If you do not mind, Please post your trade in offer from Tesla so we can compare note

[breser]

not exactly. not everyone fully qualifies for the $7,500 tax credit. how about retired people on a fixed income, with retirement savings?
they can afford a new or used Model S paying cash, but they don't qualify for the $7,500 federal tax credit, since they don't pay that much federal tax.
There are many different situations, though I agree in general, most will not be willing to spend anywhere near what they can buy a new Model S for.

These sorts of people are a very small subset of the market. If you try to price for them you'll never sell the vehicle. Eventually sellers will get tired of waiting and lower their prices to the larger market. Those unicorns will end up buying a vehicle that's priced for the larger market.

The only reason to price for them is if you're not really wanting to sell but are willing to sell if the price is heavily in your favor. Then you might get someone who is impatient and doesn't care about the extra money or the new things on the vehicle.

 

[Drymr]

(Canadian Dollars) Toronto, Ontario
Fully-Loaded 2013 P85, 15 months old, 14,500km
Original Price: $133,000 (including 13% HST)
Tesla Buy-Back Quote: $75,500
Depreciation: ~34%/year
WTF???!!!

 

[Canuck]

(Canadian Dollars) Toronto, Ontario
Fully-Loaded 2013 P85, 15 months old, 14,500km
Original Price: $133,000 (including 13% HST)
Tesla Buy-Back Quote: $75,500
Depreciation: ~34%/year
WTF???!!!

While you may include tax as part of depreciation, it really doesn't count that way when it comes to a new purchaser looking for a deal on a car without sensors, etc., and Tesla does have to turn some profit on it.
Does the $133k include the $8,5k EV rebate (i.e. the actual price without rebate was $8.5k more)? You have to remember that whoever buys this vehicle used from Tesla won't qualify for that rebate but has to pay tax.

I understand how you can see this as a low offer but taking into account the above points, it seems reasonable to me. No one should buys these cars (or any car for that matter) as an investment.

 

[Drymr]

$133,000 was before the $8,500 rebate. Without HST and including the rebate the car cost approx. $111,500. That's 26%/year depreciation which, while better than 34%, is still terrible. My old Infiniti G37 depreciated at 10% year, and that car was nothing compared to a Model S. I didn't buy the Model S as an investment but the car is worth much more than $75,500 today. The same cars are selling for approx. $104,000 on autotrader. If I sold it back to Tesla at $92,000 there'd still be a $12,000 upside for them and I'd get $92,000+13% HST savings = $104,000. I'm not in the business but isn't a $12,000 upside very good?

 

[lolachampcar]

Drymr,

Please do keep in mind that depreciation is not linear. You take a HUGE hit when you drive it away from the service center and that hit is then diluted by the number of months/years you keep the car. My past premium car ownership has set my expectation at $1/mile IF I keep the car for at least three years. Anything less than that, for whatever reason, has always come with a significant hair cut.

I suspect that, barring any step change in features like the latest D, you would do much better reselling a 100 mile loaded MS than trying to do the same thing with a loaded S Class. You would be shocked at what that S Class is worth just from driving it off the dealer's lot. The MS being supply constrained does help us some.

 

[rlang59]

...considering Elon Musk guaranteed a 50% value after 3 years...

Just so you are not surprised later it is not 50% of the total price.

This is the formula they will be using:

This value is equal to 50% of the original base purchase price of the 60 kWh Model S plus 43% of the original purchase price for all of the options, including the upgrade to the 85 kWh battery pack (exclusive of taxes, fees, and accessories).

 

[MassModel3]

Just so you are not surprised later it is not 50% of the total price.

This is the formula they will be using:

This value is equal to 50% of the original base purchase price of the 60 kWh Model S plus 43% of the original purchase price for all of the options, including the upgrade to the 85 kWh battery pack (exclusive of taxes, fees, and accessories).

So with base Model S 60 price of $70K, that works out to:
35,000 + ((your purchase price - 70,000) x .43).

Then I would assume you would also subtract $1 per mile over 36,000 (base lease is 12,000 miles per year).

 

[Lloyd]

So with base Model S 60 price of $70K, that works out to:
35,000 + ((your purchase price - 70,000) x .43).

Then I would assume you would also subtract $1 per mile over 36,000 (base lease is 12,000 miles per year).

I believe that formula allowed 15K miles per year IIRC

 

[tandrup]

Just finished reading through the offers so far - and my initial conclusion is that as long as Tesla is supply-constrained in terms of volume, the CPO program will be almost non-existing. All of you (I just ordered one, so cannot consider myself an owner quite yet) who are selling will get an offer from Tesla, evaluate it against the private market and decide to sell there instead based on what I am seeing so far. Maybe it will change over time, but I think the initial conclusion is that there will be very few cars coming to - and therefore be available in the Tesla CPO program. What do you guys think?

Thanks,
Lars

 

[rlang59]

Just finished reading through the offers so far - and my initial conclusion is that as long as Tesla is supply-constrained in terms of volume, the CPO program will be almost non-existing. All of you (I just ordered one, so cannot consider myself an owner quite yet) who are selling will get an offer from Tesla, evaluate it against the private market and decide to sell there instead based on what I am seeing so far. Maybe it will change over time, but I think the initial conclusion is that there will be very few cars coming to - and therefore be available in the Tesla CPO program. What do you guys think?

Thanks,
Lars

Once the buyback program kicks in for people that have had the car for three years you will probably see a larger amount of pre-owned cars available for the CPO program.

