CPO program

[arijaycomet]

AmpedRealtor- it isn't that they were handing the savings to the next owner, but they had no choice. Prior to recent months, you only had two options: buy new, or buy used. Most of the used cars were still fairly low miles, and high demand (vs waiting 60-120 days for your custom order)

As such, resale was decent, but someone buying new could buy said vehicle new for $7500 off (fed tax credit). So used cars would never easily sell unless they too were competitive, meaning they had to be less by around $7500 plus discount for age and mileage.

Now fast forward to today. You have three new options. First, inventory cars are more popular and discounted plus they have fed tax credit. Second is certified pre owned cars, which again price needs to make sense so those are lower. And lastly used cars which are finally more mileage and deeper price discount to account for pre-autopilot hardware (the CPO and inventory cars also reflect this discount of pre auto pilot).

All in all I think the analogy of a house doesn't make sense. Because few homes depreciate. Cars almost always do. The exceptions are rare and not mass consumer cars like a tesla but collector exotics which this is not. IMO the pricing market is doing what it should and any smart consumer will expect the use car price to reflect depreciation values off purchase price not sticker price since all buyers see that discount typically.

 

[PokerBroker]

The tax credit is not a subsequent buyer's concern any more than it's their business what deductions I take on my car. If it's okay to discount the car by the amount of the tax credit, then you should similarly discount your home resale by the amount of all the mortgage tax deductions that you've received over the years. If you get any other tax benefits on your car, for instance business use deduction, then you should pass that along to a buyer as well? Why is one okay and not the other? Where does it end?

And when Tesla cars no longer qualify for the tax credit, then what? Will all resale prices rise as a result?

Of course this is a moot point because you can only sell for what a buyer is willing to pay, and the used Tesla market is what it is. My only point is that if early owners had not been so quick to pass along this benefit that nobody really asked for, leaving money on the table, used prices might be a little bit higher today. But we can't go back in time. I am surprised that owners are advocating a position that is not in their interest.

This analogy isn't quite accurate... The $7500 gets passed along to the second buyer because the used Model S market still has to compete with the new Model S market.

And yes, if the tax credit goes away the secondary market will rise in response. The used car market is based on the difference in net price between a new car and a used one.

 

[Tamar]

My Store Manager is saying that it'll be 2 years before CPO cars with dual motors and autopilot are available...that almost sounds like CPO vehicles are only going to be "off lease" and not trade-ins. Thoughts?

 

[Alysashley79]

My Store Manager is saying that it'll be 2 years before CPO cars with dual motors and autopilot are available...that almost sounds like CPO vehicles are only going to be "off lease" and not trade-ins. Thoughts?

I think that they are basing this off people actually trading in their D's. trade up for the newest model or X. I doubt many people have actually tried to trade the D in to tesla yet.

When end I was looking for a CPO car they had RWD cars with autopilot only a couple but they were out there. That was a bit ago though.

 

[arijaycomet]

My Store Manager is saying that it'll be 2 years before CPO cars with dual motors and autopilot are available...that almost sounds like CPO vehicles are only going to be "off lease" and not trade-ins. Thoughts?

If they run the CPO program the same as their competitors (Audi, BMW, etc) then it seems like cars that would be eligible for CPO will need to meet certain criteria. In the case of Audi, usually they don't certify a car that is over a certain mileage, etc. At the same time, most of these manufacturers require the car be of a certain age/mileage too. So you often times won't see a really new car with only a few thousand miles be certified, because it just isn't cost effective at that point (too much factory warranty remains, etc).

Check this out for some good details on CPO programs across the industry:
Certified Pre-Owned Vehicles Program Guide Details

My expectation is that CPO cars will typically probably be at least prior-year (meaning right now 2014 or older), and in most cases the cars will probably have over 6,000 miles. I say this simply because it seems as though I've never once seen an Inventory (new) car with over 6k miles. My wife's inventory S60 had 5,500 miles, and as such was the highest mileage inventory car we could find.

Because the 85D is only about 60-days old, and the P85D just came out about 120-150 days ago, it seems unlikely that you'll find a CPO version of those cars for some time. But it also is totally possible that come this fall, someone with a P85D would sell their car back to Tesla when their Model X reservation arrives. In that instance you could have a P85D that was easily driven 10-20,000 miles depending on the owner, that would be essentially 1-year old. I'd bet you'll start to see a lot of that, as I know quite a few Model X owners ended up temporarily buying themselves an 85D/P85D and might still trade-up. So keep your eyes open for CPO dual motor cars in about a year, or just over.

 

[SabrToothSqrl]

I own a CPO

And I am planning to trade it in on a CPO Model X. I was able to get a CPO 2013 in March 2015. So my logic is 2015 Model X in early 2016/17.

I'm... just not quite in the position to acquire a new one. I paid what was a good price, from my research for my CPO, and the warranty definitely helped seal the deal.

I never really wanted a Sedan... I just wanted a Tesla so bad my brain was going to blow a fuse if I didn't get one to hold me over... Love the car to death, and it's sexy as all hell, but I just... prefer SUVs...

 

[dennis]

I just learned two very interesting facts from a knowledgeable employee at a Tesla store:

1) As of last week, the warranty for a CPO car is 4 years and 50,000 miles from date of CPO purchase. In other words, equivalent to a new car warranty. I didn't ask about the drivetrain warranty, but I would be surprised if it isn't 8 years/unlimited.

2) A store can source CPO cars from anywhere in the US. Inventory cars can only be sourced from within the sales region.

It sounds like Tesla is really trying to make the CPO buying experience equivalent to buying a new Model S.

 

[baillies]

The CPO for model S is now live via the Internet although still limited locations.

http://www.teslamotors.com/models/preowned

Looks like an easy way to get a cheaper Tesla especially for people who do not qualify for the tax credit. i would be interested to know if any owners have seen their old Tesla listed and how their trade in compares to the CPO price?

 

[ecarfan]

Yes there a multiple threads over the past few days about the Tesla CPO program going live at teslamotors.com