That makes absolutely no sense to me. Financial transactions are always conducted at the current fair market price, not what it might be in the future. This applies to stocks, houses, cars, etc. I don't think you would have been happy to receive an offer for your car based on a more depreciated value next year because you're selling your car *today*.
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If you do not mind, Please post your trade in offer from Tesla so we can compare note
- Thread starter lolachampcar
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That makes absolutely no sense to me. Financial transactions are always conducted at the current fair market price, not what it might be in the future. This applies to stocks, houses, cars, etc. I don't think you would have been happy to receive an offer for your car based on a more depreciated value next year because you're selling your car *today*.
I believe you. However, it still doesn't make sense for Tesla to be sitting on a fleet of used cars as a depreciating asset. Frankly, I think they should be offering at least whole sale values on trade-ins which would a) encourage more sales to current Tesla owners who want to upgrade and b) allow more people to buy a Tesla at a lower price point. This will further encourage the adoption of EVs which is the core mission of the company.
breser
AutoPilot Nostradamus
The S85 I traded for the 85D is sitting in a parking lot at the Tesla Factory. What PlanB is saying jives with what I saw when I turned the vehicle in. They had 3 other vehicles sitting there that were waiting for transportation. I can't imagine they'll holding onto these vehicles for too long because otherwise the investors will eat them alive on holding inventory come the Q4 earnings call. So I'd bet that early Q1 they'll be starting the CPO program.
The real rub for me is not that a bunch of engineers that want to play used car salesmen are buying depreciating assists and sitting on them. That kinda stuff does not surprise me when I hear comments on the conference call like we are spending money as fast as we possibly can in response to questions about growth (SuperCharger network,,,,). Start ups treat cash differently and sometimes make decisions that established businesses would not.
The reason why is simple and is exactly in line with what I was told by Tesla management. Tesla was not pleased with how the secondary market was dealing with their product and how they were handling customers. I suspect Tesla had to put out a bunch of fires (not real ones) created by used car salesmen that would say just about anything to sell the car. The customer is promised the warranty covers god knows what or the range is 50 miles past empty or you can leave it at the airport with zero charge for three months or, or, or, or. You get the picture. When it goes wrong, the used car outlet simply says "call Tesla, it is under warranty". The details are just a guess but I was specifically told by Tesla people that they do not want cars going to dealers and I was told by one of Tesla's dealer partners that they used to bid on and buy Model S trade ins through Tesla in the exact same way they do ICE trades.
The rub here is that Tesla wants the cars but is not run well enough from a used car business standpoint to compete. The solution, pay your most loyal customers $10K less than market for their cars. The smart ones will get pissed. The dumb ones will take it without ever knowing they have been done. Judging by the number of people I have tried to explain this to over and over again on TM, the dumb ones list is long.
I started off upset but not indignant. I've moved towards indignant when all the evidence consistently pointed towards Tesla knowing exactly what they are doing and not it just being a case of Tesla finding its way. If there is evidence that Tesla is evolving, please post it. I do not like "indignant Bill".
Thanks,
Bill
The reason why is simple and is exactly in line with what I was told by Tesla management. Tesla was not pleased with how the secondary market was dealing with their product and how they were handling customers. I suspect Tesla had to put out a bunch of fires (not real ones) created by used car salesmen that would say just about anything to sell the car. The customer is promised the warranty covers god knows what or the range is 50 miles past empty or you can leave it at the airport with zero charge for three months or, or, or, or. You get the picture. When it goes wrong, the used car outlet simply says "call Tesla, it is under warranty". The details are just a guess but I was specifically told by Tesla people that they do not want cars going to dealers and I was told by one of Tesla's dealer partners that they used to bid on and buy Model S trade ins through Tesla in the exact same way they do ICE trades.
The rub here is that Tesla wants the cars but is not run well enough from a used car business standpoint to compete. The solution, pay your most loyal customers $10K less than market for their cars. The smart ones will get pissed. The dumb ones will take it without ever knowing they have been done. Judging by the number of people I have tried to explain this to over and over again on TM, the dumb ones list is long.
I started off upset but not indignant. I've moved towards indignant when all the evidence consistently pointed towards Tesla knowing exactly what they are doing and not it just being a case of Tesla finding its way. If there is evidence that Tesla is evolving, please post it. I do not like "indignant Bill".
