Tesla drops prices on X/S $20k. All colors free. Bye bye resale

[NeuroRad]

I guess I don’t understand the hate with price drops. If I wanted to make money on a purchase, I’d invest my money instead. It didn’t buy a car to make money, I bought it to get me around and have fun while I do it. I look at depreciating assets as paying what I could afford and I thought worth it for the entertainment it provides to me. Like putting together a $7500 gaming computer that 8 years from now will be worth a fraction of that.

I would happily pay $150K for an MSP if it came with great assembly (even at the current material quality level) and great service. Nothing competes with it for the current or even previous price.

150 is way too much. Let Tesla’s stock crater more and let’s see where prices go.

 

[P90D]

1. People don't like it when they're charged a lot more money for something they could have paid a lot less for.
2. Sudden large price drops put a lot of folks under water on their loans increasing the odds of their car being totaled after an accident and having to write the bank a check just to pay off your now under water loan.
3. Those who only intend to keep their car for a few years and then resell. This is literally money out of their pocket they weren't counting on.

2. In the event of a total loss, insurance replaces the vehicle and the lease/finance lender writes an "asset swap" under the same terms.
1. I was taught the definition of a good trade is the buyer would have paid more and the seller would have accepted less.
3. Anyone intending to sell a car inside 3-5 years should lease to put a limit on the net loss and still have the option to purchase and net any gains … this has worked on even Porsches for years. A lease on a 918 was a million dollar win. A lease on a Taycan was worthwhile insurance against the downside.

 

[E90alex]

2. In the event of a total loss, insurance replaces the vehicle and the lease/finance lender writes an "asset swap" under the same terms.

I’ve never heard of that before.

In the event of a total loss on a financed car, the lien holder is paid out the current market value of the vehicle. It’s up to the registered owner to make up any difference between market value and the remaining balance of the loan if there is no gap insurance. Then it’s up to the owner to find and purchase a new vehicle on their own. The insurance doesn’t replace the car for you.

 

[travwill]

I’ve never heard of that before.

In the event of a total loss on a financed car, the lien holder is paid out the current market value of the vehicle. It’s up to the registered owner to make up any difference between market value and the remaining balance of the loan if there is no gap insurance. Then it’s up to the owner to find and purchase a new vehicle on their own. The insurance doesn’t replace the car for you.

Agree, that's the reason for GAP insurance. Probably a key thing for some Tesla owners to have if they purchased at high prices with a high value loan.

 

[sorka]

2. In the event of a total loss, insurance replaces the vehicle and the lease/finance lender writes an "asset swap" under the same terms.
1. I was taught the definition of a good trade is the buyer would have paid more and the seller would have accepted less.
3. Anyone intending to sell a car inside 3-5 years should lease to put a limit on the net loss and still have the option to purchase and net any gains … this has worked on even Porsches for years. A lease on a 918 was a million dollar win. A lease on a Taycan was worthwhile insurance against the downside.

2. That's not a thing. If you have gap insurance, which costs, then you're covered, but then your paying more for financing.

Your responses for 1 and 3 literally make no sense.

 

[sorka]

Agree, that's the reason for GAP insurance. Probably a key thing for some Tesla owners to have if they purchased at high prices with a high value loan.

Exactly. And gap insurance is something that financing companies will force on buyers when they're doing a zero down. Nobody ever chooses to buy gap insurance since it increases the payment.

 

[P90D]

2. That's not a thing. If you have gap insurance, which costs, then you're covered, but then your paying more for financing.

Your responses for 1 and 3 literally make no sense.

gap insurance protects the lender in the event the borrower cannot meet the terms of the lease, it's only sold under the guise of protecting the borrower, it's an insurance premium. if the borrower can meet the terms and the vehicle is a total loss, the vehicle insurance will close the lease or replace with a new vehicle (if available and under the terms of the policy) which the lender can then "swap" into the existing lease

as for "not a thing" I replaced a Porsche and the lessor wrote an asset swap. It avoided some fees to terminate and start a new lease. That's how I know it is a thing. : )

Of course most people without experience in business, especially trading, don't make sense of it, and only people with experience in leasing tend to learn the "wow" of leasing a vehicle (in my case, a GT3 RS) that was worth a multiple of its cost basis after I'd driven it for two seasons) and the "thankfulness" of having a Range Rover and a Tesla both deep under water and happy to walk away from the lease.

 

[sorka]

gap insurance protects the lender in the event the borrower cannot meet the terms of the lease, it's only sold under the guise of protecting the borrower, it's an insurance premium.

I think this is about the only thing we agree on.

 

[E90alex]

gap insurance protects the lender in the event the borrower cannot meet the terms of the lease, it's only sold under the guise of protecting the borrower, it's an insurance premium. if the borrower can meet the terms and the vehicle is a total loss, the vehicle insurance will close the lease or replace with a new vehicle (if available and under the terms of the policy) which the lender can then "swap" into the existing lease

as for "not a thing" I replaced a Porsche and the lessor wrote an asset swap. It avoided some fees to terminate and start a new lease. That's how I know it is a thing. : )

Of course most people without experience in business, especially trading, don't make sense of it, and only people with experience in leasing tend to learn the "wow" of leasing a vehicle (in my case, a GT3 RS) that was worth a multiple of its cost basis after I'd driven it for two seasons) and the "thankfulness" of having a Range Rover and a Tesla both deep under water and happy to walk away from the lease.

