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Model S Depreciation curve flattens when?

VolunteerPin

Member
Nov 8, 2017
5
2
Knoxville, TN
Okay, so I bought a used 2015 P90D with pretty much all available options in 2017. I paid $87,000 for the car which had an original sticker price of $142,000. Bought the car with about 7k miles and now turning over to 40k miles later this week.

I was toying with the idea of selling the Tesla for some non-car reasons (overall, I love the car and it has given me exactly ZERO troubles except going through some tires which is understandable). Looks like the value on my car is somewhere in the $50k's range but I have seen numbers from about $45k to $60k online.

My main question is this: do we have an idea yet of how/when the depreciation curve on Model S cars flattens out? I mean, it would seem to me a very big part of the depreciation has already taken place and (just from a depreciation standpoint) most of the pain with it. Part of me thinks I should simply keep the car and deal with my personal issues in a different fashion. Heck, I only have 40k miles and the car has been one of the most reliable things I have ever owned. I am sure at this rate I can get many more years out of the car.

Any input is appreciated.

Thanks!
 

glide

Active Member
Jun 6, 2018
2,881
2,901
USA
Don’t think of it as a depreciation curve like with a traditional ICE vehicle. Think of it like a depreciation curve with a cell phone.

Your several-year old iPhone 4 is likely worth a fraction of what you originally paid. Your Tesla is trending in that direction.
 

travwill

Active Member
May 1, 2015
1,360
490
Marble Falls, TX
Okay, so I bought a used 2015 P90D with pretty much all available options in 2017. I paid $87,000 for the car which had an original sticker price of $142,000. Bought the car with about 7k miles and now turning over to 40k miles later this week.
Thanks!

It's much more rough on older models due to improvements in tech combined with lower prices. A 140K old tesla is comparable to a much more efficient, longer range, newer tech, brand new Tesla that is $100K. Definitely since the starting point for a superior version is already a good 30% less, coupled with age/quality, hits the older ones hard (especially the 90kWh batteries that have a bad degradation rap).
 

ucmndd

Well-Known Member
Mar 10, 2016
6,413
11,965
California
Don’t think of it as a depreciation curve like with a traditional ICE vehicle. Think of it like a depreciation curve with a cell phone.

Your several-year old iPhone 4 is likely worth a fraction of what you originally paid. Your Tesla is trending in that direction.

Sort of, however I’ll also add they seem to have a price floor at the moment due to their relatively high value as parts cars. Even a completely non-running P90D will still fetch near $30 grand right now if the major components aren’t damaged.
 

Ostrichsak

Active Member
Sep 6, 2018
3,337
3,298
Colorado, USA
Don’t think of it as a depreciation curve like with a traditional ICE vehicle. Think of it like a depreciation curve with a cell phone.

Your several-year old iPhone 4 is likely worth a fraction of what you originally paid. Your Tesla is trending in that direction.
The only difference is that the iPhone at that point isn't even useful as parts nor can the hardware keep up with the iOS updates being thrown at it. The opposite can be said for the Tesla in that the battery will likely be the most valuable asset and can be used as parts along with the rest of the car. The hardware can be upgraded to the newest version of main computer that comes in the latest car for pennies on the dollar compared to the cost of a replacement new car.

Personally, I think you should just keep the car. Too many people are uber paranoid about owning these cars used with some miles since that will likely hold up much better in the long run than similarly aged ICE vehicles in terms of moving parts that can fail. Sure, some of the parts that do fail on a Tesla can be costly if you pay Tesla to replace them but many others can be fixed for a few bucks worth of parts and an hour or two of your time as evidenced by several threads by those that have done it.

If you don't NEED to sell your car... don't. I feel like you've got that in the nice sweet spot of where ownership is minimal when depreciation is taken into account so might as well just keep it rolling if it's never given you any issues and your needs haven't changed. IMHO the newest version is maybe 5% more in terms of actually improving your day to day experience which is a pretty expensive ROI compared to what it would cost in terms of dollars to make that swap.
 

VolunteerPin

Member
Nov 8, 2017
5
2
Knoxville, TN
Good info. Thanks.

