isn't something that should be occurring.
After all I'm not saying that car makers can't have "deals" but the price of any new car for sale—on special or a regular—should be published and not negotiated.
This doesn't make sense to me.
Thinking about it, my last three laptops were bought with a discount, just by not being afraid to ask for some.
When you're buying one laptop, of course not. You're talking a $3000 purchase vs a $40,000+ purchase. You negotiate on cars, because getting a thousand or two off is a huge deal for a lot of people.
The "No haggle" thing that Tesla is doing works fine for their $60,000-$120,000 cars. People spending that kind of cash on a car are probably not going to bat an eye at an extra thousand or two. Anybody spending that much money on a car isn't buying it because they have a limited budget, and are not trying to maximize their value.
I don't think it's going to work as well on their lower priced cars. People who don't have a $50-60k budget for a car don't have tons of money to throw around.
Haggling is stupid. Cars are usually overpriced because the expectation of haggling is priced in. I'd rather Tesla put a $35K price tag on their Model 3 knowing that's exactly what I'll pay than put a $38K tag knowing that I'll try to haggle it down to $35k.
A random citizen buying a single car isn't comparable to a corporation negotiating a volume discount.
Tesla doesn't let anybody else fix their cars. So you have to take it to their... what, repair center?
Dealerships may or may not have your best pricing interests in mind, so forcing them to exist is not particularly useful.
It says move all sales to online, but it only says closing many stores.
A car transporter carries 11 cars and can drive say 500 miles per day at a cost of $500 per day (including driver, fuel, and vehicle rental).
If the average delivery distance from factory to customer is 1500 miles, then transport cost works out to $136. Add to that the 'last mile delivery' which is probably going to involve a $20 per hour employee driving to the customers premises, doing a 2 hour training and handover process, and catching an uber home. Call that 4 hours, or $80 + $30 for the Uber.
Total delivery cost with an efficient delivery network could be $246.
Assume a 20% 'failure rate' (ie. where the customer rejects the car), and in those cases double the cost (returning the vehicle) and fold it into the amount the other customers have to pay, and you arrive at $369
https://www.youtube.com/watch?v=-inPRBhonfY https://www.youtube.com/watch?v=MXoOEuH9Jag
That feel to me awfully low. Can you be more specific on how you get to $500 for all that? Renting a car can cost me more than 100$ a day for similar distances. I can't imagine 11x that would cost less than half of it and on top of that include the wage of someone that have to drive full time.
That's barely his cost and doesn't consider anything else (administrative and etc..). I feel like it would be closer to 1500$ a day.
But there's a difference between the OSD MSRP discount. (i.e. buying off the OSD price sheet) and the standalone "Destination Fee" line item. Further, even though Volvo ships the car back to the the states for free for you, it's up to the dealership (and potentially your negotiation skills) whether they still add that destination fee to the final bill.
OTOH, I do know many people who paid delivery fees for customized luxury cars. The $35k Model 3, however, is not a luxury car and is barely customizable, even to the extent of available add-on packages.
This was the first google result that came up for "car destination fee" :- A "destination charge" is a fee that the manufacturer charges to deliver a vehicle from the factory to the dealership, and that is passed on by the dealer to the consumer; it is not included in the MSRP of the vehicle. Destination charges are typically not negotiable.
You may be doing that thing where you assume parent, and indeed everyone, is in the same country you are in, subject to the same laws, regulations, and traditional rorts.
As to why you’d want to: if you ask someone to quote bottom line, and they do, then you can start picking their line items apart to go lower. Or if you quote high, you can use line items as justification for it to some buyers.
But why? If I want a lower price I don’t care where they have to shave it from to do that do I? I don’t care about how they’ve arrived at a price or how it’s accounted for if I just want it be lower.
I say I want that price to be lower in order for me to buy and they say yes or no depending on if it’s worth it for them.
A more thorough discussion can bring down the offer they are willing to accept. You don’t have to care about the details to use them in a negotiation.
So why would you ever use the former approach? It’s strictly worse.
"Can you reduce bottom line by x" is like saying, "the documentation is a bit vague, can you improve it please?"
"Can you reduce line item n by x" is like saying, "there's no way the user could possibly intuit that the sampling period may be truncated to precisely hit the target value after the specified duration. Given that the programming language itself has no specification, this longstanding behavior must be explained clearly in the user docs."
Which response do you suppose will be more likely to lead to an improvement in the docs? It's probably the one that shows evidence you know your domain and how to assess quality there.
Of course, that analogy is the dream. In reality the car salesperson will come back with the reduced line item but with adjustments somewhere else. And it's hard to keep track of because, for example, how would an increase in the down payment affect your idea of the "total bottom line?"
