The Tesla Purchase Experience: Week 2

Sunday

Returned from Las Vegas. We won some money this trip and I'll put it towards the electrical work that's going to be done next week. Got an alert from Fed Ex letting me know the wall charger will be delivered on Monday.

Monday

Expected the wall charger to arrive today. Turned out I read the email wrong and it's due tomorrow. Scheduled the electrical work to be performed a week from Wednesday, on August 22. I had to put down a 50% deposit for the work. Did I mention I also had to pay $65 just to have the electrician come out and give me an estimate? I'm in the wrong business...

Tuesday

Wall charger was delivered.

Wednesday

Thinking about what personalized license plate I should get. Washington has a bunch of rules about what characters can be used on a personalized plate, so it limits things somewhat. There's a 7 character limit and you cannot use any of the below formats.

Those rules knocked out out a couple of my choices, but I believe I have one picked out that meets these requirements and is not already taken.

Oops! Sorry!

Ack. I discovered a ton of blog comments that were queued waiting for my approval to published - some from as far back as June! Sorry! I thought I used to get an email notification when some were waiting for approval, but I guess I don't.

Thursday

Called my insurance company to check on what it will cost to insure this car. To be honest, I was dreading this call because I thought my premium would rise significantly. I was pleasantly surprised to find that my insurance will only go up by $8 a month!

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The Tesla Purchase Experience: Week 1

Sunday

I spent four hours today reading the Model S Owner's Manual. I did find out some new info. Most people know about the crazy acceleration modes "Insane" and "Ludicrous" that allow the Model S to have more power to take off quickly. Today I discovered there is a mode that limits power so you accelerate more slowly. It's called "Chill." I imagine this would come in handy if you have a teenager. Maybe I should tell my wife we need to Tesla and chill.

I spent some time researching locations to place my toll road transponder in the new car. Owner forum posts from 2013 to 2015 or so indicated people where having difficulty getting toll roads to pick up the signal from their transponders due to the metallized front windshield of the Tesla. Newer Teslas now have a special area on the windshield near the rear view mirror without metal to overcome this problem. In fact, as I read further into the manual, I found the page with this info on it.

Tuesday

Checked on the price of the wall charger and cables again. Yup. I wasn't imagining things last week. The price is back down to $500 and $520.

Holding off on ordering until I find out if my house can support the wall charger.

Tesla was in the news today as Elon Musk tweeted about possibly taking Tesla private, then elaborated in a blog post on the company site. I have own about two dozen shares of Tesla that I picked up back when it was in the $70 or so range. I've made a nice profit so far. My initial reaction to this news is positive. I agree with Musk's assessment that going private will allow the company to focus more clearly on the future instead of trying to maximum short term earnings. I think this announcement should also strike some fear into the heart of all the Tesla short sellers.

Wednesday

The electrician came out today and verified I have 200 amp service to my house, so  can get the wall charger if I want. But he did give me some kinda bad news.

My panel box is small and pretty old. I only have 2 empty slots, which would be used up by the circuit for the car charger, whether it's the wall unit or a regular 50 amp NEMA14-50 outlet. If I ever want to add anything in the future I'd need a new panel.

Furthermore, my panel has aluminum bussing inside of it. I have had experience with aluminum wiring before. It was used during the late 60s and early 70s for wiring when copper prices skyrocketed. The problem is aluminum is not as safe a copper. It heats easier and melts easier when high currents are put through it. It also has corrosion problems with connected to a dissimilar metal, such as copper. While aluminum wiring is no longer used (and I don't have it in my house), some electrical panels still use aluminum bussing and builders use these types of panels because they are cheaper than all copper ones. My panel is, unfortunately, of one of the cheap ones. The panel I have has a manufacturer's expected lifetime of 20 years and my house is 28 years old. Yeah, time to replace that.

The new panel will be all copper and have an unlimited lifetime warranty. It will also have more spaces for additional circuits so I can expand in the future. Cost for the new panel: $4,150. I opted to get the panel replaced because, besides the car charger, we also plan to install a tankless water heater in the future. I had one of these in our house in Arizona, but up here, where the weather (and hence, the ground water) gets much colder, a much bigger circuit is needed to power it. The electrician told me the old panel would definitely have to be replaced when I get that installed.