Thanks,
Bill
If this is true - that the car will be stored then I resent the fact that I was given a time limited offer, i.e. must accept in 7 days and was told that I would have to turn the car over immediately - even warned to make sure that I had alternative transportation arranged. I was surprised that it took so long for them to pick the car up after I accepted and I've since noticed that it is still linked to MyTesla (though they have now turned off remote access after I asked them to unlink the car). Given that the car seemed to be depreciating at nearly $3000 per month (based on their trade in price and the current private market pricing) this seems crazy. If they weren't going to do anything with the car, they could have extended some good will and let me hang on to the car for longer. Anyway, as I get closer to my new car I'm less aggravated about it but it does all seem a bit haphazard.
aggravated = indignant?
I also prefer "fanboy Greg" to Indignant Greg.
aggravated = indignant?
I also prefer "fanboy Greg" to Indignant Greg.
I'm still in aggravated and/or indignant mode. I thought about trading my loaded (except back seats and dual charger) P85 for a D. Got a lowball offer from TMC that is well below wholesale. Thought about selling it to Earth Motors but their offer was only slightly better and TMC told them to pound sand on a courtesy trade pass through. I see what the retailers are asking and certainly understand leaving a "little on the bone" for them to make a profit. Listed here on the forum for private sale, but I think the market is now full of traded in cars. Probably 30 plus cars here in DFW at Earth and Starwood. I've had my car almost 2 years with 13K miles. It is pristine, reliable, comfortable and fast enough for me. Since i haven't ordered a D yet, there is no pressure to move the car and I've decided to sit on the sidelines and watch for a while. For me it's a matter of principal. If TMC had made a good faith offer on my car I'd have eaten the depreciation and upgraded. Guess I'll get my acceleration fix from my FGT and CGT instead.
First of all I am sure that TESLA has some pretty smart people making some of these decisions. I don't know why they are shipping cars to Ca, but they probably have a pretty good reason.
However the value of your car is a MARKET VALUE. Lets think about this for a minute. You don't like getting say $75k offer for your 1 1/2 year old $110k car. Well then what would you pay for it if you wanted to buy that car? Some on this thread are upset that they want to trade their 4 month old car and they want almost all their money back. Well, lets say you were in the showroom and they had that 4 month old car. Would you pay $100k for it? Would you pay full price for a car that doesn't have all the features you can get with a Fresh new one? What is the variance? How much will someone want as a price reduction to purchase something used? that is the question. Even if it is just 4 months used there has to be a reduction or incentive to get someone to purchase a used item. That is why TESLA has the demo program. Just because someone wants to trade up to something new, why do they think that someone else will come along and pay big money for their trade? I just purchased a used P85, with 16k miles and every option available. The car new was over $110k plus tax. The new car exactly like it with the D package and new tech stuff is $130+K. How much do you think that car is worth, or what will someone pay for it? What would you pay for it? I compared it to what TM was offering in a S85 with a lot of really nice feature but not all the ones on this car. After rebate the Demo with 5K miles would have been around $78k. I paid slightly less than that for a car with more equipment but also more miles. It has less warranty but I know that. The value of the trades are estimated at just less than what the public will pay for a car, so someone can then resell it and make some MONEY. It is all about the MONEY, not about your feelings or someone screwing you. Your car is worth slightly less than what someone will write a check for.
I thought they would do that to my car but what about the frunk frame, didn't that change in the molding process?
"Judging by the number of people I have tried to explain this to over and over again on TM, the dumb ones list is long."
I guess mnlevin means I'm going to have to do the same here. Let me give it a go.
Tesla's offer $68.5K. Earth's offer $78K. I traded the car locally for an ICE so I could "park" my sales tax credit; that was $79K.
mnlevin, I am talking wholesale to wholesale numbers. I am sorry I can not make this any clearer for you. I simply do not posses the words.
As for Tesla having smart people, smart people can do dumb things.
There is simply no way for Tesla to compete with the likes of Earth and Starwood. They require less margin to operate and make money on back end products like sign and drive financing.
Actually, there is a way for Tesla to compete. All they have to do is pay less than Earth or Starwood for the cars they are going to resell. mnlevin, who gets to pick up the tab on that one?
Someone, and I apologize for not being in a position to properly attribute the point, posted that, duh, of course Tesla can not pay these currently inflated wholesale numbers. That would have the cost of the car competitive with what it costs Tesla to actually build a brand new car.
