Model 3 resell values have plummeted.

[phaheem]

I placed an order for a 2022 M3P FSD on June 23, 2022, based on an offer from Tesla to trade in my 2019 M3 LR AWD FSD. Just before I was to take delivery in late August, Tesla repriced my trade in over 25% lower, citing "market conditions." That is right -- 25% lower in less than 2 months. I had to cancel the deal, as there was no negotiating with Tesla. The sales associate said that Tesla "does not make money" on reselling Teslas (BS - as a stock holder I would want them to make money on trades). Even worse, the fact is, their web site was still listing similar 2019 used configurations for the same price that triggered me to start the deal back in June. Plus, the FSD option should have further increased the value of the trade as the FSD price increase occurred in that timeframe.

Similarly, in early July, we started the same deal with my wife's 2020 MY LR FSD trading it for a 2022 MYP FSD. Same deal. The trade in offer plummeted and we canceled that one too.

Needless to say, I was quite disillusioned with the whole process. It started with so much excitement & anticipation and ended with disdain.

You should’ve sold your 2019 M3LR back in June when the market was hot and “locked in” the higher price. Of course a used car will continue to depreciate as time goes on, can’t blame Tesla (or anyone) for paying market value for a car.

I got a very lucrative offer from Carvana for my BMW i3 in May 2022 and sold it to them immediately, then placed an order for a Tesla the very next day. While waiting for the Tesla, I bought a used car from Craigslist ($1,500) to get around until the Tesla was delivered. Ended up selling that used car for more than what I bought it for and made a profit including what I spent on gas, maintenance, registration, etc.

 

[cdubois]

You should’ve sold your 2019 M3LR back in June when the market was hot and “locked in” the higher price. Of course a used car will continue to depreciate as time goes on, can’t blame Tesla (or anyone) for paying market value for a car.

I got a very lucrative offer from Carvana for my BMW i3 in May 2022 and sold it to them immediately, then placed an order for a Tesla the very next day. While waiting for the Tesla, I bought a used car from Craigslist ($1,500) to get around until the Tesla was delivered. Ended up selling that used car for more than what I bought it for and made a profit including what I spent on gas, maintenance, registration, etc.

In New York State, if you trade in a used car for the purchase of a new, you don't pay sales tax (~8% depending on the county) on the portion covered by the trade in. This is significant. Selling to another party would need to offset that, plus I'd be out of a car for two months waiting for the new one. Tesla had the best trade in offer at the time out of 4 that I checked with.

 

[jjrandorin]

In New York State, if you trade in a used car for the purchase of a new, you don't pay sales tax (~8% depending on the county) on the portion covered by the trade in. This is significant. Selling to another party would need to offset that, plus I'd be out of a car for two months waiting for the new one. Tesla had the best trade in offer at the time out of 4 that I checked with.

In "Normal" times, selling a 2 year old car to buy a brand new one of the same make would absolutely have been a losing money proposition. The question would be "how much are you going to lose, $,$$$, or $$,$$$. The fact that so many people were trying to capitalize on a once in a generation type market inflation, should tell everyone that there is no way those prices could last (and that they were completely out of whack with reality).

Just like "most" people miss out on stock purchases when they are at the bottom , or some people sell stock too late after a rise and it comes back down, same deal here.

People were speculating on tesla vehicles like they were stock, and they arent, they are cars, which are normally something one holds onto for a few years before selling them unless one is prepared to lose a lot of money.

 

[phaheem]

In "Normal" times, selling a 2 year old car to buy a brand new one of the same make would absolutely have been a losing money proposition. The question would be "how much are you going to lose, $,$$$, or $$,$$$. The fact that so many people were trying to capitalize on a once in a generation type market inflation, should tell everyone that there is no way those prices could last (and that they were completely out of whack with reality).

Just like "most" people miss out on stock purchases when they are at the bottom , or some people sell stock too late after a rise and it comes back down, same deal here.

People were speculating on tesla vehicles like they were stock, and they arent, they are cars, which are normally something one holds onto for a few years before selling them unless one is prepared to lose a lot of money.

True. For what it’s worth though, and this is purely anecdotal, but I believe Teslas hold their value very well. I leased a M3SR+ in July 2019, then sold it for $40k in December 2020 (long before the used car market ballooned). MSRP on my SR+ at the time I leased it was ~$42k.

 

[cdubois]

In "Normal" times, selling a 2 year old car to buy a brand new one of the same make would absolutely have been a losing money proposition. The question would be "how much are you going to lose, $,$$$, or $$,$$$. The fact that so many people were trying to capitalize on a once in a generation type market inflation, should tell everyone that there is no way those prices could last (and that they were completely out of whack with reality).

Just like "most" people miss out on stock purchases when they are at the bottom , or some people sell stock too late after a rise and it comes back down, same deal here.

