M3 P+ Depreciation

[banned-66611]

Actually 38-40 is a pretty good estimate. Teslas hold their value extremely well.

Model S/X do, but I doubt the Model 3 will. It is being produced in much higher numbers, and right around the time the lease is ending there will be a glut of used ones hitting the market.

The robotaxi plan could take thousands off too. No-one wants to drive a taxi.

 

[Rooster6655]

Model S/X do, but I doubt the Model 3 will. It is being produced in much higher numbers, and right around the time the lease is ending there will be a glut of used ones hitting the market.

The robotaxi plan could take thousands off too. No-one wants to drive a taxi.

It’s produced in much higher numbers but the demand will be higher especially for the used market where entry level will now be at a lower price.

 

[banned-66611]

It’s produced in much higher numbers but the demand will be higher especially for the used market where entry level will now be at a lower price.

Well that's the other problem. EVs are getting cheaper. As more become available the depreciation will be worse.

 

[Rooster6655]

Well that's the other problem. EVs are getting cheaper. As more become available the depreciation will be worse.

EVs that can not be updated OTA and that have a dealership network taking a cut will see the largest depreciation compared to the Fake RRP.

There will not be a high enough amount of EVs hitting the used market even in 3 years time to saturate the demand when taking into consideration of fuel savings vs ICE cars.

If robo taxis did appear in 3 years in the UK (unlikely) all used Teslas with FSD ability will be sold and the prices will rocket especially those that have already paid for FSD.

 

[Artiste]

Well that's the other problem. EVs are getting cheaper. As more become available the depreciation will be worse.

That is a valid point. EVs are supposed to be at a comparable price to ICE cars by 2022, though that date is continually being brought forward. Not that long ago batteries made up 54% of the cost of an EV, now it’s about 33%, and it’s forecast to drop to 20% in just a couple of years. That will inevitably lead to a drop in prices.

 

[MrBadger]

Yep. By time first load of Model 3’s come out of finance I think the EV market will be quite different- not everyone wants silly performance and there will be many more dipping their toe into the EV market for the first time that may want the security of buying new (at cheaper price too) rather than a thrashed Tesla - no point getting a performance unless you intend to thrash it.

And that’s before the company car buyers needing new to benefit most. I think in two or three years, the car market will be quite a different place to what it is now - past performance no guarantee of future etc.

 

[Peteski]

Yeah in 2 or 3 years time VW might actually have delivered a handful of ID.3s alongside millions of ICE Golfs. There may even be a handful of other alternatives from the likes of Polestar, probably with lengthy waiting lists. Only Tesla are really committed 100% to EVs and it really shows!

So I don't think the market will change overnight, more like 10 years based on typical 6 year automotive product cycles. Buyers are slow to catch on too and will continue to buy ICE cars from their favourite brands as long as they keep pumping them out. Plus they can stick a 10 kWh battery in their ICE cars and badge them up as EVs with blue highlights. Job done.

It amazes me how many people don't even realise my Tesla is fully electric. Because it's a huge SUV they often presume it must be a hybrid.

 

[MorayEVGuy]

Watched a Youtube video by James Cooke and a couple of other EV bloggers who were discussing used EV prices. According to their discussion demand for EV's is rising faster than supply which is pushing up the price of used vehicles.

Even older Leaf's are selling for the same or more than 2 to 3 years ago. Unless supply catches up, demand is always going to excede it as more and more people start to catch on to the benefits of an EV.

As these Models come on to the used market in 3 to 5 years I think we will be surprised by the retained value left in these cars.

 

[Rooster6655]

Watched a Youtube video by James Cooke and a couple of other EV bloggers who were discussing used EV prices. According to their discussion demand for EV's is rising faster than supply which is pushing up the price of used vehicles.

Even older Leaf's are selling for the same or more than 2 to 3 years ago. Unless supply catches up, demand is always going to excede it as more and more people start to catch on to the benefits of an EV.

As these Models come on to the used market in 3 to 5 years I think we will be surprised by the retained value left in these cars.

Yep demand for a second hand 300 mile EV for under 25k will be huge!

 

[MrBadger]

I’ve seen and heard things in a ‘past life’ that I cannot reveal due to commercial and client confidentiality, plus I don’t know some of the detail other than what has been shared within the company - some things were even kept secret even amongst co-workers and this was not my area so I was not privy to detail.

However I think I can say don’t underestimate how seriously some ‘traditional’ manufacturers are taking alternative energy sources or the time frames they are aiming for. Based on info a couple of years old, nothing to doubt it’s not still correct.

 

[gangzoom]

Yep. By time first load of Model 3’s come out of finance I think the EV market will be quite different

People were telling me this in 2015 when I had a Leaf, and in 2017 when we got our X people said just wait till 2019, and now its 2021.....

So far this year 14k EVs have been sold in the UK, versus 1.4 million other cars. So for ever EV sold another 100 non EVs were bought.

Its going to be along long time before EVs reach any kind of market saturation.

Also remember if your worried about EV depreciation due to cheaper EVs, what about the 100 non EVs sold at the same time? Their deprecation will be astronomical!!

 

[Rooster6655]

So far this year 14k EVs have been sold in the UK, versus 1.4 million other cars. So for ever EV sold another 100 non EVs were bought.

That surely puts things into perspective, can’t see the market being saturated in the next 5 years unless Elon can pull off 10-20x current sales volume anytime soon.

 

[Peteski]

I’ve seen and heard things in a ‘past life’ that I cannot reveal due to commercial and client confidentiality, plus I don’t know some of the detail other than what has been shared within the company - some things were even kept secret even amongst co-workers and this was not my area so I was not privy to detail.

