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Seller backed out

Discussion in 'Roadster' started by thefortunes, Jul 31, 2013.

  1. thefortunes

    thefortunes Member

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    After a week of emails, texts and phone calls confirming various things (including a discussion with the Tesla service center that did the annual service) and negotiating a price, I agreed to purchase a 2008 1.5 Roadster from an individual 1700 miles away.

    The price was reflective of the lack of warranty and refurbishment vs. a CPO, but it had just been in for annual service and nothing was noted re: the PEM or ESS (on the paperwork or in my dicussion with the service advisor).

    I began the process of setting up transport and escrow, while the seller was looking into what he neeed to do to get the lien removed from the title.

    Unfortunately, the seller called last night to say that he had someone local stop by, test drive the car, and buy it (for more than we agreed upon of course).

    Just venting :mad:. Thanks for listening.
     
  2. dhrivnak

    dhrivnak Active Member

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    I have found this to happen on more than a few occasions when trying to get something for the bottom dollar. Keep at as one will come you way. I think Tesla has to 1,5 CPO for $58k on their web site. With the warranty that is a pretty low price.
     
  3. thefortunes

    thefortunes Member

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    Thanks for the comment.

    I have been in discussions with Kevin at Tesla about anything they have (or is coming available), but I am hesitating to pay the $12,500 difference for the warranty. Obviously one problem with the PEM or ESS can eat that up quickly, but for existing owners, do you really think it is worth that?
     
  4. Vger

    Vger Active Member

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    Since you are new to the forum, first I will say WELCOME!

    Having owned a Roadster 2.0 for 3+ years, I would say-- stretch a little, find a great car, and buy it.

    This may well be an heirloom car in just a few years, and prices may skyrocket. You will probably find yourself wanting to keep it a long time (I plan to keep mine my lifetime).
     
  5. thefortunes

    thefortunes Member

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    Yikes...

    I just got an email from Kevin that they are no longer even including the UMC with CPO purchases, much less a J1772 adapter. The pricing is getting less attractive IMHO.

    Example (comparing a CPO to the private vehicle I had "purchased"):

    $58,000 2008 CPO (not yet listed) (the private party vehicle actually had a couple thousand less miles, but I'm not factoring that in)
    +2,100 UMC and J-1772 adapter
    +3,400 Carbon fiber upgrades
    + ? Rear-view camera
    (12,500) Warranty
    (1,500) Refurbishment
    $49,500

    Which is more than we had agreed upon (however we didn't complete the transaction, so maybe this isn't an accurate comparison).

    Again, I'm still struggling with the true value of the warranty vs. its cost.

    Can you tell I'm in finance?
     
  6. bonnie

    bonnie Oil is for sissies.

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    Buying a Roadster is something you do with your heart, not your head :). It will never make good financial sense. And you won't care.

    (I agree with the other advice here. Trying to snag the best deal will likely cause you to lose the car you want. It's like trying to chase the lowest point before investing in a stock.)
     
  7. hcsharp

    hcsharp Active Member

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    No. Somebody in finance would have calculated the present value of the next 37 mo of repairs, especially if they didn't trust the $12,500 figure. And then if you were trying to justify the purchase (for example, if you're married) you would have continued tweaking the numbers until you got the result you wanted. And you would not include anything for the value of Tesla's J1772 adapter because that would be more accurate.* Then you would go out drinking with your non-finance buddies so you would stop thinking rationally and just buy a CPO Roadster because you will never regret it.

    Seriously it's pretty hard to find a private sale less than 50k from what I've heard.

    *Disclosure: I sell a competing adapter here that fits snugly between the seats in a nice padded bag so you can calculate the value of extra trunk space and less weight.
     
  8. thefortunes

    thefortunes Member

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    LOL. I agree with all your points. Luckily my wonderful wife stays out of vehicle (and other toy) purchases, it's just my left brain trying to convince my heart (as per Bonnie).

    That's why I continue to ask what others think the value of the warranty truly is.

    Do you expect repairs for the next 37 months on a low mileage Roadster to exceed $15k?

    *Disclosure: I hadn't really looked at your J1772 adapter - if I buy a car without an adapter I will DEFINITELY be buying yours.
     
