Tesla resale and depreciation concerns as prospective buyer

[Pandamoanium]

I've been looking at buying a Model X and have numerous concerns about resale and depreciation.

1) It looks like the cars have depreciated something like 30% in the past year.

2) It seems Tesla is hurting owners ability to sell their cars for a decent price in several ways:
a) Tesla destroyed the independent used car dealer market by not allowing warranty transfer on those cars. Which means your only option to sell your car back is to Tesla (gives them ability to set the trade-in price as they have no competition)
b) Tesla makes it hard to sell your car privately because the warranty on a private party sale is also not clear
c) Tesla won't sell an extended warranties on any used car (which is something German OEMs continue to offer)

3) So it seems basically you get ****ed on the back end with a Tesla. I have read on this very forum some people were offered 70% of new price after just 6 months of ownership by their local Tesla store. That is an egregiously low trade-in offer. With a BMW or Porsche, you can just take it to Carmax and get a better offer. At Tesla you can't because independent dealers can't transfer the warranty so that market doesn't exist.

Am I correct in this, or have I been fed false info. It is enough to prevent me from buying a Tesla. I have always got solid resale prices selling my cars privately. If I am forced into a model of selling for rock bottom trade-in value then I am out because I would be much better off with an X6M or a Cayenne Turbo (when the new style comes out).

is there any car that when bought new doesn't suffer a hit to it's value once it is driven off the lot?

GT2 RS comes to mind.

 

[TOBASH]

With all due respect:

I could give a rats @$$. If you're gonna buy a 160K vehicle, then you might not care about resale value.

It is a 160K toy. If you're worried about an investment, buy Boeing. Buy Gold. Don't buy a new car/SUV.

I love the X, but I could buy a Ford F150 and drive it for years without spending 160,000. Price never entered into the decision. This vehicle is a wonderful escape from routine day to day issues at work and home.

My plan is to drive it until the wheels fall off in 10 years, then upgrade to something else. In the mean time I'll enjoy the free supercharging. There will be no resale.

MHO...YMMV

T

 

[Stealth.Pilot]

My understanding is there are a lot of Porsche 911's that have retained their value very well because of unique body styles and options, that are harder to find in the used car market. That said, I also have heard Porsche's have a very high cost of ownership in terms of maintenance. Exponentially more than VW/Audi, Mercedes, BMWs, etc. Is this true? If so, should that be a factor that's also considered when talking about cost of ownership and depreciation?

Porsche Service is expensive, but not very expensive. Price of annual service is between $250 and $880 depending on the year. Repairs are free under the warranty. It has been an awesome brand to own in terms of TCO.

 

[Stealth.Pilot]

If Stealth.pilot is whom I believe him to be, he's buying his BMWs with a European Delivery discount then sells them a year later for little to no loss, as BMW gives you 7% off if you take ED, plus a few select delearships will negotiate an even lower price, as the sale doesn't count against their inventory, so the don't really loose anything selling to you. It's not impossible to get a car for 13% off list, have it loose 20% MSRP in the first year sell if for that loosing <10 of your actual purchase price.

If it's him, I posit he's become so used to that process that he no longer appreciates how exceptional a deal the ED process represents. By definition, exceptional is atypical elsewhere, including Tesla.

It's me, but I also buy Mercedes without Eurodelivery and Porsche. I can get 10% off on a Mercedes without ED by shipping around, and 3-10% on Porsche depending on model.

 

[Stealth.Pilot]

First, a car is pretty much throw away money any way you look at it. And, Im not sure of the logic in looking at 1yr depreciation values on a car purchased new - who on earth would do that...not sure of the use case but it reminds me of that commercial where theres a guy at an art auction bidding on a painting. He wins the auction and then declares immediately that he wants to sell it.

In buying a car, outside of reliability and it having the basics, everything else is "bling". If we agree on that then the next thing might be real world apples to apples comparison - I just went through this with my P85D. Keep in mind, Im not looking at this through the lens of being emotional about Tesla - just a purely economic look at what your statement suggests.

