Help me overanalyze - new or CPO?

[Havok1327]

@carter_seattle This is a very similar spread sheet to what I have put together. Accept yours looks much nicer than mine. Also if it makes you feel any better my depreciation numbers are very close to what you've used. I hope we've both guessed very well.

Wow our tax rate is about 1/2 of yours..

 

[Drewsd]

Cool, thanks all for the additional thoughts and insights, and particularly @carter_seattle for the nice spreadsheet. Great points on both sides. At the end of the day, I'm comfortable being a few years behind the curve, so I'm leaning CPO.

 

[cinemasatty]

First, let's set aside AP2 stuff. The OP has stated that he doesn't care about AP1 (or most other options) so it's hard to imagine he'd care deeply about AP2. Plus, let's be honest, by the time AP2 capabilities are actually useful/proven/legal, the first batch of AP2 cars will be coming up as CPOs. I'll make my biases clear: I purchased a CPO 85D (don't have it yet) and plan on essentially trading it in every 3 years for another, more current CPO. I'm fine to be one revision behind the curve.

Regarding cost, let's agree that:

Cost = Price + Financing - Value at sale = Financing + Depreciation.

So, what is depreciation anyway? Let's look at a brand-new Tesla that retails at $80k. After tax incentives and referral bonus, you pay $71,500. But remember, everyone (almost) is also paying $71,500 for that new car. So the effective price of the car is $71,500. And that is where the depreciation clocks starts, not at the retail price. You see this spelled out explicitly when Tesla values your trade-in. They take $7500 right off the top.

So, what does it cost to own a new car for 3 years vs. a CPO for 3 years?

New = $Price * 30% - $2550

CPO = $Price * 22%

I built a spreadsheet to cover this in more detail:

Tesla New vs. CPO

Thanks for the spreadsheet. Incredibly useful as I was having the same debate. I pick up my Classic P85 in a week. Happy to be a part of a great community.

 

[JRMW]

Degradation - when your 60D looses 10% in few years you're looking at 190mile car (~150 real life travel, maybe down to 120 in cold weather/strong wind), when your S85 looses that 10% you are in 150-190 real life ranges -

Is this True on the current 60?
Because it had a 75 kWh battery.

Will Tesla software limit the 60 to emulate battery degradation?

 

[JRMW]

Let's look at a brand-new Tesla that retails at $80k. After tax incentives and referral bonus, you pay $71,500. But remember, everyone (almost) is also paying $71,500 for that new car. So the effective price of the car is $71,500. And that is where the depreciation clocks starts, not at the retail price.

Although I agree with this now, does this hold true in 1-2 years when Tesla matures out of the tax credit?

Currently, everybody takes $7500 off the value of a CPO Tesla because new Teslas have the credit.

So people are currently looking at a $71,500 cost of a new car and ignoring the $80,000 list price. Heck, even Teslas website does that!
this forces a discount on current CPOs, since nobody will pay more for a CPO than a comparable new car

But in 3 years there will be no credit.
So the cost of a new Tesla bumps up $7500 to the buyer
This makes a CPO more valuable in the future

However, this depends on what happens to Teslas price strength after the tax credit goes away.
Will demand soften so much that they have to drop the base price of the car? (Or bump up the referral code to $7500?). Or will demand hold and they can keep prices where they are? (My GUESS is you'll see prices of new models drop, but not by full $7500)

The spreadsheet Carter made is great,
But it relies heavily on the past and estimates... and it cannot truly account for the upcoming discontinuation of the Tax credit and its subsequent affect on future demand and base price of future Tesla S. This is a major factor to the calculation, and cannot be reliably estimated as this has never happened before in a used car market. (How to model it?). The closest thing was cash for clunkers, and that program was far too different

 

[nagypite]

85D for 66K with ap 1.0
85 kWh Model S 5YJSA1H2XFF080984 | Tesla
85 kWh Model S 5YJSA1H25FFP69962 | Tesla

 

[JRMW]

My own thoughts
You really can't go wrong, so go with your gut. This is an emotional decision and not a rational one. Since it's a luxury purchase, you should get what you want, and leave what you don't.

