Today I go over my complicated rationale for buying a Tesla Model 3, despite being a self-proclaimed finance blogger.
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As a self appointed physician finance blogger, it is important to do certain things, like have a financial plan and a budget. I feel it’s also important to live my life in a way that’s a good example to others on the road to financial independence.
Aside from setting a budget and having aggressive savings goals, frugality is often a key tenet of those seeking FIRE. So how could I possibly justify the purchase of a Tesla, which is seen by many as the epitome of luxury?
To be fair, I’m going for a fattier flavor of financial independence: moFIRE (morbidly obese financial independence, retire early). This artery clogging version of FIRE includes room to spend over $200k a year in retirement.
But there’s more to this story than just dollars and cents.
“A colossal waste of money”
The White Coat Investor founder, Dr. Jim Dahle, is famously critical of Tesla owners. It’s become such a flash point of his comments section that he dedicated a blog post to the controversy.
The crux of his argument is that a reliable automobile can be had for $5000, making luxury cars (and especially Teslas) a huge waste of money.
He’s absolutely right that older used cars can provide perfectly fine transportation!
Our other car, and the one I drove for most of my surgery residency, is a 2010 Mazda 3 hatchback. It’s paid off and currently worth about $5000, according to Kelly Blue Book. We recently had to replace a transmission sensor, but otherwise, it’s faithfully plodded along with no major issues. It’s a great car.
So why did I go ahead and purchase this Tesla, which has strapped me with a $900 per month payment for 5 years? Yes, I even financed the purchase! *gasp* *boo* *hiss*
Let’s be real: with annual expenditures of over $300,000, I’m not your typical seeker of financial independence. But I’ve done the math, and I’m acutely aware of the negative drag an expensive car can have on your finances.
At a cost of roughly $55,000 even after the tax credit, the Tesla Model 3 is by far the most expensive car I’ve ever owned.
Life before Tesla
Right before I took the plunge with the Tesla, I had moved up to driving a Mazda CX-5 SUV. In the “Soul Red“ color, this SUV was pretty fantastic. It had a big trunk for our jogging stroller, black leather seats, and a sweet sound system.
But once I accepted a position as a surgeon about 50 miles away from my house, I realized that no car is fantastic when you have to sit in it and manage bumper to bumper traffic for over an hour each way.
After two years of this mind-numbing commute, I was spending an average of over 12 hours a week in traffic! I was gaining weight and feeling irritable and angry. Something had to change.
Either I had to find a new job, or I had to optimize my commute.
How did I choose?
Although my job is far away, I like my colleagues and my employer. I also get overtime opportunities that increase my pay by about 30%. The overtime is really supercharging my journey to moFIRE.
So I decided to optimize my commute as much as possible before I looked for another job.
In 2018, when production of the Tesla Model 3 began in earnest, I seized upon this as an answer to my prayers. I sold my Mazda CX-5 at a loss and bought a long range Tesla Model 3.
These are the ways my Tesla Model 3 has changed my life, in order of increasing importance:
- No more gas stations
- No more oil changes
- HOV lane access
No more gas stations
When I was driving my Mazda SUV about 100 miles a day, I visited the gas station every five days to fill up my gas tank.
Since getting an electric car, I plug it into the charger when I get home and leave it to charge overnight. I wake up to a car with over 270 miles of range, which is more than enough for my needs.
No more oil changes
Since there is no internal combustion engine, I don’t need to get oil changes anymore! This is a great bonus. Previously, I had to sacrifice a morning on the weekends to get my SUV’s oil changed every few months. It was an annoying waste of time.
Electric motors don’t need engine oil. So my maintenance so far has been reduced to just getting the tires rotated every 10-15,000 miles.
HOV lane access
HOV stands for “high occupancy vehicle”. In California, the HOV lane is the carpool lane, and is restricted to cars with two or more people driving together. Clean air vehicles, including electric cars, get a special sticker that allows access to this lane.
