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Comment by BenoitEssiambre | Hacker News Reader

"To achieve these prices while remaining financially sustainable, Tesla is shifting sales worldwide to online only. You can now buy a Tesla in North America via your phone in about 1 minute, and that capability will soon be extended worldwide. We are also making it much easier to try out and return a Tesla, so that a test drive prior to purchase isn’t needed. You can now return a car within 7 days or 1,000 miles for a full refund. Quite literally, you could buy a Tesla, drive several hundred miles for a weekend road trip with friends and then return it for free. With the highest consumer satisfaction score of any car on the road, we are confident you will want to keep your Model 3.

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,"

Bold

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“Courageous”

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

This is very good advice to keep in mind, but it's not Tesla's fault if the credit reporting agencies are terrible.

It's not Tesla's "fault", but it's cutting corners in a bizarre way for the auto sales industry. I don't want to risk $35K+taxes/fees and get an Aldi shopping experience.

I think they both deserve credit, in reality returning a 30 thousand dollar object is never going to be smooth.

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)

Once you drive it, you are not going to want to return it, so all this is moot for most people.

I tested one years ago (not the model 3) and hated it. There are plenty of people who don't want to own a Tesla even when cost isn't a factor.

Why would those people buy one though? The parent's comment was that people who purchase the car are unlikely to want to return it after driving it.

They were not saying, everyone who drives one will want to buy one.

Because now you can't drive one without buying it first.

That's not true, though. You can still go to a Tesla dealer and test drive one. You can't necessarily test drive the exact model that you would buy but that's exactly the edge case that the new return policy is meant to address.

Did you miss the part where they said they're closing their stores?

Where did they say they're closing all their stores? All they said was that they were moving sales to online only. They'll still have service centers and other physical locations unless there's a source somewhere that says they're closing all physical locations...

https://www.theverge.com/2019/2/28/18245296/tesla-stores-clo...

Looks like I was right.

You can if your friend has one they will let you drive.

Love comments like this. Everyone has a friend with a Tesla.

You can also steal one and drive it around for a bit if you don't mind.

This kind of comment isn't helping. There is also Turo, a service where you can rent various cars including different Teslas. Pricier than normal rentals but not a bad investment if it helps someone make the right choice for them.

I drove a Model S. None of my cars is a Model S.

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.

Though a model 3 does not compete with an A4, it competes with a Honda Civic or similar...

Not really, a Civic starts at 20K in the USA.

For an absolute base model. Most of the models start in the mid 20s, and you can find a $33,000 Civic (as in one that's available to buy, not "I clicked every single option in the Build menu") easily enough.

No the Tesla 3 does not compete with cars that can be had for 20k. The closest things to civics are the leaf and bolt.

It was a Model S we were in

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?

I have a Model S and I used to own several BMWs. Honestly, what luxury does an entry level BMW or Audi even provide ? BMW 3 series is a joke with it 4 cylinder engine, soft handling, and a tiny screen where you have to visit the dealer to get a map update. Teslas are way more luxurious in the sense that they provide a 21st century car.

To the average base model buyer a 4 cyl means nothing when it’s paired with a silky smooth transmission, soft handling is a plus, the “tiny” (very crisp and responsive) screen is modern, and I’ll take wireless CarPlay over Tesla's Bluetooth integration any day.

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...

Found the BMW 3 series buyer who bought on downpayment. No shame in buyer's regrets. Keep on trucking and downpaying.

First off I don’t know what you mean when you keep saying “bought on down payment”...

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?

Depends on where you are I guess. In Sweden the Model 3 is significantly more expensive than an A4. And while they haven't announced the price of the new cheap Model 3 yet I will be very surprised if it comes in under twice the price of a Civic

You have a valid point about inexperienced owners but the car (more premium Model 3s) has been favorably compared with a BMW M3 in a similar price range, by people who know premium cars well, and they have called it a toss-up just on driving feel alone. Which has a totally different character in the two cars but both fantastic. That’s without even taking into account cost of ownership, auto pilot features, safety, beast mode AWD, or energy sustainability.

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.

More favorably compared by who? I’ve sat in model 3,s, and x, and when compared with similar priced BMW or Mercs, there is a massive difference in interior luxury and comfort. Seriously, go and experience being inside a 100k 7 series bmw to a 100k model s. It’s like night and day in comparison. The Tesla’s always feel cheap in comparison. The handling, road noise, luxury features, seat comfort, etc are all inferior in Tesla cars.

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.

I’ve had the opposite experience.

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.

That was a rough time to be in a 7 series. Bunch of new tech with horrible teething trouble.

Yea, that's a good point. It was... well, had a lot of features. Some of them worked. Some of the time. And plenty of sensors to let you know when they weren't. Except when the sensors were the thing that was bad.

You are comparing cars 15(!) years apart. I'm sure that pretty much every car today is a considerably nicer experience than a model T ford, but that's hardly a fair comparison :D

What year of Model S did you test drive?

This is a couple of years back so I don’t recall anymore but...

What do you mean year, Teslas don’t have model years because you’re always getting the most improved car

-Tesla “salesperson”

Yeah they don't have years because they update them all the time, incrementally. They still are each made in a certain year. If you drove it a couple years back, things have moved forward since your conclusions were locked in your mind.