  9. thefortunes

    thefortunes Member

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    Weird...I replied but it didn't post.

    I agree with the present value calc - but with the cost of capital so low (and to simplify) I am really just asking if owners think I will have >$12,500 of repairs in the next 3 years on a low-mileage (<10k) 2008 that has been through its annual lately. I realize with the high cost of PEM or ESS repairs it is somewhat of a crapshoot, but I'm still looking for thoughts.

    Luckily my wife defers car (and toy) decisions to me, so I only have to justify my heart's decision to my stubborn left brain.

    I hadn't investigated your J1772 adapter, but I will DEFINITELY buy one if the Roadster I purchase does not come with one.
     
  10. adiggs

    adiggs Active Member

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    Welcome 'fortunes!

    I'm a pretty recent Roadster owner (mine was dropped off in mid-March), and I can say that I haven't seen any comments here by anybody I disagree with. I think you'll need pretty specialized circumstances to make a small 2-seater sports car pencil out financially, so I didn't even bother trying.

    For me, I DID spend about 6 months watching the market, checking cars, before the car that represented the best combination of price and what I wanted came along. And when it did, I was fortunate enough to not get it bought out from under me (it helped I was dealing with a Lexus dealer, seriously, and put in a deposit to head off anybody else).

    So patience and effort will also lead you to the promised land!

    The CPO program was running while I was looking, but the prices were much higher than they are now. Think $80k for the lowest end 1.5 and upwards of $130k for a 2.5 Sport.


    So hang in there, keep looking, and the right deal will come along for you. (Side note - if the CPO prices then, were what they are now, I'm almost certain I would be driving a CPO Roadster now; they're that good last I knew).
     
  11. markwj

    markwj Moderator, Asia Pacific

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    Warranty (aka Extended Service Agreement) is kind of like insurance. So, say your house fire insurance is $1k for the next 3 years. What you are asking is like saying "do you expect fire damage repairs for your house to exceed $1k in the next 3 years?".

    The question here really is do you buy the warranty or self-insure? The answer comes down to personal circumstances and risk appetite.

    We don't have definite figures, but estimate US$10k+ for a PEM and US$40k+ for a battery. Batteries can be serviced (11 sheets, individually replaceable), but PEMs are a single sealed unit. Replacement of a PEM is a few hours of labour. Replacement of a battery is a few days of labour.

    So, I guess it comes down to is it worth spending $4k/year to insure against a potential $50k loss?

    Presumably, Tesla know the real statistics and have priced the agreement at what they think the average risk is, plus a profit margin.

    It is a crapshoot. If the PEM or ESS (aka battery) needs replacement even once, taking the warranty would definitely have been worth it. If not, I seriously doubt anywhere near $4k of work per year would be required on the other parts of the car. My own opinion is that the chances of requiring a complete battery replacement ($40k cost) in 3 years on a low mileage car, is pretty near zero. Partial replacement is more likely, as is a PEM fault.

    One last point: there are components in the battery (such as fuses) that can be affected by external issues. For example if either that 400V power converter in the front or the PEM fails, they can easily take out the fuses in the battery (leading to a labour-costly battery repair). Personally, I'm not worried about my battery completely failing. I am worried about my PEM and/or something else failing and taking the battery fuses with it.
     
  12. shrink

    shrink Member

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    +1

    To the OP, you seem to be stuck on this $12,500 figure which may not be a fair comparison because that offer is no longer available - and I don't think it'll be that easy to find another one in the near future.

    I am currently going through the CPO process and it's a little more than just the warranty. I'm getting new tires, new carpets, a new steering wheel (I guess the existing one was worn), repainting of rim scuffs and touch up on the chassis, a hard top, UMC, etc.

    Throw in the vehicle and battery warranty, which I believe Tesla used to sell for $7000, I think the CPO value is quite good. The warranty also transfers should you decide to sell within the warranty period and that should help resale value.

    But if you can find that sub $50K one and can self insure as mentioned above, go for it!