The difference in installing the wiring for the wall charger versus the NEMA outlet is about $500. I went ahead and opted for the wall charger and the cost for that was $1,775 plus another $200 in permit fees (including the permit for the new panel).

Now that I know which charging option I am going with, I went ahead and placed the order with Tesla for the wall charger. Luckily, the price was still $500 with free shipping. As soon as that arrives, I'll schedule the electrical work to be done.

Thursday - Sunday

Time off in Las Vegas! We got free tickets to see Amy Schumer at the Cosmopolitan, so we're spending the weekend there.

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The Tesla Purchase Experience: Week 0

Sunday

When I walked into the Tesla store, I wasn't sure I'd actually be able to buy the car there. I know there are many states that prohibit Tesla from selling directly to the public and I wasn't sure if Washington was one of them. My plan was to visit the store, see the color my wife was raving about, get any questions answered, then go home and place my order online. That's not quite how it went down.

The Purchase

I entered the store with my wife and daughter. There were three vehicles in the store - two Model S's and one Model X. (I thought owning a Prius was bad when it came to speaking of them in the plural - Priuses? Prii? I can tell the Model S is going to be worse.) One of the Model S's was the Midnight Silver that caught my wife's eye. I had to agree, it was nice looking. We spent some time poking around the car. I sat in the front and back seats, played with the sunroof, messed with the touchscreen functions. It's a nice car. I had taken a test drive two years ago, so I was somewhat familiar with the interior. It felt good to be back in one!

My wife and daughter left to do some shopping and I hung around the store a bit more, looking at the Model X, but mostly watching other people checking out the cars. Every person I eavesdropped on sounded impressed. I also spent some time checking out the interactive displays, looking at the home charging options and how fast each can recharge the car.

I wandered around and caught the eye of a woman who asked me if I had any questions. I had one regarding the front license plate mount. (Sadly, Washington requires cars have a front license plate. My old state, Arizona, does not.) I don't like that the front plate breaks the clean lines of the nose of the car, but, at least the mounting area looks fairly well integrated. It's not like someone just screwed the license plate into the bumper, which I have seen on other cars.

I mentioned I was ready to place an order and she went of to find an "Owner Advisor" to help me. A few minutes later, a man came and took me over to a computer. He talked to me a bit about the car and Tesla in general. He pulled up my information and saw I had taken a test drive in Arizona in the past.

We then started going through the order process. It was the same as on their public website. In fact, I think it was their public website I was using. The advisor was just there to answer any questions I might have and to go over the various options you can purchase.

I decided (before even entering the store) that I would buy the P100D version of the Model S. I figure if I'm going to spend a boatload of money on a car, a bucket to two more won't make much difference. The advisor went over the car options, but the P100D comes with most of them already, so there wasn't much to decide. I opted to not get the rear facing child seats. The performance package does come with a rear spoiler that I could do without, but leaving it off didn't lower the price any, so I left it.

I did opt to change to the 19 inch wheels instead of the 21 inch wheels that come with the performance package. I have read many stories about drivers with the 21 inch wheels hitting bumps or curbs and blowing the tires or damaging the wheels. In fact, the advisor said someone took a test drive last week at the store and blew a tire hitting a curb. I have since spoken with another Tesla owner and it also turns out that 19 inch wheels provide greater range per charge than the larger wheels, so I think I made a good decision there.

I made sure to give the advisor my referral code from a previous owner, so I could get the free Supercharging. It was then that he told me about how the promotion keeps getting extended, as I mentioned last week.

I had originally decided to not trade in my vehicle and instead to sell it myself, then use the money to pay down my car loan. However, the advisor mentioned that, in Washington, the amount of your trade-in is deducted from the purchase price of your new vehicle when it comes to calculating sales tax, thus reducing the tax you have to pay. So if my new car costs $50,000 and I get $10,000 for my trade in, I only have to pay sales tax on $40,000. Later that day, I decided to go ahead and trade in my old car instead of selling it myself. If I don't like the amount they are willing to give me for it, I can always change my mind again and sell it myself.