 

[breser]

Got my quote back on my vehicle. Took delivery on 9/24/2014. Had 2,432 when I asked for the quote. Purchase price was $94,320. Quote is $82,000. Tesla says that's 94% of the purchase price after removing the federal incentives.

 

[yobigd20]

Got my quote back on my vehicle. Took delivery on 9/24/2014. Had 2,432 when I asked for the quote. Purchase price was $94,320. Quote is $82,000. Tesla says that's 94% of the purchase price after removing the federal incentives.

so Tesla is using people's federal income status/eligibility against them??? Tesla has no right to claim this as profit for themselves...

 

[mitch672]

so Tesla is using people's federal income status/eligibility against them??? Tesla has no right to claim this as profit for themselves...

they do because they sell new vehicles with the "you get a $7,500 federal tax credit". they have removed the fed credit from every quote they have done.

 

[bonnie]

so Tesla is using people's federal income status/eligibility against them??? Tesla has no right to claim this as profit for themselves...

But consider that when someone has already taken the credit, the next buyer cannot. If someone is turning in a car that they just bought & hasn't registered it yet, then the tax credit is available for the next buyer, making that car 'more valuable' than the one where the tax credit has been taken. I don't see this as Tesla claiming the tax credit for themselves, but rather a reality of what the true cost is that we pay for the cars.

Would you buy a very slightly used car that was $7500 less than a new car, if you knew you could get $7500 back in a tax credit on the new one? I wouldn't.

 

[breser]

But consider that when someone has already taken the credit, the next buyer cannot. If someone is turning in a car that they just bought & hasn't registered it yet, then the tax credit is available for the next buyer, making that car 'more valuable' than the one where the tax credit has been taken. I don't see this as Tesla claiming the tax credit for themselves, but rather a reality of what the true cost is that we pay for the cars.

Would you buy a very slightly used car that was $7500 less than a new car, if you knew you could get $7500 back in a tax credit on the new one? I wouldn't.

I know this isn't an important part of your point (which I agree with). But, registration doesn't matter for the federal tax credit. The title changing hands is what matters.

From Plug-In Electric Drive Vehicle Credit (IRC 30D) :

The vehicles must be acquired for use or lease and not for resale. Additionally, the original use of the vehicle must commence with the taxpayer and the vehicle must be used predominantly in the United States. For purposes of the 30D credit, a vehicle is not considered acquired prior to the time when title to the vehicle passes to the taxpayer under state law.

(emphasis mine)

I believe that title passing means when you signed to take ownership of the vehicle.

 

[Canuck]

Got my quote back on my vehicle. Took delivery on 9/24/2014. Had 2,432 when I asked for the quote. Purchase price was $94,320. Quote is $82,000. Tesla says that's 94% of the purchase price after removing the federal incentives.

Will you take them up on that offer?

 

[breser]

Will you take them up on that offer?

Strongly considering it. I can't imagine that someone else would pay me more than that. A private party sale (for the same amount) would end up costing the buyer more than a new vehicle (unless they couldn't take the $7,500 tax credit).

 

[Pollux]

I almost fully agree with @lolachampcar: at the end of the day, this issue is settled by the market itself. It will also be settled by the Feds and States, which at some point will phase out these incentives.

Where I disagree: markets are partly about psychology. When sellers preemptively discount, they send their own signals into the market.

I think @breser and I at least partly agree; that agreement is captured in @breser's remark, "older vehicles that have considerable depreciation on them... can probably start ignoring the incentives."

The the argument is-

How much is new so I can figure out if used makes any sense?

One side says new is sticker.

The other says it is sticker minus the rebate.

Well, it is simple. The actual sale price on the secondary market will answer this question. Arguing with a potential seller about if they choose to include or exclude any one incentive just does not seem to make any sense. Take a look at what sellers are succeeding in doing and you will have your answer.

 

[yobigd20]

But consider that when someone has already taken the credit, the next buyer cannot. If someone is turning in a car that they just bought & hasn't registered it yet, then the tax credit is available for the next buyer, making that car 'more valuable' than the one where the tax credit has been taken. I don't see this as Tesla claiming the tax credit for themselves, but rather a reality of what the true cost is that we pay for the cars.

Would you buy a very slightly used car that was $7500 less than a new car, if you knew you could get $7500 back in a tax credit on the new one? I wouldn't.

Not everybody qualifies for the credit. It's not Tesla's right to assume everybody qualifies and penalize the ones that don't. Nobody here knows what % of owners actually claim the credit as Tesla's kept those numbers private as they've opted for non-disclosure of the IRS credit filings. The credit isn't going to last forever either.

I get your point though. They are not going to offer someone a buy back at MSRP minus $10k and resell it at MSRP minus $5k when someone can order brand new and get MSRP minus the $7500 credit and save themselves $2500. Plus it'll be new.

Eh. They should just offer retrofits for a decent price and close the matter. That'll make everyone happy (assuming they don't price gouge the retrofits).

 

[breser]

Not everybody qualifies for the credit. It's not Tesla's right to assume everybody qualifies and penalize the ones that don't. Nobody here knows what % of owners actually claim the credit as Tesla's kept those numbers private as they've opted for non-disclosure of the IRS credit filings. The credit isn't going to last forever either.

I seriously doubt Tesla has any idea of those numbers. All Tesla does with the IRS regarding the credit is file the number of vehicles they've sold and certify that the vehicles are eligible for the credit. That certification is a general certification not per vehicle.