This would be like a developer countering by saying, "Ok, but to clarify that section of the docs I added threading to the event loop." And then every single developer suddenly becomes some kind of darkworld saboteur, and you finally give in by saying, "I guess this is just how software gets made..."
Line itemisation is very silly for cars. All I need to know is how much does it cost me to get the car. I don't care that some of that money goes to person A and some of it to person B. Irrelevant to me!
But you would have already told them, "As long as I can afford..." So they'll spend the entire exchange trying to optimize for the maximum amount they think you can afford. They can try to convince you they've optimized when they really haven't, and they can try to pick a vehicle of a lower quality and persuade you that the price drop is the optimization.
If your response to every trick is to respond, "No, please try again to optimize for TCO," they'll eventually interpret your behavior as the equivalent of an ad-blocker. Then they'll either persuade you to reveal more data or move on to a customer who negotiates on their terms.
There is a difference simply because the results are different, whether due to the need to save face, behavior psychology, sales training, or more intangible factors.
What I'm saying is that either OP will accidentally give away information at the outset that virtually guarantees overpayment-- "Here's what I can afford"-- or robotically repeat a fair price calculated ahead of time and request TCO optimization until they are thrown out of the dealership.
It'd be like going to a shell game and requesting to pay $7 so your kid can have 10 guesses at where the shell is. Then when they ignore you, start asking what's wrong with that, I mean, those are the odds, no? I've even rounding up for that pure profit. Why wouldn't someone with a big crowd of good faith players want to accept that?
You have to be pretty bad at negotiating to be hit with a delivery fee since in my neck of the woods, aka SoCal, most dealers will waive that for everyone.
I recalled this wrong — I looked at the sticker for my car 3 years ago and it was $795. I think $500 was for my previous vehicle, and that was a long long time ago :)
P.S. by "dude" I meant that the man just drove the car to the owner's place from their Fremont factory (30 min).
Car haulers don't make sense for sparse local deliveries.
Then Tesla registered the car improperly and took months to correct.
Most Tesla owners I talk to say the same thing, they love the car and hate everything else about dealing with Tesla. I can't imaging removing dealerships is going to make this any better with customers.
>and then return it for free.
which implies that there's no financial loss on your end.
They should at least have phrased it in terms of "and you're only out the initial delivery fee".
Edit: I don't know what the actual status is. One commenter mentioned a delivery fee that's separate from the headline price; I was just going off the earlier discussion.
didn't realise being able to get a loan is a human right now.
I'm not sure that Tesla is saying you can't test drive it. There are other ways to evangelize the car and let people test drive it, ones that don't involve massive rents in premium retail spaces. Toyota brings the Mirai to my local Farmers Market, for example.
They could easily organize such events for the Teslas.
I even tried going with a different finance company to secure the exact car I wanted (it was an excellent offer I had driven the dealer to) and they came back with a flat no.
In my case they hadn’t secured the loan yet. I doubt they’d be so flexible even if the car had been totaled as I drove it off the lot without the loan being secured.
Say, for Spain the price of the long range model is 59K€, if you remove taxes and after currency exchange the price comes to 47K$.
Add oversea shipping and the cost is not that much higher than the US.
https://insideevs.com/tesla-model-3-pricing-info-released-eu...
https://www.teslarati.com/tesla-model-3-long-range-325-miles...
Where do they say that? On the site is a big "Test drive" button which goes to https://www.tesla.com/drive which, I asume, will let me test drive a Tesla. Without Buying.
When I requested a test drive in a state with no dealerships I was directed to a store out of state.
These stores will no longer exist.
The messaging is also very clear, sometimes it’s ok to read between the lines...
We’re closing stores where you test drive + we’re pushing returns hard in the marketing = we want to move past test drives
This is a new annocument, other parts of the site don’t even have the right mileage and days for returns last I checked, give them some time before the site is consistent with the new reality
Does this include their dealerships? There are plenty of dealerships that offer test drives.
EDIT: I assumed that the "stores" were the places in malls etc. that don't have (say) a whole bunch of machinery for the service center etc.
Their “dealerships” don’t sell you a car, you just get handed off to the website
Loans, mortgages, etc. are based on your whole credit history, and if you take out a loan it will be marked on your history and when you cancel it within the 14-day cooling off period the credit history will be updated to say it's closed.
Unless you're doing this multiple times in six months or so, it won't affect anything (maybe your credit score might go down a bit when you take out the loan but it goes back up after a few months when it's updated again normally - but a this credit score doesn't mean anything it doesn't matter).
