You hear it all the time. Teslas are for rich people, not ordinary folks. What a bunch of unadulterated crap. The truth is, a Tesla Model 3 Standard Range costs less to own than the average new car in America. That’s because the average new car isn’t a car at all — it’s a truck or an SUV. Manufacturers spend billions every year advertising trucks, trucks, and more trucks. SUVs are getting bigger all the time as people expect 8 passenger seating and enough cargo capacity for a long weekend of camping.
Think of the last time you watched television. What ads did you see? Slugfests between Ford and Chevy about whose trucks are bigger, beefier, tougher, or more rugged. Have you seen an ad from Ford of Chevy in the past two years that wasn’t for a pickup truck? Unsurprisingly, Ford, GM, and Chrysler have scaled back production of passenger cars as they shutter some factories and repurpose others to make more trucks and SUVs. Who says those are not for ordinary folks?
7 Million Americans Are Behind On Their Car Loans
Here’s food for thought: Kelley Blue Book reports the average price of a midsize SUV in January was $38,744. The average price of a midsize sedan was $25,930. Carmakers aren’t stupid. If they can convince people to shell out nearly $13,000 more for an SUV than a sedan, they are going to do so. They say the public demands the larger, heavier, thirstier cars, but how much of that demand is driven by the gargantuan advertising budgets of the automakers?
Here’s really startling news: According to USA Today, the average car loan in America today is just a tick under $37,000 and costs the buyer $550 a month. And here’s the kicker: the average length of a loan has grown to 69 months, just a little less than 6 years. Some lenders are offering 84 month loans. Who even keeps a car that long anymore?
But wait, it gets worse. More than 7 million Americans are now at least three months delinquent on their auto loan payments, a benchmark that many lenders say is a strong indication that a recession is just around the corner. According to the Federal Reserve Bank of New York, that’s a million more troubled car loans than there were in 2010.
Tesla Model 3 Standard Range (SR) Costs Less Than Average New Car
So, just how affordable is a Tesla Model 3 SR compared to the rest of the new car market? Tesla follower extraordinaire Vincent has that information.
This is insane
2018 US avg auto loan payment $530
Model 3 SR w/o AP $485
W/ Tax&Gas saving $373
Model 3 SR w/ AP $531
W/ Tax&Gas saving $384 pic.twitter.com/w72BX9BufB
— vincentyu.eth (@vincent13031925) March 1, 2019
Still think Teslas are only for the rich? Think again. Not only is a Tesla a better built, safer car than the average new car, not only does it offer technology that is years ahead of the competition, but it also costs less to buy and operate. The financial wizards are wailing today that Tesla is circling the drain, demand has dried up, and Elon Musk is a loose cannon who must be reined in before he steers the company into a ditch.
But the truth is quite the opposite. Once people find out they can buy a Tesla for less than the price of an average new car, do it all online (no haggling), have it delivered directly to their home (no request from a commission-hungry salesman to add on this and that), and return it within 7 days (or 1,000 miles) with no questions asked for a full refund, demand will explode.
The genius of Elon Musk’s vision for electric cars is only now being fully revealed. This is the high-water mark for cars with internal combustion engines right now, today — er … 2017 was. After this, the only reduction in demand will be for cars with antiquated gasoline or diesel engines sold through traditional franchise dealers. Most people would rather have a root canal than shop for a new car. Tesla has swept all that worry and pain away with its new 100% online sales model.
There are three kinds of companies in the world — those that make things happen, those that watch things happen, and those that wonder what happened. Ford, GM, and Chrysler have just had their Kodak moment. They just don’t know it yet.
Photo by Tesla Shuttle
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