Owner Frustrated with Tesla Depreciation

[tinm]

A counterpoint to the OP's post. I bought my Model S in August 2013 and with taxes and fees it came to about $98,000. Almost twice what I'd ever paid to buy a car ever before. Nuts. But gas where I lived at the time was $4.30/gal and was costing $100 per fill-up, twice a month. So I said goodbye to ICE and went Tesla.

Five and a half years later, my S has 93500 miles on it. My S is pre-AP, pre-dual motor, pre-everything including parking sensors. I suspect the car has lost at least $65,000 in value and if I tried to sell it today would go for something in the $20,000s. Bummer, right? But I love the car just as much as I did the day I bought it. Every single day I get in the car it's a marvel all over again. I still want to drive it all over the place, and am willing to do errands all over town more than ever, just so I have an excuse to drive it.

Do I think about the fact that its value has plummeted? Sure. Does it ruin my day? Nope. Will I buy another Tesla? Yep. Looking forward to that. I figure I'll hold out for a while yet though -- am expecting the Model S to have another major refresh including turning the interior dash into a Model 3-style dash, with landscape-mode screen, and maybe with HUD. HUD might push me over the line

 

[seattlite2004]

sorry but a 2017 charger at $45k, in Jan 17 is only worth avg $25 k in sept 2018, you say that's not bad? 45% in 19 months? that's huge.

Oh yeah...not sure what I was lookin at....the Charger depreciated as much as the OP's Model S. Hmmm....I'm hoping the Challenger Redeye will have similar depreciation....if so...what a freakin bargain for that monster.

 

[JimAHSVX]

Sorry Melvin. You are a victim of your desire for the biggest and best (P version vs normal), and the bad luck of timing. I have been following the used prices on various channels and what I see are a couple of things. The P versions definitely depreciate much faster than the non P versions. If you think about it makes perfect sense. A person buying a used car is likely more frugal or cash strapped than a person buying new so they are much less likely to spring for the additional cost of a P vs non P. Second - AP 1 has dropped significantly in price since AP2 became available. However, on the bright side you do have supercharging for life, and I suspect the full value of that is not yet reflected in the market value for these vehicles. I suspect at some point in the future Tesla will offer Supercharging for life as an upfront payment (most likely once they start to convert charging stations to their storage and/or solar so they have more control over costs) at which point your car should take a bump up in value. Unfortunately it is likely to take another hit if the full self driving becomes reality. If you still value the P performance as much as you did when you bought it then I would just hold onto the car instead of taking the hit.

 

[caskater47]

If I recall all luxury cars have a steep drop off of at least 35-40% after year or two that then slows down significantly. Case in point, I bought my 2006 Audi S4 used in 2008. It had 11k miles on it and I paid $29K. New the car was 58k. That's nearly 50% drop in value in under 2 years. However for the first 3-4 years of my ownership the value held steady at $30k (kbb actually said it was worth 35k when I bought it). The value continued to slowly drop over time since. Today the car is 12 years old and worth about $10k.

This is why buying luxury cars is a pretty bad idea to begin with. Hence the saying that new buyers are paying a 40% Luxury Tax. The best deal on any luxury car is always 1-2yrs old after the initial major drop in value. This doesn't hold true for very popular luxury models (eg BMW M3) but it for most others it's practically science.

When you buy a luxury car like a Tesla you're not buying it for immediate resale value. You're buying it to be "that guy" with the cool fancy expensive car. My Tesla P3D is the first new luxury car I've ever purchased because I had waited three years to be "that guy". I'm happy with my purchase despite knowing the value will drop off a cliff.

Calm down and wait a few more years for the value to stabilize.

 

[thejamesS70D]

I sold cars many years ago. I bought used for the first time here noting the slower depreciation curve after the third year. Just bought a 2015 S70D with 16kmi certified from Tesla, not a used sales lot that couldn't certify the car. My '03 M5 that I leased new dropped 50% in those short four years. Mercedes drops even harder, faster with more of them on the road making a used sale tougher. If I could've bough your car for $60k certified (around what I paid) it would've been a steal. In the Bay Area CA, that car should sell in the high $70k's-maybe mid $80 ish, still reasonable knowing that higher performance cars drop faster. Same for the completely stripped model, drops faster due to no factory options.

