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HOT TOPIC How to Buy a New Tesla For $5000

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csalvato

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I'd be more concerned about the long-term business viability
That was another thing we ran into... my partner and i think it’s clear that within 10 years most people won’t even own a car.

EDIT: also don’t forget Turo takes 10-40% of your top line which needs to be factored in.
 

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Good luck David! Look forward to reading how it goes. My "experiment" (although of an entirely different nature) went well, until it didn't. As Kenric mentioned, love to see the numbers on the business aspect.
 
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Davidla

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Awesome @csalvato!!

Thanks for the tips and breakdown.

IIRC (and please double check me) the CO tax credit can be claimed on any used vehicle that has not previously claimed the credit and will be registered in CO. Most user M3s are out of state, so you can buy a car from another state, and register it in CO and get the tax credit.

Again, please double check with your accountant (and if he says no, check with another one to be safe, since I believe I know a few people who have done this.)

The federal credit, however, has probably been claimed and is lost. But $5000 is still significant.

Any used vehicle should immediately be 20% less than the list price, even with 0 miles.

I was perusing several online Tesla-only marketplaces where there are PM3s listed for $55k which can probably be negotiated down to $50kish. For example:


The latter vehicle is $58k if you buy it new....$64k if you add on FSD



Any 2018 shipped early in the year should have all the Full Self Driving (FSD) features such as Navigate on Autopilot, Summon and Autopark, which will save you another 6k if you care about those features. This is because they used to be bundled into the package of Enhanced Autopilot (EAP).

Most cars have aftermarket upgrades, as well, such as ceramic coating or upgraded wheels.

Also, your sales tax will be lower, and ownership on older vehicles (even 1-2 years) is significantly lower.

In general, if you buy out of state, a used Tesla will save you much more than the in-state tax credit on a new vehicle.

EDIT: One main thing that you may be missing is that Tesla recently unbundled the FSD package and reduced the price dramatically on the M3. So you will probably get some sellers who are anchored to their original sale price, which is 10k more than what Tesla would charge for the same spec today. Unfortunately, these sellers will need to readjust their expectations, so look for cars that have been listed for a while where these people have already been beaten down. This is also another reason why buying a new Tesla is stupid -- they have really hurt their early adopters by reducing prices and killing resale values. Better for you to be on the other side of that as a used buyer rather than a new buyer. As a used buyer, you also don't have to pay Tesla's documentation and delivery fees which are nearly $1200.
 
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Davidla

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The business I've initially looked at is an Amazon Merch business. I didn't know much about it prior, but after doing some DD it looks like it is legit on one hand and not great on the other.

Asking Price: $33,000

Monthly Net: $1,200


Pros:

-Passive (recent months seller hasn't done anything, spent 1hr/week and results are better than last year)
-Aged account with ability to upload thousands of designs.
-Reliable monthly income ($1,200 month average), holidays 2-3X stronger than norm.

Cons:

-Merch is low barrier to entry with massive competition.
-Only a handful of SKUs are responsible for majority of the sales (out of hundreds of designs)
-I think business will naturally slow down in ~6 months if no active work is done
-Apart from a bit of Amazon experience, I don't have any prior experience/skills here.

My take:
  • Can be a good investment, but at a lower multiple. (~1.6X yearly v.s. 2.3X asking).
  • Will definitely require some work to upkeep/grow (hence willing to pay less).
  • Can use higher income during holidays to invest in more designs being created, create a profitable VA system for creating/uploading new designs, marketing them etc.
If seller doesn't negotiate on price, will drop it altogether. There are plenty of other affiliate type businesses around the same valuations that could be candidates for this.

I am also working on a larger aquisition of a local company in Denver (one of our competitors)..so if that moves forward I'd probably drop the idea of buying a smaller passive business, and treat the Tesla as a reward for a successful deal coming out of that profit/added monthly income.

I'd be more concerned about the long-term business viability, but I've probably already ranted enough to you about that. It seems to be a reasonable valuation, though. Curious how it all pans out!
David,

I’m more interested in the numbers and type of business you are buying.
Good luck David! Look forward to reading how it goes. My "experiment" (although of an entirely different nature) went well, until it didn't. As Kenric mentioned, love to see the numbers on the business aspect.
 

csalvato

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The business I've initially looked at is an Amazon Merch business. I didn't know much about it prior, but after doing some DD it looks like it is legit on one hand and not great on the other.