Would you be willing to disclose in general terms what you have in your portfolio of investments. Keen to learn.
You could easily achieve similar returns in an S&P 500 index fund.
This is not the mentality that gives someone good returns on their money so I’m forced to assume people who say it can’t afford the cars they’re talking about.
Why is it supposed to be easy? If it were easy you'd have too many people buying a car "for the weekend", costing the company money and driving up prices for everyone.
Like to the tee, they literally use the example of taking the car out with your friends on a road trip as a test drive.
To my mind the mere fact that someone would borrow money at all to buy _a car_ is a huge red flag against their creditworthiness / financial responsibility.
But I keep reading online that people who otherwise seem pretty sensible do this as a matter of course. Is it possible that living in a city with functioning public transport has sheltered me to the point of naivety? That is to say, is having a car really so essential to holding down a job and accessing services in most of America (etc.) that taking out a loan to acquire a car becomes a necessary evil?
It’s all about opportunity cost. If you have better things to do with the cash then it makes sense to finance.
Yes, it is, and it really sucks that we in Amercia designed so many of our towns and even cities this way.
[0] https://whatever.scalzi.com/2005/09/03/being-poor/
If you're talking about the US, this is the greatest understatement I've seen in some time. I don't have a very good source handy, but for the median American under 40, try more like "$1,000".
Wow.
Given your healthcare system and the potential costs of being ill combined with having such a low amount of savings / safety money. Losing your job could potentially terrifying in the US.
How do people live what that level of stress continunally?
I could lose my job tomorrow and live for 4-5 years on savings and I'm not comfortable with that amount and occasionally find myself worrying about my financial situation.
Financial literacy is low, and financing is available on everything. Just tell the person that they can buy something with no money down and you're halfway to making the sale.
They have no other choice. Education is far too expensive to better yourself and train for a better career, everything is designed to suck every possible penny from those with less money than average, and if you don't work your ass off to pay what you can, you die on the street because we have no safety net. Being poor is a treadmill. If you were born poor and don't get absurdly lucky, you can look forward to being poor forever and passing that great experience onto your possible children.
Welcome to America, land of the free I guess
A 35K car loan at a net of 1.5% (3% - 2% + marginal tax rate on 2%) will cost over a thousand dollars over 4 years.
US public transit is really bad outside of major urban areas. In the (medium-sized) city I live in, the only public transit is an unreliable bus service that only covers a few areas of the city with really limited routes. We don't really have taxis, either, and there's enough sprawl that you can't bike to places easily, so your options are to either use uber/lyft for everything and hope you can get a ride reliably, or buy your own car.
Median household income in the US is only around $60k/year [1], which makes it pretty difficult to afford a car without some form of loan. If you save up pretty far in advance, and buy a cheaper used car, it's probably doable, but most people don't want to do that (and if everyone tried to do that, used car prices would likely go up to almost the price of a new car anyway).
[1] https://fred.stlouisfed.org/series/MEHOINUSA672N/
Otherwise I’d say that’s the short sighted financial sense.
I was borrowing at a rate that was barely costing my anything in finance charges and gaining the opportunities having that much cash open for investment or other expenses gives me.
I don’t see a reason to buy a car in cash if you can get a good enough rate...
Hi Jeff Just a polite reminder that a) there's nothing wrong with financing, it's essential to the buildup of the US and b) the average US citizen doesn't have the same income distribution that the average HN reader does.
The median price of a car in the us is $35K [1] and the median household income is $59k [2]; For most families in the US the car is absolutely essential for work, life (kids) and basic necessities of life. The median American has less than $5000 in a savings account. This is especially bad for marginalized minorities [3]. It's practically impossible for most Americans to walk in and buy a car with straight up cash, and even if they could, I would consider that unwise.
Back to debt: there's nothing wrong with debt, and some of the smartest richest people I know use debt carefully to manage cash flow.
[1] https://www.researchgate.net/profile/Till_Stowasser/publicat...
[2] https://en.wikipedia.org/wiki/Household_income_in_the_United...
[3] http://apps.urban.org/features/wealth-inequality-charts/img/...
https://en.wikipedia.org/wiki/The_Market_for_Lemons
Great value for money, and it had a relatively classic look that belied its price. That's the kind of car I intend to buy again in the future.
It generally makes little to no sense to pay cash for a car. Auto financing is cheap, and so there is is significant opportunity cost if you don't invest the money instead into something that appreciates. Also, inflation.
Apparently yes.
And as others have mentioned, if financing can be done for less than the value of the money in your pocket, it's better to finance!
I have a 0% interest rate for 7 years on my other car. That's literally free money.
