Advice on Selling S60 after 9 months

[virtualsmack]

Hi all,

This is more of a financial question but related to my Model S. Hope you guys can provide some POV's and maybe even validate my thought process.

Situation:
- I bought my Model S in Oct 2016. It currently has 9,500 miles.
- I used to commute about 80 miles a day. I could charge for free @ work, needed the carpool sticker.
- Definitely paid more than I normally would for a car, but I spent so much time in the car and decided to treat myself.
- I've started working from home and I now drive the car about 5 miles a day.

Since I barely drive my car, I am pretty sure I want to sell it. My rationale:
- At this point, I feel like I'm overpaying for the car to sit in my driveway. Whenever I drive it, I love it, but that's about 10 minutes or 5 miles a day. Probably more on weekends but I still feel like it's more car than I need, especially since the gas and time savings are non-existent.

- I also have my eye on another car that has more functionality (all wheel drive, compact SUV) but most importantly way cheaper. Monthly payment is about $300 bucks. It's certainly not as nice as a Tesla but it gets the job done and for the amount I drive, even if I missed my Tesla, it would be a short-lived feeling. Plus when I hit the slopes during winter, I'd probably be grateful that I had the car and space.

- Financially, I'm not swimming in cash, but I live comfortably. I have healthy retirement contributions, education contributions, etc. My family and I are pretty happy and have what we need, and if we had more money we would use it to save even more, and use it on something I would actually be able to enjoy (a new patio to hang out in, trips w/ the family, etc).

What I need advice on:
- I do feel like the wise thing to do is to sell the car, but it will be at a loss (maybe $3-5K loss, but who knows). I probably end up saving about $800 bucks a month so I would make the money up in half a year, but is there a limit to how much I should be willing to lose? Let's say that I lose $10K on the car, at what point does it become a dumb decision to sell the car, knowing that I would make that amount back up in a year? Is there even one? I still have 4 more years of payment so that would be 4 years of savings!

- Secondly... is there any reason that I should keep the car? I can't think of any, especially w/ the savings. If the savings was significantly less, it'd be a different story. Initially I thought that "if I can afford it, let's just keep it", but if I'm not using it, I don't even see the point in that! Am I missing something?? Let me know!

Final thoughts:
- I know that the first year is when I lose the most, but it'll only continue to depreciate.
- I was also worried about the sunk costs (I did titanium coating, blacked out chrome, tinted windows) but I'm over that!
- And finally, here is what I have to look at every day! So sad!

Any comments and POV's are appreciated. Thank you!

 

[Tam]

...loss...

Usually, a car means depreciation so loss is expected.

If you don't need it then don't keep it.

Unless, you still want it even if you don't need it

 

[davidc18]

put it up for sale and see what the market responds with. if you don't get any offers at your target price, keep the car.

 

[David_Cary]

Sell. But expect a bit more loss than you are budgeting for I suspect. Price went down recently (or features up - doesn't matter) - to the tune of $3500 (75 for price of 60 and included power lift). So I'd budget for a $8k loss.

 

[nagypite]

- federal tax credit (7500)
- depreciation

 

[whitex]

Consider the concept of "sunk cost" and then stop considering about how much you paid for the car. The decision you are trying to make should be made based on future only - how much money would you get back, or how much monthly would you save. How much money you paid for it to-date is irrelevant because there is no "loss" concept that would be beneficial to you (such as in a case where you write off the loss), unless you bought or leased the car for a business that has income.

If you do choose to sell it, make sure you advertise if it's a software upgradable 60 (to 75) since that upgrade recently went down from $9K to $2K.

 

[Snowstorm]

Maybe you should list it for sale as a S75D and upgrade just before you sell it if someone is interested.

 

[SabrToothSqrl]

Sell it, and buy a model 3...

 

[virtualsmack]

thx for all the feedback. you guys are right. gotta stop thinking about it as loss.

and good call on the 75. ... kbb lists a 75 for 8k more...

 

[Xolt]

Keep in mind the $7500 tax rebate less the depreciation. Compare that to the price that Tesla sells inventory cars for that still get the $7500 tax credit and $1000 referrals less the discounts. If you paid sticker you will be taking a $12-$15k hit not counting taxes so keeping it may be the best option.

 

[nagypite]

they will apply the 75 badge for you in the SC

 

[Drucifer]

Conversion to an S75 is a good call at this point.