If I did sell it, I would likely not get another Tesla until I can grab a used Cybertruck possibly in a few years. I'd probably end up getting an older Porsche to play around with in the meantime. Something that has already hit a flat depreciation. That said, I'd certainly be at risk for large maintenance bills so the concern about some expensive fixes isn't that much different theoretically in either scenario.

Sort of, however I’ll also add they seem to have a price floor at the moment due to their relatively high value as parts cars. Even a completely non-running P90D will still fetch near $30 grand right now if the major components aren’t damaged.

As far as this goes, if the bottom floor of ownership ends up being something north of 20 grand even 5 years from now it would be pretty silly to sell out now. Maybe that isn't the floor but it would be nice to think so.
 

cypho

Member
Dec 20, 2018
765
897
USA
I wouldn't sell right now if I were you.

Your problem is that Tesla dropped the price of the Model S significantly since 2015. Used car shoppers are not comparing your car to its original 140K price tag, they are comparing it to the cost of a new 2020 car which is only around 75K.

So at 50K the buyer is only saving 33% over a 2020 S. I think that is a lot to pay for a 5 year old car. Especially considering how much Tesla has improved the car since 2015.

I doubt that Tesla will continue to lower the price of new S/X cars as much as they did in the past, so going forward depreciation should be less painful going forward.
 

CadillacJack

Member
May 21, 2015
259
196
Mississauga, Canada
I bought my first S as a CPO for $80k Canadian. It pretty much depreciated $10k a year after that as I sold for $30k after 5 years. I just bought another Used S from Tesla for $96k Canadian and also plan for a $10k a year depreciation on the way to a Cybertruck or a S redesign in a few years. It may retain more as it’s a P100d but I’m not betting on it.

I think avoiding the first big depreciation drop from new is the key for me.
 
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VolunteerPin

Member
Nov 8, 2017
5
2
Knoxville, TN

Yeah. Good thread. I have only been averaging about 11k miles/year driving. Sounds like that car was an Uber.

As I still enjoy my car and it has been very reliable thus far it sounds like just keeping it for quite a while isn't such a bad idea. Not to mention the fact that I will still be enjoying my continued savings on gas and (most likely) less potential repair costs as compared to an older Porsche or other luxury vehicle. Heck, my car only has 40k miles on it and driving it another 5 years will only put me at the 100k mark!

So at 50K the buyer is only saving 33% over a 2020 S. I think that is a lot to pay for a 5 year old car. Especially considering how much Tesla has improved the car since 2015.

I doubt that Tesla will continue to lower the price of new S/X cars as much as they did in the past, so going forward depreciation should be less painful going forward.

Yep. Makes sense.

Thanks for all the input.
 
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FoxSTL2HOU

Member
Nov 12, 2018
475
276
HOU
Have a vehicle collision on the auto record and it will flatten quickly. Carvana recently quoted $20k, which I thought (may not be true anymore) was around the working-HV battery-salvage value, so short of the HV battery going out, the vehicle's value cannot go any lower.
 

David.85D

Active Member
Oct 29, 2016
1,402
1,149
USA
I bought my first S as a CPO for $80k Canadian. It pretty much depreciated $10k a year after that as I sold for $30k after 5 years. I just bought another Used S from Tesla for $96k Canadian and also plan for a $10k a year depreciation on the way to a Cybertruck or a S redesign in a few years. It may retain more as it’s a P100d but I’m not betting on it.

I think avoiding the first big depreciation drop from new is the key for me.

this was my strategy, too. Bought a 3 year old fully optioned P85D for half of sticker $65k/$130k with five years of warranty and ESA. Pretty sure I’ll be able to sell it for $35k after 5 years which puts the yearly cost around $6k.

Also, I’d be reluctant to keep a Tesla out of warranty anymore. Way too easy to get nailed for a $5k or $25k repair that blows up the whole strategy.

Prefer this cost better than the original buyer that took the new car depreciation hit and the price drop hits (I don’t think it’s over - model 3, model y, CT will all push down the demand curve) who paid around $22k/year

for comparison, we also have a loaded Toyota minivan. $40k new, drove it 10 years. Maybe worth $4k now. That’s $3.6k/year plus $2.5k/yr in gas. So, essentially my Tesla strategy is costing the same per year for a Toyota minivan.