That’s for a lease and that’s something Porsche Financial did for you to keep you as a customer. Porsche Financial owned the car in that situation and you as a lessee are only on the hook for the remaining lease balance. Many leases already include gap built in that you can’t opt out of.

That “asset transfer” is not something the insurance company did for you and that’s definitely not something you can expect for a financed vehicle.

A financed vehicle is owned by you and you owe the bank the entire amount. Gap insurance for a financed vehicle absolutely protects the buyer.

 

[BMode13]

Something nobody has mentioned, specifically for financed vehicles, gap coverage doesn’t always cover the entire amount between the current market value and the remaining loan balance. Particularly for those of us terribly under water due to 35k + MSRP adjustments, gap will cover a portion above the current market value, but not necessarily the entire remaining loan balance. I urge those of you who have financed model S to really read your gap policy coverage, you may be surprised to find out that you might still be on the hook for a large chunk of money even with gap.

 

[brooklyn]

Depreciation is one thing. Happens naturally and is greater for some cars than others. You roll the dice there, but you generally have an idea of what to expect. Forced depreciation is something else entirely. I put down $30k on my Tesla. Today, my balance is maybe $10k less than I would pay for the same car brand new. Not because it naturally depreciated, but because the company decided to simply drop the price by about $30k. I certainly didn't buy the car to make money on it and like every other car I've ever owned, I walked in knowing at some point I'd sell it/trade it in and get something else in about 5 or so years. I just don't know that I've ever seen a manufacturer eviscerate the value of a vehicle as Tesla has just to try and boost sales numbers with seemingly little regard for what it does to the value of the vehicle for existing owners. Pretty crazy and definitely suggests leasing might be the only was ahead if I select another Tesla moving forward.

 

[T3SLAROD]

Depreciation is one thing. Happens naturally and is greater for some cars than others. You roll the dice there, but you generally have an idea of what to expect. Forced depreciation is something else entirely. I put down $30k on my Tesla. Today, my balance is maybe $10k less than I would pay for the same car brand new. Not because it naturally depreciated, but because the company decided to simply drop the price by about $30k. I certainly didn't buy the car to make money on it and like every other car I've ever owned, I walked in knowing at some point I'd sell it/trade it in and get something else in about 5 or so years. I just don't know that I've ever seen a manufacturer eviscerate the value of a vehicle as Tesla has just to try and boost sales numbers with seemingly little regard for what it does to the value of the vehicle for existing owners. Pretty crazy and definitely suggests leasing might be the only was ahead if I select another Tesla moving forward.

Good point about leasing. Thing is, they drop the price trying to boost sales but those in the know will still be hesitant to purchase due to this price game they continually play. Even trying to trade in a Tesla to someone else other than Tesla is being frowned upon or you are getting lowballed even more.

 

[brooklyn]

So I do have a weird observation, although perhaps this was just a case of the insurance coverage. My father-in-law is the first Tesla owner in the family and he purchased a used Model X several years ago. May have been a demo model, but he paid about $90k for it at the time. I think 2018/2019 timeframe. He drives very little and probably had about 20k miles or so on it when a driver ran a light and t-boned him a few months ago. USAA paid him something like $70k after totalling the car. At that point he was within earshot of a new model despite the car being almost 6 years old. Genuinely curious what they'd give me on a trade-in towards a new Model 2 with the mechanical horn, new seats, and ideally the ability to roll the track package brakes into the price of the car but since the latter isn't an option, I doubt I'd even pursue investigating it at this point. This company genuinely baffles me

 

[brooklyn]

For sharts and giggles I checked to see what Tesla would give me on a trade-in. My MSP is an Aug 2022 build with 15k miles. $66k was the offer. Paid about $115k a year ago.

 

[sorka]

For sharts and giggles I checked to see what Tesla would give me on a trade-in. My MSP is an Aug 2022 build with 15k miles. $66k was the offer. Paid about $115k a year ago.

For tesla that seems like an impossibility high offer. I'd take that without delay.

 

[WilliamG]

For tesla that seems like an impossibility high offer. I'd take that without delay.

Just tested on my Plaid, June, 2022 build, just under 9k miles (with FSD), and it was $69,900.

 

[aerodyne]

For sharts and giggles I checked to see what Tesla would give me on a trade-in. My MSP is an Aug 2022 build with 15k miles. $66k was the offer. Paid about $115k a year ago.

May 22 build here with same miles. Did you counter with $69420?

 

[aerodyne]

Just tested on my Plaid, June, 2022 build, just under 9k miles (with FSD), and it was $69,900.

And I think you've got high number there!

 

[WilliamG]

And I think you've got high number there!

Yeah but realistically even if I, say, wanted a 2024 to get a new car with new, fancy seats (and my goodness do I want them), it’s not worth paying $88k+$8K FSD+$1500 blue color + TTL to get there again. That’s over $30K…

 

[aerodyne]

Yeah but realistically even if I, say, wanted a 2024 to get a new car with new, fancy seats (and my goodness do I want them), it’s not worth paying $88k+$8K FSD+$1500 blue color + TTL to get there again. That’s over $30K…

Well, it's been said the best car is the one you have.

Although the R3 looks compelling...