What does everyone think on Model Y depreciation in 4 years time (crystal balls to the ready)? I'm trying to work out whether leasing might be a good option for my order, as the prices seem really competitive. By my spreadsheet a Model Y spec'd to cost £57k would have to still be worth £33k or more in 4 years for buying it with a tesla loan to be cheaper overall.
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Model Y 4 Year Depreciation
- Thread starter jsteele
- Start date
dangrenade
MYLR White/White Inductions
Tesla PCP gives a balloon of 20K. Seems very low but hopefully I will have equity in it when the 4 years are up.
It's difficult to predict 4 years out. My thoughts... As the Model Y is only just coming onto the market in the UK and there will initially be a limited supply, I think that the depreciation over a couple of years will be relatively low. I leased an M3 through my company for 2 years in 2020 as I wanted to see how the battery held up and I generally only keep vehicles for 2 or 3 years. I have a MY on order but will be buying it through my company rather than leasing, so I'm taking a punt on the residual value in 2 to 3 years time. However, it's all down to individual circumstances!
I would certainly be open to trading it in before the 4 year mark to maximise the value you get back. There's a depreciation curve but from our experience it's very different to ICE cars. The 1-2 year range right now seems to be the sweet spot. Our Aug 2019 SR+ that we got for £36.5k we sold in March 2021 for £33.5k w/25k miles on it. Our Mar 2021 LRAWD that we paid £49.9k for in March is getting quotes for around £48.5k with 12k miles on it right now. This has worked out to an effective cost of £4.4k over the last 30 months or about £146.67/month in depreciation costs. Whilst I expect the Y to not be as favourable as the last two, I still expect it to retain a significantly larger percentage of it's value vs an ICE car.
It's why we've gone with the Tesla loan instead of PCP or leasing as it just worked out a lot cheaper and with the loan vs a PCP where you pay interest on that balloon the whole time, the loan meant we were putting more against principal.
It's why we've gone with the Tesla loan instead of PCP or leasing as it just worked out a lot cheaper and with the loan vs a PCP where you pay interest on that balloon the whole time, the loan meant we were putting more against principal.
Envchem
Member
I believe any future price will also depend and what will happen with the Model Y produced in Berlin. If these arrive in the UK market with the 4680 battery pack and maybe increased range then the current ones will take a hit. Same will go with 3.
HenryT
Active Member
I think there are too many variables to make an informed decision about depreciation.
Instead, I think you should base the lease/finance/cash decision on other factors such as short term cost, availability and/or cost of funding, tax implications, cash flow, opportunity cost, etc.
Jason71
Well-Known Member
Given the Three has been around 2 1/2 years that would normally give a clue but all second hand values are so crazy right now it is impossible to speculate.
But here I go anyway. Within the next 4 years my predictions are
I don't think EV prices are going to come down hand over fist
I don't think there will be a new battery tech that will make everything obsolete. new tech takes years to ramp up to volumes high enough to make it mainstream viable and there is nothing else has even starting ramp up at this point.
Finally the EV market is only going to grow so even when second hand prices return to normal I think used EV prices will continue to defy Gravity and ICE ones will start to suffer. Who is going to want a diesel you buy today in 4 years when its barred from all cities. And as desirable used EV's go I think the Y will be high on the list. So I think it is as good a bet as any car to buy /PCP right now.
But here I go anyway. Within the next 4 years my predictions are
I don't think EV prices are going to come down hand over fist
I don't think there will be a new battery tech that will make everything obsolete. new tech takes years to ramp up to volumes high enough to make it mainstream viable and there is nothing else has even starting ramp up at this point.
Finally the EV market is only going to grow so even when second hand prices return to normal I think used EV prices will continue to defy Gravity and ICE ones will start to suffer. Who is going to want a diesel you buy today in 4 years when its barred from all cities. And as desirable used EV's go I think the Y will be high on the list. So I think it is as good a bet as any car to buy /PCP right now.
Jason71
Well-Known Member
given the recent roller coaster in prices I think a dart board probably would have given you as accurate a picture as anyone the last few years.
You need to think about how the overall car market will evolve, EVs will be even more popular in four years compared to the supply
of four year old EVs at that point which are fixed by the mkt today. As long as EV market grows the second hand values of all EVs will hold up better than people expect.
FWIW the current depreciation of basically zero has been distorted by the pandemic, so that is unlikely to last. But it does give ICE owners a great opportunity to cash in a car that should be depreciating rapidly and switch to an EV!
Jason71
Well-Known Member
This.
EV's made up 11% of new cars last year.
So in 4 years time do we think that, of the the people who are looking to buy a 4 year old car, more or less than 11% of them will want an EV?
I suspect more. which will push up the cost of used EV's and push down the cost of used ICE.
This will be compounded by the fact that overall new sales were low this year due to the pandemic / chip shortage so the number of 4 year old cars in 4 years will be low anyway
I think this is a great point, thanks. The thoughts along these lines from you and others definitely has me leaning towards buying.
