Depreciation on Model S is Horrible

[Tic-tac-toe]

In my observation, the higher level a Tesla is, the faster it depreciates. The Model S 75 / 75D doesn't depreciate very rapidly, the 100D depreciates significantly more rapidly, and the P100D has a very steep depreciation curve. That is consistent with higher end luxury cars, in my observation. A Panamera, for example, depreciates comparably to a higher end Model S. Rightfully so, given the Pano's complexity (approx. 10k more moving parts) creates much higher risk for costly repairs.

Our 2018 MS P100D was a showroom/demo car, March 2018 build which had around 800 miles on it at purchase. Tesla discounted the purchase price by 14k. It was in pristine/like new condition, a good deal especially with free supercharging for as long as we own the car.

 

[ucmndd]

It amazes me how many people are surprised by this, and then come up with some crazy worst-case numbers (like not including the instant $7500+ tax credit depreciation and then using lowball trade-in values) to support their case.

Yes, new cars depreciate rapidly in the first year. Especially luxury / high-end cars (excluding exotics and their whole artificially limited supply thing). Tesla is the awesome intersection of the crushing depreciation of luxury automobiles with the ruthlessly quick lifecycle of high end consumer electronics.

 

[cantdecide]

I think as many have pointed out you shouldn't count the $7.5k federal rebate or the low ball offer value as depreciation. I've gotten $10k more than Tesla offers for trade in. That probably takes your 36% depreciation and turns it into 18% actual depreciation.

My role of thumb for any car depreciation is 20% per year with average driving and I see Teslas matching this curve... So the 18% is roughly in line with that.

Teslas suffer much more by agree than by miles. So it may be technically true that most 50k mile Teslas only have 28% depreciation but that is because Teslas (even the high mileage ones) are only on average 2 years old or less (you can check how many Teslas were produced in total versus the last 18 months). However this doesn't apply to the average driver who will take 4 years to get to that mileage. So that statistic may be true but it's certainly misleading.

Despite all this I agree with the recommendation to buy used... They are a bargain. A 100k mile Teslas still had most of its life and most of its gas savings in the future so should be worth more than half of the new price. A used S 85D with autopilot can still save $20k in gas compared to a similar ICE and isn't very expensive.

 

[P85DBeast]

There are a few. The cheapest "clean title" S for sale right now is a base 2013 S60 RWD with 104k miles, Zero Accident's and 1 Owner is going for $28k. Some are cheap and good condition while other's are completely trashed and going for well over 40k.

 

[Eevee]

#FirstWorldProblems

It's hard to have any sympathy for someone who is considering buying a new Model X just for the heck of it and whining about depreciation on their barely driven Model S. You obviously don't _need_ a new car. Why are you even looking at Model X? Just keep your Model S a little longer and trade it in when it makes more economical sense. Give that money that's burning a hole in your pocket to charity instead.

 

[whitex]

#FirstWorldProblems

It's hard to have any sympathy for someone who is considering buying a new Model X just for the heck of it and whining about depreciation on their barely driven Model S. You obviously don't _need_ a new car. Why are you even looking at Model X? Just keep your Model S a little longer and trade it in when it makes more economical sense. Give that money that's burning a hole in your pocket to charity instead.

Do you have a Tesla, and if so, are you planning to sell it, buy a used Leaf for $7K and donate the difference to charity? Almost anyone driving an EV doesn't face a problem of dying of starvation every day. By your logic, we should all buy old ICE cars and donate all money we don't need to buy cheap food to charity. EV's are not yet the most economical way of transport.

 

[Eevee]

To the OP:
If you're dead-set in buying a new car and getting rid of your Model S, try CarMax. Also, since you tend to own cars for a very short period of time, you might be better off leasing.

Do you have a Tesla, and if so, are you planning to sell it, buy a used Leaf for $7K and donate the difference to charity? Almost anyone driving an EV doesn't face a problem of dying of starvation every day. By your logic, we should all buy old ICE cars and donate all money we don't need to buy cheap food to charity. EV's are not yet the most economical way of transport.

