Market value for Plaid

[unk45]

So the folks who bought high at 140 got 60k drop on top of depreciation, is this ok? You know that is almost 50% depriciation in 1 year. Which other brand has that? 50% is what you plan for at 5 years!!

Cars depreciate for sure but not at this rate.

Really that is not uncommon, but published data and consumer experience diverge.
Nearly every high end vehicle has similar experience in practice.
Just consider these elements:
- dealer markup typically >12% of MSRP,
-options proliferate with negligible resale value,
- taxes, fees, etc all with zero resale value.
The image we seem to be seeing is that Tesla, in times of severe scarcity, defied gravity, but not now.
There is long history of temporary shortages making insane high resale values (early Honda Accord, early BMW 3 series, several Ferrari models. There is an equally long history of gigantic % drops on resale (BMW 12 cylinder, most Jaguar, Rolls Royce, Buick Reatta).

Tesla experiences are definitely within norms. They seem excessive ONLY because Tesla is open about price changes. Everyone else, every large OEM, deceives reality with non-disclosed dealer incentives, lease/loan subvention, etc.

Factually high end vehicles lose at least 30% of value the moment title changes hands. Just Taxes, transaction fees, dealer markup account for most of that while options and new/used effects produce the rest.

None of that makes it easier to realize that Tesla is no longer niche cult- driven gravity-defying.
FWIW, when I bought my 2021 Model S Plaid I knew all that and did it anyway.
We all must know that if actual depreciation is a prime motivation we should NEVER buy a new vehicle. A nearly new one will save 20% or more at the minimum.
Everyone buying new vehicles should know that even though the vehicle vendors of the world try to focus on monthly payments rather than cost.
Chill and enjoy your Plaids! I know I do!
FWIW, I’ve personally owned >50 new vehicles (cars, boats, airplanes, helicopters). I’ve seen both sides, but never been surprised. Of course, spending years involved in financing and selling these things makes me acutely aware of transaction costs, among other things.

 

[ucmndd]

@whitex so you are saying it is ok for a car company to fluctuate the price that 2 years of buyers roughly lost 40-50% of care value in 1 year compared to industry standard of around 20%?

The job of car companies is to sell cars. The market decides what cars are worth. Car companies respond to the market as necessary to sell cars.

What about this are you not understanding?

For real, are you saying MSRP adjustments are the same as dealer incentives!!!!???

They are exactly the same.

You have no clue how financial institutions like insurance companies put value on assets. everything starts from MSRP (not how much you paid for it)

You really think banks and insurance companies don’t know what vehicles are actually transacting for (I.e. what they’re worth)? MSRP is meaningless.

Finally, yeah I like the car, but I like not getting screwed more. it is not about money, it is about principle!!!

The principle is don’t buy high. The car market was so very obviously in a bubble. Listen to the signals or pay the price.

 

[jpk195]

If they do not do their research, then they own whatever position they find themselves in; complaining because Tesla changes their pricing structure is ridiculous. People need to own their decisions. Full. Stop.

Not everyone wants to do a research project before they buy a car. That’s great that you can, but when people who don’t are surprised by something like that his and decide not to buy another Tesla nobody should be surprised by that. Capitalism works both ways after all.

 

[PR0FESSOR]

Agreed.

Not everyone wants to do a research project before they buy a car. That’s great that you can, but when people who don’t are surprised by something like that his and decide not to buy another Tesla nobody should be surprised by that. Capitalism works both ways after all.

 

[Yelobird]

Not everyone wants to do a research project before they buy a car. That’s great that you can, but when people who don’t are surprised by something like that his and decide not to buy another Tesla nobody should be surprised by that. Capitalism works both ways after all.

I don’t research a gallon of milk but I do see value in researching a 100k car purchase. Maybe I’m wrong…

 

[Neon001]

They are exactly the same.

I don't agree for two reasons:

1. Manufacturer or dealer incentives are, by nature, limited duration. This means that it's assumed that the price will go back to its original value when the incentive is no longer offered. You could make the argument that Tesla prices are also cyclical, but this is very much not a given. With decreasing manufacturing costs and price pressures from competition (that I don't believe are warranted but are equally as valid if people believe itis so), many people only see Tesla price drops as evidence that further drops are possible.

2. Incentives like the ones you are talking about usually come with strings attached - financing deals with specific terms, or only apply for late model vehicles (which Tesla does also for inventory cars), or are only valid in certain markets. People inherently understand that Tesla MSRP adjustments are more impactful because they apply to everyone in a DTC sales model, regardless of where or when they order.

