2018 Model S Depreciation

[Matthew XC]

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.

This isn’t about saving money at all. It’s abkut understanding the actual cost if I decided I wanted a new car in 1 year. Sounds like my best bet would actually be to get a used one that’s about 3 years old.

 

[coupedncal]

Anyone here care to comment what would be the market price for a model S 75D say in 24 months from the initial purchase date? And what would be the market price say in 36 months? For sake of discussion, assume the car is a 2018 model and take into account the end of tax credit later this year and also the fact the model S will switch over to the next gen later this year.

This is a real question as i believe i will be in the market for an S75D in 2 to 3 years (2020 timeframe).

Alternatively, would looking at a lease residual value for a 2 or 3 year lease give me some idea on what the market price would be at that time? Or do you think Tesla inflates or deflates the residual and the actual market price can't be judged based on residual?

 

[coupedncal]

Any takers on this market price for a used Model S 75 question?

 

[ArizonaP85]

Any takers on this market price for a used Model S 75 question?

Everyone here has opinions. You'd be better off listening to folks with expertise: the Black Book Residual Value Guide. Lessors bet billions of dollars every year on the expert prognostications of the Black Book (even though no one can guarantee accuracy of predictions). Your local bank or credit union should have access to look up for you. Good luck!

 

[barjohn]

I recently purchased a used S 75D Dec 2016 build for $65K. It has 13,500 miles on it. Slightly more than a year old but 2 years old as model years go. The original owner purchased it new as a 60D for $83,420 plus sales tax. It was fully loaded except for Sub-Zero package and no AP software. She then spent $2K getting it upgraded to a 75D and another $6K for EAP. Bringing her total to $91,420 plus tax. Assuming she got the $7,500 tax credit and the $2,500 CA rebate the vehicle cost her 81,420. Therefore she lost 20% in one year. Her pay off on the vehicle was a little over $70K so she had to take another $5K out of pocket to sell it to me. The car was in perfect condition.

 

[David_Cary]

Guessing resale is a tough one. The decline of the tax credit will help, Tesla changes will hurt.

The usual rate is something like 20%, 15%, 10% for the first 3 years. Or add 1-2% to each year. So 2 years is 35%-40%. That is what I consider typical luxury vehicle.

Now - just like Tesla did (still does?), options depreciate faster. So the extra cost for 100D depreciates at a higher rate. And then P depreciates even faster.

 

[rnortman]

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.

It's worse than that -- principal remaining is not a straight line, it's a curve that goes opposite to the depreciation curve. You have a fixed monthly payment over the life of the loan. Early on most of the payment is interest and very little goes to principle. As principle drops more and more of the monthly payment goes to principle rather than interest. Net result is that principle balance remains rather high early in the loan, and then the principle decline accelerates toward the end.

 

[Tummy]

I bought a Model S 60 in December 2016 with $78k MSRP and earlier this week looked to trade for an inventory 2018 S 100D. So 2 years and 3 months. Tesla offered $38k. Carmax offered $35k. Carvana offered the same as carmax and noted that a $3,000 body shop repair appears on the carfax and takes about $5k off the value. So maybe $40-$43k if no repair history.

We have an early (3,xxx VIN) Model 3 LR RWD delivered in January 2018. So owned it for 1 year and 2 months. Paid $57,500 before fed tax incentive. Tesla offered $32,500, Carmax offered $38k, Carvana offered $41,800.

 

[zer0cool]

Tesla cars used to hold their value quite well, but recently it's become worse than BMW/MB -- just crazy depreciation in the first couple years. At this level of depreciation, it begins to feel dumb to buy new...

 

[zambono]

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 $$??

2 years = lease

 

[Bzzz]

At this level of depreciation, it begins to feel dumb to buy new...

At which point in history was buying a new car for daily use a sound financial decision?

 

[trident]

3 year lease, residual $54,000 on a 2019 S 75D. Expect $20 grand on a Mercedes S as soon as you drive it off the lot. Just realize all cars are going to depreciate, just enjoy it. Life is too short. You can't take it with you.