This lane is typically much less crowded, especially at rush hour. Since getting my HOV lane sticker, I’ve shaved off at least 10% of my commuting time. This equates to about 1-2 hours a week that I’m not stuck in my car.
Think about what you’d pay to regain 1-2 hours a week of free time.
It it were just the first three benefits, you could rightly argue that I could have gotten a cheaper electric car with the same benefits. A Chevy Bolt, for example, would have been about $15k cheaper than the Tesla Model 3.
But no other electric car has the Autopilot feature.
When I’m on the highway and I activate Autopilot, my Tesla will faithfully stay within its lane, drive at a set speed, and adjust that speed depending on the traffic conditions.
I keep a hand on the wheel for safety, but otherwise my mind is free to ponder deep thoughts and even dictate blog posts into my iPhone.
It’s been a lifesaver on drowsy afternoon drives home after a hard night of call. I’m quite certain it’s saved me from a couple of fender benders, and more importantly, it’s made my commute immeasurably less stressful.
What used to be a poke-my-eye out commute has turned into a low stress time for self development via podcasts and self reflection.
I can’t wait until my car fully takes over most of my driving. This might be here sooner than you might think:
After one year of ownership in over 25,000 miles of driving, I love the Model 3 more than ever. It’s a joy to drive, saves me time, and has probably saved me from a couple of fender benders (or worse).
It’s an expensive car, but my commute doesn’t make me almost stroke out from road rage anymore. I’ve been able to continue my job despite the distance. So in the last year alone, the overtime opportunities have more than paid for the cost of the car.
I’ve decided to try to enjoy the journey to moFIRE, as well as the eventual destination. The car is one way I’ve chosen to manifest this decision.
There is a bit of a hard limit to my current situation. My HOV lane sticker expires in January 2022. When that happens, I might have to quit my job immediately. Just kidding. Maybe not kidding. We will see.
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Do you still feel the Tesla is a “colossal waste of money?” Do you have a Tesla of your own? Comment below!
Please share and subscribe for more content!
- How my Tesla Model 3 saves me $200 a month in fuel costs
- The heartache and joy of owning Tesla stock
- The Darwinian Doctor’s 13 Monthly Expenditures (with real numbers)
- What is moFIRE (morbidly obese FIRE) and why do I want it?
- Handsfree Blog Post from behind the wheel!
- My 15 year plan to financial independence, moFIRE style
- Detours on the road to financial independence
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You are definitely preaching to the choir with this post. I wrote about how I loved my model S Tesla (got it in Dec 2015) and it truly is a game changer for me as well regarding my commute.
Ever since I started dropping my daughter off in the morning in school my commute increased from 75 miles round trip to a little over 90 miles. My previous daily driver would get 25 mpg (the Tesla equivalent is well over 100mpg). This would make me have to fill up gas at least 2x/wk.
It is a great feeling to have a fully full car in the morning every day now. I also find I drive more as I don’t have to do mental calculations to see if I need to go to the gas station an extra time that week (which I try to avoid).
I have the first version of Autopilot and even that is remarkable. Makes the drive so much more enjoyable especially with traffic aware cruise control which keeps a safe distance with the car ahead of you (my old car only had regular cruise control so I always had to turn it off and on in regular driving).
The autopilot in stop and go driving is amazing as well (fortunately it is rare where I live but I can imagine in California it is a lot more common). Too bad about the HOV expiring. I think I got a lifetime sticker for my state and yes it is much easier to go to work and back in the HOV lane.
You also forgot to mention that it is an absolute blast to drive. The instant acceleration is phenomenal. I have free supercharger for life (which I think is currently being offered again) and use that for long distance travel.
I debated for a while if I should write about my Tesla. It opens me up to Tesla haters, which are legion.
But your experience I think is typical of Tesla owners — much more positive than the media would suggest.
I don’t have supercharger for life like you, but it’s not very expensive when I do need it (which is only on long distance trips up the coast).
Thanks for sharing your thoughts!
Brave confession! Like Dr. McFrugal and Xrayvsn before you, there’s a soft spot for Teslas among a subset of what one would expect to be extremists – physician finance bloggers.
