Discussion: Resale values - depreciation -- Time to buy resale or wait?

[montreid]

Been kicking around the idea of buying resale EVs. The rate of depreciation due to the falling new sale prices has been incredible where EVs used to hold their resale value at the tops of cars.

We have an aging 3rd vehicle that we would be interested in replacing with Y or X.

Do you think this will continue? Tesla led the way of reducing prices throughout 2023. Most media appear to put this due to softening demands while Tesla forums say it's part of Tesla's strategy to drive prices to parity with ICE vehicles. What is the truth--somewhere in between?

So until new price vehicles stabilize, the resale pricing wont either --- what do people think for 2024? Buy resale or wait?

 

[tangible1]

Elon will not retreat from making sure his factories stay busy.
Since he has the profit margins others don't, that means Tesla is still not tapped out on price reductions.

Tesla sets the standard, yet 2M vehicles per year represents only a small percentage of annual industry unit volume. Although Tesla is a high % of EV volume.
Internationally, the Chinese (BYD etc) are coming, so Tesla has some challenges there and prices will be fluid.
In the Americas, less pressure, and some opportunity to keep margins higher than elsewhere. We are seeing that already.

Overall in NA, I'm not sure it makes sense to buy used just yet unless it's a smoking deal.
Take a look at End of Quarter opportunities, then decide.

 

[Waltjo]

I think that the high used Teslas prices were due the the new car waiting lists that Tesla had, scarcity of used inventory as well as the higher prices that Tesla maintained. Lately, all three of these factors have begun to change.

The wait time has decreased, because of the higher production rates in the new factories, And that is a good thing for Teslas as they need to compete with other comparable EV offerings, Long waiting lists could drive buyers to other makers.

The inventories of used EVs, and Teslas particularly are largely the result of, more Teslas having been built and sold and owners replacing their initial Teslas (i.e I replaced my Model 3 with a new Model Y). And lastly, the decision from Hertz to shed a large number of their rental fleet, ironically they say the diminished resale value is part of the reason, and yet the sale of these cars will further depress the used prices.

And as competitive EVs have become available Teslas has reduced their prices in order to hold on the as much market share as they can. The lower new car prices, do indeed affect the used car prices as well.

All of these factors seem to me to be pretty normal as technology moves from early adopters to the more mainstream position. And only time will tell how it all plays out. Tesla may continue to be the leader, as Microsoft, Apple, and Dell have in done in their market, or they may fade away like the many many PC companies that were popular in the early days of that market.

 

[Mateo83]

Compared to 2022, its good time to buy, no some much to sell

 

[fiehlsport]

To be clear, by "resale" do you mean you're interested in purchasing a used EV?

 

[jay1122]

It is all about supply and demand. I would say the used Y and X price will get close to the typical industry depreciation curve of similar priced cars. If you are expecting a slightly used pristine Y to drop to $20K. that is not going to happen. if you actually need the car, it is a good time to buy. Although I don't think Tesla is the best bargain right now. The demand for tesla is still fairly solid. A 2021 $130K MSRP taycan 4S is around low $70K now. A 2022 under 10K mile loaded polestar 2 with near $60K msrp can be had for low $30K. I think these are good bargains. It may change after tesla charge stations open to other brands.

 

[ucmndd]

Market is softening all around. Given the choice between cutting prices and cutting production, Tesla will cut prices until they can’t any more.

There’s plenty more room for prices to fall further, particularly if interest rates stay high.

 

[patmurphey]

All things considered, with the exception of those that bought during the mania of 2022, depreciation is at a very normal level considering the impact of the $7,500 tax credit. MSRPs of new Model Y's are virtually identical to what I paid in 2021. To trade for a new one would be at a price reflecting reasonable depreciation when I get a $7.500 discount, not even considering inventory discounts.

I sympathize with those who bought in 2022 especially when fooled by the IRS SUV ruling fiasco that caught some bear the end of the year into the beginning of 2023. A lot of buyers of other EV brands and ICE cars got caught underwater with loans with the same trap including a great many by dealer markups.

 

[lencap]

Greetings!

