Bob Lutz in person has already said that the Model 3 has excellent fit and finish, but you will still hear people criticizing exactly these aspects of the car. Anyway, most of us complain about the price. And of not being able to buy one. Supposedly in our rescue, the WhiteBoard Finance YouTube channel presented a situation in which it is possible to drive a Model 3 for free. But only for some months. And only in the US.
The video shows the example of Chandler David Smith, an entrepreneur. And this is where the specifics of the free Tesla start to appear. If you do not have a company, you will not get that advantage, called bonus depreciation.
As a company asset, the US government allows the entrepreneur to write off up to US$ 18,000 for the car in its first year of use. That is because your "work tool" will depreciate, so you get to pay fewer taxes. But that is not the end of the free driving thesis.
Smith bought the Tesla Model 3 with a US$ 2,500 deposit and by paying more US$ 5,000 to get financing. He would have to pay an installment of US$ 1,251 per month.
By the end of 2018, when Smith bought his car, he was still able to apply for the US$ 7,500 federal tax credit – which translates into money back to your pocket. That said, he would have spent solely the money the government would later return.
But that no longer works: Tesla delivered more than 200,000 cars in the US. That makes tax credits be reduced until they no longer apply. In the first half of 2019, they amounted to US$ 3,750. If you buy one Tesla now or until the end of the year, you get US$ 1,875 back.
Since the entrepreneur also owns a Ford F-150 Raptor, he only gets the chance to write off US$ 7,290 of the original US$ 18,000. Mostly because he has the right to write off all the US$ 78,000 he spent on the pickup truck.
Those almost US$ 8,000 are equivalent to six months with no installment payments. If Smith did not have the truck, he would possibly be able to write off US$ 18,000. That corresponds to 14 months of the installments he has to pay each month.
Bottom line, if you own a business and want a Tesla, you may buy it for your business – as a company asset – and write off US$ 18,000. Having paid US$ 7,500 in deposit and finance and with a US$ 1,875 tax credit, you would “drive your Tesla for free” for almost 10 months.
When the tax credit ends, you will get 8 months of some sort of relief in payments. With the care not to use the car apart from business. Do otherwise could eventually be considered tax fraud. An unnecessary burden for “driving a Tesla for free”. We’d rather be sorry just for not being able to afford one.
Video Description via Marko - WhiteBoard Finance on YouTube:
In this video, Chandler David Smith and I will show you how you can drive a Tesla Model 3 for FREE!
Chandler achieved this by taking advantage of tax credits and tax write-offs made possible by owning a business and using his Tesla Model 3 for business use.
Although the title of this video may seem like clickbait, he truly got to drive this Tesla for free for 6 months. There are a TON of valuable nuggets that Chandler shares during our drive together, so be sure to watch the entire video.
Owning your own business is a powerful way to take advantage of government incentives and tax laws.
Watch the entire video to see me kick Chandler’s butt in the Tesla racing game!