7 ms·

While this might look like a good short term solution for new car payments, expecting it to last over the course of a loan is extraordinarily dangerous. With e

by Steeeve 10y ago

While this might look like a good short term solution for new car payments, expecting it to last over the course of a loan is extraordinarily dangerous. With every rental comes mileage and wear and tear on the vehicle, devaluing it. Not to mention the fact that it is being used as a rental requires disclosure upon sale, permanently devaluing the car below comparable vehicles.

toomuchtodo 10y ago
Tesla's hold their value at a higher rate than internal combustion vehicles [1]. They're also orders of magnitude cheaper to operate per mile [2] (electricity as fuel gets you down to ~3-7 cents/mile, not including maintenance which is limited in a powertrain with only a handful of moving parts). > Not to mention the fact that it is being used as a rental requires disclosure upon sale Only in some states is this disclosure required. [1] https://electrek.co/2016/09/13/tesla-model-s-value-retention-leading-segment-losing-only-28-after-50k-miles/ https://electrek.co/2016/09/13/tesla-model-s-value-retention... [2] https://avt.inl.gov/sites/default/files/pdf/fsev/costs.pdf https://avt.inl.gov/sites/default/files/pdf/fsev/costs.pdf
- daeken 10y ago
  This is awful logic. What happens if there's another financial downturn, causing you to not be able to sell your car? What happens if the price of oil goes way down, causing the value of Teslas to drop dramatically? If you can't afford the car without others paying for it, you probably shouldn't sign for the loan. Hell, you shouldn't be able to get one in the first place.
  - xj9 10y ago
    True, but it is a good sign that people are willing to do that to drive a good electric car. Tesla is going to make a killing whenever the Model 3 happens. I'm especially excited to see the other auto manufacturers responses. I'd like to have a variety of electric car options.
  - dotancohen 10y ago
    > What happens if the price of oil goes way down, causing the > value of Teslas to drop dramatically? It is generally considered far more likely for the price of oil to go dramatically up, not down. Saudi Arabia is currently pumping at razor-thin margins. In the words of their oil minister (yes, they have one): "The stone age came to an end not due to lack of stones"
    - bryanrasmussen 10y ago
      "The stone age came to an end not due to lack of stones" what does that even mean?!? It implies that there is not a lack of oil but the oil age will be coming to an end anyway. I think what he's actually trying to say is "we're running out of oil, but I can't say that".
      - runamok 10y ago
        As in better technology than fossil fuels is now available which will cause less oil demand over time. I have seen a lot of articles recently mentioning how several countries have a significant portion of their energy needs met by renewables. IIRC Costa Rica was one...
      - Arnt 10y ago
        The actual quote is roughly "the stone age didn't end for lack of stones, the oil age won't end for lack of oil", and he was saying that the oil age would end when the price of newly developed oil fields rose above the level where consumers would choose to spend their money in other ways. I think he also said that "there'll always be a trickle of oil being produced at $1000/barrel" but maybe that was at another time.
      - forgetsusername 10y ago
        >what does that even mean? It's precisely analogous: the age of oil will be "over" long before we run out of oil. That's how resource economics work.
        tamana 10y ago
  - dismantlethesun 10y ago
    Shouldn't? Forgive me, but it sounds like you're making a moral judgement here. If there's a downturn and a loaned car can't be sold privately, then the car is simply repossessed and auctioned off. These things are all contractual, and in a properly setup system the company shouldn't make any losses over all their loans, regardless of a few pettering out. If you buy a car and rent it, that's suspiciously like simply running a business and many businesses run using loans both short term and long.
- icantdrive55 10y ago