>I remember the “salesperson” talking about how quiet it was as wind noise whistled through the cabin like we were in a Corolla.

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.

Most luxury cars have almost zero engine noise inside the cabin. Also at speeds over 20mph, wind noise is louder than engine noise outside the vehicle, so electric cars aren’t really quieter than ICE except in parking lots.

That’s not always the case. It depends on the luxury car. I visited a Masarati dealer, and their selling point against a Model S was that the engine was loud. (“You want a car that that sounds like a car. You want to hear that purr and and feel that rumble. You can’t get that with a Tesla.”)

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.

Those are sports cars. They don't compete with a Model 3 or Model S. They compete with the Tesla Roadster. Have you ever been in one? You can't hear each other at all it's so loud.

Good thing there's an "inactive exhaust" function.

Maseratis have a signature sound, that's one of their core selling points. If you remove that, you are left with a mediocre quality car with insane depreciation.

And you know, for a car/technology company I find it odd they don't do any sort of active noise cancellation. Especially when they pin themselves on making luxury electric cars.

Agreed. I had a 2016 A4. Went to Austin for a conference, was in a 2016 Model S. Road noise was better in the Audi.

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.

I have a Q7, $20k cheaper than the X and far nicer; Tesla can’t even get CarPlay. If I am paying $100k+ for a car and it has less connectivity to my devices than a KIA, that’s a problem. During the time I own the Q7, the gasoline expense isn’t going to exceed the markup for the X. I like Musk’s vision, but Teslas are the Honda Civic of the Silicon Valley crowd.

But you’re part of the problem, not part of the solution so... but yeah the Q7 is nice. BTW no problems whatsoever with device connectivity with the Model 3. And the X is a moving target; it’s improved all the time so past experience does not indicate the current situation.

Buying overpriced luxury cars ICE or EV is not making anyone part of any solution.

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

That's the noise of outside + wind. The materials used for insulating external noise add non negligible weight to the car. You can make it quieter, but at the cost of reducing MPG (or MPAh?) :(

I doubt sound dampening has to be that much of an expense or added weight. It’s just not batteries, which is Tesla’s core tech concern.

Spot on.

I agree with the luxury statement.

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.

One of the reasons I will likely never own a Tesla is because I have driven all of them...including the limited edition Roadster (courtesy of an old boss that liked collecting fast, shiny things). Other than the impressive acceleration, the handling and ride other ride tangibles of every Tesla model is below-average for both its price point and its class.

Couldn't agree more. Handling is so much more valuable to me than fancy stitching and 0-60 times in a straight line.

Handling below average on a Model 3? Really?

>The finance has already written you a check, they’ve already done all this leg work.

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.

That’s kind of rude to people who didn’t earn it.

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.

They probably just reset the miles to zero. No one would know.

That is illegal.

https://www.dmv.org/vehicle-history/odometer-fraud.php

Chrysler got burned on this way back. “The pride is back and so is the odometer.”

Does it matter to the victim who is at fault?

...also, there's a $1,200 delivery fee. Is this the new "restock fee"? it is conveniently left out of the marketing materials.

Cars have always had delivery fees. Delivering something that weighs several tons is not cheap.

Yes, but you can normally test drive a car without paying the delivery fee.

You can test drive a Tesla without paying the delivery fee too.

How do you do this if they close “many” of their showrooms, as Musk described it?

edit: This was an honest question, and instead of downvoting, perhaps you could enlighten me?

> We are also making it much easier to try out and return a Tesla, so that a test drive prior to purchase isn’t needed.

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?"

That's not the full story though. When delivering to dealerships they are often delivered in a more efficient manner, so the per unit cost of delivery is lower.

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.

With a $3,750 federal tax credit and possible state credits to offset the delivery cost, the headline price of $35,000 is misleadingly high.

And if the car could just be delivered to a dealership, you'd be getting the tax credits, and not paying the cost of to-your-house delivery.

They don't charge you extra if you live farther away, though. The delivery fee is charged to you whether they deliver it to the dealership or to your house.

I've never seen a dealership delivery fee over $500, and Tesla is going to charge $1200 to deliver this car to my house.

24,450 is the posted actual cost after normal rebates and credits

A large part of that is "savings on fuel"

Yeah that’s a Tesla trick to make their cars look cheaper than they are. It’s deceptive. When I buy a gasoline power car, I don’t figure the cost of gas into the purchase price of the car.

It also wrongly assume that you can charge it at home. I only have access to street parking in London. I would need to register to various charging provider in order to be able to keep a car reasonably topped up without having to go to the supercharger at the beginning of a journey.

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.

It's cheaper to Tesla if they "deliver" it at their factory. I took delivery of my Tesla at the Fremont factory. was still forced to pay full delivery fee. insane.

That’s a law.

"This is 2019," he said. "People want to buy things online."

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.

Source: https://www.businessinsider.com/tesla-is-eliminating-most-of...

I'm glad he has picked this one to break then. Requiring a middleman to sell cars is even stupider than taxi medallions.

Middlemen help you buy a car from competing dealers. Buying only from Tesla means you can’t negotiate for a better price.