Honestly, though the incentives amount to the same thing for manufacturers and dealers as Teslas price changes, Tesla should steal a page from their books. The competition has learned a thing or two over the last 80+ years, after all. Temporary incentives are a very powerful motivator. Just look at the FSD transfer and free supercharging offered in 2Q. Even though a small demographic cares about these things, just the word of mouth about temporary offers is sometimes enough to move the needle.

 

[ginmqi]

I don’t research a gallon of milk but I do see value in researching a 100k car purchase. Maybe I’m wrong…

Dude, exactly.

Yeah, not everyone researches a ton before buying any car.

But if you don't do your homework before buying a 100k car....then you don't get to complain afterwards.

When I saw the Plaid get the MSRP dropped to 90k and all colors included I had to remain calm and know that I still need to wait and watch. This big of a MSRP is mighty tempting BUT it also means market is shifting quickly and Tesla is trying to stay ahead of the game....which means market can continue to shift...and so I'm still waiting for potentially even more MSRP drop on the Plaid. They had dropped before but MSRP bumped back up and they had end of quarter incentives as well....given the state of the market I'm still waiting to see what the price is on 9/30/23 and also 12/31/23 before I pull trigger. I might want to wait until MY 2025...we'll see.

 

[Predation]

soooo any on here looking to sell their plaid? I’m going to be in the market for a used one in about a month. Might hold out a bit longer to see if prices drop further from tesla? wish full thinking, but if tesla drops to low $80’s, I’m working overtime behind Wendy’s dumpster to pick one up by EOY.

 

[ucmndd]

1. Manufacturer or dealer incentives are, by nature, limited duration.

Just like Tesla pricing, which we’ve seen clearly can and does change whenever they want it to.

This means that it's assumed that the price will go back to its original value when the incentive is no longer offered.

This is quite the assumption that hasn’t matched reality in many instances for the ~25 years that I’ve been buying cars. Dealer holdbacks, cash rebates, financing incentives, or some combination of all of the above are sometimes used continuously to prop up unrealistic MSRPs for entire model years until they can be adjusted (or continued on despite their lack of connection with reality).

2. Incentives like the ones you are talking about usually come with strings attached - financing deals with specific terms, or only apply for late model vehicles (which Tesla does also for inventory cars), or are only valid in certain markets.

Sometimes but far from usually. There are all manner of nationwide pricing incentives to bring transaction costs down below MSRP - some visible to consumers but others only to dealers and entirely opaque.

Honestly, though the incentives amount to the same thing for manufacturers and dealers as Teslas price changes, Tesla should steal a page from their books.

From my perspective Tesla has engaged in precisely this practice every single quarter at least since I bought my Model S back in late 2016. They are well-versed in “temporary” end of quarter incentives, in addition to readily adjusting MSRP as necessary.

 

[TSLA Pilot]

I don’t research a gallon of milk but I do see value in researching a 100k car purchase. Maybe I’m wrong…

Please ensure that's some plant-based milk?

Why?

1. You're not from the bovine family.

2. Cow's milk is for baby calves which double their weight every few months.

3. You've been weaned for decades, most likely.

4. Cows are "forcibly impregnated" as they produce milk for the same reason human females do: for their offspring. Thus, after birth their calves are removed within hours (otherwise they'd be drinking the cow's milk, which is the milk we'd like to steal for humans). Those calves are tied up in small cages to become veal. So we're stealing babies for slaughter for "milk."

Thus, adopting plant-based milk is far more ethical and moral, not to mention the massive environmental impact, as reported by the UN so many, many years ago:

Animal agriculture is responsible for 18 percent of greenhouse gas emissions, more than the combined exhaust from all transportation. ​

"Livestock's Long Shadow: environmental issues and options". Food and Agriculture Organization of the United Nations. Rome 2006

(See more at COWSPIRACY: The Sustainability Secret)

 

[iggy33]

Dude, exactly.

Yeah, not everyone researches a ton before buying any car.

But if you don't do your homework before buying a 100k car....then you don't get to complain afterwards.

When I saw the Plaid get the MSRP dropped to 90k and all colors included I had to remain calm and know that I still need to wait and watch. This big of a MSRP is mighty tempting BUT it also means market is shifting quickly and Tesla is trying to stay ahead of the game....which means market can continue to shift...and so I'm still waiting for potentially even more MSRP drop on the Plaid. They had dropped before but MSRP bumped back up and they had end of quarter incentives as well....given the state of the market I'm still waiting to see what the price is on 9/30/23 and also 12/31/23 before I pull trigger. I might want to wait until MY 2025...we'll see.