There is no doubt the wholesale (and retail for that matter) market will adjust downward. When you go from very few cars on the market to a bunch, supply and demand dictates a price adjustment. Perhaps Tesla is so smart that they have a way to buy up all the available inventory, CPO it, then sell it at current (small available quantity) retail pricing. They may actually be genius' but somehow I just do not think so.
Anyone have some theories on this one?
I guess mnlevin means I'm going to have to do the same here. Let me give it a go.
Tesla's offer $68.5K. Earth's offer $78K. I traded the car locally for an ICE so I could "park" my sales tax credit; that was $79K.
mnlevin, I am talking wholesale to wholesale numbers. I am sorry I can not make this any clearer for you. I simply do not posses the words.
As for Tesla having smart people, smart people can do dumb things.
There is simply no way for Tesla to compete with the likes of Earth and Starwood. They require less margin to operate and make money on back end products like sign and drive financing.
Actually, there is a way for Tesla to compete. All they have to do is pay less than Earth or Starwood for the cars they are going to resell. mnlevin, who gets to pick up the tab on that one?
Someone, and I apologize for not being in a position to properly attribute the point, posted that, duh, of course Tesla can not pay these currently inflated wholesale numbers. That would have the cost of the car competitive with what it costs Tesla to actually build a brand new car.
There is no doubt the wholesale (and retail for that matter) market will adjust downward. When you go from very few cars on the market to a bunch, supply and demand dictates a price adjustment. Perhaps Tesla is so smart that they have a way to buy up all the available inventory, CPO it, then sell it at current (small available quantity) retail pricing. They may actually be genius' but somehow I just do not think so.
Anyone have some theories on this one?
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dennis
Model S Plaid
If you would read through the earlier posts that have published comparative numbers you would see that Tesla is offering MUCH less than what a retailer buyer will write a check for. Take @lolachampcar's numbers as an example:
Wholesaler's offer, $78K
Tesla's offer, $68.5K
So Tesla is offering about $10K less than a WHOLESALER. And two parties (wholesaler and retailer) have to make some money in the wholesaler case, and only Tesla in the trade-in case.
I believe that qualifies as "someone screwing you", to use your words.
I did ask if Tesla was going to bring the cars current with things like autopilot and was told "there was not enough money in the cars to do that".
Exactly. The order and purchase process was pretty straightforward when I ordered my P85 in late 2012. Lots of features were included in the packages (carbon spoiler, air ride, turbine wheels). Pano was $1500. Now these items are split out at extra cost. The pano is now $2500. The whole process feels like I'm dealing with a Ferrari dealer...buy a car at MSRP, then get hosed on the trade in, in order to get the next model (with all the add on line item costs).
Here is a reality check. Car dealers don't know what is going on in the TESLA world. that is why they offer TOO much for the cars. The proof is just look at EBAY. THey have cars they CANT sell! So you and LOLACHAMPCAR think that TESLA is being sinister, but they had an inside understanding of what was going to happen. The market has fallen out on all these cars. There is a dealer in S Fla trying to sell a P85 for over $85k and another that wont take less than $83k for a S85. They will definitely lose money on those cars because they put too much in them, thinking that there would be buyers clamoring for slightly used TESLAS, But with the new technology and all the TECH owners looking to dump there cars to get the newer ones, you have a glut on the market The average dealer didn't know this was going to happen. So the reality is AGAIN that the market dictates the prices, what people will pay. And the TESLA people are pretty smart, probably smarter than most of the people here. So they knew what would happen when the new TEch and configurations were announced. So for those who were able to unload their cars to unsuspecting buyers and dealers, good for them. But to bash TESLA because they could see the glut and market drop is just simple minded. No problem being hard on me, I got my good deal and I am not upset about the MARKET right now.
breser
AutoPilot Nostradamus
The dealer lolachampcar was using sells more used Teslas than just about anyone else in the whole US. To say they don't know what they can get out of a car is ridiculous. In fact I used the same dealer to gauge the offer that Tesla made me. In fact they told me they were paying that for vehicles that were originally about $20k more than what mine was. So I ended up taking Tesla's offer.
I happened to get a good deal from Tesla, but I think the only reason I did so is because I was turning the car around so quickly.