The US is the only country that follows this scheme, and it's only certain manufacturers that let their franchises get away with that.

Next time try buying a Honda or a Subaru. There's almost no wiggle-room in price.

Haggled significantly on a Subaru just last year.

Honda in the past. They may not move as much, but they definitely move.

I own a Toyota and I was definitely able to negotiate a lower price.

I kicked 5k off of the deal price a subaru forrester 2 years ago, by saying no 3 times. No trade either.

Here in Brazil it's also haggling hell to buy a car.

Sorry, that's not true at all. There's often A LOT of wiggle room.

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.

The problem with your insider tip is that everyone, dealer included knows about it. I hate when people say be prepared to walk when most of us don’t have a million dealerships to visit. Sure if you’re in Southern California you can visit 6 Honda dealers and waste 1-2 days. You’ll get the quoted price and then they’ll try to stick you the next time you come in. Consumer is at a huge disadvantage here because dealers know they have limited time. It’s no secret dealers make you wait forever so you grow impatient and agree to their bullshit. Some of us don’t want to deal with that kind of crap.

This person has a point. We should put a thin layer of collective consumer organization (regional, statewide, national, global, or some other user-defined organization) that's programmatically (smart-contract-based) guaranteed to hunt for better bulk deals with the supplier within certain convenience parameters (e.g. "I want to buy mine within the month"). If these were open-source programs (ideally run in trustless blockchain envs) then the competition to create a popular one would undercut their middleman profits to optimally-tiny percentages due to arbitrage.

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)

Well, in this case, there is no middleman. And, with Tesla, there never has been AFAIK. So not sure if applicable. But assuming a general statement, I have to bite...why smart contract?

Dealers are stupid and make no sense.

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).

My experience with test drives is that you immediately know if you like the car or not. Reviews have never really made sense to me, most reviewers seem to talk about stuff I just don't care about.

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...

Interesting. My experience is that if I want some idea of how I'll feel about the car in a year, a test drive of less than a week gives me almost no data.

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.

An important part of choosing a car is ergonomics. I like to rest my arms on the door and middle console armrests while driving, but my brand new (expensive) SUV, bought sight unseen, comes just short of being able to do this, which bothers me a little every day. Obviously these things differ from person to person, so yeah, next time I'll probably go for a test drive first.

Find a reviewer that has a similar body size to you. There's literally hundreds of car reviewers on youtube, there will be plenty who will have the same ergonomic structure to you.

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.

I feel the same. I’ve had stronger urges to buy a car I rented than one I test drive for 10 minutes. You just never get the same level of familiarity, the little quirks and knowing how your body feels after an extended multi-day drive if you simply test drive at dealer. I like to have my cars for a week at the minimum before I can confidently form a strong opinion in regards to purchase.

I wouldn't mind car dealers if they actually offered a useful independent service. When I go to buy a camera the person in the store can explain the pros and cons of Canon vs Nikon vs Fuji vs Sony and let me try them all next to each other. Why can't I go to a car dealer and have them explain the pros and cons of Honda vs Toyota vs Nissan and let me compare them right there in the store.

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.

Rule of thumb for life: Never ever get advice about what to buy from the person selling it, unless that person has literally no incentive whatsoever, or if the purchase is extremely low risk (e.g. low item cost or hassle-free returns policy).

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.

I always thought it was weird that we negotiate a price with new car purchases. I do negotiate hard on my cars (and on behalf of family) and I hate the process. It's stupid. I'd much rather the manufacturer nominate a fixed price and not allow any negotiation at all. Then the manufacturer would be forced to pick a price that competes with the market.

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.

There are no haggle dealers and have been no haggle brands from time to time. One problem is that the people who like and think of themselves as driving a hard bargain don’t like the inability to do so

Those that truly do know how to work the system should be able to get a better deal. Subsidized of course by those who are not good at it. Or who don't care.

Or a store should be selling goods at the same price to all consumers, instead of giving some consumers preferential pricing over others if they know the right hand-shake.

Consumer price discrimination isn't something that should be occurring.

Where I come from, we call those people "assholes".

For those people who like to drive a hard bargain, they can do what everyone does with every other expensive commodity—wait for the time when sales numbers are dropping off and take advantage of sharper prices.

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.

RIP Saturn

Last time I bought a car, the "no haggle" dealers like DGDG were about 10% more expensive.

When you buy a laptop from HP, do you negotiate with the web form? If you went into an HP store (assuming there was one), would you negotiate with them there?

This doesn't make sense to me.

You can order laptops via phone or email, you know.

Thinking about it, my last three laptops were bought with a discount, just by not being afraid to ask for some.

When we make large purchases from HP, Dell, Microsoft, you're damn right we negotiate the rates and get discounts. If you're making a purchase that is a large percentage of your budget, you'd be stupid to not try.

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.

Don't you think it's silly that paying sticker price is considered paying extra?

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.

What you call “law” is mandate established by car dealers by buying off politicians. This is one of the most disgusting monopolistic snake oil business that had little chance of surviving otherwise for so long. Musk is doing great favor to all of us by showing them middle finger and letting them know that they can’t hide behind their purchased politicians.