I bought my Tesla used. I took advantage of the depreciation.
I considered a Leaf. When I discussed my driving needs with a Leaf owner we came to the conclusion that a Leaf would not be suitable for me. I needed an ICE, hybrid, or Tesla. A Leaf or other EV simply wouldn't cut it.

We can, of course, take the concept as far as we want. Every choice to buy something involves a choice to not save that money or donate it. And we could go to some extreme level if we wanted. I certainly know some people who take the concept of Effective Altruism to a level that would make me uncomfortable, donating 50% or more of their income to charity. I'm not suggesting that. I'm simply pointing out how entitled the OP sounds.

But everyone knows that cars are not investments. Everyone knows that new cars depreciate. Everyone also knows that the trade-in value of a car is generally less than the market price for that car. It's also a general rule that if you plan to own a car 2 years or less then a lease makes more sense than buying it. These are some pretty basic financial principles here that anyone who can actually afford these cars SHOULD know already and should not be surprised about.

 

[cab]

My experience mirrors the stats most are quoting here. I picked up a CPO Model S (P85+) about 30 months ago. it was three years old at that time and had depreciated by 50%. A drop of a bit over $1700/mo on average (although the curve is not linear as folks note, always steeper early on). Of course it has continued to drop since that time at an average of about $830/mo. Ouch, that is still a lot of real dollars every month even if it is less than half those first few years. It is VERY easy to see how folks get upside down on these purchases w/o large down payments.

Although I am definitely interested in a Model 3, I convinced myself to wait on it as the actual experience of driving it - I've done three test drives including an all day Turo rental - isn't light years from what I have now (and that's comparing to my now 5+ year old Model S). It is mostly just "newer" and the "new cool thing".

 

[chillaban]

To the OP:
If you're dead-set in buying a new car and getting rid of your Model S, try CarMax. Also, since you tend to own cars for a very short period of time, you might be better off leasing.

DO NOT do that with Tesla if "short period of time" means anything less than 36 months with Tesla! The US Bank offered leasing terms are just awful. Even buying out the car before 36 months is considered "early termination" and incurs the large financial penalty associated with that.

Maybe they changed their terms recently, but in general I agree with your advice and that was my strategy too with Audi and BMW since I also like upgrading my car every 2 years or so. But with Tesla, make sure you familiarize yourself with the lease terms first instead of assuming it'll be similar to VW Credit/ BMW Financial (both of whom, especially BMW, offer extremely generous terms for getting out of leases early)


But yeah, with a trade in, you are paying a hefty premium for the hassle-free experience of getting rid of your car right now. In my experience the best trade-in I could get is always around 10-15% lower than the going rate I see for CPO and used listings of comparable cars. But that doesn't really matter if you're not in the game of looking for a seller, dealing with scammers trying to turn test drives into free car rentals, and all the other fun that comes with selling a car yourself.

 

[Benjanos]

It's hard to have any sympathy for someone who is considering buying a new Model X just for the heck of it and whining about depreciation on their barely driven Model S. You obviously don't _need_ a new car. Why are you even looking at Model X? Just keep your Model S a little longer and trade it in when it makes more economical sense. Give that money that's burning a hole in your pocket to charity instead.

Totally agree. The OP makes no sense. To paraphrase: "I bought a VERY expensive flagship model car, I then bought a Model 3 because that's also a nice car, now I want a Model X because I have had a 'sedan rethink'. Why am I losing so much money along the way!"

I sincerely don't want to be disrespectful and I don't wish anyone to lose money unwittingly, but I am never sure with these ones if they are not Short Selling Trolls....

 

[willcasp]

Check "Black Book" pricing before you trade in. These can be tricky to get, but it is the roughly one week old auction price listings that the dealer uses. It is common for dealers to buy at Black Book and sell at Blue Book, and buyers think they are getting a deal at KBB. I have often seen Tesla trade in offers at Black Book or slightly better. That being said, new Tesla Model S prices in general have increased year over year, while their production and materials costs have decreased dramatically. They are still selling every car they can make. I don't see them dropping prices until the inventory starts to pile up.

 

[kirkhilles]

Here's my input from someone who has been wanting a Tesla from the beginning but is now finally seeing used Model S's come down to a feasible price.

