Suprised on model 3 depreciation

[Camera-Cruiser]

Indeed. And it’s foolish to think that fed/state/local incentives that the vast majority of new buyers qualify for doesn’t impact that value and worth

Absolutely, which is why incentives in all forms should go away. I think they negatively affect markets. Just look at the sales cliff when the full $7,500 was halved. People hate losing, which is why our monkey brains are so easily stimulated by 50% off sales on merchandise that has been marked up 200%.

So yes, it factors into pricing, but not the full amount. Forgetting unrecouped sales tax loses and individual state programs, if I bought the car Dec 31st all cash, and could use the full $7,500 for my taxes four months later, but sold the car to you Jan 1, I might offer it to you for $2,500 less than sticker. I make 5K, you save 2.5K NOW, and pay slightly less sales tax now. You don’t have to wait another 13 to 15 months to do your taxes to get the potential $3,750 federal incentive for which you might knowingly not qualify for.

Remove the 24 hour used car factor, and it sitting in my garage overnight, I’d say that your immeadite saving now would be worth more than buying new, even if you might qualify for the full $3,750 15 months from now.

 

[DWdrum]

Jesus christ dude, I got a headache trying to read your post. .

LMFAO x 1000 Was thinking the same thing

 

[insaneoctane]

If you're looking to sell or trade in a few years, you gotta stick to the SR or SR+ to get the best value.

why?

 

[ucmndd]

Absolutely, which is why incentives in all forms should go away.

Agree to disagree on that point I guess. I’m not suggesting the EV tax credit is a great example of how to do it - in fact I think it’s pretty terrible - but I’d argue one of the few things governments SHOULD be doing is stimulating markets to accelerate energy independence and the reduction of carbon emissions.

 

[OCR1]

You would have a better argument if these incentives were at point of sale for everyone, but they are not. Some people who didn’t understand their tax situation got nothing to only part of the incentive back when doing their taxes, and I would imagine they were the least prepared for it. Some got greater incentives based on utility, and some more again based on social economic status near the poverty level.

So your point is there might be someone out there who doesn’t understand their tax situation that might overpay for a used Model 3 rather than buying a new one and capitalizing on the incentives? What percentage of Tesla buyers fall into this category? If you can find a sucker to buy your used Model 3 for more than the net price of a new one, so be it. But those buyers are few and far between and don’t establish market value overall. They are outliers.

Is your, or any else’s Tesla in California worth less because Coloradan’s get a $5,000 incentive instead of California’s $2,500?

Absolutely! Someone in Colorado is going to value my car at $2,500 less than someone in California. So if I was thinking about marketing my used Model 3 out of state I would certainly look for states with either no incentives or a smaller incentive. Colorado is probably the last place I would try to sell my used Tesla.

Not everyone has the coupon, not everyone that has the coupon uses it. The value of the coupon even changes post sale in the case of the CA EV state incentive. The state wants a % of the $2,500 back if you sell the car within a certain period of time after receiving the rebate.

Again, it sounds like you are arguing there might be a California buyer who ignores all the information out there about CA rebates and doesn’t apply for one. Maybe, but again what percentage? Outliers don’t make the market. There are always a few suckers out there.

The only thing that matters is what two parties negotiate.

Nobody is disagreeing with you on this. But what a buyer is willing to pay will clearly be impacted by what he can buy elsewhere, including buying new and receiving any current rebates or incentives.

 

[glide]

why?

Because highest price/performance models will always take the greater depreciation hit.

 

[mswlogo]

I don’t understand why everyone brings the incentives into the resale equation other than to use them in a new to me today price minus “potential” future incentives vs used price to me today minus and incentives for used EVs (such as SCE Edison’s $1,000 EV incentive new or used). Not everyone qualifies for the same incentives, which is why I ultimately think they are bad, creating false markets.

Value, or maybe worth is really determined when two parties exchange money for a given item at a given time. Might be different tomorrow.

If I buy a gallon of milk for $3.00 with a .75 coupon for a net of $2.25 how does that make the milk worth less to the guy without the coupon? What if I have a coupon doubler and now it’s $1.50 off, then 2% back on my rewards card, and fuel points too? Did I mention that my grandma is visiting and gave me the $3.00 for the milk?

None of that matters when I get back home and my neighbor frantically runs over asking if I have any milk because she has 9 cats and three kids who need their breakfast. Sure, I just back from the store, I have a fresh gallon right here...she slaps a fiver on me grabs the milk and is gone.

What does that make the milk worth?

Oh, to answer the OP your car is worth more than Tesla is offering and probably less than what you want, but you can probably get close.

Incentives do matter. It doesn’t matter if the seller or buyer didn’t qualify or won’t qualify. But it does drive the price. If one buyer doesn’t qualify another will and they will drive the price due to supply and demand. Because most do qualify. And if seller didn’t qualify that’s not the buyers problem.

So what it was purchased for with incentives or not means zippo. What the average cost new with the average incentives sets the new price that used will be measured against.

