Expected Depreciation on a new Model S

[Tslanwbie]

After weeks of second thoughts and questions (thank you forum members!) I finally ordered my model s 75.

the delivery is planned for June end to coincide with the end of my BMW lease.

here is a question - should I buy or lease. the most important factor will be the expected depreciation.

What do you think will the depreciation be at the end of year 3 and at the end of year 5? I don't expect to clock more than 10k miles a year.

I really liked the model s and may most probably keep it for 5 or 6 years

 

[azred]

If you have to finance anything, finance your house. Pay cash for everything else. (This post is destined to get at least 100 thumbs downs, but the only thumbs up I care about are from my parents looking down from heaven and luckily I listened to them about personal debt).

 

[xyeahtony]

If you have to finance anything, finance your house. Pay cash for everything else. (This post is destined to get at least 100 thumbs downs, but the only thumbs up I care about are from my parents looking down from heaven and luckily I listened to them about personal debt).

Paying cash is nice. But a lot of people can get a higher rate of return on $85,000 of cash than what the interest rate would cost. Hell putting that $$ into Tesla stock would've net you a hefty sum if you bought in 2013.

Tesla Model S retains its value better than gas-powered cars in its segment, losing only 28% after 50k miles

Teslas generally have lower devaluation than comparable ICE cars.

 

[Dutchie]

Paying cash is nice. But a lot of people can get a higher rate of return on $85,000 of cash than what the interest rate would cost. Hell putting that $$ into Tesla stock would've net you a hefty sum if you bought in 2013.

Tesla Model S retains its value better than gas-powered cars in its segment, losing only 28% after 50k miles

Teslas generally have lower devaluation than comparable ICE cars.

That's exactly what I am thinking. They offer 2.49% for 8 years. In stead of paying cash you just borrow, and put the money in stocks. You could take out monthly from your investment account for what is needed to pay the loan. Over 8 years you should be making 5% to 6% guessing conservatively.

 

[Spidy]

Tesla Model S retains its value better than gas-powered cars in its segment, losing only 28% after 50k miles

Teslas generally have lower devaluation than comparable ICE cars.

This does not account for the Model 3 though.

 

[xyeahtony]

This does not account for the Model 3 though.

OP bought a Model S. As for the Model 3, its lower priced so depreciation is not as painful, and will most likely be a lower rate than the Leaf or Bolt.

 

[ScaredByCars]

OP bought a Model S. As for the Model 3, its lower priced so depreciation is not as painful, and will most likely be a lower rate than the Leaf or Bolt.

I think he's worried about the Model 3 effecting demand for the S. It's something I was concerned about too... but at the end of the day I figure nobody buys a MS because it's a wise financial decision.

 

[Reciprocity]

If you have to finance anything, finance your house. Pay cash for everything else. (This post is destined to get at least 100 thumbs downs, but the only thumbs up I care about are from my parents looking down from heaven and luckily I listened to them about personal debt).

I get the idea of staying out of dept but 85,000 in cash is a lot to tie up on a car. Think about it this way. If you financed the car at 3% and invested the rest in Tesla's stock, you would have a Tesla and 300,000 in cash at the end of the loan. If you bought it in cash, you would have a 40,000 asset. I'll take door number 1 Alex.

 

[pdaddy]

One of the factors which led me to financed in 2016 through Tesla rather than paying cash or leasing was the Resale Value Guarantee which was included. It works as a stop-loss. Here's the fine print:

Welcome to the Tesla Family! Your vehicle identified above (“Vehicle”) qualifies for our Resale Value Guarantee
(“Guarantee”). We guarantee that your vehicle will have a resale value after 3 years of at least the Guaranteed Resale
Value specified above. This value is equal to 50% of the original purchase price of the base Vehicle at the time of your
purchase, plus 43% of the original purchase price for all options including battery pack upgrade (exclusive of taxes, fees
and accessories). During the period between 36 months to 39 months from your Guarantee Effective Date, you have the
option to sell your vehicle to Tesla for the Guaranteed Resale Value. This Guarantee is subject to the following terms
and conditions:
TERMS AND CONDITIONS

 The Vehicle is financed through one of Tesla’s official vehicle loan financing programs. The Vehicle will need to continue to
be financed through this program and your account must remain in good standing for a minimum of 36 months.
 The Vehicle is maintained by Tesla Motors or its subsidiary according to Tesla’s recommended service schedule. You must
not have taken any action that would void the New Vehicle Limited Warranty on the Vehicle.
 The Vehicle will be inspected by Tesla and the Guaranteed Resale Value will be adjusted for damage, excessive wear and
use based on Tesla’s standards for normal use and for mileage in excess of 15,000 miles per year. Excess mileage will
reduce your Guaranteed Resale Value at a rate of $0.25 per mile.
 To exercise this Guarantee, you will need to contact us and deliver the Vehicle to us for inspection and purchase during the
period between 36 months to 39 months from the Guarantee Effective Date. Prior to or in conjunction with our purchase
of the Vehicle, you will need to provide proof of ownership and clear title for the Vehicle. To obtain clear title on the
Vehicle, it is your responsibility to clear all outstanding obligations with the lender, including any principal amount, late
payments, penalties, and other fees that may be due to the lender.
 This Guarantee may not be assigned or transferred by you to any person or entity at any time. Only the Owner(s) identified
above, and no other person or entity, including any heirs or successors, has any rights under this Guarantee. This
Guarantee only applies to the vehicle identified above. Tesla Motors, Inc. and any of its successors hereto, may assign or
transfer this Guarantee, or any portion thereof, to any third-party without your prior consent or approval. This Guarantee
automatically expires on the 39 month anniversary of the Guarantee Effective Date.​

 

[Tampaukfan]

An S with an MSRP of 85K will be worth 70 or less after year one, year two 50-58 then settle in the 40's at year 3.
The big factor is the model 3, if it ever hits the pavement and its really cool then expect S prices to really take a hit.
Tesla buyers are tech geeks, they want the latest and greatest so the 3 will have to offer something cool to entice people to buy.