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Crazy high residuals

Boogaloo

Member
Apr 1, 2018
27
14
London
I bought an MX 90D with premium cabin options, price came in at £100k on PCP with balloon after 4 years of £50k.

Checked the auction sites and they’ll offer me £63k for it. I’m a few months before the lease ends but that’s incredible.

So at the end I’ll have paid £37k for an MX for 4 years (even less with petrol savings).

It’s astonishing the strength of the residuals. Anyone else seen the same?
 

DJP31

Active Member
Aug 30, 2015
1,678
1,085
UK
Given that the lead time for a new one is the end of '22, and that's Tesla time, I don't think it's that surprising the residuals are very strong. Queston is, if you do sell it, what are you going to buy instead?

Plenty of owner on the FB group discussing extended warranties and hanging on for the refresh to make it over here.
 

OliLondon

Member
May 1, 2021
71
79
Greater London
Agreed, not surprised that the residuals are so strong with the end of 2022 uk deliveries for X and S - how about M3P on a PCP with a deposit down on an X plaid - residuals are strong on the 3 as well so would still be in a good position to sell earlier come delivery of the X and not take much of a hit atall
 
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hingus2000

Member
May 24, 2020
232
175
London
Is there any way an ordinary lease customer can see the benefit of strong residuals? I suppose it notionally should make leasing a Tesla somewhat cheaper at the outset, but once in a lease, if residuals are stronger than is originally priced into the cost of the lease, is there any way that can be leveraged when it comes to renewal or replacement leases (with the same provider)?
 

Boogaloo

Member
Apr 1, 2018
27
14
London
Would like to stay EV but no offstreet parking. Enjoyed it but practical issues of getting power are frustrating. As neighbours buy PHEVs access to lamposts gets far tougher which is a shame as conversely super chargers have been everywhere I need them

Tempted to go for a PHEV whilst govt figures out how to let us run cables safely over pavements. That said, really want to stay Tesla.

Ideally I want a Y with air suspension and electrically deplorable tow bar. May refinance this car, extend warranty and upgrade infotainment.
 
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Tiger

Active Member
Oct 31, 2016
1,700
1,264
Estonia
Would like to stay EV but no offstreet parking. Enjoyed it but practical issues of getting power are frustrating. As neighbours buy PHEVs access to lamposts gets far tougher which is a shame as conversely super chargers have been everywhere I need them

Tempted to go for a PHEV whilst govt figures out how to let us run cables safely over pavements. That said, really want to stay Tesla.

Ideally I want a Y with air suspension and electrically deplorable tow bar. May refinance this car, extend warranty and upgrade infotainment.

Easy solution: relocate to a place which enables charging at home.
 
Jan 11, 2021
79
116
Bristol
Is there any way an ordinary lease customer can see the benefit of strong residuals? I suppose it notionally should make leasing a Tesla somewhat cheaper at the outset, but once in a lease, if residuals are stronger than is originally priced into the cost of the lease, is there any way that can be leveraged when it comes to renewal or replacement leases (with the same provider)?
I think the answer to that is almost certainly no. In the same way, I wouldn’t expect the lease company to land me with a big bill if residuals don’t turn out to be as good as originally expected.
 
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Jason71

Active Member
May 8, 2019
2,966
2,895
Shropshire
I think the answer to that is almost certainly no. In the same way, I wouldn’t expect the lease company to land me with a big bill if residuals don’t turn out to be as good as originally expected.
though they can be more likely to nickel and dime you on any scratches etc to make ends meet if the residuals go bad. at least that is the experience some people I know claim to have had when the market turned bad
 
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shuhockey

Member
Dec 2, 2019
70
45
UK
Yes. You could as some lease companies do off you the chance to purchase at the end of the term, as long as this was a good price you could then sell for profit.
 
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GeorgeSymonds

Active Member
Mar 16, 2018
1,267
802
UK
There's a bit of an artificial bubble at the moment as you simply can't buy a new one. £800 or so a month deprciation on a £100k car is great, but its still £800 a month depreciation on a car. I doubt those who bought the MX P100D for £145k feel the same way when over night Tesla wiped off £40k a few year ago.
 
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tomorrowman

Member
Mar 10, 2020
296
273
Hampshire
Agreed on the 'Bubble' comment. It's a massed produced car where currently demand outstrips supply and this despite Tesla increasing supply by an average of 60% a year and on track to increase this annual percentage by greater than this amount for the next few years.

Ultimately Tesla's goal is to transform the transportation sector and to do that they need cheaper cars to allow greater market penetration (assuming they get past being supply constrained).