Not me. I pulled the trigger and I am picking it up later this week. Been watching for most of the year and I think this is a good entry point. I can see both sides though. But, the inventory is way down, and they are now taking a couple of months to order again. Also, there's no new incentives so far for the end of the quarter and there's just a few days left. My thoughts are that there won't be really any discounts and if there's any refresh, it will probably mean a bump back up in pricing.

Of course, who knows? Just my two cents.

 

[jpk195]

I don’t research a gallon of milk but I do see value in researching a 100k car purchase. Maybe I’m wrong…

I think anyone on this forum has done at least SOME research before buying. We have some very knowledgeable people on this forum that I suspect forget that not everyone follows the history of Tesla price drops and model changes. These happen in a way that’s different than any other car manufacturer, even if you want to argue in net effect they are similar. It’s almost like we expect new buyers to know everything the forum knows, or at least that’s how it comes across to me.

 

[Neon001]

Just like Tesla pricing, which we’ve seen clearly can and does change whenever they want it to.

It's not that Tesla's price reductions won't ever be overturned, it's that there's no guarantee that they will be. And if they are, the timing of those price increases is dictated by a variety of factors making them difficult to predict (economy/inflation, interest rates, competition, government subsidies, CEO public favor - anything that influences demand). Go look at historical data on MSRP for almost every other car available on the market and you'll see a line with almost zero negative slope. Tesla's pricing looks like this: Tesla Car Price History Can you see an upward trend there? No. And factoring inflation over that period, it's actually the opposite. Even if there are temporary incentives playing with the overall value of those other cars, the fact that MSRP is always going to trend upward gives people confidence that their car isn't devaluing (even faster than it otherwise would). This perception has a real effect.

In the sales game, the worst thing you can do is to give people reason to believe they'll be better off if they wait to buy. Tesla is the awful at this. Constant (hardware) feature rollouts throughout the year, price reductions, and claims of future proofing that have all ended up being complete BS give consumers reason to doubt now is the right time to buy.

This is quite the assumption that hasn’t matched reality in many instances for the ~25 years that I’ve been buying cars. Dealer holdbacks, cash rebates, financing incentives, or some combination of all of the above are sometimes used continuously to prop up unrealistic MSRPs for entire model years until they can be adjusted (or continued on despite their lack of connection with reality).

We're apparentely of a similar age based on buying history, and I've not seen the kind of longstanding incentives you're talking about aside from select eras where there were outside factors at play (usually government involvement). I don't even know how you might prove such a claim. And keep in mind dealer (not manufacturer) rebates and mark downs are not the same thing, as those are not discounts that everyone can obtain. They have a much weaker link to resale values than Tesla's price cuts under a direct-to-consumer model where you benefit no matter how well you negotiate or where you buy.

Edit: let me be clear - I do think Tesla prices will rise again (probably quite soon with the UAW strike putting pressure on prices and supply elsewhere), and that the sky is not actually falling with these recent cuts, but I think Tesla should be far more judicious in how quickly they adapt pricing to demand. They are chasing it too actively. If demand is too low for current pricing and inventory is piling up (i.e. what happened recently to precipitate the cuts), using a combination of *modest*, limited duration price cuts (say, $2500 or less) and deep discounts on inventory units only would be a better way to go.

 

[ginmqi]

Not me. I pulled the trigger and I am picking it up later this week. Been watching for most of the year and I think this is a good entry point. I can see both sides though. But, the inventory is way down, and they are now taking a couple of months to order again. Also, there's no new incentives so far for the end of the quarter and there's just a few days left. My thoughts are that there won't be really any discounts and if there's any refresh, it will probably mean a bump back up in pricing.

Of course, who knows? Just my two cents.

Yeah that's a very good point. In this forum, several members have ordered the Plaid at the newer lower price and the EDD have been 1-2mos...so this means they are likely filling up production capacity for the Model S Plaids and hence the later delivery dates.

I think you're right in that looking at this informal data point...it's likely Tesla is seeing decent uptick in demand for the MSP cars and there is likely no incentive for end of Q3 (end of this week) and likely no further drop in price any time soon (if any, there mayt be a MSRP price bump back up if demand is pretty decent/consistent).

We will see how it is near end of quarter 4

 

[Yelobird]

Yeah that's a very good point. In this forum, several members have ordered the Plaid at the newer lower price and the EDD have been 1-2mos...so this means they are likely filling up production capacity for the Model S Plaids and hence the later delivery dates.

I think you're right in that looking at this informal data point...it's likely Tesla is seeing decent uptick in demand for the MSP cars and there is likely no incentive for end of Q3 (end of this week) and likely no further drop in price any time soon (if any, there mayt be a MSRP price bump back up if demand is pretty decent/consistent).