 

[Ficheh]

So I purchased my first Tesla just over 2 years ago. I ended buying the Tesla Model S P90DL. At first I absolutely loved the car and today I still love it but it has depreciated 50% of the original value in just over 2 years! I don’t care how much I love any car, this is completely unacceptable and I will never buy another one again! Most cars especially luxury cars lose 55% over 5 years! The 2016 P90DL that cost $145K are selling in the $60k’s and $70k’s range! And most if not all the blame falls on Tesla themselves because it’s their used vehicles that are determining the value since they are basically giving them away! On top of that they have lowered the price on the P100DL etc, which is completely the wrong thing to do when manufacturing cars. Every other luxury car slightly increases the price year after year. The people working at Tesla are either some of the dumbest individuals or they are the dumbest individuals and are ruining Every aspects of ownership of having a Tesla. I remember reading Elon Musk promise that Tesla’s would keep their value better than or equal any other manufacturer when it came to Tesla’s retaining their value. He even went as far as saying that he would guarantee that they would hold their value or they would buy the car back at top price in order to convince owners to purchase their cars and not to worry of the car depreciating like other luxury cars. Well they aren’t, they are the most depreciating in history and they need to fix this before everyone like myself decides never to buy another Tesla again! At this point the only way to not lose a fortune would be too lease the car otherwise you can expect to lose everything you put down and much more when you decide to sale. I have never seen any car go from $145K to $70k in the matter of 2-2 1/2 years. As much as I love the car they will never get my business again and this doesn’t include tons of other shady lies and restrictions they have been caught doing in order to keep them from having their batteries. At this point I have lost all faith, trust, and desire to ever be part of the Tesla family again. If your contemplating purchasing a Tesla DON’T! The resale value is nothing less than pathetic and clearly Tesla does not care, on the contrary it seems like they are trying to accomplish this and succeeding. I can’t wait to get rid of this money pit and never buy another Tesla again. With so many other ev vehicles poised to be released, it’s only a matter of time that they lose every customer since they have no clue how to keep their vehicles maintaining the value they should. Which should not be that hard considering the warranties they offer as well of the fact that they are supposed to be able to get 500k miles yet they lose 50% of their value in a measly 2 years! Farewell Tesla your time is UP!!!

Look at a BMW i3. Brand new 2016 over $50k, 2018 resale value $20k. That's 60%.

 

[Ficheh]

So I purchased my first Tesla just over 2 years ago. I ended buying the Tesla Model S P90DL. At first I absolutely loved the car and today I still love it but it has depreciated 50% of the original value in just over 2 years! I don’t care how much I love any car, this is completely unacceptable and I will never buy another one again! Most cars especially luxury cars lose 55% over 5 years! The 2016 P90DL that cost $145K are selling in the $60k’s and $70k’s range! And most if not all the blame falls on Tesla themselves because it’s their used vehicles that are determining the value since they are basically giving them away! On top of that they have lowered the price on the P100DL etc, which is completely the wrong thing to do when manufacturing cars. Every other luxury car slightly increases the price year after year. The people working at Tesla are either some of the dumbest individuals or they are the dumbest individuals and are ruining Every aspects of ownership of having a Tesla. I remember reading Elon Musk promise that Tesla’s would keep their value better than or equal any other manufacturer when it came to Tesla’s retaining their value. He even went as far as saying that he would guarantee that they would hold their value or they would buy the car back at top price in order to convince owners to purchase their cars and not to worry of the car depreciating like other luxury cars. Well they aren’t, they are the most depreciating in history and they need to fix this before everyone like myself decides never to buy another Tesla again! At this point the only way to not lose a fortune would be too lease the car otherwise you can expect to lose everything you put down and much more when you decide to sale. I have never seen any car go from $145K to $70k in the matter of 2-2 1/2 years. As much as I love the car they will never get my business again and this doesn’t include tons of other shady lies and restrictions they have been caught doing in order to keep them from having their batteries. At this point I have lost all faith, trust, and desire to ever be part of the Tesla family again. If your contemplating purchasing a Tesla DON’T! The resale value is nothing less than pathetic and clearly Tesla does not care, on the contrary it seems like they are trying to accomplish this and succeeding. I can’t wait to get rid of this money pit and never buy another Tesla again. With so many other ev vehicles poised to be released, it’s only a matter of time that they lose every customer since they have no clue how to keep their vehicles maintaining the value they should. Which should not be that hard considering the warranties they offer as well of the fact that they are supposed to be able to get 500k miles yet they lose 50% of their value in a measly 2 years! Farewell Tesla your time is UP!!!

