CPO during the long wait?

[Twiglett]

OK, I posted a while back about the lease ending on my LEAF.
Well its only a few months away now and the landscape has changed considerably.
The used prices for a LEAF are seemingly in free fall. Last year a two year old LEAF was 10K, now I'm seeing low mileage cars for 6.7-7.5K. All of which makes getting a used LEAF a losing proposition, especially in my area where battery capacity loss is a given.

So instead, now I'm seriously considering getting a low end CPO 85.
My question is really down to how much will a CPO lose in value if I decide to sell it when the Model ☰ arrives.
I'm further confused by the difference in CPO cost and that the KBB value which is usually about 4K less.
I'm assuming that at this age the 85 is a safer bet to the older 60 as well.

Thanks!

 

[Az_Rael]

KBB values being $4k less than CPOs is probably accurate since all CPOs come with a 50k mile warranty. That is more valuable than the extended warranty available on privately sold cars because the extended warranty has a $200 deductible and requires every maintenance to be done on time to stay valid.

As far as a CPO 85 losing less than a used Leaf, I am not so sure. If you bought a $7k Leaf and sold it in a year, the most you would lose is $7k. (Which is very unlikely that values would go to zero.)

However, if you bought a used CPO 85 and sold it in a year, you could potentially lose more than $7k.

If you are serious about buying a CPO, a subscription to the historical data of ev-cpo would be helpful. You could see how much prices have gone down over time and make a guess as to how much they will continue to go down.

 

[Jayc]

How much more do you think you would lose on a low mileage Leaf in another 2 years? Let's say half its value is lost (which IMO is an overestimation), by the time you take delivery of your Model 3 you've lost 3.5k. Compare that to what you could potentially lose in a Tesla S that costs 60k+

Not suggesting that a Model S is not a good buy today but I really don't see the point in getting one as a temporary solution.

 

[doofenshmirtz]

Think of it this way - You could trade in your CPO for the Model 3 when it arrives and let you get the most optioned out car probably without having to put down any more cash
The Leaf - money down the drain

 

[ummgood]

Honestly I'll be different and say I would buy a 7.5k used leaf. You know it won't be your last car and it only needs to last until the Model 3 comes out. My thought is the more expensive the car the more likely you are to lose money on it.

Let's say you buy a 50k used model S and it loses 20% by the time you sell it. That is 10k loss.
If you buy a 7.5k leaf and lose 50% you have lost 3.75k or 1/3 the amount of loss with the Tesla.

Now let's assume that Tesla is going to come through on the autopilot before (or have a lot of press about it almost being done) by the time the model 3 comes out you could take a bigger hit on the standard S without autopilot or autopilot v1.

As far as for me the Model 3 is going to be the first car I buy that I expect to take a bath on. Until this car I have always purchased cars that keep their value insanely well. For example I bought a 2 year old Toyota Echo as a commuter banger for 6k. I polished it up and put new rims on it. By the time I sold it I had about 7k into it. I turned around and put 25k miles and had it for 2 years and I sold it for 6k. So I had a car I drove for 2 years for 1 thousand bucks.

My current Toyota Tacoma I bought for 17,900 @ 5yrs old with 50k miles. I have had it now for 7 years and it now has about 120k miles on it. I think I could get maybe 11 or 12k for it. Worse case scenario I lose about 1k/year on that vehicle too. So my philosopy is you always do better buying a several year old car and selling it shortly after than you do with a newer car. Plus the older it is the less likely a ding or two is going to affect its value.

 

[ummgood]

Plus to add I including a lot of new to electric buyers probably wouldn't want to buy a Model S third party. So you're going to take a bath on resale because no one will pay the 4k difference between kbb and the cpo price after you have had it. Assume that you'll take a 4k loss right off the top. Then add onto that any depreciation plus trade in value is probably another 2 to 3k less. I am guessing the second you pick up your car you'll have lost at least the price of the 7.5k leaf. Then any money you make selling the leaf you're ahead. On the flip side any money the Model S depreciates after you drive it away will be an additional loss and it is a gamble to guess what that might be.

 

[Zaphod]

Yes, the allure of the CPO has crossed many a mind since the Model 3 reveal. I've been there too. From a purely financial point of view, I don't see it making sense. The relatively short term depreciation is too big of an unknown. Even being considerably conservative at 5%, a $50K 85 will be $2500 depreciation. Take the LEAF and use same 5% for $7K, that is $350. The LEAF would need to have over 30% depreciation to match the Tesla. I'm sure the LEAF depreciation will/has leveled off. I know it's not the sexy or cool answer, but from a financial perspective, it just makes more sense. But I know there is more to the decision than money.

Also, I never use KBB for Tesla values. I've never seen them to make any sense. At least to me anyway.

 

[ummgood]

Yes, the allure of the CPO has crossed many a mind since the Model 3 reveal. I've been there too. From a purely financial point of view, I don't see it making sense. The relatively short term depreciation is too big of an unknown. Even being considerably conservative at 5%, a $50K 85 will be $2500 depreciation. Take the LEAF and use same 5% for $7K, that is $350. The LEAF would need to have over 30% depreciation to match the Tesla. I'm sure the LEAF depreciation will/has leveled off. I know it's not the sexy or cool answer, but from a financial perspective, it just makes more sense. But I know there is more to the decision than money.