Like what was mentioned, $33k is not that bad considering many folks can buy new for $37k with incentives.

There might be a small segment of buyers that don’t qualify for incentives that might drive prices for used up a little bit. But that is probably not a lot of demand.

 

[afadeev]

Your headline is misleading. Tesla isn’t interested in trade ins. Their quote does not equal “depreciation “. Just sell your car and buy another one if you want to. Carvana gave me the best price on my Model S.

Depreciation, as defined in English language, is decrease in value due to wear and tear, decay, decline in price, etc."
the definition of depreciation

So yeah, Tesla offering $33.5K for a car that it sold ~10 months ago for $56K is the textbook definition of 60% depreciation in one year. It is steep.

It should be noted that Tesla does not usually warehouse used cars, and flips right around at a wholesale auction. Therefore, the value is real.
It is also true that one should be able to get a higher offer by selling the car directly to other buyers, but that is definitely a project, and not everyone is comfortable managing the private selling and haggling process.

That same car today is basically 47k brand new. I’m on mobile so not sure where you’re located but if in CA then minus 10k in incentives. 33k doesn’t seem bad.

That is part of the problem.
By dropping the price of the cars Tesla sells new, it is driving the depreciation curve for all the existing owners who had bought it at the higher MSRP price in 2018.
It is what it is.

Don’t people know that these cars don’t depreciate?
Elon promises they will appreciate...

Therein lies the dichotomy.
Many folks here take Elon at his word.... and then reality of doing business with Tesla gets in the way of the hype....

a

 

[MXWing]

I have been wanting to trade my 2018 rwd LR red with autopilot for the last 6 months for Performance 3. It took me submitting an online request twice, a call to service center and finally a call to corporate over a month to finally get a trade in quote. Service center said they would have someone call me with quote. A guy called back and suggested I must not have done online quote right and it was not in their system. They said they would put through and call back next day but after a week I called back and routed me to corporate. They didn't know how to look up and somebody would contact me. Got an email asking me for information on my car and after saying I wanted to trade my 3 they responded finally with a quote. Suprised it was this hard because when I traded my S for the 3 it was easy trade in quote after 1 ask. I paid $56k in July 2018. Have 10,500 miles. Was offered $33,500 "final offer". That's way more depreciation than I would have thought and $10k under water on top of being even more disorganized than ever.

My OTD price for a 3SR after accounting all incentives was $31,750. My OTD without incentives is $39,000.

I probably would have bought your car for $39,000 to get the full experience, non nerf autopilot, and 300 mile range. That I have no worries about messing or waiting for post rebates.

That's a $5,500 premium over Tesla.

Tesla could also easily value your autopilot option for $0, as they can turn it on themselves. That makes your 56k car a 51k car to them.

I really hate it when people argue disingenuously and in bad faith.

 

[zhu-]

If I buy a gallon of milk for $3.00 with a .75 coupon for a net of $2.25 how does that make the milk worth less to the guy without the coupon? What if I have a coupon doubler and now it’s $1.50 off, then 2% back on my rewards card, and fuel points too? Did I mention that my grandma is visiting and gave me the $3.00 for the milk?

Technically yes, the coupon devalues the milk and your crazy cat lady neighbor made it appreciate. The difference is that the convenience price people generally are willing to pay for immediate availability is higher than the cost of things like milk to begin with. Same goes for the lack of convenience with someone going to the manager to complain that you paid $0.75 less for your gallon. The subconscious emotions are still there, they just don't manifest into action until magnified by 20000x for a $60K car.

 

[Rojer Lockless]

The guy I bought my RW LR M3 red with FDS ect.. the sticker said 60,500, they offered him 33k final trade in too. Tesla sure doesnt' want their 3's back at all. Absurd prices.

 

[MXWing]

The guy I bought my RW LR M3 red with FDS ect.. the sticker said 60,500, they offered him 33k final trade in too. Tesla sure doesnt' want their 3's back at all. Absurd prices.

Then don’t sell it to Tesla?!?!!!??!

FFS

 

[OCR1]

My brand new LR RWD 2019 Model 3 black/black Aeros was a net price of $34,850 after discounts, incentives and credits. That includes the $1,200 doc fee but not sales tax or registration fees.

So if I were planning on selling it in a year, at 15% first year depreciation it would go for $29,623. I doubt I would have to sell it for quite that low but that’s what it would look like with a true hit of 15% depreciation of the actual net selling price I paid.

Technically I’d have to return part of the rebate to CA if I don’t keep it for 30 months...but this is just theoretical. I’m not planning on selling it any time soon.

 

[Rojer Lockless]

Then don’t sell it to Tesla?!?!!!??!

FFS

He didn't... I bought it from him. I'm glad you like reading.

