Published on August 28th, 2014 | by Christopher DeMorro
Five Steps To Save Money For The Tesla Model III
Say you’re like me, an aspiring member of Generation Y who sees Tesla as much more than a car company. It’s a beacon of hope for a greener, better future, and the return of the can-do American spirit. Oh, electric cars aren’t viable? Tell that to Elon Musk. The man has helped revolutionize the way the auto industry sees EVs, and I want to do my part by throwing my hard-earned money at him.
As I’ve previously pointed out though, by the time the Tesla Model III is built, the $7,500 federal tax rebate is likely to have expired. That means the Model III is going to cost at least $35,000 out of my own pocket, almost exactly twice what I paid for my fuel-sipping 2012 Chevy Sonic. It’ll likely be a stretch (being a writer isn’t exactly a lucrative business these days), but I figure if I’m smart with my money, pay down some debts, and keep things realistic, I could be one of the first to own Tesla’s mass market electric car.
How cool would that be?
I figured I would share with you all my plan, and maybe inspire somebody to do the same thing. So here’s my plan, as it may pertain to you.
5) Keep Driving What You’re Driving
Right now my wife and I (still not used to writing that!) drive the aforementioned Chevy Sonic, and have less than three years left of the five-year loan. That means I should be able to pay off the Sonic just in time for the launch of the Model III, freeing up about $270 a month.
As you can imagine, splitting a car with your significant other can be challenging, but since I work out of the home, I only need the car every now and then to run errands. We’ve been doing this for two years now, and don’t see a problem with keeping it up for another three years.
4) Pay Off Some Of That Debt
Like so many members of my generation, I’m saddled with thousands of dollars of college debt; I racked up just over $40,000 of student debt over five years (at a public university, mind you), though if I’m lucky and smart enough, it’s not inconcievable that I could pay off my loans a couple of years early. Currently, I’m halfway through my ten year repayment term, and if I can pay off my loans early, I’ll free up another $350 a month. Yes, you read that right; my student loans cost me $80 more per month than my new car payment, but that’s a story for another post.
Between those two monthly debt burdens, I can free up about $600 a month, which could put me right where I need to be to pay for a Tesla Model III. But obviously this isn’t the same case for everyone else out there, and there are other ways to save up the money needed to buy a Tesla, including…
3) Buy A Bike And Use Public Transit
This pertains more specifically to city dwellers, though suburbanites can benefit from the practice of biking and public transit rather than driving as well. Most cars get far worse gas mileage in stop-and-go city traffic than they do in smooth highway travelling, and even an efficient hybrid still costs thousands of dollars a year to own and operate once you factor in things like wear-and-tear and taxes.
In fact, by going car-free, the average American can save as much as $10,000 a year by simply not owning a car. This obviously isn’t practical for everyone, but with the Model III about 3.5 years away, you could save close to the $35,000 or so the affordable Tesla is estimated to cost.
2)Buy Tesla Stock
This one is for the believers in Elon’s all-electric philosophy, as well as those who don’t mind taking a big risk. Tesla is one of the hottest stocks on Wall Street, sitting at or above $250 per share for most of the year. Yet recent estimates have suggested that the share price could easily rise to $385 a share or more, especially once the Tesla Gigafactory gets going right along the time Model III production begins.
$250 a share is a lot, but its not inconceivable that the share price could double in the next few years. Analysts are constantly comparing Tesla to Apple and Google, both of which have seen their shares soar in recent years.
Wait for a down day, and then snap up as many Tesla shares as you can; if you’re lucky, you could earn enough for a down payment by the time Model III orders open up.
1) Sell Your Extra Stuff
Look inside just about any American home, and you’re likely to find a treasure trove of unopened and barely-used appliances and devices. I’m no different, and over the next few years I intend on seriously downsizing the amount of extra stuff I have in my life. While it certainly won’t make me rich, it will put a few extra bucks in my pocket, and selling excess goods on eBay and Craigslist is likely to keep me busy, so I don’t end up spending money on even more unncessary crap.
Most of these things are low-value items, but surely some of you have campers, jet-skis, or other valuable “toys” that see little or no use these days. So…sell ’em! Put that money aside, or invest it in Tesla stock, and just pretend it isn’t there for awhile.
If I sell a few items each week, have a few more tag sales, and just keep my wallet in my pocket, saving up enough for the Tesla Model III doesn’t seem like nearly as much of a stretch as it once did.
Hopefully in a few years, I’ll be able to look back on this post as the beginning of my electric car journey.