We will see how it is near end of quarter 4

Speculation but Tesla is generally always focused on keeping the share holders happy and maintaining annual values. In my opinion, they Needed to shift repeat buyers and new to the premium product as anyone even considering a model 3 is likely in a holding pattern for the switch over. Product updates are great long term but the switch over phase for their #2 top seller is crushing to the year end profits. I speculate (assumed) the Model SX will go back up drastically when that Model 3 funnel opens as they don’t want to mass market the premium models and never have. They are simply a stop gap for production transition.

 

[Predation]

Speculation but Tesla is generally always focused on keeping the share holders happy and maintaining annual values. In my opinion, they Needed to shift repeat buyers and new to the premium product as anyone even considering a model 3 is likely in a holding pattern for the switch over. Product updates are great long term but the switch over phase for their #2 top seller is crushing to the year end profits. I speculate (assumed) the Model SX will go back up drastically when that Model 3 funnel opens as they don’t want to mass market the premium models and never have. They are simply a stop gap for production transition.

i just hope they either a.) hold current pricing for the plaid, or b.) lower. Any increase would pretty much negate a purchase from me. :-( doesn't matter how much OT i do behind the dumpster.

 

[Yelobird]

i just hope they either a.) hold current pricing for the plaid, or b.) lower. Any increase would pretty much negate a purchase from me. :-( doesn't matter how much OT i do behind the dumpster.

That would be nice but the companies target is volume sales and maintaining revenue expectations. They afforded you and others a Great entry opportunity now (hence the anger of threads like this that bought early) so I wouldn’t speculate long on entry for a deal like this as I suspect it wont last. (opinion). Once Fremont and TX are cranking volume M3’s I suspect Tesla will be comfortable reducing volume of premium MSX units back to normal or reduced volumes as the revenue will be a minimal variable.

 

[teko]

Speculation but Tesla is generally always focused on keeping the share holders happy and maintaining annual values. In my opinion, they Needed to shift repeat buyers and new to the premium product as anyone even considering a model 3 is likely in a holding pattern for the switch over. Product updates are great long term but the switch over phase for their #2 top seller is crushing to the year end profits. I speculate (assumed) the Model SX will go back up drastically when that Model 3 funnel opens as they don’t want to mass market the premium models and never have. They are simply a stop gap for production transition.

That is a good point and totally makes sense. My thinking is that it looks like they are blowing the inventory of MS&X due to update introduction, but ias you say it could be that they are just trying to prop up the sales until the new M3 is launched.

I am on the fence about getting MSP. Main sticking points are no sensors so park assist is bad and then the normal cruise control phantom breaking. My MYP had the issues with phantom breaking and phantom collision warning messages so it makes me wary to jump into another Tesla since I know I hate this.

 

[Howie Dub]

I had a mobile service technician tell me not to worry about the price drops b/c Teslas hold their value; not if they keep dropping the prices the way they do. I bought my Plaid when it was $130k and came out to $145k after everything. Put $20k down with a loan that was 2.39% through Logix. I go upside on my loan every time they drop the price just as I’m getting ahead. Upside down as of today. Luckily my insurance automatically includes 20% gap insurance just in case anything happens, but still pisses me off.

While I respect Elon, this is artificial depreciation caused by one person. I have never seen any other car manufacturer reduce their new price by over 30% in a year. You’ll see $5k, $10k, maybe even $15k (assuming $100k vehicle), but that’s usually to push out the old in order to bring in the new model year. And the new model year will always be priced higher. The difference between Tesla and other dealerships is that you can negotiate at other dealerships. If you don’t like the deal, you just go to another dealership or even go out of state. That’s what I did with my 2021 Ram 1500 Limited. I was able to get 14% below MSRP. Used value is 20% below what I bought it at, but it’s also a year older. Even if I purchased at MSRP, I’d be down about 30%. And it’s not even considered a luxury vehicle. While I don’t expect cars to appreciate in value, I also don’t expect them to depreciate so quickly the way my Plaid did. Yes, I’ve had fun with it, even with the 40mph vibration issue, but I don’t anticipate buying a new Tesla again. And they have the nerve to charge their existing Plaid owners $2700 for the upgraded brake pads and calipers that all new Plaids get. What rattles my cage the most is that I could get a new Plaid now, add the insanely expensive Track Package, and it would still be less than what I paid last May.

End rant.

 

[ucmndd]

While I respect Elon, this is artificial depreciation caused by one person.

The market decides what cars are worth. Not Elon. The only thing Tesla gets to decide is if they want to listen to the market and sell cars, or not.

What exactly is “artificial depreciation”? You think Tesla voluntarily reduced the prices of their cars because they got sick of making so much money on them?