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## Total cost of owning and driving a 60 kWh Tesla Model S (no options) in California, for 36 months, and 45,000 miles in total.

## Total cost of owning and driving a 60 kWh Tesla Model S (no options) in California, for 36 months, and 45,000 miles in total.

I would like to make a calculation to determine this total amount (as accurate as possible), for which I would like your assistance as well.

A citizen of California wants to own and drive a Tesla Model S for a period of 36 months. The total number of miles driven in these 36 months will be 45,000 miles. And after these 36 months the Tesla Model S will be sold back to Tesla Motors for a guaranteed resale value of 50% of the value of a new Tesla Model S. This citizen of California wants to find out what the total cost will be, assuming that the cheapest Tesla Model S is chosen to make this calculation.

The base price of a Tesla Model S with the 60 kWh battery pack with no options chosen is 71,070 USD.

The down payment is 10,660.50 USD (= 15% of 71,070 USD).

The US Federal and State tax is in total 10,000 USD.

Estimated monthly payment is 916 USD. Total amount after 36 months is 32,976 USD (= 36 X 916).

The guaranteed resale amount (when selling the car back to Tesla Motors after 36 months) is 35,535 USD (= 50% of 71,070 USD).

To make the actual calculation I would appreciate some assistance with:

- Sales Tax;

- License Plate;

- Car Insurance in California for 36 months;

- What is the total amount that this citizen will have to pay to Wells Fargo to get rid of the loan after 36 months;

Who would like to assist me with this calculation?

chrismarcellino| May 5, 2013Sales tax, licensing can be had from http://www.dmv.ca.gov/FeeCalculatorWeb/index.jsp .

Can insurance varies by zip code, your age and driving history. LA area most expensive. $1200 a year is not unusual, assuming you get comprehensive coverage (yes.) Some pay as cheap as $800, so as much as $2000. In all cases, it is in line with similarly high valued ICE cars.

Benz| May 5, 2013@ chrismarcellino

Thanks for your input.

Would an average amount of 100 USD per month for the insurance of a Tesla Model S be acceptable to most people in California?

Mike C| May 5, 20131200 is probably fair. I pay 1700 for a commercial policy in Los Angeles, but it would have been 1500 if I didn't have a speeding ticket on my record.

Benz| May 5, 2013@ Mike C

OK, 100 USD per month be it (in this caculation).

I realised that I have not mentioned the amount of the initial loan from Wells Fargo to buy the Tesla Model S:

85% of 71,070 USD = 60,409.50 USD

Now, how do we calculate what the remaining amount of this loan will be after 36 months (when the car will be sold back to Tesla Motors for 35,535 USD)?

elguapo| May 5, 2013Use a FV calculation. What's the assed term for the loan?

Benz| May 5, 2013The total number of the terms of the loan is 72 months.

That's what the monthly payment of 916 USD is based upon.

But the requested amount (remaining loan) occurs after 36 months.

And the intrest is 2.95% per year.

Which means that the intrest per month is: 2.95 / 12 = 0.2458333333%.

The amount of the loan is 60,409.50 USD.

How do we do this calculation?

Step 1:

1 - (1 + 0.002458333333) exponentiate to minus(72-36)

1 - (1.002458333333) exponentiate to -36

1 - 0.91540252108120312778337658801171 = 0,08459747891879687221662341198829

step 2:

0,08459747891879687221662341198829 / 0.002458333333 = 34,412533802142800061289903189989

step 3:

916 USD x 34,412533802142800061289903189989 = 31,521.88 USD = remaining loan

Benz| May 5, 2013It appears that the remaining amount of the loan is lower than the guaranteed resale amount.

When selling the car back to Tesla Motors after 36 months we get to keep: 35,535 USD - 31,521.88 USD = 4,013.12 USD

That's interesting.

Benz| May 5, 2013I have chequed the link provided by chrismarcellino, but I do not see sales tax being mentioned there.

And to calculate the Registration Fee I have tried it, but all I see is ERROR.

Can I get some help with that please?

Mike C| May 5, 2013If this helps:

Cash price = $88,520

CA sales tax = $7,967

Registration, transfer and titling fees = $655

CA tire fee = $7

Benz| May 5, 2013@ Mike C

Thanks for this info.

And will the buyer have to pay this amount for the sales tax to the seller (Tesla Motors) together with the $71,070?

Or will the buyer have to pay this amount for the sales tax directly to the Authorities of the State of California?

Mike C| May 5, 2013It was included in the sales price (i.e., paid to Tesla Motors together with the rest)

Benz| May 5, 2013@ Mike C

OK, so:

You have paid in total: $88,520

And that all these three amounts were included:

CA sales tax = $7,967

Registration, transfer and titling fees = $655

CA tire fee = $7

That would mean that the price of the your Tesla Model S (with all the options that you have chosen) would have been: $88,520 - ($7,967 + $655 + $7) = $79,891

Is that correct Mike C?