  I don't think the average Tesla owner cares about "cheaper to operate". I have a weird feeling the average Tesla owner has a classic, gas guzzling, vechicle/vechicles in their multi-unit garage. Teslas are a rich man's car. I'm waiting for the day it becomes a poor/middle class vechicle. I know I won't buy a used one until they open up the parts supply, and open up the operating system. I don't see that day coming. I really wanted one a year ago. I figured they must have a few that have been wrecked. I wanted to put one back on the road, with a salvage title. I found it's practically impossible. As to holding their value, yes--they are commanding high prices, even used. They are a rich man's novelty. If a rich man can get deal on a used car, why not pay bite. It's a small demographic sector of society. It's a niche market right now. My hope is in the future all electric vechicle manufactures are required to open up their software, so guys like myself can buy in the secondary market, tweak, and get these used electric cars back on the road, in a cost effective way. (Dissabled the AI if you think if the Tesla, or federal government fears guys, like myself, will tinkering with it. I can live without the AI. I do want a cheap, used, electric vechicle.)
  - GirlsCanCode 10y ago
    No. Our second car is a Chevy Volt. Stop being so prejudiced against those who may be more productive than you are.
  - pjc50 10y ago
    I too am looking for a cheap used electric vehicle, and the Leaf is almost the right answer. But I very much doubt that the software will ever be open, as that's where the value-add and "secret sauce" is. It'll be interesting to see what if any legislative response happens as a result of the VW scandal, but too few people understand the implications. (I have exactly the wrong use pattern for an electric car: my petrol car sits unused for most of the week, but every now and again I drive it several hundred miles.)
    - tehwebguy 10y ago
      This month you can lease a Fiat 500e in CA for a total cost of under $3k after rebates (36mo, 10k mi/yr)
- ghaff 10y ago
  3-7 cents per mile is not "orders of magnitude" cheaper. Total burdened cost per mile (including insurance, maintenance, fuel, etc.) for cars today is about 55 cents per mile these days per the IRS. The fuel only cost for a car that gets 25 mpg (which is not great fuel efficiency) is currently at around 12 cents per mile assuming $3/gal gas. Maintenance may be lower with an electric car but, in the case of Tesla, it's a luxury car brand with expensive sole-source parts and there's the big question about battery costs over time.
- JustSomeNobody 10y ago
  It doesn't matter that they hold their value at a higher rate than ICVs. When you go to sell it, you're comparing it to other Teslas.
- dogma1138 10y ago
  Teslas hold their value because the supply is low and the waiting list is very long. A lot of the cars are resold at prices that are very close to a new listing, this isn't that different than many other high end cars with limited production (although these tend to be at higher price brackets than the model S). As far as the cost per mile goes the fuel costs are not the biggest factor. Insurance cost, cost of financing/ROI loss and the devaluation of the vehicle are considerably more important when calculating the per mile costs of owning a car.
- chatmasta 10y ago
  Slightly off topic, but does know if you can claim the same mileage deductions on your tax return for an electric vehicle as you can for any other?
  - ghaff 10y ago
    I'm not an accountant but I can't think why not. The IRS doesn't know or care if I'm driving a Prius or a Ford Econoline van today so I doubt if they treat EVs differently. And, from the IRS site, see no indication that they do: https://www.irs.gov/credits-deductions/individuals/standard-mileage-rates-glance https://www.irs.gov/credits-deductions/individuals/standard-...
- colechristensen 10y ago
  A 30 mpg car with $3 gas costs $10k per 100k miles to fuel. In other words, the operating costs for a Tesla do not make up for the premium price of the vehicle. You're buying a luxury car, not paying upfront for operational expense. When they release the 3, things will be different.
pc86 10y ago
> Not to mention the fact that it is being used as a rental requires disclosure upon sale Whether or not something like Turo qualifies as "rental" is going to be state-specific and based on the wording of the relevant legislation.