Based on my research (which I'm sure mirrors what many in my position would do), the problem is not desire... we all desire a Tesla greatly. The problem is fear. Fear of owning this vehicle outside of warranty. The MCUs have fundamentally flawed design/software with the eMMC that is designed intentionally to be non-removable and can ONLY be replaced by a remanufactured until from Tesla at a cost of over $3k. The "clunking" sound issue is a very common one requiring a $4k repair that isn't covered by the intentionally named "drive unit" (as opposed to "drive train" warranty). $700 door handles (despite the core problem being simple and inexpensive). The 2012s are going to be getting out of their battery/DU warranty starting next year and given the number of DUs that have been replaced on the average Tesla, the owner can expect at least one $6k repair right there. Oh, and don't even ask about a problem with the battery pack that has a list price more than what the person bought the entire car for.

Very disappointing, but I just don't see how I could ever afford that own a Tesla out of warranty and others will come to the same conclusion. So, what that means is that the overall market for Teslas is going to get worse and worse. I'd expect to see 2012s soon become a "sucker's bet" where there is almost no legitimate market for them... think of trying to sell a high mileage, old, undocumented service Porsche Boxster.

At the same time, the price of NEW Model S's is going to decline over time. Why? Well, not only because of the success of the Model 3, but Tesla provides a full 4 year warranty on their Used sub 50k mile Model S's making it have a warranty equal (minus a few years of battery warranty) to what new ones get. Of course the costs of repairing a Tesla is becoming more well known, so insurance is going to increase as even a minor accident is becoming a "totalled" event.

I'm not trolling. I REALLY want a Model S, the only option would be to get one with a 4 year warranty and sell it before that period is up and that's just crazy.

 

[SSonnentag]

You can't equate wholesale price to resale value. There was a large resale value drop when Tesla cut the prices of the S and X by $15K-25K a couple of months back, but that's a different issue. Now you have to compare used prices with current new prices, not the old new prices as those were intentionally and admittedly inflated in order to fund Model 3 development.

 

[Mike Robinson]

Our 2018 MS P100D was a showroom/demo car, March 2018 build which had around 800 miles on it at purchase. Tesla discounted the purchase price by 14k. It was in pristine/like new condition, a good deal especially with free supercharging for as long as we own the car.

How did you get free lifetime supercharging???

 

[darxsys]

Here's my input from someone who has been wanting a Tesla from the beginning but is now finally seeing used Model S's come down to a feasible price.

Based on my research (which I'm sure mirrors what many in my position would do), the problem is not desire... we all desire a Tesla greatly. The problem is fear. Fear of owning this vehicle outside of warranty. The MCUs have fundamentally flawed design/software with the eMMC that is designed intentionally to be non-removable and can ONLY be replaced by a remanufactured until from Tesla at a cost of over $3k. The "clunking" sound issue is a very common one requiring a $4k repair that isn't covered by the intentionally named "drive unit" (as opposed to "drive train" warranty). $700 door handles (despite the core problem being simple and inexpensive). The 2012s are going to be getting out of their battery/DU warranty starting next year and given the number of DUs that have been replaced on the average Tesla, the owner can expect at least one $6k repair right there. Oh, and don't even ask about a problem with the battery pack that has a list price more than what the person bought the entire car for.

Very disappointing, but I just don't see how I could ever afford that own a Tesla out of warranty and others will come to the same conclusion. So, what that means is that the overall market for Teslas is going to get worse and worse. I'd expect to see 2012s soon become a "sucker's bet" where there is almost no legitimate market for them... think of trying to sell a high mileage, old, undocumented service Porsche Boxster.

At the same time, the price of NEW Model S's is going to decline over time. Why? Well, not only because of the success of the Model 3, but Tesla provides a full 4 year warranty on their Used sub 50k mile Model S's making it have a warranty equal (minus a few years of battery warranty) to what new ones get. Of course the costs of repairing a Tesla is becoming more well known, so insurance is going to increase as even a minor accident is becoming a "totalled" event.

I'm not trolling. I REALLY want a Model S, the only option would be to get one with a 4 year warranty and sell it before that period is up and that's just crazy.

