Guaranteed Buyback Experience

[PeteP]

I am just a few months away from hitting the 3 year mark on my Model S purchase which will make me eligible for the guaranteed buyback program. Since it looks like that program was introduced in April 2013, I would suspect that the first group of eligible owners are just hitting the 3-year mark. Since this is such a unique program, I was hoping that people could post their experiences and share tips for how to get through the process. Questions that I have are (1) how aggressive are they in looking for damage to reduce the buyback value, (2) are they more forgiving if you are getting another Tesla, (3) which loan payment should be my last, (4) will Tesla reach out to me or do I need to contact them to get the process started??

Thanks everybody.

 

[brkaus]

I am just a few months away from hitting the 3 year mark on my Model S purchase which will make me eligible for the guaranteed buyback program. Since it looks like that program was introduced in April 2013, I would suspect that the first group of eligible owners are just hitting the 3-year mark. Since this is such a unique program, I was hoping that people could post their experiences and share tips for how to get through the process. Questions that I have are (1) how aggressive are they in looking for damage to reduce the buyback value, (2) are they more forgiving if you are getting another Tesla, (3) which loan payment should be my last, (4) will Tesla reach out to me or do I need to contact them to get the process started??

Thanks everybody.

It's a totally optional thing, so don't expect them to reach out to you.

Also, you can likely sell it on the open market for more than the guaranteed buyback amount. But it never hurts to check!

 

[tanner]

I am just a few months away from hitting the 3 year mark on my Model S purchase which will make me eligible for the guaranteed buyback program. Since it looks like that program was introduced in April 2013, I would suspect that the first group of eligible owners are just hitting the 3-year mark. Since this is such a unique program, I was hoping that people could post their experiences and share tips for how to get through the process. Questions that I have are (1) how aggressive are they in looking for damage to reduce the buyback value, (2) are they more forgiving if you are getting another Tesla, (3) which loan payment should be my last, (4) will Tesla reach out to me or do I need to contact them to get the process started??

Thanks everybody.

Yeah, don't sell it back to Tesla unless you need to dump it quick, it's in bad condition or you just can't sell it private party. I got over 15k more selling private party than they offered me for a trade in/buy back.

 

[sjb1077]

Yeah I had the same question. My buy back is in about 5 months. I cant imagine my P85 2014 being worth more now than the RGV with all the updates and autopilot. I was just planning on giving it back to Tesla and ordering a new one.

 

[tanner]

Yeah I had the same question. My buy back is in about 5 months. I cant imagine my P85 2014 being worth more now than the RGV with all the updates and autopilot. I was just planning on giving it back to Tesla and ordering a new one.

Doesn't matter what it is, I can guarantee you'll be disappointed by the price the offer (sadly).

 

[tomp]

Doesn't matter what it is, I can guarantee you'll be disappointed by the price the offer (sadly).

Isn't the price they will offer basically set by the buyback offer? They could offer more, but why would they?
Thus, I'm wondering why someone would be surprised or disappointed by their offer, as you basically know what it is going to be.

 

[Flyingdoc]

Good article about this topic!
Tesla Motors Is About to Face a Critical Test | Fox Business

 

[tanner]

Isn't the price they will offer basically set by the buyback offer? They could offer more, but why would they?
Thus, I'm wondering why someone would be surprised or disappointed by their offer, as you basically know what it is going to be.

Only because KBB is much higher and you can sell it for quite a bit more private party if you've kept good care of it. I guess you shouldn't be surprised, if you've already calculated it - if you haven't, you're in for a world of hurt. It's basically less than 50% of the original price (50% of base + 43% of all extra options).

 

[sjb1077]

yeah I know my offer will be $58,xxx with 45,000 miles on it in good condition starting in about 6 months good for three months ~ 36-39 month offer on $121,000 P85 bought in march 2014

 

[brkaus]

Isn't the price they will offer basically set by the buyback offer? They could offer more, but why would they?
Thus, I'm wondering why someone would be surprised or disappointed by their offer, as you basically know what it is going to be.

They could offer more to get the business. The buyback guarantee is pretty low as stated (50%/43% options) and should give them some headroom depending on the car. They might still make money paying more, esp in the case of a new car purchase. No, they won't beat private party purchase.

 

[Skryll]

Kelley Blue Book

$57,000 today to private party sale according to kbb - so why do you all say you can get more for it than the guaranteed buyback price of $58k ? Do you realize he is talking about the 50%/43% guarantee that kicks in at 3 years and was bought with higher interest rates of the car loan?

I am about to get the Model X and am a bit worried about the price being more affected by future technology progression in terms of autopilot advances and battery range and am prepared to pay about 1% above market interest rate to secure the buyback price guarantee, which will cost me roughly $3k. Looks like in his case, it would not have been worth it, since his buyback may only about $1k above market of the car today. Interesting to see how well teslas projections on the market value they can guarantee holds though 3 years into the game.

I hope to read more reports here of people that executed on it and tell us if it was worth it in retrospect, or not.