Based on the Tesla Battery day presentation Tesla has the means to produce it's existing cars at much lower cost, which when supply constrained means high profits but will lead to the cars ultimately getting cheaper.

Personally I try not to treat cars I own as assets and run them until they die or get too costly to run due to repairs.

In summary enjoy it while it lasts, hell I might take advantage myself and trade my model 3 for one of those mythical Berlin Model Y's - if they ever turn up.
 
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Durzel

Active Member
Jul 17, 2019
3,450
2,407
Bath, UK
Is there any way an ordinary lease customer can see the benefit of strong residuals? I suppose it notionally should make leasing a Tesla somewhat cheaper at the outset, but once in a lease, if residuals are stronger than is originally priced into the cost of the lease, is there any way that can be leveraged when it comes to renewal or replacement leases (with the same provider)?
Leasing is a bet with the leasing company against the future value of the car. If the residual value ends up being higher than the leasing company thought it would be, then they win. If its less, you effectively benefitted from not having bought the car outright (assuming you were in a position to do so). This is even more magnified with PCP.

So, to answer your question - no. And it pays to remember that the "luxury" for being able to pay monthly for only a portion of the car's true value, versus buying it outright being the only option, has a cost too.
 

GeorgeSymonds

Active Member
Mar 16, 2018
1,267
802
UK
Leasing is a bet with the leasing company against the future value of the car. If the residual value ends up being higher than the leasing company thought it would be, then they win. If its less, you effectively benefitted from not having bought the car outright (assuming you were in a position to do so). This is even more magnified with PCP.

So, to answer your question - no. And it pays to remember that the "luxury" for being able to pay monthly for only a portion of the car's true value, versus buying it outright being the only option, has a cost too.
Kind of agree... PCP though is a no lose gamble for you, but you pay a bit more for it. If the car is worth more than the GFV you simply buy the car at the end and flip it on at a profit if you don't want it, if its worth less, you hand it back.
 

Durzel

Active Member
Jul 17, 2019
3,450
2,407
Bath, UK
True.

I've heard you can ask several leasing companies for quotes to buy the car at the end, but as noted the difference is that they aren't obliged to sell you the car, and if they do make you an offer for you to buy it presumably it would be closer to the prevailing market rates than whatever was agreed at the start (as it is with PCP).
 

Kenners

Member
Sep 29, 2019
206
178
London
One thing to understand about EV residuals is that supply is constrained by the number of cars sold in a given year. You can’t compare new supply to existing stock. So as demand for EVs goes up, it goes up against fixed supply of old stock. Even if they made millions more, none of these would plug the shortfall in the second hand market for three/four + year vehicles. So depreciation will remain low as long as demand is rising. That is a given. This to me is the main economic appeal of being an early adopter for me. Likewise ICE depreciation is going to be grim, this is underpriced in leases still, as much as EV residuals are under appreciated.

I doubt price of EVs are going to fall, they are already similar price to ICE equivalents really (like for like, I know people like to say a Ford Fiesta driver still can’t afford a model S) and much much cheaper to run. The EVs are too expensive debate is a load of rubbish really. Similar to all the negative spin about charging that incumbents use media (indirectly) to try and put people off!
 
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gangzoom

Active Member
May 22, 2014
1,322
1,130
Uk
Ideally I want a Y with air suspension and electrically deplorable tow bar. May refinance this car, extend warranty and upgrade infotainment.

We will almost certainly get a 3 or Y, but it wouldn't be to replace the X. Having spent a week in Cornwall with a fully loaded 6 seater X - including a 5hr+ slog up the M5 today, I honestly cannot think of another family car I rather own.

Stuff like the crazy FWDs that make a mockery of 'tight" Cornwall holiday car parks.

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The unparalleled view offered by that windscreen.

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The ability to lap up proper 'drivers' roads despite having the entire extended family on board.

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A brand new Plaid X with the fancy new PS5 level information computer is tempting, but even with amazing residuals you are looking at a £50k upgrade cost. I rather keep our X (MCU2/FSD/CCS upgraded) till the battery warranty runs out and than get a 'new' 90kWh pack from Tesla.

It's testament to how far Tesla pushed tech with the X that 5 years on from launch there is still no other car that can come close to the drama/ultitly/enjoyment of the X.

Given the price of the new version, the £71k we paid for our back in 2016 really does seem like a 'bargain' :)..........Though having no home charging is a killer for any EV, but that's a different debate :(.

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