    Oh - and I totally agree with the other posters who admitted the futility of rationalizing purchasing a 2-seat, limited edition, depreciating asset. I cannot wait until I get mine! :)
     
  13. thefortunes

    thefortunes Member

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    #13 thefortunes, Aug 1, 2013
    Last edited: Aug 1, 2013
    I'm not sure why you say that offer is no longer available. I spoke with Kevin yesterday and we discussed the cost of the warranty again as an item that I would need to factor in when buying from a private party. It is also on their website as available for purchase.

    I agree that the refurbishment process should have some value (at least $1500), but since I am looking at very low mileage examples they should not need much. Tesla is no longer including UMCs per my discussion with Kevin, and a hard top is irrespective to the CPO status - the car either had one or didn't (and is priced appropriately for it).

    Nowhere did I say I am trying to rationalize the purchase, just the warranty. Markwj has summarized what I was TRYING to ask (and focus the discussion on)...do people feel they will incur more than the cost off the warranty in repairs in the 37 month period or are you better off self-insuring. I have NEVER purchased an extended warranty on anything, so my tendency is to self-insure (and I don't have that option if I buy CPO).

    Thanks for all opinions.
     
  14. shrink

    shrink Member

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    #14 shrink, Aug 1, 2013
    Last edited: Aug 1, 2013
    Oh, okay, I see what you're saying now. I didn't realize you were referring to the warranty listed at the bottom of this page:

    Tesla Service | Tesla Motors

    When I said not a available anymore, I was referring to finding a sub $50K Roadster. I think that's hard to find.

    But yes, I'd be reluctant to buy the above as well. It seems quite overpriced. I think you can only buy the above warranties if the car is still under the original warranty. Might want to double check that though.

    EDIT: From the page above:
    I believe what happened with the CPO's was that they dropped the prices in June, offered extended warranties at an additional cost of $3500 for general mechanical + another $3500 for the battery. Then, they just increased all the prices by $3500 and included the warranty on both mechanical and the battery. So having these $3500 figures in my head, I was confused about your $12,500 figure, but it makes sense now. I would not want to pay over $10k for a warranty either.

    My local service tech said there were "supplier issues" with the UMC, but no longer to include them at all with a CPO is definitely a consideration. $1500 is significant.

    Anyway, good luck in your search. I do think the CPO's still offer good value, but whatever route you go, I do hope you're in a Roadster soon. The last minute cancellation must have been incredibly frustrating and disappointing.

    Good luck!
     
  15. hcsharp

    hcsharp Active Member

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    One source of information to help with this valuation is the Plug In America study done on the Roadster battery and PEM by Tom Saxton. The data is publicly available and last I checked showed about a 5% replacement rate on PEMs and batteries. In some respects it's not very good info because Tesla replaced a number of PEMs pro-actively that probably didn't need it, or at least wouldn't have been replaced if the owner had to pay for it. And many of the battery swaps didn't require the whole ESS. They probably only required 1 or 2 sheets replaced/repaired. It takes about 10 person-hours to replace a battery which is included in the $36 to 40k figures that are being thrown around.

    Most car dealers make more profit on extended warranties and financing than they do on just the car alone. They have to advertise car prices that have very low margins in order to compete. Extended warranties typically have a high profit margin. I don't know if that's true with Tesla or not. I suspect it is.
     
  16. bonnie

    bonnie Oil is for sissies.

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    If the cost of potential repairs will only make you say 'ouch', then I'd self-insure.

    If the cost of potential repairs could impact when you retire, then I'd buy the warranty.
     
  17. thefortunes

    thefortunes Member

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    Yep...I've spent WAY too much time reading the study and perusing the data. Great info, but as you say probably not a good representation of what was truly required.

    Guess I'll keep looking (actually I spoke with another private party today - 1.5 with <8k miles, hardtop, perfect, $53k).

    I thought I read somewhere on here about a modification to the fan shroud for cold weather (or snowy) climates? Anybody have it, or was I dreaming?
     
  18. patp

    patp Member

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    You're not crazy. Had this modification done on my Roadster. I think they did this for all Canadian's Roadster.
     
  19. Doug_G

    Doug_G Lead Moderator

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    Yes, they did.
     
  20. thefortunes

    thefortunes Member

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    What does it do?
     

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