People were speculating on tesla vehicles like they were stock, and they arent, they are cars, which are normally something one holds onto for a few years before selling them unless one is prepared to lose a lot of money.

Understood, agreed, but the fact of the matter is, today, the used prices for Tesla's current used inventory are about 10% lower than they were in June. Both cars would have been traded in even with a 10% trade in reduction. 25% down was/is way more extreme than even their own published used car prices, certainly in August and still today in late October. Then and now, the trade in value dropped way more than their used car inventory prices. Further, they still have very little used inventory, best I can tell.

 

[jjrandorin]

True. For what it’s worth though, and this is purely anecdotal, but I believe Teslas hold their value very well. I leased a M3SR+ in July 2019, then sold it for $40k in December 2020 (long before the used car market ballooned). MSRP on my SR+ at the time I leased it was ~$42k.

Model 3s (and Ys) have historically done pretty well on resale value. Not "I can sell my new car for more than I paid for it" well, or "I can sell my 1 year old car for more than I paid for it" well, but well in general.

Thats why (frankly) its frustrating to see people rush to post "Oh noes, model 3 values have plummeted!" as even though the actual fact is true, its "plummeting" from values that were not driven by reality'

Its like someone complaining that the price of Toilet Paper has "plummeted" from its pricing in Mid 2020 or something, when people were hoarding toilet paper and "flipping" it online.

 

[Lavender]

I placed an order for a 2022 M3P FSD on June 23, 2022, based on an offer from Tesla to trade in my 2019 M3 LR AWD FSD. Just before I was to take delivery in late August, Tesla repriced my trade in over 25% lower, citing "market conditions." That is right -- 25% lower in less than 2 months. I had to cancel the deal, as there was no negotiating with Tesla. The sales associate said that Tesla "does not make money" on reselling Teslas (BS - as a stock holder I would want them to make money on trades). Even worse, the fact is, their web site was still listing similar 2019 used configurations for the same price that triggered me to start the deal back in June. Plus, the FSD option should have further increased the value of the trade as the FSD price increase occurred in that timeframe.

Similarly, in early July, we started the same deal with my wife's 2020 MY LR FSD trading it for a 2022 MYP FSD. Same deal. The trade in offer plummeted and we canceled that one too.

Needless to say, I was quite disillusioned with the whole process. It started with so much excitement & anticipation and ended with disdain.

I have a question for you. What is the logic behind ordering a car with FSD? Tesla still offers the $199/month price for the subscription. Just curious what motivates people to spend the extra 15k up front when you can't transfer the feature to a new car, and you would have to keep the car 6+ years just to break even

 

[jjrandorin]

I have a question for you. What is the logic behind ordering a car with FSD? Tesla still offers the $199/month price for the subscription. Just curious what motivates people to spend the extra 15k up front when you can't transfer the feature to a new car, and you would have to keep the car 6+ years just to break even

Im going to push that discussion to one of the many many (many) threads about FSD in the FSD subforum:

AI, Autopilot, & Autonomous/FSD

Discussion about AI, Tesla Bot, Tesla Autopilot (AP), the promise of Full Self Driving (FSD), as well as other Autonomous Vehicles.

teslamotorsclub.com

I feel very strongly that since we have a entire subforum for that discussion ( that is extremely extremely active) that is where discussion on that topic should go.

 

[Lavender]

Im going to push that discussion to one of the many many (many) threads about FSD in the FSD subforum:

AI, Autopilot, & Autonomous/FSD

Discussion about AI, Tesla Bot, Tesla Autopilot (AP), the promise of Full Self Driving (FSD), as well as other Autonomous Vehicles.

teslamotorsclub.com

I feel very strongly that since we have a entire subforum for that discussion ( that is extremely extremely active) that is where discussion on that topic should go.

I was inquiring as to the individual's (cdubois) motives for doing so, not trying to start a new general discussion

 

[BigNick]

No one should ever buy a car assuming it will be an appreciating asset.
Except possibly an Italian exotic with a four-legged animal badge on it.
And even that is no guarantee.

 

[afadeev]

I placed an order for a 2022 M3P FSD on June 23, 2022, based on an offer from Tesla to trade in my 2019 M3 LR AWD FSD. Just before I was to take delivery in late August, Tesla repriced my trade in over 25% lower, citing "market conditions." That is right -- 25% lower in less than 2 months. [....]
Needless to say, I was quite disillusioned with the whole process. It started with so much excitement & anticipation and ended with disdain.

I almost got run-over by the same train. Was in the final stages of finalizing an order for a new Tesla, when their estimates for my TM3P trade-in value come in at comically low level. Lower than wholesale. Lower than ANYONE else out there.
And even those #s were not final - Tesla reserves the right to reprice the trade in on the day when the transaction commences, which is within 1 week of new vehicle delivery. They refuse to take your trade-in vehicle at the time of placing the order.