I’d count you three as spending on what you value (and, given that you and DMF live in So Cal, an improved quality of life during your traffic time can be argued to extend career longevity).
Still curious how your experiment in living larger up front will play out. My narrative (entirely accidental) was nose to grindstone early with cutting back later as a game-changer.
I enjoy learning all the different paths to FI that are available, and look forward to hearing more about yours over time.
My sneaking suspicion is that your narrative will prove superior, CD.
I came to the FI movement a bit later than optimal, just after I made some pretty big decisions about my home, job, and schooling that locked us into a fairly high spend. Whether through lack of conviction or resistance from the Dr-ess, we’ve chosen to keep most of these things static, while trying to optimize everything else and invest all our raises. It’s clearly an inferior path than cutting expenses down at the same time, but one I’m happy to explore for the FI community.
Here’s to enjoying the journey!
I have a minimal commute, yet still find my time in my M3 very enjoyable. I’ve lived many places, but now in SoCal. Can’t imagine this traffic without the extra safety of Enhanced Auto Pilot. Not to mention the severe drop in spousal driving arguments on long trips. It’s by far the most expensive car I’ve ever owned… despite being the cheapest Tesla available… AND no complaints.
Describing the joy of the full tank fairy (shows up every night while I sleep) will undoubtedly be lost on any non EV driver. However I wager it’s the first joy (after acceleration) that any new EV driver will report.
The random 5% increase in power and range delivered in an over-the-air update last week doesn’t hurt either!
I agree that the safety aspects of the Tesla cars are really undersold by the media. I pass so many accidents on the highways every day, and I’m so grateful for the high tech safety features that come standard in my car.
I worship the word of the White Coat Investor, but respectfully, top of the line safety features are one thing that just don’t exist in a sub-$5000 car.
I have had a Model S since Dec 2015, like xrayvsn. I have an 8 mile commute. 15k mikes a year. Not sure how you and xrayvsn do those 80-100 mile round trip commutes, even with the Tesla and autopilot. I Still enjoy my car. It does have its annoying aspects at times. It is still a car. Model 3 long range is a much better value than the Model S. Aesthetics maybe better on the S plus slightly bigger for a family of 5 ( I have the rear seats which I do use regularly – 3 young kids ) Plus a new model S with another 100 miles of range and auto pilot cost $20k less than what it did in 2015! So far have 60k mikes after 4 years. Hoping the car will last another 6 years. Some material things are worth the money.
Hey Dipak, thanks for your insights! I also hope that my Model 3 lasts forever. Even expensive cars start looking like a good deal after 10 years.
I do wish I had more room for my kids in the car. The Model 3 is a bit cramped. Carseats aren’t helping. But we manage.
Here’s to car longevity!
I’m a physician as well, a traveling Emergency Medicine Physician where I have to travel 9-10 hours each way (I usually stay a week or a bit more than that each time). I was driving my 20-year old Toyota Pickup that I had during residency, and it was time to get a new vehicle. Since I’ve had my Tesla Model 3 Performance (I only got the performance version over the AWD due to the lifetime free supercharging which paid for the upgrade and more over the 10 years I plan to keep the vehicle as my primary transportation) over the past 1.2 years and 56,000 miles it’s been a pure joy to drive. My commutes are hugely less stressful, I can relax, when I get into traffic I don’t have to get upset and can just have down-time while the car practically drives itself (yes, I do pay attention and hold onto the wheel at all times). I too look forward to the day when I can let the car do all of the driving and get some valuable sleep that is in short supply in our profession. After running the numbers initially, the savings have been real and fit my budget compared to an economy car I was considering buying. Best vehicle I’ve ever owned.
Patrick, thanks so much for adding your voice to the conversation! My experiences mirror your own, although I can’t claim to come close to your 10 hour drive time!
I also can’t wait until I can abdicate all driving to the car, and focus on other tasks like writing, reading, and yes, sleeping.