Crazy low residuals?

[pdk42]

My Model 3 is now three and a half years old with about 42k miles on the clock. So, I'm thinking do I flip or stick (with an extended warranty). The car has been very reliable and it's still in great condition with only about 7% battery depreciation. But I did a test drive of a new Model 3 and although the difference isn't night and day, the latest models are just that little better built and just that little quieter and more refined in the cabin. So, maybe I'll flip... but looking at residuals it's all gone crazy.

I got a firm WBAC offer of £39k a year ago. Today it's £23k. That's sort of crazy. A new Model 3 of similar spec would be about £52k so that means my car has depreciated to only 44% of its MSRP. That's crazy low for a car that's about average mileage for its age. Even the BMWs I had before with higher mileage never dropped that low.

Looked at another way, the depreciation cost has been £29k - that's over £700 a month or about 69p per mile.

Who said Teslas were cheap cars to run?

 

[munkypuzel]

WBAC is not your only choice - they are selling for a lot more generally than the low ball offers from there..

 

[NewbieT]

Makes me feel better about my lease. 4yrs 60,000 miles £29,181. 49p per mile.

 

[M3PBOSS]

My Model 3 is now three and a half years old with about 42k miles on the clock. So, I'm thinking do I flip or stick (with an extended warranty). The car has been very reliable and it's still in great condition with only about 7% battery depreciation. But I did a test drive of a new Model 3 and although the difference isn't night and day, the latest models are just that little better built and just that little quieter and more refined in the cabin. So, maybe I'll flip... but looking at residuals it's all gone crazy.

I got a firm WBAC offer of £39k a year ago. Today it's £23k. That's sort of crazy. A new Model 3 of similar spec would be about £52k so that means my car has depreciated to only 44% of its MSRP. That's crazy low for a car that's about average mileage for its age. Even the BMWs I had before with higher mileage never dropped that low.

Looked at another way, the depreciation cost has been £29k - that's over £700 a month or about 69p per mile.

Who said Teslas were cheap cars to run?

I would sell it privately on autotrader. It's likely that the depreciation on Tesla's has likely reached a plateau and i anticipate the values will start increasing when demand on new cars exceeds supply again. The new Model 3 refresh will arrive later in the year/early next year so may be a better to sit tight and wait until things improve

 

[Jason71]

Agree about WBAC. Please stop using them as the bench mark. I flipped my similar age M3 for an MY in September. If i still had it i would either be keeping it till prices stabilse or buying used while the prices are low. If life gives you lemons...

 

[Jason71]

My Model 3 is now three and a half years old with about 42k miles on the clock. So, I'm thinking do I flip or stick (with an extended warranty). The car has been very reliable and it's still in great condition with only about 7% battery depreciation. But I did a test drive of a new Model 3 and although the difference isn't night and day, the latest models are just that little better built and just that little quieter and more refined in the cabin. So, maybe I'll flip... but looking at residuals it's all gone crazy.

I got a firm WBAC offer of £39k a year ago. Today it's £23k. That's sort of crazy. A new Model 3 of similar spec would be about £52k so that means my car has depreciated to only 44% of its MSRP. That's crazy low for a car that's about average mileage for its age. Even the BMWs I had before with higher mileage never dropped that low.

Looked at another way, the depreciation cost has been £29k - that's over £700 a month or about 69p per mile.

Who said Teslas were cheap cars to run?

Is it fair to measure depreciation against the new price now? You only paid about £46.500 for your car not £52.000 and it does not have all the kit a new one does. Power boot, heatpump, bigger battery, etc

 

[UkNorthampton]

My Model 3 is now three and a half years old with about 42k miles on the clock. So, I'm thinking do I flip or stick (with an extended warranty). The car has been very reliable and it's still in great condition with only about 7% battery depreciation. But I did a test drive of a new Model 3 and although the difference isn't night and day, the latest models are just that little better built and just that little quieter and more refined in the cabin. So, maybe I'll flip... but looking at residuals it's all gone crazy.

