TMC is an independent, primarily volunteer organization that relies on ad revenue to cover its operating costs. Please consider whitelisting TMC on your ad blocker and becoming a Supporting Member. For more info: Support TMC

Model 3 immediate resale value

Discussion in 'Model 3' started by DavidS314, Oct 27, 2016.

  1. DavidS314

    DavidS314 Member

    Joined:
    Oct 27, 2016
    Messages:
    16
    Location:
    las vegas
    Hello, assume someone with an earlier reservation number receives their model 3 in late 2017. Wouldn't the car's value immediate appreciate upon delivery? Considering demand will be greatly backed up what do you think a 50k model 3 would sale for if the owner immediately put it on the market?
     
    • Informative x 1
  2. Boourns

    Boourns Member

    Joined:
    Mar 9, 2016
    Messages:
    891
    Location:
    Dallas
    There might be some immediate demand, but I am not sure I'd count on making a ton of profit. I don't see a ton of people wanting to overpay for a $50k model 3 when a base or CPO S is not much more. Also, as with other Teslas, the federal tax credit immediately devalues the car.

    If you are really asking whether you should spend $50k on a 3 for speculative purposes, it seems pretty risky to me. I'd be sure you actually wanted and can afford it in case you have to keep it.
     
    • Like x 1
  3. ecarfan

    ecarfan Well-Known Member

    Joined:
    Sep 21, 2013
    Messages:
    12,564
    Location:
    San Mateo, CA
    I have no idea just what price a new model 3 would command but I am sure that the seller could find a buyer who would pay thousands more than the seller paid.

    Regardless of the fact that there is nothing illegal about what you describe (selling a brand new Model 3 right after taking delivery) I dislike speculators who try to take advantage of scarcity. Yes, I know that pricing is based on supply and demand, this is just capitalism at work, etc..

    In this particular case, when there are hundreds of thousands of Model 3 reservations made by people who have been waiting well over a year for their car, there will clearly be demand.

    You wouldn't happen to have an early Model 3 reservation, would you?

    Queue the intense debate about the "free market at work" vs. "greedy car flippers"...
     
  4. JeffK

    JeffK Well-Known Member

    Joined:
    Apr 27, 2016
    Messages:
    5,180
    Location:
    Indianapolis
    The one thing that would be illegal is trying to get the tax credit... they might consider it fraud if you simply flipped the car.
    Instead nobody gets that credit and you just wasted time for those looking to get the credit. Imagine how pissed you'd be if you were the guy who takes delivery one day after the full credit expires. Sure you'd get the half credit, but if it wasn't for that darned car flipper you'd potentially be looking at $3750 more.

    I'm basically saying it's a dick move, please don't do it.
     
    • Like x 4
    • Disagree x 1
  5. DavidS314

    DavidS314 Member

    Joined:
    Oct 27, 2016
    Messages:
    16
    Location:
    las vegas
    I should be in the first 100,000. I am not interested in reselling it as i really want it for myself, just curious how the market would be for them for the first 1-2 years after the first deliveries.
     
  6. JeffK

    JeffK Well-Known Member

    Joined:
    Apr 27, 2016
    Messages:
    5,180
    Location:
    Indianapolis
    1-2 years after the first deliveries it'll be a whole new world. There will be more competition and Tesla will probably introduce new features in the Model 3, meaning the original Model 3 will be still awesome, but slightly outdated causing its value to decrease..
     
    • Like x 1
  7. Lysol

    Lysol Member

    Joined:
    Oct 22, 2016
    Messages:
    98
    Location:
    Virginia
    I'm getting really big into playing the electric guitar and I just wanted to say that there are many "boutique" guitar pedal builders that have over a year waiting list for their top pedals (i'm currently on one). People are getting on the list, purchasing one for about $300, and then turning around and selling them for over 100% profit. Heck, I've seen some listed for close to 300% the original cost. AND PEOPLE ARE BUYING THEM.

    So I would probably bet money that people will take advantage of supply and demand in the first few months of the release and make a decent profit. I think that some people will still overpay for an optioned model 3 vs an un-optioned model S. They would be priced about the same in the end.
     
  8. xav-

    xav- Member

    Joined:
    May 26, 2016
    Messages:
    501
    Location:
    Orange County CA
    First model 3s shipped will be fully loaded.. $80k minimum cars. No way a $50k model 3 will ship early. Ask all the folks who ordered MX.. Never wondered why none of the first model X on the road were 75Ds?

    They will start with bigger battery pack and likely force AWD and air suspension. They will likely fill tens of thousands of such orders for these cars, make big profit margins on it, surprise Wall Street expectations (instantly freeing up access to a lot more capital something which they desperately need), and use that as an opportunity to make the economies of scale to produce a cheaper model 3.

    This is why they removed our position in the queue from their website. As a March 31st reservation holder who lined up at 6 am who doesn't plan to spend money more than $50-$55k, I wish that was not going to happen, but it's all written.

    Back to your original question I am not sure a fully loaded 3 will hold its resale value that well.
     
    • Like x 1
  9. dsvick

    dsvick Active Member

    Joined:
    Jun 10, 2016
    Messages:
    1,253
    Location:
    NE Ohio
    The first cars will go to employees, not all employees will order fully loaded vehicles, so there will be some $50K cars shipped in the first few months.

    To the original question though, you might be able to make a profit on it but you also have to consider the taxes you'll pay, destination fee, documentation charges, initial title and all the other costs involved. All of that will add thousands to the $50K price paid, then, as Boourns mentioned, you'll need to subtract something for the tax credit from it, since no one will want to give you full price knowing you're getting an additional $7,500 later. Also, since you've already titled it, it'll be a used car, regardless of the number of mile on it so there will be a lose of value for that.