I admire what Carter et al have attempted to do. However, I believe his spread sheet is very precise, but likely not accurate. Calculating the financial impact is near impossible given the difficulty with estimating future residual values. (You see this with the widely divergent lease rates and insurance quotes we all get. Nobody truly know how to value these cars!)

Tesla is a great company, and the cars are awesome, but the Quality leaves some to be desired. (For instance I've had my car for 10 days and I already have to bring it in when I get back to MN)
Teslas are expensive to maintain. ($4100 for four years maintenance service plan!? Yikes!!)

It is believed that quality on newer Teslas is improved compared to older years. But they aren't Toyota
I believe many Tesla owners abuse their drivetrain (launching, driving aggressively). Thus used Teslas are more risky than lets say a Toyota Corolla or Avalon, in terms of likely future repairs needed.

If you're looking at an S 60, you are getting 15 kWh for FREE!

You (and I) will keep this car a long time

My last car (Lexus RX 330) was reliable but expensive to repair. Car before that not reliable (VW Passat) and very expensive to maintain. (I spent thousands of dollars the last 1 year repairing the Lexus), that's why I decided to jump into the S and not wait for the 3)

I decided to choose new so that I can buy the extended warranty and fix my future expenses, for the next 8 years, knowing that My Tesla will be expensive to repair

A CPO only gets you 4-8 years of warranty. After that the first repair will likely blow through much of the savings you accrued by not taking the depreciation hit.

So to sum
-calculating true financial impact of used vs CPO is very difficult
-this is a LUXURY purchase
-you know the full history of a new car
-Teslas are not reliable, and expensive to repair
-by report new cars are better built than a used car
-a 60 gives you free battery
-New cars have up to an 8 year warranty (for you) so you can fix your future costs

And of course a new car has AP2 available, which you don't care about now, but could always add later (as well as the other 15 kWh)

All that said, I think getting a CPO is a GREAT choice as well.

 

[Havok1327]

@JRMW You've raised some good point. Thanks for the info.

@carter_seattle and others using the spreadsheet he posted. I was comparing our 2 spreadsheets again, the loan payoff amount and mine didn't match. It looks like its spreading the interest evenly across the life of the loan. So the payoff is off a bit, I just added new sheets to it with loan amortization for each loans It should give a more accurate payoff.

Tesla New vs. CPO

 

[skitch23]

Thanks @carter_seattle & @Havok1327. I had made a similar spreadsheet for myself a while back, but this is much more streamlined!

 

[Qbenjamin]

I am going through this debate right now. I am going for my first test drive later this afternoon and had my eye on a 15 85D nicely loaded and only had 10k miles for $72,500 CPO. My other option was a new 60D that wasn't as loaded for around the same price. You have to keep in mind, buying new is really $8500 cheaper since you can also factor in $1,000 referral fee on top of the tax credit. I was all set to buy this CPO but didn't want to be impulsive and wanted to test drive first. Sure enough late last night, it came off the market, and there is nothing currently for CPO that meets my requirements and budget that make sense. I am going to continue to search for a 85D CPO for the next couple of months, but if I don't see anything pop up, I will probably end up buying the new 60D which at least gives me AP 2.0. I am hoping when I go for my test drive in a couple of hours, they have some other options for me. I want to keep the budget around 70k and want low mileage (less than 15k) if I go CPO. One advantage of going CPO is I will finance less (and pay less interest) and won't have to depend on the tax credit.

Exactly what happened to me before I pulled the trigger on my 14' S60. The only real requirement that I had, was that it must have the Tech package along with AP. After letting one awesome pre-owned offer pass me by, I just couldn't do it a second time. This should tie me over until we get the 3 in the next year or so. This is my first EV, so I needed to be completely sold before I shelled out another $20K for it brand new.