Needless to say, I did not place the order.
My next EV will be something other than a Tesla.

 

[Trips]

We are a couple months away from new cars potentially getting a $7,500 refund so I'm guessing that is also part of it.

 

[rpiotro]

We are a couple months away from new cars potentially getting a $7,500 refund so I'm guessing that is also part of it.

Careful, it is not a "refund". It is a tax credit. You must actually have $7500 in federal income tax liability in the same year the vehicle is purchased to receive the full credit.

I think it is fair to say most people that can afford a new Tesla have an income that would qualify. When I bought my short lived Nissan leaf I knew I would get little if any of that credit as my wife and I are retired. As it turned out I paid almost no federal taxes that year as I took write-offs after doing improvements to my rental property.

Wasn't too upset as the Leaf was a new leftover 2020 model and the dealer incentives and factory rebates made it a steal. Then I got a good trade allowance to boot.

 

[T4M3]

Careful, it is not a "refund". It is a tax credit. You must actually have $7500 in federal income tax liability in the same year the vehicle is purchased to receive the full credit.

I think it is fair to say most people that can afford a new Tesla have an income that would qualify. When I bought my short lived Nissan leaf I knew I would get little if any of that credit as my wife and I are retired. As it turned out I paid almost no federal taxes that year as I took write-offs after doing improvements to my rental property.

Wasn't too upset as the Leaf was a new leftover 2020 model and the dealer incentives and factory rebates made it a steal. Then I got a good trade allowance to boot.

Also please keep in mind that there is an upper limit on the income level. Adjusted Gross Income must be lower than $150K for single, or $300K for joint filers.

 

[father_of_6]

Plus, the FSD option should have further increased the value of the trade as the FSD price increase occurred in that timeframe.

FSD is worth *zero* to Tesla. They can add it or remove it from any car in their possession. Why would they "buy" a software license from you for *their* own software?

 

[nate704]

People on this forum think cars are appreciating asset which is not.

 

[Druidv1]

I agree, I bought my performance model 3 back in April and would always go to vroom and other car sites, put in my VIN and see how much they offered me. I always suspected they would drop and wanted to sell eventually.

The entire time it would change from 68k to 70k. Eventually I noticed that everyone started offering me less, around 52k, 50k, etc... but vroom was still offering me 67k, so I pulled the trigger and sold it, had it for 5 months, 5k miles and lost like 2k because I paid 69k for it. Waited a few weeks and kept checking anyway because vroom will still give you a price on your car even though they bought it already lol... so it went down to 52k eventually and now they are offering me 42,190 which is 25k under what they paid me literally a month and 2 weeks ago!!!! can you believe that...

I've also been looking at the used car market and *sugar* it's been dropping like crazy, the car vroom bought from me was eventually listed for 74,500 they now dropped it to 71k, I doubt it will even sell at that price when you can go on the tesla website and get a used one for less with FSD which mine doesn't have.

The Tesla bubble is deflating, I'm just waiting for the right time to buy back my car now...

 

[jjrandorin]

People on this forum think cars are appreciating asset which is not.

*most* cars are not appreciating assets, this is true, but there are a few that are. They are generally not in the mass market vehicle category though, which pretty much every tesla except for the original roadster is.

There also was a fairly brief time (measured in months) where cars in general WERE appreciating assets, so I am not surprised at people "wishing" that was still the case. I am surprised at any angst and indignation its not the case any longer, though.

 

[VT_EE]

The Tesla "bubble" is not deflating, the used car market in general is deflating and coming back down to earth. It was extremely frothy last summer.

 

[father_of_6]

I agree, I bought my performance model 3 back in April and would always go to vroom and other car sites, put in my VIN and see how much they offered me. I always suspected they would drop and wanted to sell eventually.

The entire time it would change from 68k to 70k. Eventually I noticed that everyone started offering me less, around 52k, 50k, etc... but vroom was still offering me 67k, so I pulled the trigger and sold it, had it for 5 months, 5k miles and lost like 2k because I paid 69k for it. Waited a few weeks and kept checking anyway because vroom will still give you a price on your car even though they bought it already lol... so it went down to 52k eventually and now they are offering me 42,190 which is 25k under what they paid me literally a month and 2 weeks ago!!!! can you believe that...

I've also been looking at the used car market and *sugar* it's been dropping like crazy, the car vroom bought from me was eventually listed for 74,500 they now dropped it to 71k, I doubt it will even sell at that price when you can go on the tesla website and get a used one for less with FSD which mine doesn't have.

The Tesla bubble is deflating, I'm just waiting for the right time to buy back my car now...

Your story is confusing. You bought new at the highest price, sold at a slight loss, and now you're waiting to buy used at the right price?

Why didn't you buy used to begin with? Or wait until prices dropped?