You chose to forgo getting/negotiating a greater discount on the purchase price.
There's no way the lender could do business otherwise.
The average new car is around 35k. 35k with 7 years of returns even with extremely conservative investments should very handily make up for any lost bargaining power at purchase.
Yeah, I think so. Financing is pretty much standard in America when you make the decision to buy a new vehicle (and many times, when buying a used vehicle).
The median amount American citizens have in savings is just over $5k:
https://smartasset.com/checking-account/savings-account-aver...
Not awesome.
I find it hard to argue for getting a car loan when the car's value is above a certain amount. Certainly if the car provides value greater than it is worth (i.e., ability to provide mobility to/from employment location) but a Tesla is more in the "luxury" category.
Buying a new car lets you take advantage of warranties, free maintenance on some brands, having new tech years ahead of what’s otherwise availble (if you’re interested in that), not worrying about a questionable history (I’ve seen cars seriously damaged by driving habits in hundreds of miles of driving by abuse), and a myriad of other factors.
At the end of the day money is not just for hoarding. You can want to buy a new car as a treat, or a reward, and still do it a financial literate way.
Financial literacy != only spending money in the most utilitarian and minimal way possible, otherwise we’d all eat rice and legumes and live in shoeboxes to show how “financially literate” we are.
This is especially true with sports cars.
At one point I was considering buying a Nissan GT-R. I could get a brand new one for $120K, or a 5 year old one with 35k miles for a hair under $70k. You'd think the used one is a no brainer! But we're talking a car with ~550 horsepower, something someone could quite likely have been taking to a race track on a regular basis, putting untold amounts of wear on the engine and drive train.
I admit $50k is a lot to pay for peace of mind, but when you're like me and own a car until it dies, I like to know how it's been treated, and being the only owner is the only way to know that.
There’s a level of financial knowledge that’s just dangerous enough to hurt you, and I’d say this is it.
I’m not having any problems with credit, do I detect a tinge of jealousy in your overtly rude comment?
Even after hundreds of thousands of Model 3s have been sold, I still get nods from other Tesla drivers and chat with people at superchargers.
This move makes sense to me. They're able to shave off thousands of dollars for each buyer. Presumably most people aren't returning cars immediately or if they really care about checking the car they rent one for a day instead of the limited test drive from the dealer. So I think most buyers will think it's worth it to save a couple thousand at the cost of having a slightly harder return process.
You’re essentially saying people should fork out hundreds to test drive a Tesla (that’s the going rate for rentals unless you’re saying they hunt down someone to just give them a car) or buy it sight unseen, neither of which is reasonable for a mainstream buyer when you start talking about the “affordable” Model 3 this change supposedly allows.
I also don’t get what you mean by buyers saving a couple of thousand. They’re still paying delivery fees and such.
I was issued a check for the amount of the car, and while the check had never been cashed canceling the check and loan and having it removed from my CR took weeks
I think the biggest issue with a typical car loan is that the market value of the car decreases after it's driven off the lot, so Tesla must have some plan for dealing with that aspect of the first week returns. My guess is that they are declaring a vehicle "new" if it has under 500 miles on it, and they include the distance the car may be driven for delivery in that 500 mile "new" buffer. Thus if you take the car on a weekend getaway and return it with under 500 miles on it, it is still new (by definition) or at least as new as the Tesla that was driven 450 miles from a distribution center to a customer's door.
Normal dealers sell vehicles all the time that have been "demos" for sales people and may have a few hundred miles on them. They typically sell them for a bit below invoice, but a mint condition vehicle with < 500 miles is new as far as most people are concerned.
It's possible that Telsa is doing something more clever than the above, but if not that's a fairly low cleverness way of accomplishing it. There is probably a mileage limit that one must stay under in the first week to be eligible for a return.
But as long as they have a huge wait list for cars, and huge numbers of people who are willing to pay for cars without testing them this makes sense.
My response to your question is "Why should I (a preorder customer) pay a premium for Tesla's business model that allows YOU to do a test drive?"
Until the demand of the wait list customers has been fulfilled, catering to the HARD SELL customer is actually making my experience worse and more expensive.
2. $35,000 Tesla plus a $100 rental payment for a 24 hour test drive.
You honestly prefer the first option?
Rentals are cheaper on the weekend, and he got to try all sorts of cars. He started with the ones he was most interested in buying, but since he was for ing himself to rent different things, he tried convertibles, sub-sub-compacts, minivans, even a pickup.
When he finally was ready to buy, he had enjoyed a quirky period of trying different things, and was now very sure of exactly what he wanted.
I tried it myself for a summer, even rented an oversize SUV for a climbing trip. And I loathe driving SUVs, but hey, if it’s just for the weekend...