 

[tanner]

Kelley Blue Book

$57,000 today to private party sale according to kbb - so why do you all say you can get more for it than the guaranteed buyback price of $58k ? Do you realize he is talking about the 50%/43% guarantee that kicks in at 3 years and was bought with higher interest rates of the car loan?

I am about to get the Model X and am a bit worried about the price being more affected by future technology progression in terms of autopilot advances and battery range and am prepared to pay about 1% above market interest rate to secure the buyback price guarantee, which will cost me roughly $3k. Looks like in his case, it would not have been worth it, since his buyback may only about $1k above market of the car today. Interesting to see how well teslas projections on the market value they can guarantee holds though 3 years into the game.

I hope to read more reports here of people that executed on it and tell us if it was worth it in retrospect, or not.

Because KBB value for my 2013 P85 in fantastic condition with only 9,400 miles on it was $72,000 and Tesla wanted to give me low $50s... i.e. As I said before, it only makes sense if your car is either in poor (or at least below good) condition or it has high mileage.

 

[sjb1077]

interesting... just checked my car on kbb.com with options and current mileage and the private party value was 63250

 

[zer0cool]

I think this is where not having dealers or real sales people or platform hurts Tesla. Basically dealers make more money selling used cars, but Tesla's offers on pre-owned cars (both Tesla and other cars) are ludicrously low... This reduces the rate of trade-ins to Tesla, reduces rate of new sales (since people can't really buy a new car until they sell their old one), and reduces used sales, where one can make a healthy margin.

Tesla really needs to improve in this area. If a private individual can sell a car for 60k in say a month, then the dealer likely can sell it for 62k. If the dealer (in this case Tesla) offers something at least reasonable, say 54k, then many people may say OK, I ll skip the hassle and just trade in, and get a new car. There's a pretty healthy margin there... However if the dealer instead offers 48k... it's not only kind of insulting (like are you playing me for chumps? I can see how much these cars go on autotrader, I am not stupid), but will likely result in me walking, depriving the dealer of healthy margin with the used car, and delay me buying a new car, or altogether make me change my mind and get another brand where the dealer offers a better trade-in.

As Tesla becomes a more volume seller and mature company, it needs to build up this area or lose fairly significant sales.

 

[Skryll]

interesting... just checked my car on kbb.com with options and current mileage and the private party value was 63250

the only extras I picked where autopilot and sunroof, thats probably why.

I also just checked with tesla about the trade in value of my honda odysee 2014 EX-L with 25,000 miles and while kbb shows me a trade-in value of $26,256 and private party being $28,409, tesla offered me $25,500. Not too far off but still makes me wonder if I shouldn't try to sell it to a private party for $28,000 and keep the $2,500 difference...

 

[Uncle Paul]

Can most always get more money with private sale than trading it back in to Tesla.

Tesla must wholesale your trade in to an auction or broker to get out of your trade, or fix it up, update any issues then remarked it as a used car via CPO program. No way they can pay full retail for your car. Would loose their shirt if it does not resell quickly.

There are a multitude of potential buyers scouring the CPO inventory, but most of them are looking for the ultimate deal as a miss priced trade in with just the equipment they are looking for.

Significant costs involved taking a used trade in, making it ready for resale, and getting it delivered and paid for. They must also be burdened with any warranty costs incurred. They can also tie up millions of dollars in a used car fleet that is urgently needed to address X issues, update the S and launch the Model 3.

Pretty much the same with every new car dealer.

 

[tanner]

Can most always get more money with private sale than trading it back in to Tesla.

Tesla must wholesale your trade in to an auction or broker to get out of your trade, or fix it up, update any issues then remarked it as a used car via CPO program. No way they can pay full retail for your car. Would loose their shirt if it does not resell quickly.

There are a multitude of potential buyers scouring the CPO inventory, but most of them are looking for the ultimate deal as a miss priced trade in with just the equipment they are looking for.

Significant costs involved taking a used trade in, making it ready for resale, and getting it delivered and paid for. They must also be burdened with any warranty costs incurred. They can also tie up millions of dollars in a used car fleet that is urgently needed to address X issues, update the S and launch the Model 3.

Pretty much the same with every new car dealer.

Yes. They turn around and sell Teslas for a premium as "CPO" cars. One I looked at a while back was THRASHED! They didn't even bother taking the trash out of the back of it before sending me pictures of it, so insulting.

 

[brkaus]

Yes. They turn around and sell Teslas for a premium as "CPO" cars. One I looked at a while back was THRASHED! They didn't even bother taking the trash out of the back of it before sending me pictures of it, so insulting.

Not sure what they do now, for a while they were only fixing cars that were actually sold.

 

[jcaspar]

I think Tesla originally said they were basing the buy back on the resale value of an S class Mercedes which is unfortunate as it has one of the worst resale values of any car sold:
S Class depreciates like a stock market crash

 

[Vince Cobelo]

Yea...the only value of the buyback is if TMC "hits the fan" and goes down or out of business decimating our car's value. I financed the minimal required amount for just this reason. Other than that the buy back program is useless I think.