How to Afford A Tesla Model S
Ever wonder how to afford anything that you want? The answer isn't to be extremely rich. So what is the answer? Turn your wants into a business, of course! Literally anything that you would pay money to do, other people are willing to pay to do it too. You can take note of this and capitalize on it if you so choose.
What I would like to break down is just how affordable a Tesla Model S can be if you're willing to make a few sacrifices in terms of ownership. I'll say a few things straight of the bat that will turn many people off:
1.) You have to be willing to let strangers drive your car (Turo).
2.) You have to be willing to drive strangers around (Uber, Lyft)
3.) You have to be able to cover the costs of the leased/loaned vehicle should something bar you from participating in the aforementioned activities
Let us begin with a price breakdown of a brand new, top of the line Tesla Model S. I optioned out a P100D (the one with a 2.5s 0-60 option) just the way I wanted it - balls to the wall. That's except for the cold weather package - I have no use for it as I live in the southwest.
The loan payment, on a 78 month term (that's 6.5 years) would be $2,131.00 a month - more than the mortgage on many peoples homes. Now comes the interesting part - offsetting the cost through savings and incentives. Of course, Tesla takes some of these into account in their "Cost After Estimated Savings" figure that is shown in the image above. This would be federal and state tax rebates and vouchers, as well as the savings associated with not paying for gasoline for a while after you purchase the car. That's all well, good, and documented to hell and back because a lot of people take advantage of this deal and get themselves a sweet Tesla.
You and I are not those people, because we're not obscenely rich (yet). Now, to get into the meat an potatoes of affordability. Allow me to introduce you to a little app called Turo (formerly known as RelayRides). It allows you to list your vehicle for rent, much in the same way that airbnb lets you rent your house or room on a day-by-day basis. Now, I for one don't really trust strangers to be careful with my car unsupervised - it is a rental, after all, and they are paying for it, after all. In a general sense, abuse will occur. Lower cost vehicles are used and abused on the app much the same way that an Enterprise rental would be. The kicker in this situation is that the higher classed car you have, the more sophisticated your clientele will be. In addition to that, you can pre-screen your rental applicants to choose the ones that you feel are going to be the most responsible with your ride. I was reading an excerpt recently about a dude who was doing exactly this - with his Tesla Model S, in fact. His experience was that the majority of the time, his renters were Model S owners traveling on business, and couldn't stand the thought of driving something other than a Tesla while they were away (must be nice).
A brand new Model S can fetch as much as $300 a day on Turo, with various discounts the app recommends for giving customers weekly and monthly rental rates. There are several different insurance options you can choose from. Essentially the less amount of coverage you get, the larger your cut of the profits are. The highest optioned insurance covers mechanical wear and tear, bumper to bumper cosmetic coverage, and will pay up to 75,000 in the event of a theft or total loss situation. I would like to do some independent research and see if they would be willing to double that amount if you listed a brand new Tesla on their app. The drawback to the elite insurance coverage is that you only get 65% of the profits from the rental. If you're renting your car for $300/ day, you only pocket $195 dollars from each rental day - that means for this particular Model S to be paid for, you'd have to rent it approximately 11 days a month. Unless you're in an extremely affluent area with a high demand for rental luxury cars, that simply isn't going to happen. If that demand somehow did exist, then you could effectively drive a brand new Model S for free, and make profit when you sell the car.
Now, that just isn't practical. It was a fun exercise, but I suppose there is a cutoff to the idea in reality due to demand. What is feasible, however, is to get a reduced option Tesla and do the same thing. If you opt out of the Ludicrous speed option and go for a lower range (sad face) then the cost is only $1,400.00 a month. At again a $300 rental price per day, it would be reasonable to rent out your car for 4 days a month and offset that price tag by 800 dollars. Tack on another 100 to that savings for the gasoline you're not paying for, and you get to drive the car of the future for about 500 a month. Drive for Uber black car a few nights a month for fun, and now you're in the cost-of-just-an-average-new-car-range of $300 a month.
That's the option for a new one - if you were to buy a used Model S, with say 30,000 miles, they can be had for under 50K. You don't get the tax credit for a used Tesla purchase (I'm sure they feds only hand out one voucher per VIN), but you can still get a 60 month term for sub 3% APR. That comes out to about $1000 a month, and the vehicle is paid off in 5 years. In this instance I would be more comfortable with the prospect because the car is less than the 75,000 total insurance payout on Turo, and you'd be making nearly as much money as you did before.
Then there are the rumors surrounding the Tesla "fleet" that is the autonomous capability of the cars. It may allow you to fleet out the car in coming years to offset the cost of ownership. In the event that Turo dies, this could be an important contingency.
There you have it. Now go, and be entrepreneurs or something!