Generally it's best to stop the bleeding. That said, I would look forward 2 or 3 years. What would be the TCO (total cost of ownership) over the next 2-3 years on the SUV, all in (depreciation, insurance, taxes, fuel, maintenance) and what would be the TCO on the S60?

For the TCO on the S60, start at the current value TODAY. Past depreciation is water under the bridge.

Now, what do you want to do? You may find that 1st year depreciation on yet another new vehicle (plus gas delta etc.) along with expected residual value in 2-3 years could make the SUV actually more expensive - though that's doubtful.

Likely the book answer is to convert to S75 and sell now, before the Model 3 starts shipping - but you should prove that, don't just take my guess on that.

 

[Snowstorm]

I am actually in the opposite spot, about to take delivery of a S100D at the end of June. Is it silly to buy a model S right before Model 3 is announced? It is a long story but his car was ordered Nov 2016.

 

[jbcarioca]

Conversion to an S75 is a good call at this point.

Generally it's best to stop the bleeding. That said, I would look forward 2 or 3 years. What would be the TCO (total cost of ownership) over the next 2-3 years on the SUV, all in (depreciation, insurance, taxes, fuel, maintenance) and what would be the TCO on the S60?

For the TCO on the S60, start at the current value TODAY. Past depreciation is water under the bridge.

Now, what do you want to do? You may find that 1st year depreciation on yet another new vehicle (plus gas delta etc.) along with expected residual value in 2-3 years could make the SUV actually more expensive - though that's doubtful.

Likely the book answer is to convert to S75 and sell now, before the Model 3 starts shipping - but you should prove that, don't just take my guess on that.

I agree with Drucifer but I'd add another point. You should also consider VLF impact in addition to depreciation. if the choice is strictly financial you're probably best off to sell the S75, as it will be, and replace with your chosen vehicle, but a model with high incentives and one model year old. Financial you'll certainly be better off, if financial questions are dominant in your thinking. Since you will be driving very little I'd ignore fuel economy as well, if you have no objection to appearing to be 'not-green'.

 

[No2DinosaurFuel]

Like others have said,

1) $7500 tax credit. So you need to take that off
2) state credit? Take that off too.
3) lower demand and higher other model s due to imminent model 3 release
4) almost $10K miles depreciation.
5) other things like lack of autopilot 2 but maybe free supercharging increases a bit.
6) taxes and such.
7) lack of slightly new features and such, but that would only be from an experience model s buyer.

So yeah I think you are looking around $15-20K lower than your purchase price at a minimum if you bought bare bone s60. More if you added other features.

But yes sell it. The sooner the better because you dont have a depreciating asset in your garage. I.e. stop the bleeding.

 

[Xolt]

Like others have said,

1) $7500 tax credit. So you need to take that off
2) state credit? Take that off too.
3) lower demand and higher other model s due to imminent model 3 release
4) almost $10K miles depreciation.
5) other things like lack of autopilot 2 but maybe free supercharging increases a bit.
6) taxes and such.
7) lack of slightly new features and such, but that would only be from an experience model s buyer.

So yeah I think you are looking around $15-20K lower than your purchase price at a minimum if you bought bare bone s60. More if you added other features.

That's right where I thought it would be if you figure the sales tax in to the number. Even at that number it still might be better for a buyer to buy a new Tesla with a full 4 year warrantee. Selling a one year old car is not a good deal as you compete with new cars.

 

[rocketdallas]

Your viewpoint seems well thought out and it may make the most sense to sell it, even at a loss, to preserve future cash flow. Do you not anticipate driving more in the future? If not, I think you're right and may be happier selling it.

 

[SabrToothSqrl]

Rent it out to make $

Turo – Rent unique cars or earn money renting your car.

 

[dinkoh]

Would it better to upgrade my S60 to S75 battery, if I plan on selling and trade-in? I thought less features would minimize the amount lost during the sale/trade-in.

 

[Drucifer]

I am actually in the opposite spot, about to take delivery of a S100D at the end of June. Is it silly to buy a model S right before Model 3 is announced? It is a long story but his car was ordered Nov 2016.

You will be fine. Used/CPO Model S compete with new Model 3 in similar price ranges. The new Model S will still be the superior car - and you can start enjoying it now instead of waiting your turn for maybe 2-3 years.