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,"
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
...also, there's a $1,200 delivery fee. Is this the new "restock fee"? it is conveniently left out of the marketing materials.
It says move all sales to online, but it only says closing many stores.
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.
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
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 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.
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.
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).
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.
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.
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.
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.
Consumer price discrimination isn't something that should be occurring.
This doesn't make sense to me.
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.
Thinking about it, my last three laptops were bought with a discount, just by not being afraid to ask for some.
Next time try buying a Honda or a Subaru. There's almost no wiggle-room in price.
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.
Honda in the past. They may not move as much, but they definitely move.
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)
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.
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?"
edit: This was an honest question, and instead of downvoting, perhaps you could enlighten me?
>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.
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.
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.
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 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.
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 :)
didn't realise being able to get a loan is a human right now.
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)
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.
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.
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.
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.
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.
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
What do you mean year, Teslas don’t have model years because you’re always getting the most improved car
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?
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'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.
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?
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 $50k is a lot to pay for peace of mind, but when you're like me and own a car until it dies, I like to know how it's been treated, and being the only owner is the only way to know that.
Where do they say that? On the site is a big "Test drive" button which goes to https://www.tesla.com/drive which, I asume, will let me test drive a Tesla. Without Buying.
When I requested a test drive in a state with no dealerships I was directed to a store out of state.
These stores will no longer exist.
The messaging is also very clear, sometimes it’s ok to read between the lines...
We’re closing stores where you test drive + we’re pushing returns hard in the marketing = we want to move past test drives
This is a new annocument, other parts of the site don’t even have the right mileage and days for returns last I checked, give them some time before the site is consistent with the new reality
Does this include their dealerships? There are plenty of dealerships that offer test drives.
EDIT: I assumed that the "stores" were the places in malls etc. that don't have (say) a whole bunch of machinery for the service center etc.
Their “dealerships” don’t sell you a car, you just get handed off to the website
Loans, mortgages, etc. are based on your whole credit history, and if you take out a loan it will be marked on your history and when you cancel it within the 14-day cooling off period the credit history will be updated to say it's closed.
Unless you're doing this multiple times in six months or so, it won't affect anything (maybe your credit score might go down a bit when you take out the loan but it goes back up after a few months when it's updated again normally - but a this credit score doesn't mean anything it doesn't matter).
Say, for Spain the price of the long range model is 59K€, if you remove taxes and after currency exchange the price comes to 47K$.
Add oversea shipping and the cost is not that much higher than the US.
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.
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.
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.
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.
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.
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?
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  and the median household income is $59k ; 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 . 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.
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.
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.
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 , 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).
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...
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.
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.
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.
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!
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:
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.
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...
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?
Also does Tesla still have Tesla branded "service shop" to do car delivery/return/refund/service?
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.
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.
Who needs repairs? Just buy a new one; it's cheap and easy.