Model 3 - Resale value

[muftn001]

Okay, I really peeved at the moment. I bought the Model 3 about a month ago with the following options:

1. Long-range ($10k more)
2. Blue color ($1k more)
3. Self-drive option ($6k more)

Since the base was just under 40k, the price of the above was 57k. At this point, freight ($1.5k), title/registration and taxes (2.5k), were added to give me a purchase price of 61k. Now I know that Tesla dropped the price of this vehicle by around 2.8k (taxes included), one day after my return period ended. This weekend, Tesla announced that they were now including unlimited supercharging for their Model S or X vehicles so I thought, I would trade in the Model 3 and purchase the S. I was completely beside myself when Tesla told me that the fair market value of my Model 3 is now 36.9k .. WTF??? The Model 3 declined in value by more than 50% in 3 weeks??? I find this really hard to buy since Tesla states they use Kelley's blue book values to price the trade-ins. Kelley's blue book value for a 2018 Model 3 is 49.2k (and that does not include self-drive) ... so how exactly did Tesla come up with 36.9k for my 2019 Model 3??

While I love the car, I am not finding Tesla to be as progressive as many believe in their business practices and they leave a lot to be desired. I will also say, if this is what they believe a brand new model 3 is worth after 3 weeks, then perhaps all of us should be ditching the idea of buying a Tesla.

 

[TomB985]

I can understand the frustration, but you won’t find a competing brand or dealership that would do better. Your car is now used since it’s been titled, and it’s worth significantly less than a brand new one. There’s no getting around that, and this has nothing to do with it being a Tesla versus a more conventional brand.

 

[Bill Foster]

lol, its pretty common knowledge vehicles have massive depreciation as soon as they drive off the lot.

Consider you are selling it back to Tesla, who is then going to resell it for profit.......

List it privately so you dont get hit as hard....

 

[Dan203]

They've always said that new cars lose half their value the second you dive them off the lot. It's not just a saying, it's true.

 

[quikshifter]

Problem is Tesla doesn't want used Teslas and only use KBB for non Teslas. Try Vroom.

 

[mswlogo]

They've always said that new cars lose half their value the second you dive them off the lot. It's not just a saying, it's true.

I've never heard that and never experienced it either.

Yes, you take a good hit the moment you drive off the lot. But it is not 50% and it's not 50% in this case either.
I'd say 20% is more typical.

You don't include Taxes and Destination when doing the math. That money is instantly gone (Tesla does not get that money back on your trade). Except some states will subtract the taxes on the trade in. Which make the effective trade in value higher.

So Tesla offered 33% below current purchase price. Which is very low. But not unheard of by dealers.

One thing that I think is working against folks is software upgrades. The "Trade" has zero value to Tesla W.R.T. software upgrades.
You are selling them back THEIR software that they could give away to the next person, even if your car had no software upgrades. They don't care if your car has any software upgrades and has no added value to them.

Where anyone but Tesla will put value into the software upgrades.

Also Kelly Blue Book is way overly optimistic on prices. I would look on Ebay (Sold Items) and then take probably $5K-ish off that to get rough trade in value. Cash places like CarMax would probably be another $5K below that.

BTW, if I were to sell my car, I think I would look at Ebay. The fees are not that bad and the exposure is really good. You may get some bad bids but eventually with some work you might do well.

 

[Joshan]

just going to use your own numbers....

Which btw are not accurate for reasons stated above so this would be even lower using real numbers

purchase price: 61k
KBB: 49.2k

Loss since purchase: 19.4%

with real numbers not including tax and the like its likely more like 15%...

Show me a production car that would not lose that?

 

[Dan203]

I thought it was half. Could be misquoting a saying. <shrug>

This guy takes the Model 3 he just purchased the day before to CarMax and they offer him $12k less then he paid for it...

Not half, but a big drop. And with the recent pretty massive price changes people might be leary of buying a used one because you could buy today for what seems like a deal and then tomorrow the price could drop and you could have got a new one for the same price.

 

[ngogas]

Welcome to buying any car and wanting to resale it.

 

[ngogas]

Car max will low ball anyone as they have to resale and take on the burden is advertisements etc.

 

[john85775]

Have you done the math of FUSC? Especially if you charge at home, it’s fairly nominal. Not worth taking a $7k-$15k bath on a brand new car. Unless you were pining for an S...

