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2018 Model S Depreciation

Hey community!

So I have a 2018 Model S coming in a week or so and I have the option to lease or buy. Question: does anyone know how fast the car depreciates if I wanted to sell it in a year or two would I take a huge hit? I don’t mind losing the amount I’m paying per month but if I did sell it would I also lose the deposit amount plus extra $$??
 

DougS

Member
Nov 16, 2016
23
13
WA
I have a 2017 model S 100D late June build. 1,500 miles in perfect condition ($117,000 MSRP) and have received the following trade-in values in the last two weeks:

Tesla: $84,400 (considering upgrading to P100D)
Random Mercedes dealer: $79,500 (was considering E63S but was not impressed. Like the way my Tesla drives much better. Like the Mercedes interior better though)

A white '17 model S 100D with 3,200 mi sold at the Riverside Manheim auction in CA (condition score 4.3/5.0) in Nov of last year for $82,100
Private sale through eBay or AutoTrader will likely net the highest amount. I haven't researched those numbers so can't speak to retail estimates, but kbb.com estimates a private sale of $102k and a CPO estimate of $106k for my car. My experience is that kbb and NADA estimates are higher than real world values.
 
Bottom line -- if you buy pretty much ANY new car and sell it in the first two years, the car will be worth less than what you paid for it and (depending on how you financed it) it will be worth less than the principal remaining on the loan. Reason is simple -- the loan is a straight-line decrease in principal remaining over the life of the loan. Depreciation is not a straight line, bu a curve with the maximum decrease taking place in the first year and then tapering off until you get to nearly nothing in the out years.

If you sell in your first two years, unless you put a big deposit down, what you sell the car for will almost certainly not be enough to pay of the remaining balance on your loan.

General rule of thumb -- for big purchases (homes, cars) in most circumstances, your break-even point is around the 3-5 year point. Selling before that ends up costing you money. If you only intend to keep the car for 2 years, a lease is a better option with less money paid out and you can walk away. Lease is a bad deal if you intend to keep the car for a long period of time...
 
2018 Model S Depeeciation
Good question, as kids' bladders typically fill faster than even an old 40kW-hr battery can drive. I usually have them hit the bathroom before we leave, and then some we live in a pretty rural area I'll just stop by the side of the road and let them go there in a pinch. Helps to open the passenger side door in my X, but you might get even better privacy and wind protection with both doors open in the S, any year.
 
Selling a luxury car that you bought new after just a couple years always means lots of depreciation.

Also Model S will likely go through a generation change in the next 2 years so your depreciation will be even bigger (luxury car buyers really don't value last gen products across all brands pretty much).

Look at 2015 BMW 750Lis for example. They were 100+k new, but being last gen, ones with pretty low mileage and great conditions and CPO are going in the low to mid 40s so probably low to mid 30's trade-in. Even assuming 10k discount at purchase, that's an almost 60k depreciation in just 3 years.
 
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Hey community!

So I have a 2018 Model S coming in a week or so and I have the option to lease or buy. Question: does anyone know how fast the car depreciates if I wanted to sell it in a year or two would I take a huge hit? I don’t mind losing the amount I’m paying per month but if I did sell it would I also lose the deposit amount plus extra $$??
depends which model

P100D? depreciates rapidly then levels off behaving like the others. The premium Tesla charges for P is not respected in the used car market so that's where you see the depreciation
100D? much better than similar class fossil cars like MB CLS/S or Audi A7/8
75D? even better
 
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Yeah it's a 75D
I think the data I've seen shows that in 5 years you'll see about 40-45% depreciation on the car. On a similar German, that's more like 60%. On a Lexus LS it's about 50%.

You have to think about it...the biggest depreciation concerns on luxury full sized sedans is engine/transmission/dated interior/miscellaneous wear/tear items like pads/rotors etc.

Tesla has an 8 year 'engine / transmission' warranty...has a pretty futuristic if spartan interior and goes through brake pads/rotors around once every 100,000 miles rather than every 40,000 miles on fossil cars (this thanks to regenerative braking).

It's a great financial value preserver, but as noted the $40,000-50,000 premium for P does not fare well. Similar to an AMG Mercedes which does similarly unwell, relative to its 'regular' brethren.
 

whitex

Well-Known Member
Sep 30, 2015
7,064
9,058
Seattle area, WA
Hey community!

So I have a 2018 Model S coming in a week or so and I have the option to lease or buy. Question: does anyone know how fast the car depreciates if I wanted to sell it in a year or two would I take a huge hit? I don’t mind losing the amount I’m paying per month but if I did sell it would I also lose the deposit amount plus extra $$??
Why don't you ask for a 2 year lease? Not sure if 1 year leases are available, but could ask for that too. Whatever you do, if you lease a car and return it before the lease end, more than likely you will have to pay to get out of the the lease (it ends up as a buy out and trade-in transaction, which in case of Tesla also adds $7,500 to your bill because Tesla subtracts the federal rebate from cap cost by adding it to the residual, so if you buy it at the end or any point, you lose the rebate).

I think bottom line is this, if you only want to drive less than 1 year old Tesla's, you can trade them every year but it will cost you. If you are planning to end the lease early, consider loan instead as you get to pocket the $7,500.
 

Bebop

Active Member
Jun 25, 2017
1,193
733
Midwest
Hey community!

So I have a 2018 Model S coming in a week or so and I have the option to lease or buy. Question: does anyone know how fast the car depreciates if I wanted to sell it in a year or two would I take a huge hit? I don’t mind losing the amount I’m paying per month but if I did sell it would I also lose the deposit amount plus extra $$??

If this is your plan, I would advise 1000% NOT to buy and instead just lease.

Buying new is really for long term holders of the vehicle. But planning on selling in a year or two? Just lease the car.
 

bob_p

Active Member
Apr 5, 2012
3,738
2,949
Over several years, depreciation should be roughly around 2% per month.

During the first year or two, you could be impacted by how early or late in the calendar year when the car is delivered (for Tesla model year=calendar year).

Agree that if you're going to hold the car for 1 or 2 years, leasing is probably better, because the depreciation is calculated based on the specific vehicle - while if you try to sell the car or trade it in, you might gain or lose when compared to other cars built in the same year.
 
Hey community!

So I have a 2018 Model S coming in a week or so and I have the option to lease or buy. Question: does anyone know how fast the car depreciates if I wanted to sell it in a year or two would I take a huge hit? I don’t mind losing the amount I’m paying per month but if I did sell it would I also lose the deposit amount plus extra $$??

Any premium car you sell in one year, be ready to lose about 20-25% in depreciation. The moment you drive it off the lot you likely lose in value the $7,500 rebate plus about an additional $10K.
 
If you have to ask ....


Anyone buying a new car, any new car, let alone a luxury car, to "save money" misses the economic reality. Look at ads posted on this forum for cars a year or two old: most have cost from one to four dollars (or more!) per mile in depreciation alone.

The ugly, literally ugly, truth is that the cheapest transportation per mile is a battered fifteen year old car with over 150,000 miles. Large or small doesn't matter because no matter how good or bad the fuel economy they'll only cost between a nickel and a dime per mile in gas and suffer no depreciation.
 
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The ugly, literally ugly, truth is that the cheapest transportation per mile is a battered fifteen year old car with over 150,000 miles. Large or small doesn't matter because no matter how good or bad the fuel economy they'll only cost between a nickel and a dime per mile in gas and suffer no depreciation.

Until it throws a cylinder and instantly depreciates to zero as the repair cost exceeds its value...
 
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