The final step was determining where I wanted to pick up the car when it came in. I had two choices - in Bellevue, where the store was located, or Seattle. Bellevue is slightly closer to me. It is also the location the advisor recommended because the pick up facility is nicer and, being in a different city, it has a 0.1% lower tax rate than Seattle. That's about an extra $150 savings.

I put down a $2,500 deposit using a credit card and I was done! Total cost of the car: $148,700.

*Gulp* That's more than my first house!

The Tesla order summary cheats a bit and knocks off the $7,500 tax credit to try to make the price look lower. Your Jedi mind tricks won't work on me!

The advisor mentioned I have three days to change my mind. I can cancel my order or change the options I selected with no penalty. After three days, the deposit becomes non-refundable and any configuration changes will incur a $500 fee.

Estimated delivery time is the end of September, although I was told that sometimes the high performance models get a higher priority at the factory, so it could come in mid-September.

The whole process was super easy and there was no sales pressure at all. Honestly, there is no need. The car sells itself.

I got home to find a couple emails - confirmation of my order, what to expect as the process moves forward, etc. I also got my own Tesla online account as well as my own referral code. So if you are looking to purchase a Tesla, use my code and we'll both get something (although what that might be seems to change periodically): https://ts.la/shaun54723

Wednesday

A very long three days passed. On the second day, I got a reminder email that my three day deadline was approaching. I thought that was a nice touch. I don't think many other car dealers would send you a reminder saying "Hey! Today is the last day you can change your mind and cancel the sale!"

On the fourth day, I got an email stating my configuration had been sent to the factory and my car was being scheduled for production. A VIN number was assigned.

It looks like most of the paperwork can be handled through my Tesla account. I was able to upload images of the front and back of my driver's license, as well as proof of insurance.

The Trade-in section of the account was marked as Completed since I said I was not making a trade in. There was no option to change this online, so I called the company and was told that was not a problem. A delivery coordinator will be contacting me in a day or two and he can make that change for me.

(One thing I noticed: Tesla really is a tech company that just happens to be selling cars. Not only was the original advisor I spoke with able to tell I made a test drive years ago, when I called in today, I didn't have to give them my reservation number or VIN number. They had my phone number from Caller ID and brought my account up from that. I realize a lot of companies can do this now, but I always like when it happens. It makes the customer experience so much nicer. I don't feel like I am reduced to a number.)

The loan approval process was not started because a loan approval is only good for 30 days. Since my delivery date is more than 30 days out, we're holding off on starting that.

Similarly with the trade in. Once they have given me a value for the trade in, that figure is only good for 2 weeks or 500 miles, whichever comes first, so that will have to wait as well. For the trade in calculation, they want two pictures of the exterior, two of the interior, the VIN, and mileage.

My online account has a nice checklist showing how many steps I have left to do before taking delivery:

Thursday

Prepping The House

Like most people, I will need to have an additional outlet installed in my garage to charge the car. I have two options. Well, three actually, but one is too slow to even consider. There are a wide range of variables to consider when selecting how you want to charge your car, including how much current the service to your house is rated for, if your car has dual chargers or not, etc. (I finally get to put my electrical engineering degree to some use!) Full details can be found on Tesla's charging page, but the below numbers are the ones that apply to me:

1. A standard 120V outlet. This is an outlet just like you have everywhere in your house. You probably also already have one in your garage. Charges at a rate of 4 - 6 km (2.5 - 3.7 miles) per hour. Not a realistic option.
2. NEMA 14-50 outlet. This is similar to a clothes dryer outlet, but can supply more current (50 amps). This is the type of outlet most RVs use and you need an electrician to install it. Charges at a rate of 37 km (23 miles) per hour. This is one possibility.
3. Tesla High Powered Wall Charger. Special unit sold by Telsa that can support varying output levels, up to 80 amps. Requires an electrician to install. Charges at a maximum rate of 84 km (52 miles) per hour. This is the other possibility.

