How To Get 35% Off a New Tesla Model Y (1.99% APR Financing Promo)
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- čas přidán 7. 09. 2024
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Tesla just brought back the 1.99% APR financing promo for the Model Y through August 31 2024 so in this brief video I’m going to show you how to effectively get 35% off a new Tesla Model Y and no I’m not including gas savings.
1.99% is almost free money.
You can also extend the loan term to 6 years.
Using round numbers,
The base long range rear wheel drive model Y can be had for $45,000.
It qualifies for a federal EV tax credit of $7,500 deducted from the purchase price, dropping it to $37,500.
Let’s assume a small down payment of $500 and a loan for $37,000.
The loan would end up costing about $2,000 in interest over 6 years for a total loan cost of $39,000.
Suppose I took the $37,000 I would have paid cash for the car and put it in a high-yield savings account currently paying 5% APY.
Let’s also assume you’re making the monthly car payment of about $550 from your earned income so you don’t have to dip into the savings at all.
5% is pretty juicy right now but it may not stay that high. Let’s be pessimistic and say rates might drop half a percent each year over the next 6 years.
The $37,000 in the savings account earns me about $9,000 in interest over 6 years, growing to about $46,000, disregarding taxes.
The salient takeaway here is not that it’s then suddenly a cheap car (it’s not) or even that you should buy one, but rather that, via a tax credit and some simple, virtually riskless interest rate arbitrage, you’ve effectively reduced the initial price by about 35%.
Now just for fun, let’s be optimistic and assume the 5% APY on the savings account stays the same for all 6 years and run the numbers again. That would result in earned interest of about $12,500, effectively reducing the initial price by about 40%.
This does again ignore taxes on earned interest, which is going to be highly personal, but it also ignores gas savings, so those probably easily cancel out. At 10,000 miles a year, $4 a gallon, and 25 mpg, that’s a gas savings of $1,600 per year for a total of $9,600 over 6 years. Electricity costs for charging should be about 1/4 of that, so if we really want to be comprehensive, that’s about an extra $1,000 a year in gas savings.
Does this financing offer have you considering buying a new Tesla Model Y in 2024? Let me know in the comments. Thanks for watching.
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Disclosure: M1 High-Yield Cash Account(s) is an investment product offered by M1 Finance, LLC, an SEC registered broker-dealer, Member FINRA / SIPC. M1 is not a bank and M1 High-Yield Cash Accounts are not a checking or savings account. The purpose of this account is to invest in securities, and an open M1 Investment account is required to participate in the M1 High-Yield Cash Account. All investing involves risk, including the risk of losing the money you invest. Stated APY (annual percentage yield) with the M1 High-Yield Cash Account is available from date of account opening and is accrued on account balance. Obtaining stated APY requires a minimum initial deposit of $100. APY is solely determined by M1 Finance LLC and its partner banks, and will include administrative and account fees that may reduce earnings. Rates are subject to change without notice. M1 High-Yield Cash Account is a separate offering from, and not linked to, the M1 High Yield Savings Accounts offered by M1 Spend LLC’s banking partner. M1 is not a bank.
Does this 1.99% APR financing promo have you considering a Tesla Model Y in 2024?
Get that high-yield cash account here: www.optimizedportfolio.com/go/m1-cash
Note that the advantage of utilizing this financing offer does NOT require having $37,000 cash on hand, which admittedly may be unrealistic; that was just my hyperbolic example to illustrate the opportunity cost.
It works the same on the other extreme. As long as you have $1 more than the minimum monthly payment, it's advantageous to put that $1 in a high-yield savings account as described for the interest rate arbitrage. That's sort of the whole point - here it makes objective sense to utilize the low-interest debt and pay the minimum monthly on the loan. Obviously if you can't afford the minimum monthly payment, you shouldn't be looking at this car in the first place.
No because I really want the new Model Y refresh
Wonder when it will arrive.
What’s the catch
I see what you did, but it's not having you save money on the car. You're just spending your hard earned interest on the car instead of using it elsewhere. Videos should be more geared toward... can you afford it, and how much you should make in a year to do so. To nit pick for some constructive criticism. 50% of American's don't have $1,000 in savings let alone $37,000. Your math is correct, your angle needs some tweaking (not being a jerk :) )
I mean yes, this is obviously assuming you have the money to buy this car in the first place. There's an opportunity cost to every decision we make. If I buy food today, I don't get to invest it or play golf. Maybe I'll do a separate one on how much you need to make to be able to afford this car.
@@OptimizedTesla just trying to help out. Delivery was good, easy to understand, production was solid.
@@TheAngryBrownsFan Thanks!
I'm thinking of getting one. Because of the promotion rate and tax credit. But still want to know what if I pay of my car early, will i be paying any penalty. And If I did sell it after 5-6 years what could be the resale. Can you please give your views on this.
Buy a second hand Corolla if you want to save money.
There’s no pre payment penalty on the loan! So you can pay it off early.
No one knows what the future holds and what the real we value will be in 5-6 years
Will ultimately depend on the lender, but probably not going to be a prepay penalty. I don't know much about typical resale value of these. I think it's not great, not terrible.
This sounds like the dumbest scam ever. Buy a Toyota Honda
What specifically do you think is a "scam?" The Tesla vehicle itself? The low APR financing offer? The simple idea of taking advantage of differing interest rates? None of those qualify as a "scam." I'd suggest revisiting the definition of that word. But thanks for watching and commenting.