Benz| May 6, 2013Here is a list of County and City Sales Tax Rates:

http://www.dmv.ca.gov/pubs/reg_hdbk/app1a_county_and_city.htm

All the rates are somewhere between 8% and 10%.

I think we should take 9% in our calculation, that would be fair.

Benz| May 6, 2013Something is wrong about the monthly payment of $916.

It cannot be the actual monthly payment, as (CA sales tax + Registration, transfer and titling fees + CA tire fee) still have to be added to the sales price of $71,070.

And that would mean that amount of the loan from Wells Fargo will be higher as well, and the monthly payment will therefore be higher also. Meaning that I shall have to do those calculations again, just with an higher amount.

Benz| May 6, 2013I think that I better start all over again.

I would like to make a calculation to determine this total amount (as accurate as possible), for which I would like your assistance as well.

A citizen of California wants to own and drive a Tesla Model S for a period of 36 months. The total number of miles driven in these 36 months will be 45,000 miles. And after these 36 months the Tesla Model S will be sold back to Tesla Motors for a guaranteed resale value of 50% of the value of a new Tesla Model S. This citizen of California wants to find out what the total cost will be, assuming that the cheapest Tesla Model S is chosen to make this calculation.

The base price of a Tesla Model S with the 60 kWh battery pack with no options chosen is $71,070.

The guaranteed resale amount (when selling the car back to Tesla Motors after 36 months) is $35,535 (= 50% of $71,070).

The US Federal and California State incentives is in total $10,000.

The total amount that has to be paid to Tesla Motors is:

$ 71,070.00 (= initial sales price of a base Tesla Model S 60 kWh

$ 6,396.30 (= 9% sales tax)

$ 655.00 (= registration, transfer and titling fees)

$ 7.00 (= CA tire fee)

----------- +

$ 78,128.30 (= total amount to be paid to Tesla Motors)

The down payment is $11,719.25 (= 15% of $78,128.30 ).

The loan from Wells Fargo is: $78,128.30 - $11,719.25 = $66,409.05

This amount will be paid by Wells Fargo to Tesla Motors so that the citizen of California can by the Tesla Model S (with a 60 kWh battery pack and no options).

And the intrest is 2.95% per year.

Which means that the intrest per month is: 2.95 / 12 = 0.2458333333%.

How much of this loan ($66,409.05) will still have to be paid after 36 months?

What is the correct amount of the monthly payments?

How do we do this calculation?

Step 1:

1 - ((1 + 0.002458333333) exponentiate to -72)

1 - (1.002458333333 exponentiate to -72)

1 - 0,83796177560182253677857008907839 = 0,16203822439817746322142991092161

step 2:

(66,409.05 x 0.002458333333) / 0,16203822439817746322142991092161 = 1,007.51

The actual monthly amount that has to be paid to Wells Fargo is $1,007.51

That is $91.51 (per month) more than the $916 (per month).

That is a difference of about 10% !!!

Benz| May 6, 2013Now that we know that the amount of the monthly payments to Wells Fargo is $1,007.51 (after having added sales tax and other fees) we now can calculate what the remaining amount of the loan will be, which will have to be paid back to Wells Fargo after 36 months.

The total number of the terms of the loan is 72 months.

But the requested amount (remaining loan) occurs after 36 months.

And the intrest is 2.95% per year.

Which means that the intrest per month is: 2.95 / 12 = 0.2458333333%.

The amount of the loan is $66,409.05.

How do we do this calculation?

Step 1:

1 - (1 + 0.002458333333) exponentiate to minus(72-36)

1 - (1.002458333333) exponentiate to -36

1 - 0.91540252108120312778337658801171 = 0,08459747891879687221662341198829

step 2:

0,08459747891879687221662341198829 / 0.002458333333 = 34,412533802142800061289903189989

step 3:

$1,007.51 x 34,412533802142800061289903189989 = $34,670.97 = remaining loan after 36 months.

The guaranteed resale amount (when selling the car back to Tesla Motors after 36 months) is $35,535 (= 50% of $71,070).

So, it appears that the guranteed resale amount is higher than the remaining loan after 36 months:

$35,535 - $34,670.97 = $864.03

So, that is positive for the citizen of California.

But we do not know if there have to be paid any fees to Wells Fargo. Can somebody else say something about that?

Benz| May 6, 2013We also have to include a payment of $600 per year for annual service.

What can we calculate with the information that we have so far?

What are the amounts that the citizen of California has to pay (-)?

- The down payment is $11,719.25 (= 15% of $78,128.30).

- The total of the monthly payments is: 36 x $1,007.51 = $36,270.36

- Remaining loan after 36 months is $34,670.97

- Annual service for three years is 3 x $600 = $1,800

- The total amount for the car insurance (monthly $100) for 36 months is $3,600

What are the amounts that the citizen of California is going to receive (+)?