After speaking with a Tesla owner, I decided I probably can get by with option 2. My house appears to have a 200 amp circuit coming into it, so I should be able to go with option 3 if I want.

Here's the deal: The car comes with a charging cord. If I go with option 2, I'll use that cord in the garage at home and have take it with me on trips to charge in case there isn't a Supercharger nearby. (Most RV sites have a NEMA 14-50 outlet you can use to charge.) If I go this route, I know I will forget to bring the cord on a trip at some point, so I thought I'd buy an extra cord to keep in the car all the time. Then I saw this:

A spare cable with adapters is $100 more than the wall charger! Looks like I'll go with the wall charger and keep the cables that come with the car in the trunk for when I travel.

I should also note that these prices seem to change quite a bit. I'm pretty sure when I looked at these 3 days ago, they were $500 for the wall charger and $525 for the cable, so there might be some shennanigans going on there. I do know that when I was running the numbers for saving up for a Tesla years ago, the wall charger was priced at $1,000.

I've scheduled an electrician to come out next week and give me a quote on installing both types of charging options. We'll see how big the price difference is.

Had a hard time sleeping tonight. I woke up at 1 AM and couldn't get back to sleep. Part of it is the fact that I'm about to take out a huge loan. I keep going over the numbers in my head and everything always comes out good, but just the fact that it's still up in the air is making me nervous. I think once the loan approval process is started and / or completed, I'll feel better.

Friday

Ran some more numbers today and it's possible I can pay the loan off in 2.5 years, well ahead of the 6 year term. That requires some serious cutting back though, especially on my retirement savings. I'm not sure that is something I want to do.

Also discovered that even if I don't pay the loan off early, I'll end up paying about $6,800 in interest payments. The $7,500 tax credit more than offsets that, so it's like I'm able to borrow money for free.

Of course, until the final numbers and rates are locked down, this is all subject to change.

Counting down to the end of September...

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The One In Which I Buy A Tesla

 

A couple weeks ago, my wife came back from the mall and said "I saw the color of the Tesla we’re going to buy!" This was a small joke between us because she and I could not agree on what color our future car should be. I wanted blue (my last two cars have been blue) and she wanted silver (her last two cars have been silver). I am opposed to silver because it’s a fairly common car color - the beige of the car world, as far as I am concerned. She is opposed to blue for who knows why. So we were at something of an impasse on the color, but I figured it wasn't a pressing issue. There was still plenty of time to figure it out.

Then she told me she was walking by the Tesla store in the mall and saw a car that was a bluish grey that she loved. She actually went into the store to ask the associate what it was called, which is pretty surprising if you know my wife. Turns out, it is called Midnight Silver. The image of the color on Tesla's website doesn't give a good indication of what it actually looks like. It's a metallic paint and looks multicolored in the sunlight. It's still more grey than blue, but there are definite hints that it's not quite what it seems. A Model 3 owner who has this color posted some photos here that show the various hues the paint can take on.

Anyway, while talking about the color, she said "You should just buy one before they stop selling that color."

Hmm. Did I hear that right? Did she just give me approval to spend a crap-load of money? I think so, but was I willing to do that?

It took a week or so of thinking about it, but, as the image above shows, I decided to go ahead a put in an order. We went back to the Tesla store, ostensively so I could check out the color myself, and I pulled the trigger. The car is due to be delivered at the end of September.

How I Talked Myself Into It

If you really want to buy something, it's pretty easy to talk yourself into buying it - just ask any of the millions of people in over their heads in debt. While I'd like to think I didn't just go inventing reasons to justify getting the car now, there is likely some part of that in my decision. That's just human nature. So here's my reasoning. You tell me if you think I am just blowing smoke up my ass.

The Incentives

Telsa recently sold their 200,000th vehicle. This means the federal tax credit of $7,500 will start to be phased out. The full credit is still available for people who take delivery of their cars by the end of the year. Conveniently, that now includes me :-)  However, buying now means I will need to take out a loan for the car. Based on my rough estimates, if I put down about 30% and finance the rest, I'll pay about $6,501 in interest charges on a 6 year loan. So the tax credit more than pays for the loan interest. I also plan to pay the loan off early, leading to even more savings. These numbers will be subject to change once I get all the final paperwork done and the numbers are nailed down, but it's looking good on this front.