 

[The Gray Foxx]

Yeah the thing about KBB is they aren't buying cars. A car's value is the amount someone will actually write a check for it.

Try Carvana. They are selling Tesla's like hotcakes and are probably offering a higher tradein value. They will buy the car even if you don't buy one from them (same as Carmax).

Your best bet will be to sell to a local private buyer. Also don't forget that tax rebate, the market sure hasn't. Every EV drops in value after first purchase because a new buyer would get that tax rebate.

 

[Dan203]

Car max will low ball anyone as they have to resale and take on the burden is advertisements etc.

I got more then expected for my last car. But it was rare. It was a 2008 BMW 135i with only 29K miles on it and in perfect shape. They gave me about $2k more than KBB said it was worth for a Private Sale.

 

[mswlogo]

I thought it was half. Could be misquoting a saying. <shrug>

This guy takes the Model 3 he just purchased the day before to CarMax and they offer him $12k less then he paid for it...

Not half, but a big drop. And with the recent pretty massive price changes people might be leary of buying a used one because you could buy today for what seems like a deal and then tomorrow the price could drop and you could have got a new one for the same price.

Getting cash from CarMax is NOT the same as a trade in. I sold my car privately for twice what CarMax offered.

You could do the same experiment as the Model 3 owner did on any new high end car and see similar results.

Also I’d be curious if that Video experiment was around the time of up to around $10k tax breaks.

 

[Sklith]

Tesla offered only $29k for my mid-range 17k mileage Tesla while Carvana offered $39k for it. It's obvious that Tesla doesn't want your used Tesla.

 

[Dan203]

Also I’d be curious if that Video experiment was around the time of up to around $10k tax breaks.

Yeah he mentioned that he got $10k in tax breaks so that if he took their offer he'd only have been out $2k.

 

[JG T3SLA]

Quick reference point... For its and giggles I ran my 2018 fully loaded performance 3 with ~11k miles by Carvana. They offered 44.5k. Backing off all tax incentives and performance package refund from Tesla I would be sitting at ~20k loss (~27k including sales tax).

Not planning on selling but wanted to check value after about a year of ownership.

 

[mswlogo]

Have you done the math of FUSC? Especially if you charge at home, it’s fairly nominal. Not worth taking a $7k-$15k bath on a brand new car. Unless you were pining for an S...

Right, I had FUSC with my P3D-. After doing the math on the $5K refund. I took the refund. I would have had to do a ton of SC to make it break even. I forget the exact numbers but it was something like 67k miles of SC to break even. That’s like 100%, inconvenient, SC for 5.5 years for me. And that’s in a state with very high electricity rates (quicker ROI). If you have cheaper rates it would take even more miles. For some people it may have more value that drive a ton and very long distances. It makes sense if you must use a lot of SC. In my case I practically require none. So it would be all just to get that value back.

It’s a nice perk but don’t swap cars for it.

 

[muftn001]

Thanks to all of the replies. This is not my first new car and with all due respect the "loss" in value is ridiculous and Tesla is just trying to rip people off. I purchased a Sienna in 2016 and we purchased an XLE model ... my wife hated it and we traded it in 6 months and 3000 miles later. We paid (before freight and taxes) $44k and we received 40k on the trade-in to buy the Limited model. If one pays $57k (before freight and taxes) for a car which is then repriced to $55k due to manufacturer price drops and you go to trade it in - you find a 33% drop in price to be normal? Guess Tesla's are even worse at holding their value than any other car I have ever heard of. Well, I would have taken a 5k hit and bought a model S, I am not going to lose 20k to do the same ...

One other comment. The $6k for the self-driving option is worth $6k since the option goes with the car. If Tesla now says this is not worth anything ... I say bull$hit - in fact, it will actually be worth $7k with Musk's announcement that the feature is going up in price shortly. If Tesla, does not include that in their trade-in values they are moronic.

 

[muftn001]

Right, I had FUSC with my P3D-. After doing the math on the $5K refund. I took the refund. I would have had to do a ton of SC to make it break even. I forget the exact numbers but it was something like 67k miles of SC to break even. That’s like 100%, inconvenient, SC for 5.5 years for me. And that’s in a state with very high electricity rates (quicker ROI). If you have cheaper rates it would take even more miles. For some people it may have more value that drive a ton and very long distances. It makes sense if you must use a lot of SC. In my case I practically require none. So it would be all just to get that value back.

It’s a nice perk but don’t swap cars for it.

I completely agree ...