Out of curiosity, what car are you going to replace the MS with?

 

[robertmanning]

So I purchased my first Tesla just over 2 years ago. I ended buying the Tesla Model S P90DL. At first I absolutely loved the car and today I still love it but it has depreciated 50% of the original value in just over 2 years! I don’t care how much I love any car, this is completely unacceptable and I will never buy another one again! Most cars especially luxury cars lose 55% over 5 years! The 2016 P90DL that cost $145K are selling in the $60k’s and $70k’s range! And most if not all the blame falls on Tesla themselves because it’s their used vehicles that are determining the value since they are basically giving them away! On top of that they have lowered the price on the P100DL etc, which is completely the wrong thing to do when manufacturing cars. Every other luxury car slightly increases the price year after year. The people working at Tesla are either some of the dumbest individuals or they are the dumbest individuals and are ruining Every aspects of ownership of having a Tesla. I remember reading Elon Musk promise that Tesla’s would keep their value better than or equal any other manufacturer when it came to Tesla’s retaining their value. He even went as far as saying that he would guarantee that they would hold their value or they would buy the car back at top price in order to convince owners to purchase their cars and not to worry of the car depreciating like other luxury cars. Well they aren’t, they are the most depreciating in history and they need to fix this before everyone like myself decides never to buy another Tesla again! At this point the only way to not lose a fortune would be too lease the car otherwise you can expect to lose everything you put down and much more when you decide to sale. I have never seen any car go from $145K to $70k in the matter of 2-2 1/2 years. As much as I love the car they will never get my business again and this doesn’t include tons of other shady lies and restrictions they have been caught doing in order to keep them from having their batteries. At this point I have lost all faith, trust, and desire to ever be part of the Tesla family again. If your contemplating purchasing a Tesla DON’T! The resale value is nothing less than pathetic and clearly Tesla does not care, on the contrary it seems like they are trying to accomplish this and succeeding. I can’t wait to get rid of this money pit and never buy another Tesla again. With so many other ev vehicles poised to be released, it’s only a matter of time that they lose every customer since they have no clue how to keep their vehicles maintaining the value they should. Which should not be that hard considering the warranties they offer as well of the fact that they are supposed to be able to get 500k miles yet they lose 50% of their value in a measly 2 years! Farewell Tesla your time is UP!!!

Unlike others who replied, I agree with your anger. I just took advantage of this depreciation and bought a CPO Tesla. And you are right, Tesla is setting these prices in their CPO market because they have a ton of cars of lease they need to unload quickly.
Know this though. The value of your car will go back up after this initial unload of vehicles. I've seen it increase in the last week. Also, anyone who buys a $100,000 non exotic car is going to see immense depreciation in the the first four years. That's the nature of owning a car.

If you like the car, hold on to it. The value will increase, but don't hold on to it too long.

Again, I hear and understand what you're saying. Good luck.

 

[ucmndd]

Did this thread get some mileage on a short forum somewhere or something? Lots of randoms coming out of the woodwork all at once to offer opinions.

 

[Ficheh]

No has nothing to do with supply and demand. Tesla is choosing to decide their CPO pricing. They are the ones that want too dump all AP1 Tesla’s for absolutely nothing. The prices are a complete reflection of what they are selling their CPO’s for. No one who paid $145k would sale their car for $70k. But when Tesla has 20 in every state then you the owner has no choice since they are setting the market value

Obviously many are willing to sell their $145k car for less than $70k since Tesla pays them less that that to trade theirs in (you are the one saying 20 in every state, which says at least 1000 people did)..

 

[admiralpatb]

Given the functionality in the Performance Model 3, you shouldn't be surprised to see a few years old Model S with AP1 to be basically worthless. People in the market for a $100k car would rather have one new.

When Tesla updated the Model S with AP2.5, they also increased the acceleration (lowered the 0-60 time by about 1s), so the novelty of the P model was significantly reduced. Also, neck injuries.

 

[admiralpatb]

Did this thread get some mileage on a short forum somewhere or something? Lots of randoms coming out of the woodwork all at once to offer opinions.

Popped up in email as a popular post so I needed to get my flamethrower.