 

[timk225]

My 3 RWD LR that I got on May 8 2018 now has almost 27,000 miles on it. My cost was $50K plus delivery and sales taxes and loan fees, so something like $54,700 all in. Give a reasonable amount for depreciation, then the $7500 tax credit, and then re-value (appreciate) it by $2000 for the AP I bought in March, because Elon said my car's value would increase, so my 3 is worth about $45K now.

Hey, it's a Tesla, they are better than gasoline cars and don't depreciate like them either!

 

[MXWing]

He didn't... I bought it from him. I'm glad you like reading.

Obviously.

However you are still criticizing Tesla's offer which is silly for you to do and silly for anyone else to do.

I like reading.

I also like extrapolating micro examples into macro analysis as well.

Your little microcosm is not representative of the macro picture when it comes to Tesla valuation.

Carmax will come in higher than Tesla. Carmax is far more authoritative and skilled at retail arbitrage.

Yet Carmax is still unable to value Tesla’s to their true potential due to information asymmetry.

Is a MY2016 December Model S worth less than a MY2017 January Model S ceteris paribus?

To Carmax yes, to knowledgeable buyers no.

MY MODEL 3 IS WORTH NOTHING BECAUSE TESLA IS OFFERING ME NOTHING.

Ignorance.

 

[CarlK]

I don’t understand why everyone brings the incentives into the resale equation other than to use them in a new to me today price minus “potential” future incentives vs used price to me today minus and incentives for used EVs (such as SCE Edison’s $1,000 EV incentive new or used). Not everyone qualifies for the same incentives, which is why I ultimately think they are bad, creating false markets.

Value, or maybe worth is really determined when two parties exchange money for a given item at a given time. Might be different tomorrow.

If I buy a gallon of milk for $3.00 with a .75 coupon for a net of $2.25 how does that make the milk worth less to the guy without the coupon? What if I have a coupon doubler and now it’s $1.50 off, then 2% back on my rewards card, and fuel points too? Did I mention that my grandma is visiting and gave me the $3.00 for the milk?

None of that matters when I get back home and my neighbor frantically runs over asking if I have any milk because she has 9 cats and three kids who need their breakfast. Sure, I just back from the store, I have a fresh gallon right here...she slaps a fiver on me grabs the milk and is gone.

What does that make the milk worth?

Oh, to answer the OP your car is worth more than Tesla is offering and probably less than what you want, but you can probably get close.

Op should neither compare to what he actually spent, or to current models at a lower cost than when he bought his. He can't take advantage of best of both worlds, Yes he can but no buyer would be that dumb to take worst of both worlds.

 

[bmms8]

My brand new LR RWD 2019 Model 3 black/black Aeros was a net price of $34,850 after discounts, incentives and credits. That includes the $1,200 doc fee but not sales tax or registration fees.

Since some of us got great deals on Q1 push i dont think we will have to eat much of a cost since sticker is sticker.

 

[Camera-Cruiser]

I think you and are pretty much on the same page. The market is the only real determining factor. If Tesla drops the price 20% across the board for new, then that is the new reference price and resets the marketplace.

What I am trying to say is that just because I, or anyone realizes a savings, especially in the form of an incentive or rebate, that it necessarily translates in a dollar for dollar value reduction during resale. Again some could have bought on the 31st of 2018 and sold on the first 2019. Does that mean that they have to give up the full $7,500? Nope, some yes, but not all. There could be someone who would prefer the car now at some savings, vs waiting another 15 months to do their taxes for the $3,750.

In time this will all get diluted. I agree my car is not worth what I paid for it, and if I were in the market to sell, I would be subject to the market. So I think we are on the same page.

I am generally one of the people who shakes their head in dismay when I see people wanting 30%-50% above market for signature cars. Maybe in 25 years, sure, But not now.

 

[Camera-Cruiser]

Agree to disagree on that point I guess. I’m not suggesting the EV tax credit is a great example of how to do it - in fact I think it’s pretty terrible - but I’d argue one of the few things governments SHOULD be doing is stimulating markets to accelerate energy independence and the reduction of carbon emissions.

This is veering off topic, but my problem with incentives is that they create false markets. If you want to reduce carbon emissions then fine/shut down those polluters to the degree that they will look at other solutions on their own. Stuff like buying and selling carbon offsets is sickening. That just lets gross polluters pay to continue to operate. Those costs just get sent to the consumer.

Since one way or another, if I have to pay more for energy, I'd rather be paying for a 100% green power plant instead of paying for the power from a company that is paying millions for carbon offsets.

If there was never an incentive for EVs, I imagine that Tesla would still be here, and selling at a more even pace, but a higher price overall, but without crazy quarterly swings. BMW, Porsche, etc., would all still have gotten in the game offering cars in the high 5 figure to 6 figure range until the the market could make adjustments. The January sales cliff was created by 50% of the incentive going away. Our monkey brain doesn't like "free things" being taken away, then market shut down and Tesla started up a whole new level of pricing hurt that freaked everyone out.

It was and is a sugar show because of market psychology and Tesla's inept management.

I wish they were privately held.