This is also a good point - if we use leasing company prices as an indicator of depreciation then it looks like they are confident that used prices will be strong (especially as they will also have a profit for themselves priced in). This would support the ideas above about how the EV market will look in 4 years time.
Lots of useful answers on this thread, overall I'm leaning towards buying and taking the risk/reward of what will hopefully be low depreciation myself!
Rooster6655
Active Member
Similar question was asked about what the 3 would be worth at around 3 years on a P @ £50k, I estimated 35-40k but many were expecting like 25-30k, I've been offered £45k so with savings financial cost is very little. Now this does factor in that I had the 3.5k grant at time of purchasing which probably helped.
I would be looking at the 3 year mark for best value and should still have a warranty left, based on a £55 LR model I will be hoping for £40-£45k after the 3 year mark. If the price of the car increases which is possible then I would expect this to be higher.
I don't see the Germany factory or new batteries really affecting the resale value significantly more likely to increase the value of said cars rather than take away from old ones based on the demand for the cars over the next few years.
I would be looking at the 3 year mark for best value and should still have a warranty left, based on a £55 LR model I will be hoping for £40-£45k after the 3 year mark. If the price of the car increases which is possible then I would expect this to be higher.
I don't see the Germany factory or new batteries really affecting the resale value significantly more likely to increase the value of said cars rather than take away from old ones based on the demand for the cars over the next few years.
I have to admit I never consider depreciation with any car purchase, When I'm ready to change which can be from around 2 years to 4 years with a car I seem to start taking an interest on what's on the market, what excites me and then read everything i can about the car.
Go to see the car, test drive it and then make the decision to purchase - only then do i ascertain what my trade in would be - though more recently, the last few years I have autotrader'd my car to see what the market is supporting - so i do have a rough idea.
All my life i have lost money on cars but don't see it as wasted because i enjoyed every single one of them - and once i have them they are machine polished and maintained to within an inch of their life, I love detailing and having a car looking brand new (hate dirty cars)
The M3P was not a typical purchase as i didn't test drive or see it beforehand - never even been in any Tesla either - but I so wanted it, so during the lockdown I did the deal over the phone - and my trade in.
Come the time when I'm ready to change again - and only then will I discover just how much depreciation I will suffer, but what i do know is whatever that is will just be viewed as the cost of having the pleasure of owning it - and do it all again with my next choice.
My car will always be very low mileage too as I'm retired, currently a tad under two years old and 6300 miles, I suspect another two to three years the mileage will still be under 12K - and the car immaculate.
The current climate is quite unusual as my car is fetching more now than i paid for it - about £3K more - never experienced that before, but i suspect by mid to late this year things will be normalising. None of us can predict how batteries will hold up and degradation, what's new and tempting/leading the market, long term ownership foibles and how all of that will affect desire in new BEV purchasers moving away from ICE.
I for one am happy with my car, love it and not going to give it a second thought where the value is in another few years.
Go to see the car, test drive it and then make the decision to purchase - only then do i ascertain what my trade in would be - though more recently, the last few years I have autotrader'd my car to see what the market is supporting - so i do have a rough idea.
All my life i have lost money on cars but don't see it as wasted because i enjoyed every single one of them - and once i have them they are machine polished and maintained to within an inch of their life, I love detailing and having a car looking brand new (hate dirty cars)
The M3P was not a typical purchase as i didn't test drive or see it beforehand - never even been in any Tesla either - but I so wanted it, so during the lockdown I did the deal over the phone - and my trade in.
Come the time when I'm ready to change again - and only then will I discover just how much depreciation I will suffer, but what i do know is whatever that is will just be viewed as the cost of having the pleasure of owning it - and do it all again with my next choice.
My car will always be very low mileage too as I'm retired, currently a tad under two years old and 6300 miles, I suspect another two to three years the mileage will still be under 12K - and the car immaculate.
The current climate is quite unusual as my car is fetching more now than i paid for it - about £3K more - never experienced that before, but i suspect by mid to late this year things will be normalising. None of us can predict how batteries will hold up and degradation, what's new and tempting/leading the market, long term ownership foibles and how all of that will affect desire in new BEV purchasers moving away from ICE.
I for one am happy with my car, love it and not going to give it a second thought where the value is in another few years.
Just wondered what sort of deposit your quote was working on with Lloyds?
Trying to work out the finance currently as a business finance purchase (PCP) and blackhorse is quoting at least 30k balloon with a max deposit of 18k.(3 yrs PCP) So they must be thinking of a higher residual value.
dangrenade
MYLR White/White Inductions
I had to up my deposit from 10K to 12.5K to get repayments under £600pm but I am now going with Forza finance. Their balloon is 27K so I can bring my deposit back to 10K and the repayments are £500pm. My hunch is that the prices will hold up ok but I intend to keep the Y for 6 years and would rather have the money in the bank now with lower repayments than stretch my budget for 4 years.