Tesla currently has a promotion going on where if you get a referral from a current Tesla owner, you can get free Supercharging for as long as you own the car. This is a feature that was included for early car purchasers, but it was recently scaled back. Now, you only get 400 kWh of charging per year for free. I'm sure this is due to the expected increase of Tesla owners now that the Model 3 is starting to roll out in force. Anyway, I found out about this offer on a Saturday and it was due to expire on the following Tuesday.

This is a pretty big deal for me. I know there are a lot of people abusing the free charging, but I don't plan on being one of them. I would like to be able to drive on long trips and not have to pay for energy, but I'm not going to bother charging for free during my daily commute. I just don't have the patience for that. Rather than stop for 15 minutes on the way home to suck up 75 cents of free energy, I'd rather just head home and plug in. The free charging for road trips was a big reason why I wanted to get a Tesla in the first place and I was sad when I thought I was going to miss out on this feature.

To be fair, the "owner advisor" I spoke with at the Tesla store did tell me that Tesla has extended this offer a couple of times, and may do so again. Truthfully, he said, a lot of people complained about it going away and Tesla was finding it hard to stop offering it. Sure enough, the day after the offer expired, Tesla once again announced that it would be extended, this time through September 16, and this time the offer is also good for buyers of the Model 3 Performance model. (Previously, it was only good for Model S and Model X buyers, as well as Solar buyers, before.)

By the way, if you are interested in buying a Tesla, please use my referral code, shown on the right, or click here :-)

The Taxes

The recent tax bill passed by Congress for 2018 limits the federal income tax deduction for state income taxes to $10,000. Washington is one of the few states that has no state income tax but the federal government allows residents of those states to deduct sales taxes paid instead. Our sales tax is a hefty 10%, but that deduction is also capped at $10,000.

I'm sure this is the first step in removing the state income tax deduction altogether. I fully expect this deduction to be further reduced or be completely eliminated in the coming years. I might as well claim it while it's available. Sales tax on the Telsa will be over $10,000.

The new tax bill did double the amount of the standard deduction. For those like me, who are married and filing jointly, the standard deduction is now $24,000. My mortgage interest payments will be about $20,000 in 2018, so I was planning to just take the standard deduction and not bother itemizing. But with the sales tax paid on a new Tesla, I'll have more than $24,000 in deductions, so I will itemize to get a bigger refund come tax time. When you include the $7,500 tax credit, I should be looking at a nice sized refund next year.

Borrowing Is Cheap

Telsa is offering buyers a loan at a 1.74% interest rate. That's pretty darn cheap. I'm sure that's only for the most qualified buyers, but I'm pretty sure I'll fall into that category. Both my and my wife's credit scores are over 800 and we'll be putting down about 30% for the purchase.

My Planned Investments Are Going Away

The planned main investment for my passive income stream has been the real estate backed mortgages I have been investing in with my partner for over 15 years now. I was earning anywhere from 8% to 12% returns on my money. Recently, my partner has run into some difficulties and it looks like the opportunities have been drying up. I'll still likely invest in real estate, but it will have to be with someone else, whose track record is unknown. That means I will be facing more uncertainty and possibly lower returns in the future. That, in turn, means my target savings goal number would have to go up, probably by a significant amount.

We Can Afford It

Look, to be honest, my wife and I make a very good living. She nearly doubled her salary when we moved to Washington and I got a big bump in mine as well. Depending on which source you read and what year's data you use, we may or may not be One-Percenters, but we most likely are at least Three-Percenters. Don't hate us because we're beautiful.

I've already written about how I love budgets. I've got all kinds of savings accounts as line items in our budget - retirement, emergencies, vacations, car and home maintenance, etc. Our emergency fund recently reached a milestone of 5 months worth of mortgage payments. That was my goal, so I'm okay cutting back on that. If I take the roughly $1,500 a month I was putting towards that, plus the $600 per month I was saving towards the Tesla, we can easily cover the car payment and then some. Additionally, I'll still be putting my online income towards the car. It's just this time it will go towards paying off a loan instead of into an investment account. So bottom line: no net change to our budget, even with a huge car loan, and we'll still be saving money in other accounts.

