Buy Model S until M3 arrives. Am I crazy?

[dckiwi]

I put down my M3 deposit online the day after the reveal. Who knows when I'll get my M3 but I'm going with sometime mid-2018.

I'd like an interim EV to hold me over. Initially I looked at the BMW i3. It's an ugly little car but no worse than any of the other non-Tesla EVs. I can get a 24 month lease now for a total cost of ~$11,000 (downpayment + all monthly payments).

But then I started thinking about buying a base Model S60 - only upgrade would be the pano roof. All in this would come to $70,500 - $7,500 tax credit = $63,000.

Now here's the question. Of course no one knows what the MS resale value will be in two years, but would it be reasonable to get ~$50,000 for this car? Assume low mileage (15k) and I keep it in great condition.

If so, then my total cost of ownership for the MS would be $13,000 over two years - only a little more than the stubby i3.

I'm also thinking MS resale values will be helped when the Tesla federal tax credit expires.

Am I being way to optimistic expecting $50k for a $63k two-year-old Model S? Would love everyone's feedback.

And yes, I know I'm being wasteful. I know I should just hang on to my ICE for another two years. But YOLO and all that.

 

[Odebek]

I put down my M3 deposit online the day after the reveal. Who knows when I'll get my M3 but I'm going with sometime mid-2018.

Keep in mind that if you become a Tesla owner, you will move to the front of the line and likely get your M3 in late 2017 or Q1 2018.

The 2013 Model S60's on the CPO website - Pre-Owned Model S | Tesla - are all going for about $50,000. So I think you can do it... unless the resale values really plummet due to AP 2.0 & higher density batteries and the car is not upgradable... why not lease the Model S?

 

[JeffK]

Let's consider a few facts before you think about resale value.

The 100 kWh Model S is rumoured to be released very soon. Just got approval in Europe
Tesla Model S and X with 100 kWh battery pack and ‘~380 miles of range’ approved by European authority

Second, starting either this year or next, the cars will come with the necessary autopilot 2.0 hardware.

Both of these things make a current model S virtually obsolete in some buyers minds. Especially when considering the value they could get from a Model 3 for the same price when it's released.

 

[ItsNotAboutTheMoney]

Honestly, no, I think that $50k is overoptimistic for a near-base S.
- If Tesla hits the $35k mark with the Model 3, the resale value of low spec Ss will fall people will have less reason to buy up to the S
- By the time Model 3 is here, we can expect Autopilot 2.0 hardware and the new hardware, along with any other new features will depress resale values further.

If you're buying an S, be prepared to make it your car for a reasonable number of years, or be prepared to take a big depreciation hit when you sell it.

 

[Boourns]

It's impossible to say but I think it's pretty likely you'll be able to get 50k for your car in two years.

Most 2-3 year old Model S are well above $50 right now. And the things that Jeff brought up above could be said for the CPOs available now -- no autopilot.

And as for the 3 affecting the S value, that may be true down the road, but remember to get a 3 around that time you will have already had to have yours reserved. It will be impossible for someone to just go buy a 3.

 

[dckiwi]

why not lease the Model S?

If Tesla had 24 month leases I definitely would. I guess I could go with a 36 month lease and swap for an M3 in 3 years. Also the lease deal I was quoted by Tesla was $826/month - which is $29k over three years!

 

[Odebek]

If Tesla had 24 month leases I definitely would.

They have a 24 month lease, at least they did in June. The option shows up when you actually go to apply for a lease approval.

 

[Dwdnjck]

Just buy the. ModelS and keep it. Problem solved.

 

[CyberKnife]

Keep in mind the money you spend now on other cars could be used for the model 3. So really depends on your budget and if you could take the depreciation hit. If you are really set on a model s, there are cpos that might loose less value.

 

[S'toon]

Keep in mind the money you spend now on other cars could be used for the model 3. So really depends on your budget and if you could take the depreciation hit. If you are really set on a model s, there are cpos that might loose less value.

Full article at:
10 Words You Need to Stop Misspelling - The Oatmeal

 

[cwerdna]

I'd like an interim EV to hold me over. Initially I looked at the BMW i3. It's an ugly little car but no worse than any of the other non-Tesla EVs. I can get a 24 month lease now for a total cost of ~$11,000 (downpayment + all monthly payments).