- The US Federal and California State incentives is in total $10,000.

- The guaranteed resale amount (when selling the car back to Tesla Motors after 36 months) is $35,535 (= 50% of $71,070).

Now we can make the following calculation:

- $11,719.25

- $36,270.36

- $34,670.97

- $ 1,800.00

- $ 3,600.00

-------------

$88,060.58 (= total to be paid)

+ $10,000.00

+ $35,535.00

-------------

$45,535.00 (= total to be received)

And what amount is the citizen of California actually paying?

$88,060.58 - $45,535.00 = $42,525.58

Suppose he drives 45,000 miles in 36 months, what is the amount paid per mile?

$42,525.58 / 45,000 = $0.945

That's pretty close to a dollar per mile.

Benz| May 6, 2013We could say that if we ad the price of electricity, then the price per mile will be even more close $1 per driven mile.

Any thoughts on that?

Benz| May 6, 2013An interesting scenario would be: "What if the citizen of California desides to keep the car, and therefore make all the 72 monthly payments"?

What will the calculation then look like?

What are the amounts that the citizen of California has to pay (-)?

- The down payment is $11,719.25 (= 15% of $78,128.30).

- The total of the monthly payments is: 72 x $1,007.51 = $72,540.72

- Annual service for eight years up to 100,000 miles = $3,800

- The total amount for the car insurance (monthly $100) for 72 months is $7,200

What are the amounts that the citizen of California is going to receive (+)?

- The US Federal and California State incentives is in total $10,000.

Now we can make the following calculation:

- $11,719.25

- $72,540.72

- $ 3,800.00

- $ 7,200.00

+ $10,000.00

-------------

$85,259.97 (= total to be paid)

Suppose he drives 90,000 miles in 72 months, what is the amount paid per mile?

$85,259.97 / 90,000 = $0.947333

Well that's pretty much the same, isn't it?

But the main point is that this citizen does get to keep the Tesla Model S. And that is the big difference.

Because a six year old Tesla Model S with 90,000 miles on the meter, still is worth a decent amount of money, isn't it?

Any guess what the resale value will be after six years and 90,000 miles?

I think that a higher % of the people are going to keep the Tesla Model S, and therefore are not going to sell it back to Tesla Motors after 3 years. Would you agree with me or not on this conclusion?

Brian H| May 6, 2013There will be very few selling back, probably mostly those who upgrade. More of a trade-in type sale.

Benz| May 6, 2013That's right Brian.

And the the resale value of a six year old Tesla Model S with 90,000 miles on the meter might just still be around $20,000 to $25,000 (if it's still in a good shape).

And if you can sell it privately, then your actual cost per mile (measured over the six years) will suddenly drop by about 20%, I think.

chicago.ev| May 6, 2013I will consider trading in for a Model X depending on pricing etc, I don't know if many others would be doing the same- probably not. It is going to be interesting to see what happens to the residual value of EV's when the initial battery life is over. If the car is well maintained, a new battery pack turns a used car into a practically new one. It makes long-term ownership of these vehicles much more attractive and economically worthwhile.

If 10 years from now a more efficient battery chemistry is developed instead of the lithium ion in place now, will legacy Tesla cars be able to be converted to this technology?

Benz| May 6, 2013@ chicago.ev

"If 10 years from now a more efficient battery chemistry is developed instead of the lithium ion in place now, will legacy Tesla cars be able to be converted to this technology?"

Yes it will be possible to do that. In that case what will change is the chemical engineering of the cells. But the battery pack itself is more about mechanical, electrical and software engineering. I am not an expert in this field, maybe somebody else can say more in this regard.

chicago.ev| May 6, 2013If that's the case, the residual value of the auto could be very strong relative to autos with ICE.

jason_freedman| May 6, 2013Don't you still get the CA and federal tax benefits? I think that that should decrease the cost by 10,000?

Mike C| May 6, 2013@benz, the numbers I gave you needed to be added together for the total, sorry.

88,520 (base price) + 7967 + 655 + 7 = 97,149

97, 149 - 7500 federal tax credit - 2500 CA rebate = 87,149 total cost

Benz| May 6, 2013@ jason_freedman

I have included the US Federal and California State incentives of in total $10,000.

Benz| May 6, 2013@ Mike C

I had figured that out. I did the same calculations, just using different numbers, so there is no problem.

Can you tell us about the options that you have chosen for your Tesla Model S?

Mike C| May 6, 2013@benz: 85kwh, grey exterior, grey interior, piano black, pano roof, tech, sound, air suspension, 19" wheels. Did not get twin chargers, HPWC, paint armor, kids seats, or parcel shelf. 2012 pricing, before the $2500 increase.

Benz| May 6, 2013Good choise Mike.

Have fun and drive savely.

Cheers

Brian H| May 6, 2013The federal benefit is for the 1st purchaser (new) only. I assume the states do the same. It's encouragement to get as many in circulation as possible.