Depreciation on Model S is Horrible

[ucmndd]

I think that $$ amount would scare the crud out of most older used car buyers, honestly.

Maybe people buying a used Corolla or Accord, but I don’t think there’s a lot of cross shopping going on there.

People buying used cars that started life as a six figure luxury/specialty automobile, no matter how cheap they have gotten on the used market, should be prepared for this eventuality.

 

[ebyard]

Here in the UK, I got a trade-in valuation from Tesla for my late 2016 facelift S75 with AP1 with 50k miles - cost new £65,000, Tesla offer was £26,500. Selling privately I could get roughly £40,000 for it. So it is clear Tesla don't want the cars back...

 

[whitex]

Here in the UK, I got a trade-in valuation from Tesla for my late 2016 facelift S75 with AP1 with 50k miles - cost new £65,000, Tesla offer was £26,500. Selling privately I could get roughly £40,000 for it. So it is clear Tesla don't want the cars back...

First, you are right, they don't want it. Elon never wanted to be a used car game. Even trade-ins are something Tesla has never been fond of. Elon prefers the Apple model of new cars sales without trade-ins. Tesla doesn't have dealerships where they can let you test drive a used one if you think the new one is out of your price range. Here in the US, they often just wholesale trade-in Teslas in auctions, instead of putting them through the CPO program.

Second, if they offered you £26,500, that means they think car would probably sell ~£35,000 with CPO warranty. They'd list it higher, but if it doesn't sell it will go down while Tesla pays to store it and while it further depreciates. So, if you can get £40,000 for your car today, take it and run - time is never on your side when selling a used car.

 

[aerodyne]

Price drop on new s and x reported today

 

[mswlogo]

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.

If Tesla does not offer a reasonable extended warranty on Model 3 before primary warranty is 75% up (time or mileage). I will be getting rid of it. Might buy another but we’ll see how things are by then.

Overall reliability looks pretty good, even on Model S. But if your an unlucky one it can be very expensive.

 

[Zeromus-X]

Just wanted to add another data point to this thread as my MS75 just hit its third birthday last week and out of curiosity I sent in for a trade-in appraisal with Tesla. I just got my trade-in quote back:

• Purchased in California, $87,077.25 (including CA tax), $79,741.25 (excluding CA tax)
• Miles: 66,994
• Trade-in quote: $28,200

So, excluding taxes, that's a solid 65% depreciation in three years, or $0.77 per mile cost of ownership.

If we factor in the $7,500 Federal rebate, excluding taxes it's a 60% depreciation, or $0.66 per mile cost of ownership.

If we factor in both the $7,500 Federal and $2,500 California rebates, including taxes (since you can't get the rebate if you didn't buy it in California, it's a 63% depreciation, or $0.73 per mile cost of ownership.

EDIT: Obviously not doing this

 

[wdolson]

Just wanted to add another data point to this thread as my MS75 just hit its third birthday last week and out of curiosity I sent in for a trade-in appraisal with Tesla. I just got my trade-in quote back:

• Purchased in California, $87,077.25 (including CA tax), $79,741.25 (excluding CA tax)
• Miles: 66,994
• Trade-in quote: $28,200

So, excluding taxes, that's a solid 65% depreciation in three years, or $0.77 per mile cost of ownership.

If we factor in the $7,500 Federal rebate, excluding taxes it's a 60% depreciation, or $0.66 per mile cost of ownership.

If we factor in both the $7,500 Federal and $2,500 California rebates, including taxes (since you can't get the rebate if you didn't buy it in California, it's a 63% depreciation, or $0.73 per mile cost of ownership.

EDIT: Obviously not doing this

Tesla offers extreme low balls for trade ins. I got a cold call from them trying to get me to upgrade to the latest P100DL and they quoted a number to me that was at least $10K less than what I could get with a fire sale price selling it privately. If I was willing to be patient I could get closer to $20K more. It's a bad idea to take Tesla's offer as anything close to market value.

I have zero interest in a Performance car and money is tight, so I was not interested. If I had the money a deep discount on a new LR S might get me interested, but I like what I have.

 

[Zeromus-X]

Tesla offers extreme low balls for trade ins. I got a cold call from them trying to get me to upgrade to the latest P100DL and they quoted a number to me that was at least $10K less than what I could get with a fire sale price selling it privately. If I was willing to be patient I could get closer to $20K more. It's a bad idea to take Tesla's offer as anything close to market value.

Yeah, I figured it was low. But it doesn't look that far off. I've seen vroom mentioned in here before and went through them as well, and they came in at $33,000. There's of course a lot of playing with numbers (considering $10k in rebates + $8k in gas savings since I've never paid for charging brings the theoretical cost to $36,077.25, or $0.54/mi) but it's still a quicker depreciation rate than I expected it would be at the three year mark.