And, yes, I know I didn’t calculate the time value of money, but given loans and saving account rates are in the 0-2% range, it doesn’t matter much. And we pay cash if we aren’t offered sub-2% financing.
 
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Ostrichsak

Active Member
Sep 6, 2018
3,337
3,298
Colorado, USA
this was my strategy, too. Bought a 3 year old fully optioned P85D for half of sticker $65k/$130k with five years of warranty and ESA. Pretty sure I’ll be able to sell it for $35k after 5 years which puts the yearly cost around $6k.

Also, I’d be reluctant to keep a Tesla out of warranty anymore. Way too easy to get nailed for a $5k or $25k repair that blows up the whole strategy.

Prefer this cost better than the original buyer that took the new car depreciation hit and the price drop hits (I don’t think it’s over - model 3, model y, CT will all push down the demand curve) who paid around $22k/year

for comparison, we also have a loaded Toyota minivan. $40k new, drove it 10 years. Maybe worth $4k now. That’s $3.6k/year plus $2.5k/yr in gas. So, essentially my Tesla strategy is costing the same per year for a Toyota minivan.

And, yes, I know I didn’t calculate the time value of money, but given loans and saving account rates are in the 0-2% range, it doesn’t matter much. And we pay cash if we aren’t offered sub-2% financing.
To get a better comparison keep the Tesla for 10 years like the minivan and that yearly cost will plummet making the Tesla an even better cost-of-ownership winner. It was almost a wash in your comparison but you also have half the ownership period which will sway things heavily in the favor of the vehicle you keep for 10 years just due to cost averaging over a time frame that's double.

Also, as a side note, people are actually selling Teslas for what they paid a year or two later and some even making money on selling cars they bought used and sold a year or two later. You don't hear much talk of that on these forums and instead it's often this assumed loss in value that everyone projects. Buying right on the front end and selling right on the back end will flip those #'s that most people tend to use.
 

David.85D

Active Member
Oct 29, 2016
1,402
1,149
USA
To get a better comparison keep the Tesla for 10 years like the minivan and that yearly cost will plummet making the Tesla an even better cost-of-ownership winner. It was almost a wash in your comparison but you also have half the ownership period which will sway things heavily in the favor of the vehicle you keep for 10 years just due to cost averaging over a time frame that's double.

Also, as a side note, people are actually selling Teslas for what they paid a year or two later and some even making money on selling cars they bought used and sold a year or two later. You don't hear much talk of that on these forums and instead it's often this assumed loss in value that everyone projects. Buying right on the front end and selling right on the back end will flip those #'s that most people tend to use.

that was my original plan, but in the last year (car is now 5.8 years old) I’ve had the main battery, front drive unit, front half shafts (3x), MCU, and charge port replaced. As we all know, these repairs would have been $2500 to $25000 each. Not wanting to own a Tesla out of warranty anymore.
 

VolunteerPin

Member
Nov 8, 2017
5
2
Knoxville, TN
that was my original plan, but in the last year (car is now 5.8 years old) I’ve had the main battery, front drive unit, front half shafts (3x), MCU, and charge port replaced. As we all know, these repairs would have been $2500 to $25000 each. Not wanting to own a Tesla out of warranty anymore.

Sorry for my ignorance. I thought the warranty was 4 years generally and 7 years or a bunch of miles for the drivetrain. Did everything get covered under the drivetrain part of the warranty?
 
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David.85D

Active Member
Oct 29, 2016
1,402
1,149
USA
Sorry for my ignorance. I thought the warranty was 4 years generally and 7 years or a bunch of miles for the drivetrain. Did everything get covered under the drivetrain part of the warranty?

i have the extended service agreement so everything is covered to 8 years or 100,000 total miles (I’m under that) The battery and drive unit warranty for my car is 8 years unlimited miles. So, all repairs were covered, but would not be once the car is 8 years old (total - I bought it used, so the clock was already running).
 

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