You should be able to get a 2-year lease on a Leaf for less.

Heck, after I leased a '13 Leaf SV w/both packages for 2 years (~$7222 in total payments + $395 disposition fee at lease end), I returned the car (residual minus $6500 discount was $3K to $3.5K above used market prices), I bought 2 year lease return '13 Leaf SV w/premium package only for $9,325 + tax and license.

Or, buy a used EV like a used Leaf. (Hint: Don't buy from Nissan franchise dealers. They have big markups. Go to a used car dealer that off-lease cars from Manheim auctions: Media Releases.)

Its value won't be 0 at the end of 2 years or whatever.

But then I started thinking about buying a base Model S60 - only upgrade would be the pano roof. All in this would come to $70,500 - $7,500 tax credit = $63,000.

Don't forget sales tax, fees and registration (and in some cases property tax).

Now here's the question. Of course no one knows what the MS resale value will be in two years, but would it be reasonable to get ~$50,000 for this car? Assume low mileage (15k) and I keep it in great condition.
...
Am I being way to optimistic expecting $50k for a $63k two-year-old Model S? Would love everyone's feedback.

IMHO, that's wishful thinking. Chevy Bolt will be shipping by end of 2016. In 2 years, Model 3 for "$35K" or whatever will be shipping. Other longer range EVs will be out.

If you are really set on a model s, there are cpos that might loose less value.

Agree.

 

[22522]

Base cars usually don't move on the used markets.

 

[Ashkenaz]

Model S now. Start enjoying your life!

 

[Jopo43]

I had the same question and decided after looking at the price of used model s and the technology advancements that waiting for a model 3 is a better option. I see buying a 2013 model s like buying a iPhone 3 today...

 

[Jopo43]

Not to mention once the model 3 is in production 2013 model s prices will drop a bunch old technology

 

[Az_Rael]

Why don't you buy a CPO Model S? The price is lower, and the depreciation curve has already taken the big hit and should be steady after that. That is what I am planning on doing. I will just skip AP 1.0 and go straight to AP 2.0 on my Model 3.

With AP 2.0 so close, I expect the AP 1.0 cars to take a big hit in value once it's out.

I do think the current S60 prices on the CPO site are high right now. Some of them are priced the same as S85s. So I expect them to drop eventually.

 

[chillaban]

It's probably worth mentioning that just because Tesla can get $50k for the car doesn't mean you can.... And you gotta factor in the ~10% taxes/fees overhead if you are purchasing and not leasing, since nobody gives you a refund for trading in or selling the car down the road.


I think $50k is overly optimistic, and if that's a key part of the financial strategy, I would caution against making this decision. It's really hard to predict the car market 2-3 years down the road. I've made that mistake once using the exact same line of reasoning supported by then-current KBB values and market data, but 2 years later found the car worth $10k less than I expected (In part due to a new generation coming out and the manufacturer starting to subsidize lease deals)

Ended up eating a $8k loss and getting my Tesla anyway because that's what I really wanted.

 

[Garlan Garner]

Keep in mind that if you become a Tesla owner, you will move to the front of the line and likely get your M3 in late 2017 or Q1 2018.

The 2013 Model S60's on the CPO website - Pre-Owned Model S | Tesla - are all going for about $50,000. So I think you can do it... unless the resale values really plummet due to AP 2.0 & higher density batteries and the car is not upgradable... why not lease the Model S?

I don't believe that for a minute. Tesla owners to the front? Elon says - here is a gift to all those who waited in line. Still waitin.....

 

[Garlan Garner]

Base cars usually don't move on the used markets.

You are absolutely right. Base cars DON"T move on the used markets. I recently had a huge discussion about this on another thread....

 

[Odebek]

I don't believe that for a minute. Tesla owners to the front? Elon says - here is a gift to all those who waited in line. Still waitin.....

You didn't get your gift yet? Maybe someone swiped it?

Yes, priority for employees, then current owners... in order of reservation, then everyone else: Reserving your Model 3

"In order to be as fair as possible, there will be a different queue for each region. And as a thank you to our current owners, existing customers will get priority in each region."​