There certainly are dealers that have overpaid for Teslas and are now trying to sell them for too much. Again I spoke with at least one in that situation (a local one, not the same one mentioned above) when I was trying to gauge my trade offer. If we were talking about some random local dealer that hasn't bought/sold very many Teslas then I would agree with you. But as I've already pointed out we're talking about a very experienced dealer with Tesla vehicles.
I find it very curious that you think Tesla has a better idea what the used market will bear than the biggest sellers of used Teslas right now. Tesla still isn't even selling the vehicles (at least not in volume, someone did mention here on the forums an offer to buy a used vehicle with no sales tax credit from Tesla). So they have no experience in pricing the used market. The closest they come is their inventory vehicles that come with the various incentives because they're technically still new vehicles.
I suspect Tesla is underpaying for cars and building up inventory for their CPO program. They're probably underpaying because of a few reasons. They don't have experience in the used market and as a result are being conservative. Plus they probably figure they can get away with low ball offers because the people ordering P85D vehicles right now are early movers and may not be paying much attention to the used market. But also as we see in lolachampcar's situation they have their position as the dealer which gives them exclusive control over the reduction in sales tax based on the trade value.
I'm not sure how you can't see this as an abuse of that position in the market.
dennis
Model S Plaid
Tedkidd
Member
Mnlevin, it seems you may not fully understand the complaint. The piece you may be missing is these guys have ready buyers for their trades. They simply want the same policy applied that Tesla allows for ICE trades, facilitation of transfer so they don't have to pay sales tax on the whole transaction.
Tesla has chosen to be abusive, neither matching the price nor facilitating the trade. Its behaving in bad faith, harming Tesla goodwill and causing uncertainty among some key supporters.
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I think Mnlevin is right in one respect. I too believe the MS wholesale market is too high. Like the wholesale market for a 458, when there is little supply, the price is high. When there is a discontinuity and the supply goes up, like when McLaren comes out with a 650s and takes the bottom out of the MP4-12C, prices will adjust.
What I take issue to is Mnlevin's not accounting for the mechanism by which this adjustment occurs naturally.
If Tesla continues to allow competitive bidding by their wholesale dealer network on ALL trade ins, we customers see accurate wholesale bids. When Tesla artificially manipulates the process such that MS trades no longer go out to bid then start under bidding the cars by a significant amount, they are taking an advantageous position at the front of a market correction and actually prematurely driving that correction. The results are (1) an acceleration of that correction and (2) damage to their wholesale partners as a result of that premature realignment.
Tesla is using it's monopolistic position to manipulate the market.
Two notes on a personal basis. First, Mnlevin I expect a higher level of dialog here on TMC than I do over on TM. You obviously have some experience in the field and I welcome negative feedback. I'm here to evolve my opinions, not force them on others so I want to learn.
Second, I am over my personal experience on the trade. Tesla reached out and we talked at length over my specific issues. The above is an open discussion about a company wide policy and the market forces that are driving it. This is not a personal vendetta to trash Tesla.
What I take issue to is Mnlevin's not accounting for the mechanism by which this adjustment occurs naturally.
If Tesla continues to allow competitive bidding by their wholesale dealer network on ALL trade ins, we customers see accurate wholesale bids. When Tesla artificially manipulates the process such that MS trades no longer go out to bid then start under bidding the cars by a significant amount, they are taking an advantageous position at the front of a market correction and actually prematurely driving that correction. The results are (1) an acceleration of that correction and (2) damage to their wholesale partners as a result of that premature realignment.
Tesla is using it's monopolistic position to manipulate the market.
Two notes on a personal basis. First, Mnlevin I expect a higher level of dialog here on TMC than I do over on TM. You obviously have some experience in the field and I welcome negative feedback. I'm here to evolve my opinions, not force them on others so I want to learn.
Second, I am over my personal experience on the trade. Tesla reached out and we talked at length over my specific issues. The above is an open discussion about a company wide policy and the market forces that are driving it. This is not a personal vendetta to trash Tesla.
I'll simply add that lolahcampcar's experience in dealing with Tesla is not unique. I and many others in this forum have expresses similar frustrations from dealing with Tesla's trade-in program on their own cars. All you have to do is review this very extensive thread to understand the issues involved. Tesla basically ignores the current fair market value for the car because it never gets sent out to their wholesalers for open bidding. The result is a rapid depreciation of Model S in the market place which have been very unfavorable to the current owners.
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