Honest question, where do Tesla owners take their cars for repairs if there are no dealerships? I always thought the dealership laws were pretty consumer friendly in this way. I can find dealerships and independent shops to have my cars repaired pretty much anywhere in the country.

Tesla doesn't let anybody else fix their cars. So you have to take it to their... what, repair center?

Laws that make independent shops possible are great.

Dealerships may or may not have your best pricing interests in mind, so forcing them to exist is not particularly useful.

I picked my car up from one of the Tesla showrooms. I did not pay the delivery fee. I was never even given the option to have it delivered.

And now they're getting rid of showrooms, so that isn't really relevant anymore.

They said they would close some. I would expect they will just deliver to their shops then, which are growing rapidly, so likely still relevant.

They're closing all stores. "Shifting to online only worldwide"

From Elon’s memo: “we will be winding down many of our stores”.

It says move all sales to online, but it only says closing many stores.

You did actually. It was built into the price of the car itself.

I wonder what an efficient car delivery service could cost?

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

What about profit for the delivery company, a receptionist, insurance, marketing, web developer, logistics software, accountants ... the delivery company need to operate profitably as well.

Strangely, my YouTube suggestions keep offering me videos that explain why this is a bad idea:

https://www.youtube.com/watch?v=-inPRBhonfY https://www.youtube.com/watch?v=MXoOEuH9Jag

> 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).

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.

Definitely seems low to me too. It could be almost $500 in fuel alone to drive 500 miles in a truck.

Because everybody in a country pays the same price. Just because some people live near by the factory or want to make an event out of it doesn't mean they get it cheaper. I believe all car companies do this (I had to pay a delivery fee when I got my BMW at the factory). Not sure whether it is a law though.

I don't think that's actually true. My Volvo was around ~$5k cheaper (plus free plane tickets to Sweden) when I picked it up from the factory. This also takes into account the complimentary shipment to my local dealer in the United States. I've been told that BMW has a similar European Delivery program.

Hi fellow Volvo OSDer. It truly is a wonderful program.

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.

If your dealer is adding delivery or prep fees to your Volvo OSD, talk to Corporate. That's a big no-no in the program. Doesn't stop some dealers from doing it however. If I recall correctly, the only fees they can add are processing fees if they handle the DMV paperwork on your behalf.

In my case I did pay a delivery fee picking it up from the factory. They did make a small event out of it of course, it being presented on a turn-table show like floor etc, but other than that it was mostly waiting and then fueling up as the first thing because the car is basically running on fumes when you get it. I did not have to pay my dealer anything of course. That would have cost something extra possibly.

Btw. Free plane ticket ? Wow. I had to drive there by train which I payed for and nobody offered me anything. Getting there was entirely my problem.

It has wheels.

Someone has to drive it though. Once they can drive themselves, yeah, I'm sure delivery will be cheaper.

I have never once paid a delivery fee for a new car. I do not know anyone who has bought a non-luxury car that has paid a delivery fee for a car.

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.

Oh yes you have. Every dealer everywhere charges a "Destination Fee." That is what you pay for delivery to the dealer's. That line item for the price of the car is non-negotiable. There is wiggle room on MSRP etc.

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.

This is typically on the order of $300-500 though

...and yet I managed to knock the price down by 5K and 2K off MSRP when I bought my last 2 vehicles. So this destination charge is often a moot point with regular car brands/dealers.

> Oh yes you have. Every dealer everywhere ...

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.

Why would anyone want to negotiate individual line items rather than just negotiating on the final bottom-line price? Why would I care if I'm reducing the destination fee or the actual price? What difference does it make to me?

The line items usually come up when negotiating the final price. It’s hard to avoid discussing the details unless one party has a string negotiating position and highly values minimal communication.

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.

> then you can start picking their line items apart to go lower

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.

Based on your last sentence, you might be ending negotiations too early. An early “bottom-line” ultimatum leaves money on the table because the details haven’t been fully considered by the other party, so (in auto sales) the seller hedges with a higher price.

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.

I don’t get it - asking ‘can you reduce line item n by x’ is exactly the same thing as ‘can you reduce the bottom line by x’, except the former asks them to do something they may not be able to do (that’s how this conversation started - the delivery fee) and the latter lets them achieve what you want any way they’re able to.

So why would you ever use the former approach? It’s strictly worse.

This is the human factor at play.

> I don’t get it - asking ‘can you reduce line item n by x’ is exactly the same thing as ‘can you reduce the bottom line by x’

"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..."

Just look at the total-cost-of-ownership. As long as I can afford the down payment and I can afford the monthly payment then I just want to reduce the total-cost-of-ownership for the car I want. In other words I want the dealer to optimise for that variable and as long as they meet my constraint for affording the down and monthly payments then I don't care how those vary as long as the optimisation goal is met.

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!

> In other words I want the dealer to optimise for that variable and as long as they meet my constraint for affording the down and monthly payments then I don't care how those vary as long as the optimisation goal is met.

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.

I don’t understand how you think it’s any different - you ask ‘can you reduce the price for the paint finish’ and I ask ‘can you reduce the bottom line price’. In both cases it’s the same reduction in their profit margin. Why do a dance around which line item it supposedly comes off?

Because they will say no to your question and yes to jancsika’s question. We’ve given you some reasons why rhetorical/persuasive skill and willingness to work to find an angle on a negotiation improves the results.

