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Ostrichsak
Well-Known Member
Never? Hyperbole much?
Here's a list, with specific figures, of ten and Tesla isn't even in it.
I've seen Mercedes Benz AMG cars that sold for $180k new worth $35k only 4-5 years later. Don't act like the sky is falling due to one unique outlier situation from a brand new manufacturer is cause for concern. People paid a premium to have the latest craze and acting like this is some sort of investment is foolish.
Once people start to see that these cars go half a million miles or more you'll see that depreciation start to bottom out and reverse somewhat. A new car will NEVER go up in value the way Elon would have is believe. Tesla has to establish itself as the long-term reliable car we know it will due to fewer moving parts. It took the likes of Toyota decades to establish it's brand as being reliable and worth money used. Tesla can't expect this overnight but once it develops that brand recognition the used prices won't depreciate quite as rapidly.
Personally, I'm of the belief that right now (if not earlier this year) was THE time to buy a used Model S. As they gain popularity the used values won't dip quite as much. Right now it's all speculation and many who know nothing of vehicle mechanics are comparing these cars to the used resale of a smart phone. It's not a smart phone. It's a car. Nobody produces are car today that gets regular updates/improvements while they sleep and nobody today produces a car who's large wear items last half a million miles or more.
Once Model S out on the road with 500k miles is the norm people will get it. Until then, I stick by my previous statement:
If your primary concern in deciding what car to buy is depreciation you wouldn't buy a new car of ANY brand.
I completely agree with "If your primary concern in deciding what car to buy is depreciation you wouldn't buy a new car of ANY brand." and I may resemble that remark!
However
The Tesla price reduction dramatically reduced value to all owners, even if they bought used prior to the reduction. My P100D probably lost 30% of it's value overnight. I have never experienced such dramatic depreciation on a used vehicle.
However
The Tesla price reduction dramatically reduced value to all owners, even if they bought used prior to the reduction. My P100D probably lost 30% of it's value overnight. I have never experienced such dramatic depreciation on a used vehicle.
Ostrichsak
Well-Known Member
Did you buy a Ford Model T a few years after they came out? This is about the closest comparison based on many factors.
Anyone who knows anything about finances will tell you that if you desire to minimize your exposure to a financial loss due to depreciation one should NEVER buy a new car. Like ever. The super rare instance of a car that holds it's value or even goes up in value is the rare exception and not worth the risk.
Source: I have actually made money on the last half-dozen or so vehicles I bought used. I used to buy brand new cars when I knew nothing about finances and no look back on my 20's with tremendous regret from a financial aspect.
This idea that Tesla owes owners some sort of financial guarantee is just silly. You knew what you were getting into when you bought a six figure car and if you didn't that's on you for not researching before making such a large purchase.
LOL that's not what I said. I said their depreciation is not extremely low. The evidence you're giving is from last year before the big price cuts but it's pretty obvious that when you take into account those price cuts, their depreciation is quite high. I'm happy they cut the price, put a new P100D in my price range. But I'm not going to go around and say they have very little depreciation when the massive price cut which cause massive depreciation is why I own a P100D.
This is what I posted in March when Tesla decided to drop prices massively in the UK. I'm still waiting for someone to show me a car in this price range that lost close to 40% in one week!
I could be wrong, but I would say this has to be the largest overnight price drop in automotive history. In the UK, if you picked up your brand new loaded MS P100DL last week you paid roughly £138k GBP. Now that car can be bought new for £95k GBP. Yours is now worth prob. £85k at best (there are now new P100DL inventory models for £91k). So you lost £54,000 ($71,000) in a week. This is the worst scenario, but everyone who owns a Tesla in the UK has been hit hard (if you're not planning on keeping for years and fully depreciating, that is).
As I said in another post, the Model S is now cheaper in the UK than in the US, which is crazy because Tesla pays 20% of the UK price to the UK government as VAT tax! And there's the shipping cost as well! So basically Tesla has decided for some reason to sell cars in the UK for 20+% less than in the US.
