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Buying in Canada without the resale guarantee safety net

Discussion in 'Model S: Ordering, Production, Delivery' started by SteveW25561, Jun 23, 2013.

  1. SteveW25561

    SteveW25561 Member

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    I've been obsessing about buying a Model S here in Canada but have felt skittish since we don't yet have the resale value guarantee here in Canada. If we had this in Canada, I would be clicking "buy now" this instant.

    I tend to upgrade cars every 3-4 years and I've been able to get greater than residual or remaining balance values for a trade in every time.

    I know the 50% 36-39 month resale guarantee has been launched in the USA but nothing has been announced here in Canada, nor are there any assurances it will (new financing options are still rumored to be "coming soon" but no word on guaranteed value). Since this is an entirely new car segment, I have no idea what the "in the wild" resale values will be 3-4 years from now.

    *** Please note I'm 90% sold on the Model S, and applaud Tesla for their achievements. I'm simply looking for a sounding board -- recognizing the inherit bias of asking on a Tesla forum, I have seen very intelligent discussion here, so please don't consider any below as flame bait! ****

    One could argue that since our neighbors to the south have locked in values around 50%, Canadian cars should hold similar value (assuming Tesla doesn't launch the same program here), but in reality Canadian and US used car values are very hard to compare.

    You could also argue battery technology really doesn't evolve very quickly (as seen in the smartphone market), but witness the difference between the Roadster and Model S in terms of battery tech (as one example, the Roadster not being able to use the supercharger network, not to mention the new battery swap).

    Taken another step further, even the Model S battery swap of today would unlikely be the same for the X, or the GenIII which will be smaller. Fast forward 4-5 years where 20,000 2013 Model S cars are around, but dwarfed by 1,000,000 GenIII's (I think these are the Tesla goals for these cars): how economical will it be for Tesla to support the original Model S? Its probably unlikely Tesla will preserve the Model S subframe for their high end sedan indefinitely.

    Thus, you could argue that Teslas might drop in value more like consumer electronics do, rather than hold value like a luxury established brand ICE car does. In fact I'd bet resale values on a theoretical all battery EV Mercedes or BMW sedan would be hard to predict.

    My biggest concern (and greatest excitement as well) is this is a new segment where each generation will have relatively more innovation and improvement than sequential generations of ICE cars do, thus eroding resale values quickly.

    I know early adopters always pay more for the privilege (I'm one of them for sure), but how did others reconcile this leap of faith? Again, keep in mind I tend to get a new car every 3-4 years, and this discussion may be irrelevant for those planning to drive their Model S for 10 years or more.
     
  2. Zapped

    Zapped Model S - PURE EV

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    I know people that will buy a 5 or 10 year old Luxury car because they are "like new" and very affordable.

    I don't think you will have ANY problem selling a 3 year old Model S for the same reason. Just think about all those people that would love to own one and can get it for 1/2 price. They will always be able to charge on a 14-50 dryer outlet; that will not change
     
  3. Krugerrand

    Krugerrand Active Member

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    Consider this might be the car that you don't turn over in 3-4 years. Consider that someone across the border may want to buy the car. Consider that all signs currently seem to be pointing to an easily upgradeable car, rather than a car that becomes obsolete; the software upgrades and now the ability to battery swap.

    It seems to me the thing holding you back is some paper: money. If you can afford to buy the Model S in the first place, then is it really a deal breaker if the resale value of the car in 3-4 years isn't as high in Canada as the US? Really? Again, I'm not sure you're actually going to want sell the car, anyway.
     
  4. Jgdixon

    Jgdixon Member

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    #4 Jgdixon, Jun 23, 2013
    Last edited: Jun 23, 2013
    Many buyers in the U.S. took the plunge before the remake guarantee.
    I leased my car 6 months ago and had to guarantee the residual myself as there is no Tesla program here as you know.
    I am not concerned at all. Any leasing company will be somewhat conservative based on the lack of resale history.
    That being said I had to talk my leasing company into a higher residual so it would make sense compared to financing.
    In any event I got the car because of what it is, the best car I have ever had bar none and an awesome piece of technology.
    I've had Audi's, Acura's,Infiniti's and BMW's. I also currently have a 911S which is going up for sale shortly.It just seems so boring and so old school now. Go ahead and get a Model S, you won't regret it.
    As for the future of the car? Tesla has stated their goal is to bring the Gen III car to market but they will not abandon the S class.
     
  5. SteveW25561

    SteveW25561 Member

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    Thanks for everyone's comments -- keep 'em coming!

    @Jgdixon: what kind of residual did you get from your leasing company (or feel free to PM me if you'd rather not state on forum).

    I won't have a problem with financing, but I am trying to explore leasing options locally -- in BC no one really has any experience leasing Teslas since there is no local Tesla sales storefront here. My guys are working on something. Leasing has the advantage of a residual value thus offering me some sort of residual floor, but lease rates are typically high (eg 6.99% I'm being quoted). Compared to Scotiabank's 3.99% but without any residual value guarantee. Thus right now I'm struggling with the difference in rates vs assurance of value -- I'm now leaning toward the Scotia offer since the difference in interest rates would likely erode the net benefit of a lease residual value vs trying to sell/trade in in the future (and taking the leap of faith...).

    I do know the Tesla 8 yr battery warranty will go a long way to preserve values (yes, I'm talking myself into this...).
     
  6. PaceyWhitter

    PaceyWhitter Member

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    A couple of points:

    The Model X is coming out next year (riding on the same frame as the S) the GenIII will not be out in until 2017-2018 (and that could be pushed back). I doubt Tesla will make any major modifications to its flagship car, the Model S while it is working on GenIII so your car will still be state of the art in 3-4 years (outside of some minor upgrades).
     
  7. SteveW25561

    SteveW25561 Member

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    Well, I took the jump today, safety net or not!

    Ordered me a nice shiny Pearl White Model S 60! I'm going to authorize an immediate push to factory so I won't need the 2 week grace period. I went with a 60 since my own M3 after 4 years only had 35700 km on it, thus I clearly don't drive long distances in it (I know, the MS will make me do so much more...).

    Woohoo!

    BTW, the Scotia financing @3.99% is still available as of right now (June 27, 2013). I don't see it advertised on the Scotiabank site anywhere either.
     
  8. Krugerrand

    Krugerrand Active Member

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  9. Zapped

    Zapped Model S - PURE EV

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    That's great news.

    For a long trips one can always rent car. On those rare occasions that's what I will be doing.
     
  10. Kalud

    Kalud Member

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  11. e4chan

    e4chan Member

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    Great news!!
     
  12. Chris TX

    Chris TX Active Member

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    The problem with that is that you are stuck with their financing. WF and USB don't tend to offer anywhere near the low rates of places like Alliant Credit Union. Factor in the extra cost of interest rate, and it would be a wash (or worse).
     

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