Also, I never use KBB for Tesla values. I've never seen them to make any sense. At least to me anyway.

And don't forget the depreciation is more likely starting at the kbb price and not the cpo price after purchase. So at a minimum there is a 4k loss right off the bat. If they can find a used leaf private party than that would start depreciation right at the price they paid. Now on top of that I personally wouldn't buy a private party Model S because I would be nervous about service. I don't know much about this though. With a Leaf at least you know you can shop around Nissan dealerships.

 

[Booga]

If I didn't have any car right now, maybe a CPO, but otherwise, I'm just keeping what I have and waiting it out.

 

[Jayc]

Think of it this way - You could trade in your CPO for the Model 3 when it arrives and let you get the most optioned out car probably without having to put down any more cash
The Leaf - money down the drain

Once you drive out of the showroom with your CPO, you've probably lost 10% of purchase price if you were to trade it in the following day. This applies to all cars not just to Model S.

 

[Twiglett]

Wow, thank you all for your responses and consideration.
As much as it sucks, the 7K LEAF probably is the most logical.
I was letting my heart rule.
Patience grasshopper.

 

[Az_Rael]

Wow, thank you all for your responses and consideration.
As much as it sucks, the 7K LEAF probably is the most logical.
I was letting my heart rule.
Patience grasshopper.

Yeah, I ended deciding to buy the CPO (my heart won), and now I am probably going to delay my Model 3 purchase until they are readily available. I don't regret having my Model S now at all though - so if you decide to do the less financially prudent option and get the CPO, you won't be disappointed.

 

[doofenshmirtz]

Once you drive out of the showroom with your CPO, you've probably lost 10% of purchase price if you were to trade it in the following day. This applies to all cars not just to Model S.

True, but how much is the Tesla grin worth?

 

[Twiglett]

my grin will be bigger if I can spend money on my Model ☰ options instead of losing it in unnecessary depreciation
or - in the unlikely event of me not liking the Model ☰, I can get a new Model S

 

[ummgood]

my grin will be bigger if I can spend money on my Model ☰ options instead of losing it in unnecessary depreciation
or - in the unlikely event of me not liking the Model ☰, I can get a new Model S

I am in the same boat as you. I really wanted a Model S. I even test drove and configured the car and probably could have pulled the trigger. The key is though for the 77k it was for the Model S at the time I could have a much nicer Model 3 (hopefully). Hopefully not that expensive plus I probably have to consider how much the insurance would be on a 'P' model. I test drove a P90D but I had them cripple it so it performed like a 70D or a 70 so I could see the difference in the two. Frankly a plan 70 Model S would have worked for me. Way more exciting than my '05 Toyota Tacoma for sure.

 

[ev-now]

Yeah, I ended deciding to buy the CPO (my heart won), and now I am probably going to delay my Model 3 purchase until they are readily available. I don't regret having my Model S now at all though - so if you decide to do the less financially prudent option and get the CPO, you won't be disappointed.

Same here, best decision for us. Safety was a big consideration as a new vehicle was required. I perceive the Model S to be one of the safest cars in the world. If I bought something else, and an accident had bad ramifications for my wife (the daily driver) or kids - I'd always have wondered what-if? So decided that heart (in two ways) rules over likely financial prudence.

Plus the S is now - who knows what circumstances might change whereby the Model 3 did not become an option (personal, or corporate). At least a year of enjoying the S is worth a lot - happy (and safe) wife, happy life!

 

[lmaccaro]

Buy a CPO now, move to the front of the line and guarantee a $7,500 tax rebate on your 3. Yes, my S will depreciate. But Uncle Sam will pick up most of the tab through a rebate I otherwise may not have gotten.

 

[igotzzoom]

My current Toyota Tacoma I bought for 17,900 @ 5yrs old with 50k miles. I have had it now for 7 years and it now has about 120k miles on it. I think I could get maybe 11 or 12k for it. Worse case scenario I lose about 1k/year on that vehicle too. So my philosophy is you always do better buying a several year old car and selling it shortly after than you do with a newer car. Plus the older it is the less likely a ding or two is going to affect its value.

You're not lying. Tacos hold their resale insanely well. I recently picked up an '04 Chevy Avalanche with 163,000 miles for around $6k. Equivalent year/mileage Tacomas were about $12-14,000. The Model 3 will for sure be the most expensive car I've ever bought or owned new.

 

[Twiglett]

actually I'm seeing a bunch of 2 year old Fiat 500E's being offered off lease for <$7000
That seems seriously cheap and has a liquid cooled battery that should hold up to TX heat better than the crappy LEAF battery.

 

[Zaphod]

Buy a CPO now, move to the front of the line and guarantee a $7,500 tax rebate on your 3. Yes, my S will depreciate. But Uncle Sam will pick up most of the tab through a rebate I otherwise may not have gotten.

It's not a rebate, it's a tax credit. Yes, for most it ends up being essentially a rebate, but for some it's not necessarily cut and dry. I suggest everyone due their due diligence before blindly counting on it as a rebate.