My personal view is that this is no way to treat your customers or run a business. It's hard to imagine one of the established car companies pulling a stunt like this and as competition in this space gets greater, antics like this will be remembered by those who decided to support Tesla in the past. But all these recent moves including closing retail outlets seem to reek a bit of desperation, so maybe burning bridges with your existing customers is the only option?
I could be wrong, but I would say this has to be the largest overnight price drop in automotive history. In the UK, if you picked up your brand new loaded MS P100DL last week you paid roughly £138k GBP. Now that car can be bought new for £95k GBP. Yours is now worth prob. £85k at best (there are now new P100DL inventory models for £91k). So you lost £54,000 ($71,000) in a week. This is the worst scenario, but everyone who owns a Tesla in the UK has been hit hard (if you're not planning on keeping for years and fully depreciating, that is).
As I said in another post, the Model S is now cheaper in the UK than in the US, which is crazy because Tesla pays 20% of the UK price to the UK government as VAT tax! And there's the shipping cost as well! So basically Tesla has decided for some reason to sell cars in the UK for 20+% less than in the US.
My personal view is that this is no way to treat your customers or run a business. It's hard to imagine one of the established car companies pulling a stunt like this and as competition in this space gets greater, antics like this will be remembered by those who decided to support Tesla in the past. But all these recent moves including closing retail outlets seem to reek a bit of desperation, so maybe burning bridges with your existing customers is the only option?
gilscales
Banned
Yes there was a market for this price to early adopters, now Tesla has to sell more cars, they know the 3 has cannibalized the S sales, the Raven update was released, they knew they are going to produce a 3 motor higher end version of the S and so they were forced by free market Capitalism to lower their price in order to produce more sales, IMHO.
gilscales
Banned
ALL vehicles are subsidized by billions to the oil companies, so there is something to this argument of not having a free market for everything, I look at the EV subsidy as trying to level the playing field with ICE vehicles but in reality if ALL subsidies were removed that affected ALL vehicles then the BEV would be a clear winner financially.
United States Spend Ten Times More On Fossil Fuel Subsidies Than Education
Yep me too. But it drives link stink and I have a sunroof on a 2018 P. That is an expensive sunroof but well worth it.
Some cars / trucks are not that bad.
Paid $48K for a 2017 Jeep Summit.
Ran it for 36 months and 40K miles.
I got $33K in trade. That’s $15K for 36 mo
Amortize $15K over 36 months comes to $414/mo
Amortize the whole Vehicle over 10 years (for the life of the vehicle more or less). And that comes to $400/mo
So I’ve essentially lost nothing. Only paid for what I "used" really. Owning a $48K SUV isn’t free.
Now let's do similar math to OP's case.
I'm guessing his $144K is with taxes, destination etc. and no tax incentives.
So let's round that to just an MSRP of $130K (Model S/X dropped about $20K)
Amortize $130K over 10 year comes to $1083/mo (this is our reference monthly cost to own for life of vehicle).
Now OP says $70K on Trade in. Well, with Tesla Trades don't include software so a "normal" trade, say a trade on a TayCan might be more like $80K (way overly optimistic I know, but the math is easier, but it would probably be more than Tesla (as sad as that might be) if you can show the value of software
)$130K - $80K = $50K.
Now Amortize $50K over 12 months use comes to $4160 / mo. Yikes.
I guess that's why folks say it's a good idea to lease.
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I usually like to keep for a year or 2, but I guess I'll be keeping this one longer. Not exactly a hardship!
Ostrichsak
Well-Known Member
Uhh... .wut?Some cars / trucks are not that bad.
Paid $48K for a 2017 Jeep Summit.
Ran it for 36 months and 40K miles.
I got $33K in trade. That’s $15K for 36 mo
Amortize $15K over 36 months comes to $414/mo
Amortize the whole Vehicle over 10 years (for the life of the vehicle more or less). And that comes to $400/mo
So I’ve essentially lost nothing. Only paid for what I "used" really. Owning a $48K SUV isn’t free.