I can't help notice how much my car has depreciated in less than a year, and likely will continue to do so. The tax credits helped ease the entry price, but the relentless price cutting and model changes makes depreciation far more impactful than expected, especially so since the early 2023 price cuts and new models (Austin built AWD 4680 battery pack - my spec).

Now that there is a lease option whereby the Federal Tax credit is indirectly applied to reduce the up front cost of the car, I'm thinking any future purchase is likely better shifted to a lease, despite the high current interest rates, to lessen the depreciation impact. It's not solely depreciation, it's the continued policy of cutting prices to attract new customers. This seems to be a trend that may continue as production capacity continues to increase along with slowing demand.

I had hoped to upgrade to the refreshed Model Y next year, but my car has depreciated by 40% (net of tax credits) in less than a year, and it makes little sense to sell it at that price point. I can only imagine how Model X owners feel if they bought their car before the massive September 2023 price cuts, along with the Federal Tax credit becoming available. That was just over a half a year ago, and the resale for their cars is totally wiped out.

 

[tesluv108]

This won’t be a popular post but I’m trying to understand why the price of all pre 2024 model y’s aren’t lower. Most people come with the weak sauce argument of not all people qualify for the federal $7500 tax credit. First and foremost I think this is incorrect. I also think the model y used market is headed for a huge drop similar to what the S and 3 have encountered. Just today a Tesla analyst stated the market is saturated. This puts Tesla in a catch 22. With rates set to remain high, people are delaying purchases and also switching to other brands for numerous reasons. Electric cars aren’t for everyone. So back to the reasons why Tesla model y used market is inflated. In what universe would a used car sell for more than the same car new at Tesla? That is happening right now. You see many used LR awd sitting on the market at a price nearly equal to new. Why would anyone ever buy these? What’s going to happen is a major market repricing. This isn’t 2022 again and a used car should sell for 20% less than new- especially a bev. It always makes me chuckle when I see a 2023 performance listed at 45k. You can literally buy this car new for 40,500 (+1590 fees from Tesla). Are dealers and private sellers just hoping you won’t notice what a new version costs? On tmc there is a 23 y lr awd w 6,000 miles on it and they want 41,500??? You can get a brand new 3 awd in blue for 40,000 with Tesla delivery fee.

 

[ucmndd]

It's not solely depreciation, it's the continued policy of cutting prices to attract new customers.

Tesla’s job is to sell cars, and the only way they're gonna do that is to charge prices the market will bear. That’s not really “policy” so much as reality.

Cheaper EVs are good for everyone. The Model Y was never a $60k car.

 

[OCR1]

This won’t be a popular post but I’m trying to understand why the price of all pre 2024 model y’s aren’t lower. Most people come with the weak sauce argument of not all people qualify for the federal $7500 tax credit. First and foremost I think this is incorrect. I also think the model y used market is headed for a huge drop similar to what the S and 3 have encountered. Just today a Tesla analyst stated the market is saturated. This puts Tesla in a catch 22. With rates set to remain high, people are delaying purchases and also switching to other brands for numerous reasons. Electric cars aren’t for everyone. So back to the reasons why Tesla model y used market is inflated. In what universe would a used car sell for more than the same car new at Tesla? That is happening right now. You see many used LR awd sitting on the market at a price nearly equal to new. Why would anyone ever buy these? What’s going to happen is a major market repricing. This isn’t 2022 again and a used car should sell for 20% less than new- especially a bev. It always makes me chuckle when I see a 2023 performance listed at 45k. You can literally buy this car new for 40,500 (+1590 fees from Tesla). Are dealers and private sellers just hoping you won’t notice what a new version costs? On tmc there is a 23 y lr awd w 6,000 miles on it and they want 41,500??? You can get a brand new 3 awd in blue for 40,000 with Tesla delivery fee.

You would be surprised how many people don’t even take the time to learn about the tax credit and just jump in and buy a used MY for almost the price of a new one after the credit. I see it all the time on Reddit in the MY sub. But I agree the used pricing for MYs on the Tesla site is ridiculous. I bought a brand new MYP for under $40K and they are asking $39K for three year old models.