What really bugs me about this is that Tesla used to offer a buy-back after three years at 50% of base price and some percent of add-ons, and I thought I was eligible for it, but it turns out I'm not (I thought they referred me to Alliant as a Tesla direct financing company but according to Alliant they don't have this guarantee and it was only if I went direct through Tesla...?). If we assume a base price for the car at $78k at the time, that would have been a buyback of $39,000 - almost $11,000 more than their offer.

 

[ucmndd]

What really bugs me about this is that Tesla used to offer a buy-back after three years at 50% of base price and some percent of add-ons, and I thought I was eligible for it, but it turns out I'm not (I thought they referred me to Alliant as a Tesla direct financing company but according to Alliant they don't have this guarantee and it was only if I went direct through Tesla...?). If we assume a base price for the car at $78k at the time, that would have been a buyback of $39,000 - almost $11,000 more than their offer.

That’s sheisty - you should totally be eligible, provided you took delivery prior to 7/1/2016. Who told you you’re not - Alliant or Tesla?

That said, $39k is probably much closer to actual value if you sold the car yourself and disregarded super lowball trade offers you’ll get from Tesla and Vroom.

 

[Sir Guacamolaf]

Having sold my S recently, I agree 100%.
Tesla plays an interesting game - they essentially control the prices of the used market via the CPO market.
When the car is new (like model 3), they keep prices good, get some good news headlines out. And then in a year or two the bottom falls out. I saw this with my S and X. The first year the price stuck, year 2,3,4 .. fell off a precipice.

Cars are gonna depreciate. Tesla makes a great car. I'd say, it drives like a dream, enjoy it, but don't buy it for "financial sense" reasons.
Oh and their service and repair totally sucks.

 

[mswlogo]

You can't go by Kelly Blue Book. Those prices are a joke.

You might be getting hit partially from pending refreshes coming more so than Model 3.

Private Sale !!!

 

[wdolson]

On the other hand if a lot of people think a refresh is botched, the older cars will go up in value.

 

[GreenT]

Nothing wrong with the trade in value IMO ... I sold my 2012 Model S this year for $25,000. 85000 miles. Sold it to a dealer no less.
So $30,000 minimum private sale but at all costs AVOID Ebay!!!

 

[dk10438]

On the other hand if a lot of people think a refresh is botched, the older cars will go up in value.

Highly doubtful

Only time I can think of that occurring is with the Porsche 993 and 996 and even that took some time

 

[SucreTease]

Just about everyone at Tesla is a liar. You shouldn't believe any of that nonsense.

Sorry about your unwelcome surprise.

I checked our your history of postings. I do not believe that you actually own any Tesla product and that you are just pretending to be an owner as a Trojan Horse in order to sabotage their brand. Every single post you have made was to badmouth and trash Tesla and never once provided actual useful information for others.

I invite other forum users to do a similar review.

Moderator: I would call upon you to ban this user--a step I have never before taken.

 

[Mikeisnomech]

I've noticed tesla-info.com are now publishing the depreciation figure for a lot of the CPO cars - I'm not sure how useful it is in general but you have to go back to 2015 and earlier before you start seeing cars with depreciation over 50% - seems they like to charge plenty to buyers but give virtually nothing to sellers - not a great surprise but the differentials are pretty steep

 

[bob_p]

Our experience in trading in a Model S for purchasing our X wasn't that different than trading in an ICE for another ICE at a dealership.

Trade-ins are always valued lower than a direct sale to another consumer. Even if you discount the sales tax you save from doing a trade-in, you'll usually get a better deal by selling your current vehicle yourself than doing a trade-in. That's true for Tesla and any other manufacturer.

We found our trade-in price for our 2012 S P85 after more than 6 years of ownership and almost 100K miles was reasonable. We might have been able to do better if we'd sold the vehicle ourselves - but that wouldn't have been as convenient as dropping our S off when picking up our new X. There's a cost for that convenience - and that true when dealing with dealerships for other manufacturers.

Because the average price for a Model S/X has been around $100K - often the most expensive vehicle purchased by Tesla owners, the $ amount of the depreciation can be a shock. But from a percentage standpoint, we've found Tesla vehicles seem depreciate at about the same percentage every year and other comparably priced luxury vehicles, if not doing slightly better compared to their ICE counterparts.

We've estimated our vehicles lose about 2% per month or around 25% per year - and that's been in the ballpark of what we've seen with our Tesla vehicles.

In the example by Zeromus-X above, their S 75 cost around $67K originally. After 3 years (using 25% per year depreciation), the estimated value would be around $28.3K - which is about what the trade-in value was at Tesla - probably better than what an ICE would have seen after 3 years.