    All in all, you're not likely to make much, if any, profit.
     
  10. SageBrush

    SageBrush Active Member

    Joined:
    May 7, 2015
    Messages:
    3,678
    Location:
    Colorado
    I'll let you know -- 1-2 years after the first cars are produced.

    As a speculation it is a dumb bet, not the least because the speculator eats the sales tax.
     
  11. JeffK

    JeffK Well-Known Member

    Joined:
    Apr 27, 2016
    Messages:
    5,180
    Location:
    Indianapolis
    • Funny x 2
    • Like x 1
  12. flamingoezz

    flamingoezz Member

    Joined:
    Apr 13, 2016
    Messages:
    316
    Location:
    NJ
    When you're selling a simple item like a pedal or a shiny new gaming system, i think you have a greater potential for buyers. there aren't tons of options, and they may end up being an extra $100 here or there. when you get into cars, people aren't going to want to pay thousands for features they didn't want, on top of paying a premium over retail -- and most of the people who CAN, probably already own an S/X.
     
  13. habanero69

    habanero69 I Dont Need Cialis. I Drive an EV.

    Joined:
    Jul 29, 2016
    Messages:
    387
    Location:
    FLorida
    THIS ^^^^^^^^^^
     
  14. N5329K

    N5329K Member

    Joined:
    Aug 12, 2009
    Messages:
    661
    Location:
    California
    First gen Priuses had a six-month wait (or longer) and were sold (by dealers) or resold (by new owners) for more than the manufacturer's list price.
    Robin
     
  15. McRat

    McRat Active Member

    Joined:
    Jan 20, 2016
    Messages:
    3,604
    Location:
    Norco, CA
    People will scalp early Model 3's. This is how capitalism has always worked.

    Don't you remember some speculators were trying to order 6 or more?

    I guarantee you some of them with big families will be successful.
     
  16. DavidS314

    DavidS314 Member

    Joined:
    Oct 27, 2016
    Messages:
    16
    Location:
    las vegas
    Besides potential tax credits issues I don't think there would be anything wrong with someone reselling a model 3. If I had the means and no reservation I would pay a slight premium myself to get the car immediately instead of waiting 2+ years (from the time of release).
     
  17. GregRF

    GregRF Squirrel Power

    Joined:
    Jul 22, 2014
    Messages:
    120
    Location:
    CA
    That is not how the tax credit expires. The full credit expires the quarter after the 200k US car has sold.
     
  18. JeffK

    JeffK Well-Known Member

    Joined:
    Apr 27, 2016
    Messages:
    5,180
    Location:
    Indianapolis
    #18 JeffK, Oct 27, 2016
    Last edited: Oct 27, 2016
    Yes, thats exactly how the tax credit expires... by date!

    There are four quarters per year
    Quarter 1 (Q1): January 1 - March 31
    Quarter 2 (Q2): April 1 - June 30
    Quarter 3 (Q3): July 1 - September 30
    Quarter 4 (Q4): October 1 - December 31.

    So the key dates for the pissed off guy are Jan 1st, Apr 1st, July 1st, or Oct 1st. If a single day earlier then he'd be in the previous quarter.

    Hopefully this makes sense to you now. Reread my post and the "...takes delivery one day after the full credit expires." part will click for you.

    The full credit could expire on a March 31st, June 30th, Sept 30th, or Dec 31st. The half and the quarter credit will do the same on one of those dates.

    Basic point is, if you get bumped from one of the expiration dates to the first day on the next quarter then you're screwed.
     
    • Disagree x 1
  19. ChadS

    ChadS Petroleum is for sissies

    Joined:
    Jul 16, 2009
    Messages:
    2,544
    People wondered the same thing with Tesla's earlier vehicle releases. Each time 1 or 2 people got lucky and turned a profit, but that was it.

    I think it will be especially hard to get a high price for the 3 given that its key attribute over existing Tesla vehicles is...its low price. Sure, there's always a chance that you could find somebody with tons of money that never heard of the car before and wants one right away and is willing to take your options and go through you (which would likely involve flying somewhere) to get the vehicle - and don't mind missing out on the tax credit when they buy your used vehicle. But I don't think there will be many people like that; in fact I suspect there will be more people trying to flip their early cars for a profit and then take delivery of their second order.

    Keep in mind that those with an early "reservation" (including employees) are in line to be among the first to place an order. An early reservation slot does NOT determine delivery order; what you order and where you live does that. So people in a hurry to get a 3 and willing to spend a lot could just order a 3 with everything, and then they'd get it early too. (One possible exception is that somebody in a late delivery area might be willing to pay to get access to an early California car).

    And as noted above, if money is no object but time is, the 3 won't have anything that the S doesn't, so buyers always have that option too. (Yes the 3 will be smaller and I am one looking forward to that; but the size difference isn't enormous and I don't think it's worth a ton of money to get a smaller, unproven car no faster than you could get a larger, proven car that will retain its value better). Sure, some may prefer the 3, but I think this option sets a cap on just how much they will be willing to pay to get one.
     
    • Informative x 1
    • Like x 1
  20. MP3Mike

    MP3Mike Active Member

    Joined:
    Feb 1, 2016
    Messages:
    3,362
    Location:
    Oregon
    But it is unlikely that just one car is going to bump over the line. And Elon has already said that they will try to cross the 200k threshold at the beginning of a quarter so that the most people possible can take advantage of the credit.
     
    • Like x 1

Share This Page