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.

Just to be clear-- in reality the game is rigged by the dealership and salesperson such that it is extremely likely one will pay too much for the vehicle. Or at least the sale will not be optimized for TCO. And that is regardless of whether one plays the salesperson's game or tries to "beat the game."

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?

That makes sense — thank you.

Life’s a stage and all the world is a play

Oh no, I definitely have never paid a delivery fee. I am one of those weirdos that reads the entire sales contact before signing.

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.

Any car has a delivery fee, around $500 in my state.

I’m curious to know where you are. I think it’s twice that where I am (California). Is this just another way for dealers in different states charge different prices, while maintaining some semblance of uniformity?

Perhaps instead of downvoting this honest question, you could let me know what you disagree with here?

Mea culpa.

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 :)

It's cheap in NorCal - my friend had a Model 3 delivered by a dude. Literally. A dude drove his car to his house and then called Uber.

P.S. by "dude" I meant that the man just drove the car to the owner's place from their Fremont factory (30 min).

That.... doesn’t sound shady. At all.

What would it have been if not a dude?

A dudette?

The car driving itself?

"Welcome to Johnny Cab"

Hell of a day, isn't it?

Dude implies something about how he was dressed and acted. If someone in a 3 piece suit delivers your car, that's less insulting.

How else would you deliver a car? Not sure what point you're trying to make?

Truck?

Put the car on a truck and then drive the truck? Might as well just drive the car?

The beautiful thing about trucks is...you can put _multiple_ cars on the truck.

Handy if you're buying multiple cars.

Just think of it as Uber Pool/Lyft Line wherein one car goes to your house, and another goes to someone else's house.

Eh... Delivering multiple cars over a short distance by loading them up on a flatbed or car hauler just doesn't make any sense. Tow trucks will always be more expensive than calling a taxi. Especially given that this is basically a textbook example of the travelling salesman problem. And I don't mean computing a route is hard, I just mean that in practice while there's overlap between destinations for a sparse set of e.g. 10 destinations spread evenly over some area around a hub it's not like being able to go between destinations directly makes it 10x shorter. Trucks are expensive to maintain and operate, much more so than a regular passenger car. Trucks also can't deliver as easily or to as many places as a person driving it. If someone lives down a dead end road that's extremely inconvenient for the truck whereas it's a non-issue for someone driving.

Car haulers don't make sense for sparse local deliveries.

How many cars do you buy at the same time?!

And increase risk of road damage/wear in transit, which likely wouldn't be caught on initial inspection during handover.

You would download it, obviously

There's something intangible about being the first to drive a new car. Doesn't make any logical sense, but there is.

Surely all cars have been pre-driven, even if in the factory.

You will never be the first driver of a car, even if it comes straight from the factory to your front door. Every car gets test driven after assembly before it gets sent out, though they might not have the odometer turned on.

Auto Pilot

I know someone who had a huge problem with Tesla over this. The issue was the Tesla contract wanted my friend to take ownership of the car, and thus responsibility as soon as it left Tesla. For obvious reasons, that's not something anyone should do. They had quite a bit of back and forth until Tesla changed the wording. I'm not sure if they did it universally though.

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.

Yes, and that's completely reasonable, but then it's misleading for their promotional copy to say:

>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.

You are not out the delivery fee. Where did you get that?

See edit -- was just going off the implication from the immediate discussion and couldn't easily verify the relevant T/C. I would have deleted the comment but it was too late.

I buy stuff online and at retail stores and am never charged a delivery fee. Why do cars get to inflate the price by charging extra for “deliver”?

You've never been charged shipping? That's basically the delivery fee for smaller items.

they roll it into the sticker price, as one of 2000 items in a truck is a pretty low shipping fee. one of 5 cars in a trailer, on the other hand, the per-item cost is very high.

You are paying for it one way or another.

“victim”? I don’t think that is appropriate here.

The credit system absolutely does force itself upon us. Your alternatives to the credit system are cash and I’m guessing layaway. Not to mention the things that require good credit but aren’t exactly a loan.

>victim

didn't realise being able to get a loan is a human right now.

It's not a human right, but being denied or briefly inconvenienced of financial services certainly for most people considered a downgrade in their capability to operate in a modern society. One of the big things that separate haves from have nots is the availability of financial services.

Yes it does, at least on HN.

Given they don't allow test drives, they should try to come up with a smart solution - perhaps partnering with a financial institution?

Don't forget that Tesla is already known to be terrible at getting paper work filed on time or at all.

Were you denied a loan from the same institution that issued the first one? I can't imagine a credit union turning down the same customer they just approved because 'computer says no.'

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.

Probably did manufacturer financing.

The first loaner confirmed they couldn’t even process a new loan while the old one was in limbo. They even put my case in for special review and apparently part of the wait was ensuring the check wasn’t being used.

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.

Huh, interesting. My Credit Union was willing to finance a loan for a new vehicle while waiting for any documentation that the existing auto loan was totalled. They just said "Make sure that you have the settlement check to us within 60 days, please", and that I paid off the remaining $1,200 "in a timely manner".