And that’s exactly the issue. Tesla, for some reason, does not want to open up service and let more people fix these cars. Along with parts being sooooo hard to get, it’s a nightmare. Owning a Tesla out of warranty certainly sounds like playing Russian roulette. I really hope that guys like Rich Rebuilds and other Tesla hackers manage to push Tesla to open this up.

 

[StarLog]

@Mike Robinson

Free Supercharging is back for NEW Inventory Model S and Model X!!

 

[Mike Robinson]

And that’s exactly the issue. Tesla, for some reason, does not want to open up service and let more people fix these cars. Along with parts being sooooo hard to get, it’s a nightmare. Owning a Tesla out of warranty certainly sounds like playing Russian roulette. I really hope that guys like Rich Rebuilds and other Tesla hackers manage to push Tesla to open this up.

i just read that Tesla is coming out soon with comprehensive "do-it-yourself" maintenance information

 

[ucmndd]

Here's my input from someone who has been wanting a Tesla from the beginning but is now finally seeing used Model S's come down to a feasible price.

Based on my research (which I'm sure mirrors what many in my position would do), the problem is not desire... we all desire a Tesla greatly. The problem is fear. Fear of owning this vehicle outside of warranty. The MCUs have fundamentally flawed design/software with the eMMC that is designed intentionally to be non-removable and can ONLY be replaced by a remanufactured until from Tesla at a cost of over $3k. The "clunking" sound issue is a very common one requiring a $4k repair that isn't covered by the intentionally named "drive unit" (as opposed to "drive train" warranty). $700 door handles (despite the core problem being simple and inexpensive). The 2012s are going to be getting out of their battery/DU warranty starting next year and given the number of DUs that have been replaced on the average Tesla, the owner can expect at least one $6k repair right there. Oh, and don't even ask about a problem with the battery pack that has a list price more than what the person bought the entire car for.

Very disappointing, but I just don't see how I could ever afford that own a Tesla out of warranty and others will come to the same conclusion. So, what that means is that the overall market for Teslas is going to get worse and worse. I'd expect to see 2012s soon become a "sucker's bet" where there is almost no legitimate market for them... think of trying to sell a high mileage, old, undocumented service Porsche Boxster.

At the same time, the price of NEW Model S's is going to decline over time. Why? Well, not only because of the success of the Model 3, but Tesla provides a full 4 year warranty on their Used sub 50k mile Model S's making it have a warranty equal (minus a few years of battery warranty) to what new ones get. Of course the costs of repairing a Tesla is becoming more well known, so insurance is going to increase as even a minor accident is becoming a "totalled" event.

I'm not trolling. I REALLY want a Model S, the only option would be to get one with a 4 year warranty and sell it before that period is up and that's just crazy.

I think you’re suffering a bit from Forum Issue Magnification Syndrome.

MCU is a problem, I agree, largely because as of now there’s no realistic third party option for this repair. Only Tesla can do it. But the failure rate is far from 100% and I think overblown here. Yup it might happen, but a ~$2-3k repair on short notice should frankly be expected for nearly any 6+ year old car out of warranty.

Early drive unit issues have been addressed and current units appear to be quite reliable.

Half shafts and the like are wear items on any car.

Door handles are a pain but the newer revs are more reliable and old ones can be fixed with a few bucks in parts and a couple hours of labor.

Parts availability will improve I believe over time not because Tesla will necessarily step up but because salvage operations will fill the need as more and more cars are removed from service.

81k miles on my 2016 Model S, out of warranty repair costs to date: $0

 

[StarLog]

@ucmndd

I believe Phil In San Fran can repair them, but you have to ship it to him

 

[Az_Rael]

Yup it might happen, but a ~$2-3k repair on short notice should frankly be expected for nearly any 6+ year old car out of warranty.

I think that $$ amount would scare the crud out of most older used car buyers, honestly. Especially with no options for cheaper repairs outside of Tesla. If an out of warranty Audi I own needs a $3k repair from Audi, then I have lots of alternative shops, some with certified techs who can probably fix it for much less. Worst case I could source a part from a salvage yard and have a third party shop install it. If my MCU goes bad, I am either paying Tesla or dealing with the very small hacker network to get it fixed, which may or may not be a viable alternative depending on my location.