Getting a car loan was one of the dumbest financial things I’ve ever done. Sure, I got a fancy car I got to ooh and ahh over for a year or so, but now the shine has worn off and the monthly repayments keep happening. I can’t go back in time and talk myself out of splurging on a car that while I can afford, isn’t a smart financial choice, I can at least lay out the numbers in the hope I don’t do it again.
After 3 years the the Model 3 has set me back $77,069.90 or $37,069.90 after depreciation:
- Purchase price/finance: $69,139.03
- Registration: $1,309.60
- Insurance: $4,926.79
- Servicing: $232
- Electricity (13.2kWh/100km @ 8c/kWh): $612.48
- Tyres: $900
- Car sale price: $42,000
If I kept my 2017 Prius for the last 3 years, the total cost of owning it and driving it for 60,000km would have been $34,417.34, or $11,417.34 after car depreciation:
- Purchase price: $23,000
- Registration: $1,509.60
- Insurance: $2,672.74
- Servicing: $2,215
- Fuel (4L/100km @ $1.80/L): $4,320
- Tyres: $700
- Car sale price: $23,000
First big problem was spending $61,475 on a car in the first place. That’s a good $35,000 than I needed to in order to get a reliable automobile. Why the hell did I think spending that much on a car was a good idea?! I love driving an electric car (one pedal driving rules, leaving the house with a full tank each day is great), but is it is $35,000 better? Not really.
Second problem was the finance itself. While the interest rate I got back in 2021 was low at 2.99%, that’s still 2.99% every year more that goes into Macquarie’s pocket instead of mine. In the 3 years since getting the car, I’ve paid Macquarie $29,163.96 and I still owe them $39,975.07. If I pay it off now I’d have spent a total of $69,139.03 - $7,664 more than if I paid cash. It would be much worse if I got a loan now current rates of 7%-9%.
The other killer with this car is the insurance and depreciation. In 3 years I’ve paid $4,926.79 to get comprehensive insurance for this thing with GIO & RACV with $2,000 excess. That’s twice as much as the Prius.
Depreciation on the Model 3 has been severe. While expected with a new car, the Tesla has lost a whopping 40% of its value as there’s 2021 models with ~60,000km on Carsales for $44,000. Whereas buying a used Prius for $23,000 back in 2021 pretty much sells for the exact same price then as it does now.
Even if I extrapolate these sums out for 4 more years until 2028 when the car hits 7 years old (end of the Tesla’s finance period and I own it outright) and gets to almost 150,000km, I’d still have paid almost $25,000 more for the Tesla over the Prius at the end of those 7 years.
The moral of the story is even a person like me, that spreadsheets everything to death - most of the posts here are deep dives into the cost of things! - still couldn’t resist a new shiny car instead of the conventional wisdom of a 3-5 year old used car that’s economical to run. Maybe this post will stop me doing it again.