I can confirm the same. Had 16k loan that was being paid by Liberty Mutual due to their driver totalling my car. Check was in flight and my Credit Union processed close to a $30k loan for a new car.

I’m guessing it’s different in the case where the check has already been cashed and the loan has been secured (ie. they have a title)

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.

I would be happy to be given this chance in Europe, I would order right now, but at double the price and limited availability we have other problems to deal with.

Before this announcement, the pricing wasn't double. It was only a few thousand more, at least in Germany, after considering tax.

Remember that US prices come without VAT and car imports from US have 10% tariff in EU.

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.

https://insideevs.com/tesla-model-3-pricing-info-released-eu...

https://www.teslarati.com/tesla-model-3-long-range-325-miles...

"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”"

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.

You won’t be able to test drive _the specific car you are buying_ before committing to purchasing it. You’d only be able to test drive another instance of that model, but not the specific one you’d be committing to for X years. This deprives you of the ability to, e.g., avoid purchasing a particular instance of a vehicle that has some annoying defect or flaw.

Defects and flaws will be repaired for free though

Do you also get a replacement car for the time you can't use the one you bought?

Wow! How nice of them.

You can always refuse delivery if you are not happy with the car

That's industry standard, isn't it? Who test drives specific new cars before buying? Would you be as okay with buying a new car after is was test-driven by several random strangers?

Have you ever purchased a car through a dealership? When you buy a car off the lot, chances are good many people have test driven it, and unless you have zero anxiety about the purchase, you were one of those people

They're closing their stores...

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

>They're closing their stores...

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.

Tesla doesn't have "dealerships" (which are not owned by the manufacturer), only "stores." The places you're thinking of are the places they're closing. Apparently they will keep some of them open, but they will be considered "galleries" rather than actually selling anything.

Tesla only has stores. Even in the states that even let them have that much.

Their “dealerships” don’t sell you a car, you just get handed off to the website

Seems like a US-centric problem, in the UK the 'credit score' is completely worthless and different for each credit agency (there are three main agencies).

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).

This recent article makes it sound like it can be a nightmare to get your money back, too: https://www.cnbc.com/amp/2019/02/21/tesla-refund-and-return-...

if you are financing an (entry level) luxury car, you are doing something wrong.

If you're not financing any car (if you can get a sufficiently low rate), you are doing something wrong.

See my comment above. I get better returns investing the cash than the interest that I pay.

How do you figure? I've been financing a car at ~3% interest for the past 4 years. My investments have returned triple that over the same period.

Those investments are not zero risk though. I don’t disagree with the general point but suggesting you should take a loan if the rate is less than the S&P return for the past year is questionable.

Nothing is zero risk, including owning a car; include the risk in your calculation. Your time frame is not one year, but typically 3-5. If your loan is at 2%, you don't need your stocks to hit 8% every year. You need them to be no worse than 2% p.a. over the entire period of your loan. That's significantly smaller risk than the risk of stocks not performing at your expectation of much higher return.

> How do you figure? I've been financing a car at ~3% interest for the past 4 years. My investments have returned triple that over the same period

Would you be willing to disclose in general terms what you have in your portfolio of investments. Keen to learn.

On average, the S&P 500 has historically returned roughly 9.8% annually. In 2017, the S&P 500's total return was over 19.7%. But for 2018, it was minus 6.2%.

You could easily achieve similar returns in an S&P 500 index fund.

Vanguard ETFs are my jam: VOO, VXF, VGT, VTI, etc.

How so? The loan on my BMW is 1.9%, which is lower than returns in savings/investments.

I have my LEAF financed because it has a zero interest rate loan. I will end up paying that loan off shortly, because the loan is forcing me to carry collision and comprehensive insurance that I wouldn't otherwise buy, especially now that the car is 4 years old. (Dropping that will increase my exposure a small amount, so the difference between that increase in exposure and what insurance costs me is essentially the financing cost.)

So many people with not enough financial sense parrot this stuff and it’s mind boggling.

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.

If you have cash and you are not financing then you doing something wrong. Your cash will almost always provide much better returns than car loan interest.

You can test drive them.

> 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”

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.

Thats literally what Tesla is saying you should do.

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.

> "financing for a car" ... "ding your credit score"

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?

I could have paid cash for my cars. I chose payments because the rate was literally less than the investments returns I get on that cash.

It’s all about opportunity cost. If you have better things to do with the cash then it makes sense to finance.

The fact that credit scoring cannot take this into account is another failure of credit scoring models.

It's not a failure. That's simply outside the scope of credit scoring models.

> 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?

Yes, it is, and it really sucks that we in Amercia designed so many of our towns and even cities this way.

The Auto Loan industry is huge. I would be surprised if more that 20% of the population could pay 35000 cash. Most people less that 40 barely have a liquid cash of 50K. To pull out 35K and regrow that remaining 15K back to 50K would take a year for someone making 100K. Instead you could take a loan which typically go for 3% for good credit, and keep that 50K in a high interest bank account (2% or more) and pay essentially a few hundred dollars over four years to make sure you have cash available for a true emergency. Why risk that. Obviously you could argue that someone with only 50K liquid cash shouldn't buy a 35K but that is not how our economy works. A few hundred bucks so you aren't broke is not crazy. Additionally in most of the country a car is essential to live, especially in suburbs and small communities. Everyone could buy a 15K corolla but everyone wants the cooler thing

Being poor is reading HN commentary about auto finance. [0]

[0] https://whatever.scalzi.com/2005/09/03/being-poor/

> Most people less that 40 barely have a liquid cash of 50K.