Asking Price: $33,000

Monthly Net: $1,200


Pros:

-Passive (recent months seller hasn't done anything, spent 1hr/week and results are better than last year)
-Aged account with ability to upload thousands of designs.
-Reliable monthly income ($1,200 month average), holidays 2-3X stronger than norm.

Cons:

-Merch is low barrier to entry with massive competition.
-Only a handful of SKUs are responsible for majority of the sales (out of hundreds of designs)
-I think business will naturally slow down in ~6 months if no active work is done
-Apart from a bit of Amazon experience, I don't have any prior experience/skills here.

My take:
  • Can be a good investment, but at a lower multiple. (~1.6X yearly v.s. 2.3X asking).
  • Will definitely require some work to upkeep/grow (hence willing to pay less).
  • Can use higher income during holidays to invest in more designs being created, create a profitable VA system for creating/uploading new designs, marketing them etc.
If seller doesn't negotiate on price, will drop it altogether. There are plenty of other affiliate type businesses around the same valuations that could be candidates for this.

I am also working on a larger aquisition of a local company in Denver (one of our competitors)..so if that moves forward I'd probably drop the idea of buying a smaller passive business, and treat the Tesla as a reward for a successful deal coming out of that profit/added monthly income.
What are their current successful marketing/customer acquisition channels? Some of these age better than others (referrals > SEO, for example)
 

ecommercewolf

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The business I've initially looked at is an Amazon Merch business. I didn't know much about it prior, but after doing some DD it looks like it is legit on one hand and not great on the other.

Asking Price: $33,000

Monthly Net: $1,200


Pros:

-Passive (recent months seller hasn't done anything, spent 1hr/week and results are better than last year)
-Aged account with ability to upload thousands of designs.
-Reliable monthly income ($1,200 month average), holidays 2-3X stronger than norm.

Cons:

-Merch is low barrier to entry with massive competition.
-Only a handful of SKUs are responsible for majority of the sales (out of hundreds of designs)
-I think business will naturally slow down in ~6 months if no active work is done
-Apart from a bit of Amazon experience, I don't have any prior experience/skills here.

My take:
  • Can be a good investment, but at a lower multiple. (~1.6X yearly v.s. 2.3X asking).
  • Will definitely require some work to upkeep/grow (hence willing to pay less).
  • Can use higher income during holidays to invest in more designs being created, create a profitable VA system for creating/uploading new designs, marketing them etc.
If seller doesn't negotiate on price, will drop it altogether. There are plenty of other affiliate type businesses around the same valuations that could be candidates for this.

I am also working on a larger aquisition of a local company in Denver (one of our competitors)..so if that moves forward I'd probably drop the idea of buying a smaller passive business, and treat the Tesla as a reward for a successful deal coming out of that profit/added monthly income.
Not sure if you answered already... but If you don't mind me asking what website are you looking at to buy biz?

I understand if you don't want to say.
 

ecommercewolf

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That was another thing we ran into... my partner and i think it’s clear that within 10 years most people won’t even own a car.

EDIT: also don’t forget Turo takes 10-40% of your top line which needs to be factored in.
Do you think everyone is doing ride sharing by then or even better high speed light rail?
 

csalvato

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Do you think everyone is doing ride sharing by then or even better high speed light rail?
I think the ultimate future here is full self driving uber/lyft-like services with electric vehicles. There are several big players already in this space, and the Chinese gov't is literally throwing tens (or hundreds?) of billions at solving this problem.

As someone who ran a transportation company, the biggest cost by far is the drivers. A business like uber can run rides for $1-2 that normally cost $10-$20 now.

I believe that if it's only $1-$2 to get a full self driving car to go take you to get groceries + back, and back and forth to work, there won't be a need for anyone to own a car.
 
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Davidla

Davidla

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What are their current successful marketing/customer acquisition channels? Some of these age better than others (referrals > SEO, for example)
For the business I was looking at (that was just sold earlier today for full asking price), it looked like they were just relying on Amazon Merchandise organic traffic.

Nice Idea! Not everyone has $33k to buy an existing biz tho!
This idea can also work with starting side hustle/any other business.
 

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Davidla

Davidla

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any updates on this?
I chose to go with another deal that's very different, buying out one of our B&M competitors. Haven't thought how the Tesla prize comes into play here..but will most likely evaluate how well the deal has gone after 12 months and pull the trigger then if the numbers are as planned.
 

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