CPO Prices in Canada

[Tony_YYZ]

Is it me or are CPO prices in Canada for the Model S ridiculously high? I've been looking out for 2014-2015 xxD models and some of the CPO options cost almost as much as a new build.

Am I way off base or are the prices high? Also I noticed that the prices for various CPO cars have increased while their mileage has as well. Don't used cars normally lose value with each passing day?

The cheapest AP1 car is going for $87,000 CAD.

Below is a screenshot of some of the CPO S' available starting from the lowest price.

Let me know what you all think!

 

[wayner]

Maybe not so good for you but for those of us here who own Teslas, and for someone like me who is a Model S P85D owner who has had his car for a little over two years it is great to know that my car has held its value and is going for 6 figures on the CPO market.

 

[sakimano]

I think tesla is reflecting the cars value in us dollars converted to CAD.

Which is weird because we can't Import so the US market shouldn't really influence the used market.

They're also trying to keep prices way up.

Personally I find the tesla listings in line with autoTRADER listings. Perhaps a small premium but nothing drastic. You just have to watch it closely...the D cars go fast. D stands for Disappear.

I have a 2015 model S 70D in white with tan upgraded nappa seats/premium lighting and interior/high fi with 23, 000 kms if you're looking. Pm if that works.

 

[wayner]

Regarding USD - the new prices get adjusted every few months for currency moves so it isn't surprising that this also happens in the resale market.

I had the Ludicrous upgrade performed on my P85D. Any idea what premium the Lud upgrade beings in the resale market?

 

[TomatoOne]

Personally I find the tesla listings in line with autoTRADER listings. Perhaps a small premium but nothing drastic. You just have to watch it closely...the D cars go fast. D stands for Disappear.

This is actually pretty accurate. We did fairly extensive research a few months ago before buying ours, and found that CPO prices were surprisingly competitive for what you get.

The cheapest D/AP1 car I've seen recently was a grey/tan 70D with basic options in Montreal. It was listed for $81K back in January and disappeared in two days.

 

[mrElbe]

Also a CPO gets a warranty.

 

[Canuck]

Maybe not so good for you but for those of us here who own Teslas, and for someone like me who is a Model S P85D owner who has had his car for a little over two years it is great to know that my car has held its value and is going for 6 figures on the CPO market.

Not really. Have you got a trade-in quote from Tesla? I did and they are not offering anything close to what they turn around and sell them for. Plus, if you try to sell your car privately, you likely won't get those CPO prices.

 

[Tony_YYZ]

Maybe not so good for you but for those of us here who own Teslas, and for someone like me who is a Model S P85D owner who has had his car for a little over two years it is great to know that my car has held its value and is going for 6 figures on the CPO market.

I can understand what you're saying but there it really doesn't make any financial sense for a new buyer to buy a ~$110k CPO when you can get a brand new car with options, the new fascia and AP2 for around ~$120k before the $14k rebate in Ontario. CPOs sitting at ~$100k mark will likely stay there for a long time until their prices start coming down

I think tesla is reflecting the cars value in us dollars converted to CAD.

Which is weird because we can't Import so the US market shouldn't really influence the used market.

They're also trying to keep prices way up.

Personally I find the tesla listings in line with autoTRADER listings. Perhaps a small premium but nothing drastic. You just have to watch it closely...the D cars go fast. D stands for Disappear.

I have a 2015 model S 70D in white with tan upgraded nappa seats/premium lighting and interior/high fi with 23, 000 kms if you're looking. Pm if that works.

See, i've heard this reason before...they are fluctuating used cars based on the USD conversion. That doesn't make any sense though. They are used. Even Inventory models don't get price adjusted if there is a price change. They get sold at the price they were purchased at or lower. Currency fluctuations should have 0 bearing on used vehicles. They depreciate with each passing day and don't have any reason to be priced with currency changes.

I don't think this can be the case but maybe I'm missing something.

Regarding USD - the new prices get adjusted every few months for currency moves so it isn't surprising that this also happens in the resale market.

I had the Ludicrous upgrade performed on my P85D. Any idea what premium the Lud upgrade beings in the resale market?

Same statement I made above applies here too. Currency changes should have no bearing on CPO cars. It doesn't even affect existing inventory, only new inventory that was acquired after the price changes took effect.