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".

> try more like "$1,000".

Wow.

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.

> How do people live what that level of stress continunally?

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.

>How do people live what that level of stress continunally?

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

Most people under 40 have less than $500 liquid cash.

> Instead you could take a loan which typically go for 3% for good credit, and keep that 50K in a high interest bank account (2% or more) and pay essentially a few hundred dollars over four years to make sure you have cash available for a true emergency.

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.

> 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?

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 [1], 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).

[1] https://fred.stlouisfed.org/series/MEHOINUSA672N/

If you’re objecting to having a car at all... yeah I’d say that’s naivety from only living in a city.

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...

What?! You are naive. Or trolling. Or both. Car loans are much lower than S&P compounded gains. Why would you want to pay everything down while you can put it elsewhere and earn?

> ... [to] borrow money to buy _a car_ is a huge red flag ...

Hi Jeff 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 [1] and the median household income is $59k [2]; 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 [3]. 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.

[1] https://www.researchgate.net/profile/Till_Stowasser/publicat...

[2] https://en.wikipedia.org/wiki/Household_income_in_the_United...

[3] http://apps.urban.org/features/wealth-inequality-charts/img/...

Not to counter you, but why would a low-income household consider buying a new car? A properly maintained ten year old car these days is normally quite reliable and safe.

Key expression is "properly maintained". And there's no reasonable way to know.

https://en.wikipedia.org/wiki/The_Market_for_Lemons

Not a fool proof way, but when you buy, say, a $10 000 car, you should budget some thousands for repairs. Then if it breaks down soon after and it's too expensive to repair, your downside is $10 000, which is how much your $40 000 new car would depreciate in a very short time. If you don't have especially bad luck, this doesn't happen for every second hand car you own, but the depreciation is guaranteed to happen for every new car.

They would not. When I was a teen, my parents had a joint income of just about $100k (definitely not low-income). When I began working, I got their hand-me-down '97 Accord. Bought for $3000 in '04, the car lasted 8 years before we sold it for $1500.

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.

It's naiveté, by the way.

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.

"Is it possible that living in a city with functioning public transport has sheltered me to the point of naivety"

Apparently yes.

You either don't live in the US, or have never lived outside an east coast urban center.

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!

I just bought a car this week and got a loan because the lender gave me $3,000 for borrowing from them. I have to wait 45 days before I'm allowed to pay it off, but there's no penalty for doing so.

I have a 0% interest rate for 7 years on my other car. That's literally free money.

Typically it's not 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.

If your investment vehicle can’t make up missing out on a couple of grand of “haggling” (highly dependent on a myriad of factors by the way) then you need to seek out better ones.

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.

My 7-year 0% loan is on my Tesla. You can't negotiate the price of a new Tesla.

> Is it possible that living in a city with functioning public transport has sheltered me to the point of naivety?

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:

https://smartasset.com/checking-account/savings-account-aver...

Not awesome.

Pay in cash?

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.

Sooo many people saying this not understanding that tying up 60 thousand dollars in a depreciating asset in one go when interest rates are hovering a little above 2% shows a certain level of financial illiteracy that is not conducive to getting good returns on your money.

If 'finantial literacy' is an issue, why would these people (or anyone else for that matter) buy a new car? They are taking the massive first year depreciation hit.

People parrot this too, someone has to buy new cars for old cars to exist.

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.

> not worrying about a questionable history (I’ve seen cars seriously damaged by driving habits in hundreds of miles of driving by abuse)

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.

Maybe don't take out a 60K loan for a luxury item? I understand a car is essential for some people, but 60K is a very expensive one.

You’re like the 3rd person to say this and I have to assume you’re not that good with money if you think tying up 60 thousand dollars in a car when interest rates are at 2 percent makes sense.

There’s a level of financial knowledge that’s just dangerous enough to hurt you, and I’d say this is it.

Yet here we are, one of us is having problems with credit, because they took a 60K loan on a luxury item and then decided they didn't like it. What was your next big loan for?

Another car maybe?

I’m not having any problems with credit, do I detect a tinge of jealousy in your overtly rude comment?

Not at all. Just different spending habits. Never been in debt in my life, and I'm pretty happy with that.

If you want to test drive a Tesla, I recommend going to a supercharger, finding someone with a car configured like what you're interested in, and talking to that person.

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.

I mean can't you just pay cash ? If you buy a tesla you are likely to have that amount of cash available I guess.

The problem is not the car. It's the credit score system.

How often are vehicles returned before zero payments? It sounds like you had that case on a vehicle before this where presumably you could have test drove the car.

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.

The car was 400 miles away. I had the check in hand when I went down to see it and it wasn’t as described simple enough.

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.

Tesla could delay executing the loan for the first week to avoid the inconvenience you describe. Typical dealers want to execute the loan immediately because accepting a return is extremely rare, but for Tesla it's part of the business model to avoid needing a dealership in the first place, so it would make sense to set up the accounting in a way where the loan is locked in but not executed until the return period is over.