Yeah, mathematically, it's not optimal. Paying off a 1.74% loan early is like earning a 1.74% return on my money and I know I can do better than that with other investments. But apart from a house, this car is the most expensive thing I have ever purchased and I'm not quite comfortable with such a huge loan hanging over my head. I'd like to get it paid off ASAP.

The Intangibles

This month, I turn 50. It's not that big of a deal for me - just another number - but I do realize that there are now likely more days behind me than in front of me. By no means do I feel like this purchase is a mid-life crisis car. I'm not trying to regain my lost youth or anything. However, it is something I would like to enjoy for several years, at least. Based on my savings rate to date, I figure it would be another 5 years minimum until I would be able to save enough to purchase the car using passive income, as was my original plan. That would put me at 55 years old. I don't want to wait that long.

Also, I have multiple sclerosis. I was diagnosed 18 years ago and, apart from a slight loss of vision in my right eye, I have, thankfully, remained largely unaffected. However, it's an unpredictable disease and it is conceivable that sometime in the future I may not be able to drive. It would suck if I never got my Tesla before that happened.

A friend on Facebook reminded me that there are opportunity costs. What will I miss by holding off on purchasing a Tesla now?  Possibly a lot of enjoyment, that's for sure.

So What Now?

I'm sorry I was not able to buy a Tesla with passive income. I know in my heart that it can be done and that it would be a totally cool thing to do. I just don't have time to amass the capital needed. If I had started 5 or 10 years earlier, I am confident I could have done it. My daughter is young enough that I know she can, should she choose to.

Now that I've abandoned my goal of buying a Tesla with passive income, what will happen with this blog? I plan to keep posting, but the focus may shift slightly. I'm pretty sure I'll be posting a lot about the Tesla experience, everything from the buying process to my adventures driving it, so hopefully, you'll continue to visit.

Rather than a percentage counting up towards a savings goal, I'll probably start counting down until the loan is paid off. (Yes, I'll be paying it off early!) This blog was, really, a means to force me to continue to save towards this goal. Publicly posting my savings was a good motivator to keep saving and not abandon my dream. I'm sure public postings will be just as strong a motivator towards paying off the car loan early.

What are your thoughts about my decision?

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Goal Update: End Of July 2018

At the end of each month, I post an update of my goals, including a brief discussion of any notable events that might have occurred during the month. The latest month's figures can always be found under the Featured menu in the menu bar at the top of the blog.

Last updated: End of July, 2018
Current value: $48,409
Change from last Month: +$2,285
Percent of Goal:  44.52%

Note that the funds in this account are invested in stock, so there will be fluctuations in value that are outside my control. I never withdraw money from this account, so any dips are purely due to stock price changes.

Events Of Note Last Month:

My SQL courses on Udemy generated $128.15 of income. My courses on SkillShare earned $92.80. Big gains this month came from stock appreciation. It was a relatively quiet month in terms of online income, but summer months typically see a slowdown in student enrollment. I do have one piece of rather big news to share, but I'm going to hold off until next week for that.

Net Worth Update

Our net worth hit another all-time high, rising almost $30,000 to $876,448. This completely surprised me, as I haven't made any changes in my saving plans. In checking the numbers, it seems the biggest increases came from my emergency fund account and general retirement accounts. These are invested solely in a Vanguard index fund and a Schwab S&P 500 index fund.

I think I've reached some sort of critical mass of investments where I'm going to start seeing huge swings in value each month depending on how the market moves. The change in value caused by market fluctuations dwarfs any increases caused by my monthly contributions. (Hopefully, these will be fluctuations to the upside!) In other words, an inflection point. This is something many FIRE bloggers talk about. A good post about it can be found over at The Green Swan.

In a surprise development, the value of our house actually dropped by about $3,500. I think that's the first time it has dropped since we bought it about 8 months ago!

June 2018

July 2018

If you have any questions or suggestions for topics, please drop me a line in the comments section!

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