I got a firm WBAC offer of £39k a year ago. Today it's £23k. That's sort of crazy. A new Model 3 of similar spec would be about £52k so that means my car has depreciated to only 44% of its MSRP. That's crazy low for a car that's about average mileage for its age. Even the BMWs I had before with higher mileage never dropped that low.

Looked at another way, the depreciation cost has been £29k - that's over £700 a month or about 69p per mile.

Who said Teslas were cheap cars to run?

The £52k price is for a new car now? We haven't had high inflation or supply shocks since before I can remember, so it's all a bit odd at the moment.

What was the original price including any government subsidy? What was the cash amount - £46,340 including delivery + towbar + free paint/interior (white/black)? So maybe £47,340?

When I looked in 2019 at resale of ANY mainstream car after 3 years - the best seemed to be about 47% of original. many much worse.

 

[UrbanSplash]

Yep. The arse has dropped out of the used market. I appreciate WBAC isn’t ‘the benchmark’ but the minimum. It’s still shocking though the hit that has happened.

Re Tesla, I’m out as soon as I can. This new FSD intervention is another nail in the coffin for Tesla. Musk is distracted by absolute vanity on scale never seen before. It’s a volatile company for which I have zero confidence in. So much shite comes out of Musk, he’s becoming a joke.

 

[P90D]

Yep. The arse has dropped out of the used market. I appreciate WBAC isn’t ‘the benchmark’ but the minimum. It’s still shocking though the hit that has happened.

Re Tesla, I’m out as soon as I can. This new FSD intervention is another nail in the coffin for Tesla. Musk is distracted by absolute vanity on scale never seen before. It’s a volatile company for which I have zero confidence in. So much shite comes out of Musk, he’s becoming a joke.

"becoming" a joke … Tesla fanboi …
: )

 

[plisken]

Agree about WBAC. Please stop using them as the bench mark.

Every dealer I've used or made an enquiry to has quoted WBAC when providing me with a trade in value for my own car (not just my Tesla), a common saying is, "we'll beat WBAC by £x) and of course £x comes to around £500 but they of course through in pain protection and blah blah blah so it feels a whole lot better, NOT.

 

[davyjohns]

Traded in my old M3 RWD for new late December. (before price reduction)
Still getting emails from WBAC which is now 10k less than I was paid.
Resale started off at trade in plus 10k with Premium Connectivity.
My old car is still for sale and it's now on offer for less than I was paid with 30 Day Premium Connectivity Trial.
Was gutted at price drop but now very pleased to have changed at the right time.

 

[Jason71]

I think the used price of EV's is probably at a low right now. Between the improvements in the supply chain for new vehicles, the energy crisis and the bad publicity around charging. Personally I plan to take advantage and buy a second used one sometime soon. You can get a two year old EV right now with very few miles for less then 2/3rds of the new price. Seems like a good deal to me.

 

[Rooster6655]

My Model 3 is now three and a half years old with about 42k miles on the clock. So, I'm thinking do I flip or stick (with an extended warranty). The car has been very reliable and it's still in great condition with only about 7% battery depreciation. But I did a test drive of a new Model 3 and although the difference isn't night and day, the latest models are just that little better built and just that little quieter and more refined in the cabin. So, maybe I'll flip... but looking at residuals it's all gone crazy.

I got a firm WBAC offer of £39k a year ago. Today it's £23k. That's sort of crazy. A new Model 3 of similar spec would be about £52k so that means my car has depreciated to only 44% of its MSRP. That's crazy low for a car that's about average mileage for its age. Even the BMWs I had before with higher mileage never dropped that low.

Looked at another way, the depreciation cost has been £29k - that's over £700 a month or about 69p per mile.

Who said Teslas were cheap cars to run?

Historically I would only have ever considered to use WBAC as a last resort as they were known for low prices and then knocking down the prices further, as others have said WBAC shouldn't be used as a benchmark as it is a private company and depending on trading conditions they might make low ball offers to increase their margins.