by Steeeve 10y ago

toomuchtodo 10y ago

Tesla's hold their value at a higher rate than internal combustion vehicles [1]. They're also orders of magnitude cheaper to operate per mile [2] (electricity as fuel gets you down to ~3-7 cents/mile, not including maintenance which is limited in a powertrain with only a handful of moving parts). > Not to mention the fact that it is being used as a rental requires disclosure upon sale Only in some states is this disclosure required. [1] https://electrek.co/2016/09/13/tesla-model-s-value-retention-leading-segment-losing-only-28-after-50k-miles/ https://electrek.co/2016/09/13/tesla-model-s-value-retention... [2] https://avt.inl.gov/sites/default/files/pdf/fsev/costs.pdf https://avt.inl.gov/sites/default/files/pdf/fsev/costs.pdf

daeken 10y ago
This is awful logic. What happens if there's another financial downturn, causing you to not be able to sell your car? What happens if the price of oil goes way down, causing the value of Teslas to drop dramatically? If you can't afford the car without others paying for it, you probably shouldn't sign for the loan. Hell, you shouldn't be able to get one in the first place.
- xj9 10y ago
  True, but it is a good sign that people are willing to do that to drive a good electric car. Tesla is going to make a killing whenever the Model 3 happens. I'm especially excited to see the other auto manufacturers responses. I'd like to have a variety of electric car options.
- dotancohen 10y ago
  > What happens if the price of oil goes way down, causing the > value of Teslas to drop dramatically? It is generally considered far more likely for the price of oil to go dramatically up, not down. Saudi Arabia is currently pumping at razor-thin margins. In the words of their oil minister (yes, they have one): "The stone age came to an end not due to lack of stones"
  - bryanrasmussen 10y ago
    "The stone age came to an end not due to lack of stones" what does that even mean?!? It implies that there is not a lack of oil but the oil age will be coming to an end anyway. I think what he's actually trying to say is "we're running out of oil, but I can't say that".
    - runamok 10y ago
      As in better technology than fossil fuels is now available which will cause less oil demand over time. I have seen a lot of articles recently mentioning how several countries have a significant portion of their energy needs met by renewables. IIRC Costa Rica was one...
    - Arnt 10y ago
      The actual quote is roughly "the stone age didn't end for lack of stones, the oil age won't end for lack of oil", and he was saying that the oil age would end when the price of newly developed oil fields rose above the level where consumers would choose to spend their money in other ways. I think he also said that "there'll always be a trickle of oil being produced at $1000/barrel" but maybe that was at another time.
    - forgetsusername 10y ago
      >what does that even mean? It's precisely analogous: the age of oil will be "over" long before we run out of oil. That's how resource economics work.
      - tamana 10y ago
- dismantlethesun 10y ago
  Shouldn't? Forgive me, but it sounds like you're making a moral judgement here. If there's a downturn and a loaned car can't be sold privately, then the car is simply repossessed and auctioned off. These things are all contractual, and in a properly setup system the company shouldn't make any losses over all their loans, regardless of a few pettering out. If you buy a car and rent it, that's suspiciously like simply running a business and many businesses run using loans both short term and long.
icantdrive55 10y ago
I don't think the average Tesla owner cares about "cheaper to operate". I have a weird feeling the average Tesla owner has a classic, gas guzzling, vechicle/vechicles in their multi-unit garage. Teslas are a rich man's car. I'm waiting for the day it becomes a poor/middle class vechicle. I know I won't buy a used one until they open up the parts supply, and open up the operating system. I don't see that day coming. I really wanted one a year ago. I figured they must have a few that have been wrecked. I wanted to put one back on the road, with a salvage title. I found it's practically impossible. As to holding their value, yes--they are commanding high prices, even used. They are a rich man's novelty. If a rich man can get deal on a used car, why not pay bite. It's a small demographic sector of society. It's a niche market right now. My hope is in the future all electric vechicle manufactures are required to open up their software, so guys like myself can buy in the secondary market, tweak, and get these used electric cars back on the road, in a cost effective way. (Dissabled the AI if you think if the Tesla, or federal government fears guys, like myself, will tinkering with it. I can live without the AI. I do want a cheap, used, electric vechicle.)
- GirlsCanCode 10y ago
  No. Our second car is a Chevy Volt. Stop being so prejudiced against those who may be more productive than you are.
- pjc50 10y ago
  I too am looking for a cheap used electric vehicle, and the Leaf is almost the right answer. But I very much doubt that the software will ever be open, as that's where the value-add and "secret sauce" is. It'll be interesting to see what if any legislative response happens as a result of the VW scandal, but too few people understand the implications. (I have exactly the wrong use pattern for an electric car: my petrol car sits unused for most of the week, but every now and again I drive it several hundred miles.)
  - tehwebguy 10y ago
    This month you can lease a Fiat 500e in CA for a total cost of under $3k after rebates (36mo, 10k mi/yr)
ghaff 10y ago
3-7 cents per mile is not "orders of magnitude" cheaper. Total burdened cost per mile (including insurance, maintenance, fuel, etc.) for cars today is about 55 cents per mile these days per the IRS. The fuel only cost for a car that gets 25 mpg (which is not great fuel efficiency) is currently at around 12 cents per mile assuming $3/gal gas. Maintenance may be lower with an electric car but, in the case of Tesla, it's a luxury car brand with expensive sole-source parts and there's the big question about battery costs over time.
JustSomeNobody 10y ago
It doesn't matter that they hold their value at a higher rate than ICVs. When you go to sell it, you're comparing it to other Teslas.
dogma1138 10y ago
Teslas hold their value because the supply is low and the waiting list is very long. A lot of the cars are resold at prices that are very close to a new listing, this isn't that different than many other high end cars with limited production (although these tend to be at higher price brackets than the model S). As far as the cost per mile goes the fuel costs are not the biggest factor. Insurance cost, cost of financing/ROI loss and the devaluation of the vehicle are considerably more important when calculating the per mile costs of owning a car.
chatmasta 10y ago
Slightly off topic, but does know if you can claim the same mileage deductions on your tax return for an electric vehicle as you can for any other?
- ghaff 10y ago
  I'm not an accountant but I can't think why not. The IRS doesn't know or care if I'm driving a Prius or a Ford Econoline van today so I doubt if they treat EVs differently. And, from the IRS site, see no indication that they do: https://www.irs.gov/credits-deductions/individuals/standard-mileage-rates-glance https://www.irs.gov/credits-deductions/individuals/standard-...
colechristensen 10y ago
A 30 mpg car with $3 gas costs $10k per 100k miles to fuel. In other words, the operating costs for a Tesla do not make up for the premium price of the vehicle. You're buying a luxury car, not paying upfront for operational expense. When they release the 3, things will be different.

pc86 10y ago

> Not to mention the fact that it is being used as a rental requires disclosure upon sale Whether or not something like Turo qualifies as "rental" is going to be state-specific and based on the wording of the relevant legislation.