 

[wayner]

If you are saying that currency changes should have no bearing on the CPO market then you are also saying that there should be no link between the CPO market and the new market. Let's say that the Canadian dollar goes back to parity tomorrow. Should the CPO market stay where it is today given the prices shown above? You are saying it should but then you would be able to buy a new car for less than a CPO vehicle and no one would do that.

 

[Tony_YYZ]

If you are saying that currency changes should have no bearing on the CPO market then you are also saying that there should be no link between the CPO market and the new market. Let's say that the Canadian dollar goes back to parity tomorrow. Should the CPO market stay where it is today given the prices shown above? You are saying it should but then you would be able to buy a new car for less than a CPO vehicle and no one would do that.

Can you provide an example where this is true for any other manufacturer? Tesla rebaselines prices a couple times a year whereas other manufacturers usually do it with a new model year, if at all.

I've never come across a situation where BMW, Merc, etc had their CPO prices be so out of line with new inventory prices, nor do I recall them ever be influenced by currency exchanges. I welcome information to the contrary though if it exists.

 

[Canuck]

Can you provide an example where this is true for any other manufacturer?

Tesla is unlike any other car manufacturer. In many cases that is good, but in some cases, like CPO pricing, it may not be.

But Tesla is in the business of selling cars. If the CPO cars don't sell they will be forced to reduce the price. I don't see that happening anytime soon because there is not a very large inventory of CPO cars in Canada and no other province has as high of a rebate as you do in Ontario, if they have any rebate at all (we have a rebate of $5k in BC but it doesn't apply to any Tesla since their price exceeds the cap of $77k). So while your pricing comments apply to Ontario, which we all know is the centre of the universe , those new cars are not $14k less in BC., Alberta, etc. Perhaps more importantly, I don't think Tesla really minds if someone in Ontario determines it makes more sense to buy new.

 

[wayner]

To be honest I have no idea how BMW, Merc, etc set their CPO prices but it seems to me like our discussion hinges around the following: assume that the depreciation for a one year old vehicle is 30%. Should you use the historical price of the vehicle or the new price for the vehicle as the basis from which to determine the depreciation. So if the vehicle cost $100,000 but due to currency movements that same car sells for $120,000 then what is the fair price for a one year old CPO - $70,000 or $84,000? I think it makes some sense to consider the current price of the vehicle.

 

[Tony_YYZ]

Tesla is unlike any other car manufacturer. In many cases that is good, but in some cases, like CPO pricing, it may not be.

But Tesla is in the business of selling cars. If the CPO cars don't sell they will be forced to reduce the price. I don't see that happening anytime soon because there is not a very large inventory of CPO cars in Canada and no other province has as high of a rebate as you do in Ontario, if they have any rebate at all (we have a rebate of $5k in BC but it doesn't apply to any Tesla since their price exceeds the cap of $77k). So while your pricing comments apply to Ontario, which we all know is the centre of the universe , those new cars are not $14k less in BC., Alberta, etc. Perhaps more importantly, I don't think Tesla really minds if someone in Ontario determines it makes more sense to buy new.

Sorry, I was using Ontario in my specific example but the same premise applies for all provinces. I would never buy a CPO for ~$110k CAD when I can get a brand new car for about ~$10k or so more. Maybe that's just me.

To be honest I have no idea how BMW, Merc, etc set their CPO prices but it seems to me like our discussion hinges around the following: assume that the depreciation for a one year old vehicle is 30%. Should you use the historical price of the vehicle or the new price for the vehicle as the basis from which to determine the depreciation. So if the vehicle cost $100,000 but due to currency movements that same car sells for $120,000 then what is the fair price for a one year old CPO - $70,000 or $84,000? I think it makes some sense to consider the current price of the vehicle.

I'm failing to understand how CPO prices are tied to currency exchanges. They should be tied to the original purchase price. If the original purchase price was $100k and you depreciate 30% in the first year, that leaves a vehicle worth of $70k. Now I can see if that number goes up/down depending on CPO refurbishment, mileage, condition, etc. The used value should be based on the original year, options and pricing. I don't see how it can be tied to what a new car is worth today.

Why would a USED Tesla's price go up because a NEW Tesla's price went up due to currency changes? Again, even New Inventory does not increase in price if it was purchased under older, lower pricing.