I’m assuming you’re talking about dealer provided financing because in my case the loan had to be “executed” to get the car.

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'm not an expert on the details, but I'm guessing that is a "legacy" finance issue. No reason why a contract couldn't be designed that treated the first week and the rest of the finance term differently, where the buyer agreed to both, and the return was greatly streamlined.

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.

I would never buy something without a test drive. No level of return policy will be good enough.

Does saving $2,100 help?

Not really if I have no idea what I’m buying?

Rent it for a couple days on Turo. I did that recently with a Model 3 just to try it out.

Turo refused to rent to me because I don’t have any recent US driving/insurance history for their insurance scoring. Never had a problem at any other normal car rental place.

So now we have to pay for test drives?

I don't think this model makes sense for the long term. Eventually there will be enough competition that Tesla will need to go through an actual Sales/Marketing process like every other product.

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.

It's more than a 20 minute test drive. You get to keep the car for a while, park it, load/unload it, try out car seats in it, etc. It is very informative compared to a dealership test drive.

Hmm. Not this time, but in 2015 when I bought an Audi, they let me have the vehicle (once I showed I was serious about buying/considering the vehicle, but without money or signature anywhere) from Friday evening til Sunday afternoon. Only thing they said was "Don't drive it to California and back, please" (from Seattle).

1. $37,100 Tesla with a free one hour dealership test drive.

2. $35,000 Tesla plus a $100 rental payment for a 24 hour test drive.

You honestly prefer the first option?

If you want to try a bunch of cars since you are undecided you might pay extra compared to now, since other brands won’t give you a discount and you still paid for the Tesla test drive.

If there's a 5% chance you'll buy a Tesla, the math still adds up to where you're better off spending $100 to test drive it over a free test drive and paying $2100 more for the car.

You're being downvoted, but honestly this is great advice. I recommend this to anyone that can do this when buying any car - it's so much better to live with the car you're thinking of buying for a day or two to see what it's actually like. Are the seats comfortable on a long drive? How good is the visibility really? How well does it fit in your parking spot/garage? What's it like to drive on your favorite road? You can't really answer any of these questions with a 10 minute test drive with the salesman right next to you.

Excellent suggestion. I did this with a Model S a few months ago and it was a blast.

A friend did this one year. He sold his old car, commuted to work on public transit M-F, and rented a different car every weekend, whether he felt like driving somewhere or not.

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...

What did he end up buying?

Rent one? Depending on where you live there are rental car places you can rent a Tesla.

Yeah, I hear you.

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.

Would you prefer to buy a Tesla at a traditional dealership, which offers short test drives and the usual "service" of a dealer and pay a premium of 2-3k for this service? If yes, then there is a business model for independant dealers buying cars at Tesla and selling them at their own conditions.

I agree with you, at least for a big ticket item like a car. But Turo exists, so you can test drive pretty much any non-exotic car in any major metro area, for a somewhat reasonable price. That's what we did before we bought a Model 3, as official test drives weren't available yet.

Ask a friend or neighbor who owns one -- Tesla owners always seem excited to share. Viral marketing... viral test drives?

Does that circumvent some state laws that demand selling cars through dealerships?

Also does Tesla still have Tesla branded "service shop" to do car delivery/return/refund/service?

"At the same time, we will be increasing our investment in the Tesla service system, with the goal of same-day, if not same-hour service, and with most service done by us coming to you, rather than you coming to us. Moreover, we guarantee service availability anywhere in any countries in which we operate."

While service is an issue, the bigger issue right now is repairs after an accident or other, bigger problems that can't be fixed in a "daily visit on site".There are people waiting three to six months for repairs: https://forums.tesla.com/forum/forums/why-does-it-take-month... https://teslamotorsclub.com/tmc/threads/repair-time-6-months... https://www.driving.co.uk/news/features/tesla-owners-facing-... https://www.sfchronicle.com/business/article/Tesla-owners-fu... My boss had to wait more than three months this past fall after his accident, and he was making payments the entire time (of course) --- they have not fixed this problem. And no, most insurance will not cover a loaner for this period of time.

Cars are a high value purchase for many people. So "online only" is bold as well as fraught with many potential issues.

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.

The delivery fee is refunded? If not it's a $1200 test drive. If you have to finance the car, your lender will not refund any initiation, application, or early termination fees. So again it's not a free test drive. Not the same thing. Free for Tesla, maybe, not the consumer.

With pay-as-u-go rental apps/services becoming reasonably common, it might be worthwhile leaning on this to take care of test driving. Similarly priced cars here go for €10 an hour. I'd try it just for curiosity, and I have no immediate intentions of purchasing a Tesla (or anything).

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.

you are lucky with two months. in germany it took me over 2.5 years with a lawsuit to return a new car which did had a water lack also after 3 repairs.

> Over the next few months, we will be winding down many of our stores

Who needs repairs? Just buy a new one; it's cheap and easy.

What I like about this on a strategic level, it opens up opportunities to (later) have a whole sub-economy of dealerships who offer additional services. Everybody can order online directly, but if you want to be the middleman you may can, but you have to earn it. Everybody with a good idea for a store can compete.

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