 

[Xcelerator]

Hmm. Report: The Tesla Model S Depreciates Only 28% Over The First 50,000 Miles

 

[Daveman]

Your post headline & TMC account wreaks of FUD & BS

 

[Electric Denny]

This is the second post I've seen like this from people that have never owner an S class or 8 series. Tesla actually holds its value slightly better than BMW or Mercedes cars in the same class, but it's not like they can reverse market trends as old as cars have been sold. Six figure cars do not depreciate like your old Prius!

When we bought our S100D this August, we sold our 2012 Mercedes E350 to a relative at the blue book (KBB) value of $20k. We paid >$70k for the vehicle new. Obviously, the vehicle lost more than 2/3 of its original value in only 6 years, but we didn't think this was unreasonable nor did KBB. I also know that high-end (cost and luxury) vehicles lose their value more rapidly because of the smaller number of people who might want to buy them.

Finally, I don't know anyone who invests in new cars hoping for only a modest loss in their original value. Pretty much everyone knows that the moment you drive your new vehicle away from the dealer it will have lost 20-30% of its value. So, if you want to minimize depreciation on a vehicle, then always buy used ones.

 

[rrodby]

There is no bigger waste of money than buying a luxury car. You buy a luxury car to make traveling more enjoyable, like you pay for everything else that brings you pleasure. Every time I drive my Tesla I get a kick out of it like no other car I have owned. Well worth any depreciation.

 

[Darren Donovan]

If I recall all luxury cars have a steep drop off of at least 35-40% after year or two that then slows down significantly. Case in point, I bought my 2006 Audi S4 used in 2008. It had 11k miles on it and I paid $29K. New the car was 58k. That's nearly 50% drop in value in under 2 years. However for the first 3-4 years of my ownership the value held steady at $30k (kbb actually said it was worth 35k when I bought it). The value continued to slowly drop over time since. Today the car is 12 years old and worth about $10k.

This is why buying luxury cars is a pretty bad idea to begin with. Hence the saying that new buyers are paying a 40% Luxury Tax. The best deal on any luxury car is always 1-2yrs old after the initial major drop in value. This doesn't hold true for very popular luxury models (eg BMW M3) but it for most others it's practically science.

When you buy a luxury car like a Tesla you're not buying it for immediate resale value. You're buying it to be "that guy" with the cool fancy expensive car. My Tesla P3D is the first new luxury car I've ever purchased because I had waited three years to be "that guy". I'm happy with my purchase despite knowing the value will drop off a cliff.

Calm down and wait a few more years for the value to stabilize.

Except Tesla vehicles are not considered "luxury" by most people, even on this forum. The price for any Tesla vehicle is something like 75% battery/drivetrain and 25% for the rest of the car. That's why it drives so awesome, but the rest of the car has uneven, haphazard quality.

 

[Tic-tac-toe]

Given the functionality in the Performance Model 3, you shouldn't be surprised to see a few years old Model S with AP1 to be basically worthless. People in the market for a $100k car would rather have one new.

When Tesla updated the Model S with AP2.5, they also increased the acceleration (lowered the 0-60 time by about 1s), so the novelty of the P model was significantly reduced. Also, neck injuries.

The S P100D goes 0 to 60 in 2.28 secs. Currently the fastest production car by acceleration. It is awesome and truly a marvel of engineering... it takes off like a rocket in ludicrous plus mode - NOTHING currently on the market like it. The new 2020 roadster will be the first car ever to go 0 to 60 in under 2 seconds at 1.9. Not sure what you mean by neck injuries. It does make everyone smile in amazement and all the kids scream though.

The Model S P100D has three modes for driving, Chill, Sport and Ludicrous.... and ludicrous plus (launch mode). I always keep it on ludicrous. It handles and responds unbelievably quick, really amazing and a pleasure to drive.

While I originally bought the car for FSD, I really don’t care when FSD arrives at this point because I love driving the car myself.

 

[pipestem]

The real lesson here is; only buy used Tesla’s.

Only the model S which has a lot of lease returns or trade-ins. A decent used S is still more than a new 3 even before the tax credit. I have a huge spreadsheet to prove it I started looking at a used S but went with a new 3. I'm happy.

 

[IchDochNicht]

Just hold on to it for another 3 - 5 years and spread the depreciation over a longer period of time. Don’t sell at the point where the largest part of depreciation has just taken place.

And remember: Options almost always depreciate by 100% the moment you drive off the lot. A big battery and performance ludicrous mode are options. More basic Model S don’t depreciate nearly as quickly as fully loaded ones.