 

[wayner]

Because a new vehicle is a substitute for a used vehicle and buyers will look at the relative prices. You are talking the accounting value of the vehicle whereas I am arguing for the economic value.

So are you also saying that a used Tesla's price shouldn't go down because a new Tesla's price goes down due to currency fluctuations? Why buy a used Tesla when you could buy a new one for the same price? Why wouldn't the argument be symmetric?

 

[Destiny1701]

Sorry, I was using Ontario in my specific example but the same premise applies for all provinces. I would never buy a CPO for ~$110k CAD when I can get a brand new car for about ~$10k or so more. Maybe that's just me.








I'm failing to understand how CPO prices are tied to currency exchanges. They should be tied to the original purchase price. If the original purchase price was $100k and you depreciate 30% in the first year, that leaves a vehicle worth of $70k. Now I can see if that number goes up/down depending on CPO refurbishment, mileage, condition, etc. The used value should be based on the original year, options and pricing. I don't see how it can be tied to what a new car is worth today.

Why would a USED Tesla's price go up because a NEW Tesla's price went up due to currency changes? Again, even New Inventory does not increase in price if it was purchased under older, lower pricing.

Hmm...not so sure the brand new would work at that price unless it's a 75D. (Even then a 75D is $135,700 loaded up plus $1300 pdi so $137k plus tax or $154,810 less 14k rebate: $140,800 vs a 110k cpo ($124,300 post tax) which would likely be a 90D with 25-30k on it and also fully loaded. So apples to apples.

Longer range and better performance as opposed to AP 2.0. I suppose some value the former or the latter

So paying net 16k more for a brand new car with AP 2.0 but less range and less performance over the term of the ownership. That's how I see it. CPO all come with renewed warranty anyway so that's a wash.

 

[Tony_YYZ]

Because a new vehicle is a substitute for a used vehicle and buyers will look at the relative prices. You are talking the accounting value of the vehicle whereas I am arguing for the economic value.

So are you also saying that a used Tesla's price shouldn't go down because a new Tesla's price goes down due to currency fluctuations? Why buy a used Tesla when you could buy a new one for the same price? Why wouldn't the argument be symmetric?

I'm saying a used Tesla's price should go down and not be tied to currency fluctuations since that should matter only for new vehicles that are purchased after a price increase happens.

To argue that a used car's price has the ability to increase because the price of a new car has gone up is like saying that a used iPhone 6 value has increased because the starting price of the iPhone 7 is higher.

Does that make sense?

 

[Destiny1701]

I'm saying a used Tesla's price should go down and not be tied to currency fluctuations since that should matter only for new vehicles that are purchased after a price increase happens.

To argue that a used car's price has the ability to increase because the price of a new car has gone up is like saying that a used iPhone 6 value has increased because the starting price of the iPhone 7 is higher.

Does that make sense?

It actually does. If a products market value increases and demand is sufficient to justify the increase then it stands to reason the used version of that same product (again approx apples to apples in function) should also benefit from market pricing. Basic economics. In this case Tesla's retail price to consumers has steadily increased far more year over year than most other car manufacturers.

A used Tesla will always depreciate however the factors mitigating part of the normal reduction are:

1. Exchange rate fluctuations allowing for a higher priced new model of the same configuration. If the price for a similar new item costs 10% higher than it did yesterday, the demand value for the used item may increase as well as a side benefit.

2. Tesla's are the only vehicle to become 'smarter' with time due to continual software updates. No other car on the road can generally keep up with its newer brethren except for T's. In this respect a used T may generally keep up with the latest of its new model.

3. Retail base pricing as well as options have all increased dramatically. Ie. a base 90D has gone from 102k last year to 119k and options have increased 20% on average.

iPhones are no different. The 6+ actually reportedly increased by $100 average in value overnight as soon as iPhone 7 prices were released!

 

[Tony_YYZ]

Alrighty then. It appears it was I who is crazy for thinking this was weird.

Thanks for the discussion folks.

 

[sakimano]

This is actually pretty accurate. We did fairly extensive research a few months ago before buying ours, and found that CPO prices were surprisingly competitive for what you get.

The cheapest D/AP1 car I've seen recently was a grey/tan 70D with basic options in Montreal. It was listed for $81K back in January and disappeared in two days.

I think I saw that one. They had a blue 70d too that disappeared in March for similar money.

 

[S'toon]

2. Tesla's ...

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