I don't have much knowledge of used car dealers but I suspect if used car sales are reduced then they are more likely to make low ball offers, so that they sales they do make are supplementing the decline in sales, this would likely bundle EVs into the mix, I think the exception probably being EV specialists maybe R Symons is worth a try still

 

[pgkevet]

I'd guess around 4yrs time will be the interesting point when ev only looms on the horizon, a moderate alternative charging structure is in place and the mainstream car manufacturers start to bring out practical, economic and well designed ergonomic alternatives
HW5 will be on the horizon and still not working well enough....

 

[Burley]

@pdk42 if you're planning on replacing with new, have you asked Tesla for a trade-in price against new? They have tended to give better trade-in than others when set against a new car. Next month there will be targets to hit for end of quarter, so you might get a better offer?

 

[UkNorthampton]

I'd guess around 4yrs time will be the interesting point when ev only looms on the horizon, a moderate alternative charging structure is in place and the mainstream car manufacturers start to bring out practical, economic and well designed ergonomic alternatives
HW5 will be on the horizon and still not working well enough....

I think the market at that time will be very different, much higher EV used prices.

Obvious that EV is the way - even the Daily Mail comments section will agree. Other manufacturers still struggling to manufacture EVs in volume, Toyota still not in high production with their EV-only platform (they said 2027 at earliest).

Batteries/raw materials not available cheaply on the spot market as those companies with sense will have implemented long-term supply deals that allow certainty for suppliers and their lenders to increase investments and hence volumes.

By this stage, EVS will have shown they are at least as reliable as ICE, so another positive.

So demand up, supply of decent cars (EVs only) down - used prices rise.

https://twitter.com/x/status/1626205685208977408

 

[greenbottle123]

After 11 months I have done 3.5k... EV is the way but residual is low
Hopeful that the lower mileage car can be competitively prices.. I will not be going via WBAC for sure.

 

[Sean.]

You can get a two year old EV right now with very few miles for less then 2/3rds of the new price. Seems like a good deal to me.

Tesla or something else? I was thinking along similar lines, make hay while secondhand prices are lower than they have been. My only thought is to insurance prices - esp for younger drivers. Not me.

 

[Jason71]

Tesla or something else? I was thinking along similar lines, make hay while secondhand prices are lower than they have been. My only thought is to insurance prices - esp for younger drivers. Not me.

Something else. Probably Mini Electric or Corsa E
Adding a young driver onto a Corsa, insured by an older driver, only seemed to add a couple of hundred quid but for the Mini ,which has 185BHP and is sold as a sporty car, bumped the insurance up by £2000!

 

[Durzel]

@pdk42 if you're planning on replacing with new, have you asked Tesla for a trade-in price against new? They have tended to give better trade-in than others when set against a new car. Next month there will be targets to hit for end of quarter, so you might get a better offer?

This.

Not sure why you'd be looking at WBAC if you're looking to buy another Tesla. Tesla are offering quite a bit more for trade-in on a new car purchase vs a straight sale.

Last years prices aren't really worth thinking about - it was a unique possibly never to be repeated time, particularly around Q1, when people were getting ridiculous trade in quotes. I was offered £55,700 for my 2020 M3P (so 2 years old at that point), which was basically £5k less than I paid for it. Other people were getting offered the same (or more) as what they bought their cars for, so traded up at zero cost. I think this period deluded people into thinking their Teslas were depreciation proof.

Tesla are churning these out as fast as they can make them. People cheer on their sales figures going up and up apparently without grasping what this means for them, as existing owners. There's loads more Teslas on the second hand market now than there was before, and this will only go up and up. Tesla have even shown that they are prioritising volume over margins, with the recent price drops.

I test drove a 2022 M3P and it was nice, definitely felt a bit more "tight" than my car - but not to the extent that I could rationalise the delta to change cars at the time. Now it's well outside the realms of possibility.

I wouldn't even look at a new 3 or Y until HW4 comes down the pipe (which might have an even greater impact on residuals).