However I think I can say don’t underestimate how seriously some ‘traditional’ manufacturers are taking alternative energy sources or the time frames they are aiming for. Based on info a couple of years old, nothing to doubt it’s not still correct.

Are they simply going to sweep all their ICE models under the carpet by say 2021/22 and start churning out millions of EVs that they are struggling even to make a profit on?

 

[Durzel]

So... after all that, what are people's thoughts about the likely depreciation on a M3P after 2 or 3 years?

If Tesla's GFV quotes are pessimistic/manipulated then what is a good guesstimate for value?

I've managed to scupper my chances of applying for a finance deal in the short term by not being registered on the electoral roll where I'm living for several years (don't ask). Otherwise perfect credit history and evidence of being at the same address for 5+ years but have been advised that that factor alone is pretty damaging.

So, I'm considering buying outright. Problem is - the lease deals I was getting would basically have cost between ~£17k and ~£23.5k all in (depending on FSD) over 2 years, with the equivalent car costing £51k+ or nearly £58k outright.

Is it feasible that a M3P would be worth about £34,000 (approx 60% retained value) after 2 years?

On the face of it there seems no benefit to buying outright at all given these numbers? And I'm not even factoring in the luxury car tax payable if buying outright either..

Am I better off waiting until 20 plates?

 

[Yev000]

Its not the ev market saturation that's important, its the battery market. Thats the bottleneck.

So, I'm considering buying outright. Problem is - the lease deals I was getting would basically have cost between ~£17k and ~£23.5k depending on FSD, with the equivalent car costing £51k+ or nearly £57k outright.

Is it feasible that a M3P would be worth about £33,500 (approx 60% retained value) after 2 years?

Don't know aha you are talking about,. Comparing 4 year pcp buyout vs a 2 year resale...

You want to sell it after 2 years?

Buying outright is always going to be better than lease. That's how leases make money. By charging you interest and making a profit in the resale. It's not a charity....

 

[Rooster6655]

Is it feasible that a M3P would be worth about £33,500 (approx 60% retained value) after 2 years?

Let’s say the M3P is £53k exc grant, I think we may be looking at around 65-70% retained value at least after 2 years but wouldn’t be surprised if it was higher than this.

 

[Peteski]

So... after all that, what are people's thoughts about the likely depreciation on a M3P after 2 or 3 years?

If Tesla's GFV quotes are pessimistic/manipulated then what is a good guesstimate for value?

I've managed to scupper my chances of applying for a finance deal in the short term by not being registered on the electoral roll where I'm living for several years (don't ask). Otherwise perfect credit history and evidence of being at the same address for 5+ years but have been advised that that factor alone is pretty damaging.

So, I'm considering buying outright. Problem is - the lease deals I was getting would basically have cost between ~£17k and ~£23.5k all in (depending on FSD) over 2 years, with the equivalent car costing £51k+ or nearly £58k outright.

Is it feasible that a M3P would be worth about £34,000 (approx 60% retained value) after 2 years?

On the face of it there seems no benefit to buying outright at all given these numbers? And I'm not even factoring in the luxury car tax payable if buying outright either..

Am I better off waiting until 20 plates?

What mileage are we talking about here re. leasing? I would expect a 4 year 40k mile residual of close to 50%. You will lose proportionally more if you sell after only 2 years since initial deprecation is always steeper. But you should still end up with a net cost cheaper than leasing. Leasing doesn't often come out cheaper overall, especially not on relatively low volume brand new cars like this. The lease companies will have built in a fair bit of safety margin on uncertain residuals. It's not like a Ford Mondeo where they can get massive bulk discounts and calculate depreciation to the nearest penny!

If you are going to buy it outright, it's better to keep it for at least 3 years if you care at all about the overall cost unless you are doing serious mileage. Basically the longer you keep it, the less it costs per mile to own.

 

[Durzel]

Sorry should've said - was looking at 15k miles. I currently have a 12k limit Evezy car and I do a minimum of 800 miles a month commuting and find I'm pretty close to the limit come the monthly renewal.

 

[Durzel]

Its not the ev market saturation that's important, its the battery market. Thats the bottleneck.


Don't know aha you are talking about,. Comparing 4 year pcp buyout vs a 2 year resale...

You want to sell it after 2 years?

Buying outright is always going to be better than lease. That's how leases make money. By charging you interest and making a profit in the resale. It's not a charity....

I've never leased before, so I'm working out the numbers. I wasn't looking at 4 year PCP buyouts, I don't know where you got that from, I was looking at 2 year leases. With Leaseplan backing apparently the lease can be extended a further year or the car purchased (which is a nice option)

The quotes I've been given so far make the total cost over 2 years as just under £17,200 for a M3P without FSD and just under £23,500 with.

Unless I'm missing something obvious the math seems simple? If £57,690 minus the cost of the lease is greater or similar to the residual value of the car after 2 years, then how is buying outright better than leasing? It seems that it simply comes down to where a M3P would be worth £34,000 or not after 2 years. If not, or if it's close, the lease would appear to be the better option - especially as I'd have £50k odd capital to do with as I please.

 

[Rooster6655]

Unless I'm missing something obvious the math seems simple? If £57,690 minus the cost of the lease is greater or similar to the residual value of the car after 2 years, then how is buying outright better than leasing? It seems that it simply comes down to where a M3P would be worth £34,000 or not after 2 years. If not, or if it's close, the lease would appear to be the better option - especially as I'd have £50k odd capital to do with as I please.

The thing we know is that the lease companies shouldn't be getting any discount buying from Tesla vs a traditional ICE car so this gives us a little advantage working out the future value. I think the M3P will be worth at least 34k after 2 years assuming average mileage.