Disclaimer: This post isn’t about my feelings about the situation. My blog is always in support of the idea that Tesla can go mass market and do well in urban locales like Chicago, New York & Los Angeles, where majority of the people park on the street or in open lots, where they’ll have no home charger, not folks that lives in the suburbs. These folks are buying a car for $35k and the difference between $1k and $3k is a big deal. So my purpose is to lay it out so they have an informed decision. I’m also discussing financial decisions, please talk to a professional financial expert before making purchasing decisions.
So you are going to be a new Tesla owner. And you have a decision to make, should you buy AP and FSD up front. You look at the page and it says that if you purchase after delivery, it’s going to be $1-$2k more than now. You might be tempted to bite the bullet. But I’m going propose for you to wait. To understand my rationale, you’ll need to hear my story, so bear with me.
When I bought my car, I bought both Enhanced Autopilot (EAP) and Full Self-driving (FSD). Here’s my rationale: I’m a software engineer, and for me it doesn’t make sense to pay one price for a software before delivery and another after. Think of a Tesla like your smartphone. Imagine if Apple or Google said, if you buy Software X when you buy your phone, it’s $10, but after you buy your phone, it’s $50. It doesn’t make sense.
Now let me take it one step further, say Software X was integrated to the Operating System of your phone. So if you were to purchase it, you are not getting a new feature on your phone, it’s just a flag to turn it off or on. That’s how EAP/AP & FSD is. As a software engineer, this variable pricing for enabling a feature doesn’t make sense. So I bought everything at once, even though I knew FSD was just a pre-order.
While I had my car, I’ve met many that haven’t purchased it. They had the option to do the Autopilot trial. After the trial they had the option to purchase at $500 more than I did. Then came the EAP structuring which made the pricing more complicated. They moved a lot of the features of EAP to FSD. EAP just became Autopilot (AP) for new owners and cost $3k pre-delivery. FSD which has Autopark, Navigate on Autopilot, and summons cost $5k.
To make it more confusing, if you got the car the same time as me and have EAP “feature”, there was 3 different pricing. If you didn’t buy EAP/FSD it was $5k, if you bought EAP, upgrading is only $2k. It’s a $3k swing. This only applies to existing owners. This is why I’m going to tell you to wait.
Don’t get me wrong, Autopilot itself is the best thing ever. Navigate on Autopilot is awesome, I use it daily on my 20+ mile commute. But as we have seen, with Tesla, those features are not immune from fluctuation. In fact, I’ll go on and say, these price might go down in the future. And now that the new FSD has workable features, it’s no longer a pre-order for new owners. An example would be similar to buying an app in the App Store and the price drops the next day.
So why wait? Note, these prices are just a feature, I’m not going to call it software. You’ll most likely have to pay for the v3 hardware anyways. And I have a feeling the price will continue to drop. I suspect that AP will eventually become standard and free.
No matter how great a Tesla is, it’s still a depreciating asset. For starters, you don’t want to tie your feature package with your car package price. If you are buying this car, you are either getting a car loan or paying in cash. If you pay with a loan, then you just tied a variable feature price that can be added later to your loan. If you paid in cash, then you get no added benefit.
What I’m suggesting to you is this. First I suggest getting a really good rewards card. This only works if you can pay it off immediately. If you are paying month to month on it, you APR will make this a poor purchasing decision. Next, do the 30 day trial. After the 30 days, your price will be $500 more than the original price based on what I’ve seen with my friends. So $3500 for AP and $5500 for FSD.
Now depending on your rewards card, you can get a lot of points and cash back. Say you have the Chase Sapphire rewards. You’ll get 1 point for every $1 on your purchase. That’s 9000 points! You can transfer that to your airline or hotel of choice! Lot of times, if you sign up for the card, you get 50,000 points if you spend $3,000 in the first three months. So this purchase can net you 59,000 points!
At 59,000 you are already looking at a round trip domestic flight! With many options of reward credit cards available, you can make this purchase work in your favor. So no matter what happens to the price, you’ll still be remember the trip that you took with your free plane tickets!