Now let's do similar math to OP's case.
I'm guessing his $144K is with taxes, destination etc. and no tax incentives.
So let's round that to just an MSRP of $130K (Model S/X dropped about $20K)
Amortize $130K over 10 year comes to $1083/mo (this is our reference month cost to own for life of vehicle).
Now OP says $70K on Trade in. Well, with Tesla Trades don't include software so a "normal" trade, say a trade on a TayCan might be more like $80K (way overly optimistic I know, but the math is easier, but it would probably be more than Tesla (as sad as that might be) if you can show the value of software
$130K - $80K = $50K.
Now Amortize $50K over 12 months use comes to $4160 / mo. Yikes.
I guess that's why folks say it's a good idea to lease.
You bought a $48k Jeep and you think you'll get $48k for it in 10 years? ROFL
I know amortized is big word, here you go.
Amortized cost — AccountingTools
To help you out. No, I approximated the Jeep or Tesla to be worth nothing ($0.00) in 10 years and amortized the purchase price over 10 years to approximate what it cost to own (monthly) that vehicle for it's useful life.
Some cars / trucks are not that bad.
Paid $48K for a 2017 Jeep Summit.
Ran it for 36 months and 40K miles.
I got $33K in trade. That’s $15K for 36 mo
Amortize $15K over 36 months comes to $414/mo
Amortize the whole Vehicle over 10 years (for the life of the vehicle more or less). And that comes to $400/mo
So I’ve essentially lost nothing. Only paid for what I "used" really. Owning a $48K SUV isn’t free.
Now let's do similar math to OP's case.
I'm guessing his $144K is with taxes, destination etc. and no tax incentives.
So let's round that to just an MSRP of $130K (Model S/X dropped about $20K)
Amortize $130K over 10 year comes to $1083/mo (this is our reference month cost to own for life of vehicle).
Now OP says $70K on Trade in. Well, with Tesla Trades don't include software so a "normal" trade, say a trade on a TayCan might be more like $80K (way overly optimistic I know, but the math is easier, but it would probably be more than Tesla (as sad as that might be) if you can show the value of software
$130K - $80K = $50K.
Now Amortize $50K over 12 months use comes to $4160 / mo. Yikes.
I guess that's why folks say it's a good idea to lease.
I WISH I LEASED, AND I WISHED THE 144K WAS WITH TAXES, IT'S NOT. BUT I DID GET THE 7500 TAX CREDIT. SEE STICKER ATTACHED
Wait. What about the leasing companies? They are going to be all messed up when they get all those cars back that have lost tons and tons of value! How does this affect Tesla's relationship with the leasing companies? Will they have terrible lease factors when this %$# hits the fan? WTF.
MattWhite I agree with you 100%. Thanks for posting!
MattWhite I agree with you 100%. Thanks for posting!
It's possible they pissed them off since Tesla now seems to be self-leasing instead of using a leasing partner.
You'd have to think that their official leasing partner would have some sort of guarantee on residual value. Who knows though.
Ouch. Doesn't look like it had FSD either.
I must say, I had considered an S/X a year ago, but the prices were so staggering I went with a Model 3 Performance.
A year later, the S/X looked so much more sane price/performance wise and a better vehicle so I swapped (and took some what of a bath on the Model 3 ($10K tops over normal "usage"), but nothing like your hit). In the end it was way cheaper doing what I did (basically waiting a year and playing with a Model 3 with some hit on that).
But those who bought today, may be in the same percentage loss a year from now. But I can't imagine Tesla cutting S/X that much in the next year, but they will likely improve them for similar prices they are selling today. So our values will go down faster than "normal". Only time will tell.
As others said, it was probably the worst time to buy an S/X. Or a 3 for that matter. Not sure if I kept my 3 for 3 years, if that 3 years use would have been significantly more reasonable.
The Model S is a $50K car at the end of the day. I would not be surprised to see those price levels.
Go check out what $50K gets you from any German manufacturer.