Yet all you (we) need to do is find a friend/colleague with a Model 3 and go to lunch/test-drive together. In fact, I would value my friend's frank opinion over a slimy car salesman's one.
Though on that point I hope they don't go the extra mile of savings by going "email only" support that companies like Google, Uber etc do.
Who needs repairs? Just buy a new one; it's cheap and easy.
If you are looking at the iron-ore-2-consumer chain of auto manufacturing for meaningful savings, it's hard to ignore the factory-2-consumer steps. Ultimately, that's a useful efficiency.
Now... "cutting out the middle-man" has a history of being much harder than it looks. You'll be following a well ridden path lined with skeletons. Just look at the factory-2-consumer markups on food, clothes...
Still... I think it's worth trying. If test drives are the bottleneck, it should be solveable somehow.
This was in reference to the Ford Model T which was introduced at $850 in 1908 and was brought down to $300 in 1925.
15%? 20%? 25%?
For reference, General Motors reports less than 10%. Toyota, 18%.
I'm going by what I've seen of people receiving orders in the last few months, over what time has it improved? If you buy one now, will the fitment compare to (for example) GM by the time it is delivered? How likely is the paint to be scratched all the way through to the base coat on delivery?
I want to believe that they can make these things right, but honestly I can not have that much faith in them given what I've seen.
Sarcasm aside, I'm inclined to be charitable to Tesla, but quality issues abound with every generation of Tesla products; and while things have improved, they are behind the industry in many areas.
[0]: https://youtu.be/FSLTNjGI8hw
That car in the video is I'll admit quite ridiculous -- I'm guessing it is an anomaly though. My car had nothing like that and I did inspect it carefully on delivery (I guess this guy did not). I don't think anyone is forcing you to take delivery if you get an insanely scratched car like that, but certainly it's fair to expect that a car company would not try to deliver such a scratched car in the first place. I just don't think it represents the normal experience these days.
https://www.google.com/search?q=honda+paint+defects+on+deliv...
https://www.google.com/search?q=bmw+paint+defects+on+deliver...
https://www.google.com/search?q=chevy+paint+defects+on+deliv...
that out of the way, well it is about time. it is nice to see, I still don't agree with how they present the cost on their website but I am at the point that I think it will take regulations to fix that. Telsa seems immune to criticism on that front. I am in the camp of, truth in advertising.
Now, the value of the premium interior took a sizable hit. the remaining advantages are heated rear seats, more speakers for the stereo, satellite maps with live traffic, streaming media, and the internet browser.
so my question is, did I pay for life of the car satellite traffic and streaming? there have been hints that this was not the case. the rear heated seats and extra speakers certainly don't make up $2500 in value but if there is lifetime satellite maps with traffic that would be a selling point.
on a side note, the other area besides advertising pricing that Tesla needs to be called out on is providing parts to repair existing cars. The nightmare still exists for many owners with some being without their car for over six months.
People say there is no need for carplay because the cars built in stuff is so much better, but I'd bet that in 10 years time, the console will stop receiving updates, but phones will keep getting better...
There are opensource projects [1] to implement android auto, so perhaps if someone runs that on a modded tesla, and gets a bunch of youtube views it might embarrass tesla into implementing it properly.
[1]: https://github.com/gartnera/headunit/tree/master/ubuntu
Also it appears Autopilot is now a $3K add-on (vs $5K previously). And the full self-driving is back at an additional $5K and includes some of the features that previously existed in AP.
Tesla charges a non-negotiable $1,200 "Destination & doc fee" which in CA is not a fee. It is not state mandated, and is just pure profit for dealerships that charge it (explaining why the amount varies wildly per-dealership).
Google it. It is NOT required anywhere, and all cars I've ever bought, I've gotten the dealership to pay it.
Also, 1.2k is a LOT of fee! Boardwalk and Momentum (two large dealerships here in norcal) both try to charge doc fees around $400, not 1.2 kilodollars!
Once people start having issues getting parts, these cars will be joining the market for cheap.
The best (and perhaps only positive) dealership experience I've ever had was when I bought my 1997 Saturn. Saturn was, at the time, no haggle, no negotiation.
If on some crazy change you actually got the dealer to line item doc fee as $0 on the contract, than they could be in a ton of trouble.
Dealers may charge buyers a document preparation service fee not to exceed $65 (or $80 if a Business Partner Automation (BPA) program participant). This fee is not required or collected by the department.
source: CA DMV: https://www.dmv.ca.gov/portal/dmv/detail/fee_calc/feecalcfaq
So about $36k net CAD for the base Model 3