Below is an example of the higher end cars that should illustrate how hard the cars get hit in depreciation given that the comparison cars are what each manufacturer would likely agree as an equal comparison. And, given they are on the high end of each car offering, they should all be examples of 'worse case scenario' depreciation.

Similar cars would be a 2014 Mercedes S63 and BMW Alpina B7 (you could also use the Panamera or A8 too).

New Prices (in 2014)

• Mercedes S63: $155,000.00 (mildly optioned).
• Model S P85D: $138,000.00 - (fully optioned) less (then) a $10,500.00 Fed and state tax credit (California).
• Alpina B7: $130,000.00

Todays value (with an average of 12K miles per year):

• Mercedes S63: $80,000.00 to 85,000.00 (trade in value roughly 10K less)
• Model S P85D: $85,000.00 to $90,000.00 (trade in value roughly 7K less)
• Alpina B7: $50,000.00 to $65,000.00 (trade in value roughly 10K less)

IN the examples above Tesla takes the smallest hit amongst the options - this isn't perfect math either; the numbers can be researched by anyone with a PC and some patience. Im looking at the pricing from a California perspective - and Im being generous with the resale values for BMW and Mercedes. The caveat is that the resell value of the Tesla is a little off because they operate a lot like Volvo where the best resale will almost always be obtained at the deanship. That said, they also offer you a very reasonable price for your car whether you are trading it in or selling it back. Factor in the other costs to maintain each of these comparable cars and Tesla easily comes out on top with TCO factored.

Car companies don't really care to understand Tesla. They want to create doubt and uncertainty around the market. The market isn't listening though and its only going to get better for Tesla as the Model 3 becomes mainstream. I also, disagree with anyone that says this latest addition to the Tesla family will further drive down the costs of a Model S. In some cases yes, but not in a material way - we only need to look at dozens of other examples by Mercedes, Audi, BMW etc can show us - the C class doesn't take away sales from the S class...the 3 series doesn't take sales away from the 7 series. Really the C class and the 3 series allow people to enter a market that they otherwise wouldn't be able to afford - allowing them to say "I drive a Mercedes...".

Lastly, consider that the Model S has been outpacing all of the rivals since 2015. In fact, Tesla’s Model S currently outsells Mercedes S-Class, Porsche Panamera, and BMW 6/7 Series combined in the US in 2017. Here are the stats (pulled from electrek.co).

View attachment 239028

Irrelevant.

We are on the model X thread. Model X has much worse depreciation than S.

Compare with the Range Rover numbers the guy posted above. Land Rover has virtually no depreciation compared the Model X dropping 30% in one year.

 

[skilly]

The pricing on the RR doesn't make any sense. A 2016 RR Autobiography retailed for about $200,000 and today you could pick one up for $120,000.00 to $140,000.00 tops - not sure what Im missing but the comparison pricing is off and so is the 1st year depreciation example - equal to or greater than 30%.

 

[skilly]

It's me, but I also buy Mercedes without Eurodelivery and Porsche. I can get 10% off on a Mercedes without ED by shipping around, and 3-10% on Porsche depending on model.

Your pricing on Porsche and MB is pretty standard stuff. Your example of RR pricing certainly isn't.

 

[skilly]

With all due respect:

I could give a rats @$$. If you're gonna buy a 160K vehicle, then you might not care about resale value.

It is a 160K toy. If you're worried about an investment, buy Boeing. Buy Gold. Don't buy a new car/SUV.

I love the X, but I could buy a Ford F150 and drive it for years without spending 160,000. Price never entered into the decision. This vehicle is a wonderful escape from routine day to day issues at work and home.

My plan is to drive it until the wheels fall off in 10 years, then upgrade to something else. In the mean time I'll enjoy the free supercharging. There will be no resale.

MHO...YMMV

T

love this!

 

[XHokie]

Not true. 911s are bullet proof in terms of service costs and resale values. The fact that they have been selling the platform for almost 50years now makes them that way. Exotic versions of the 911 will actually appreciate, but thats an exclusive club reserved for limited releases.

All this said, comparing the 911 to a Tesla isn't a comparison at all. They are distant cousins at best....comparing apples to oranges.

Agreed on the resale value part of what you are saying; you said it better than I could have and obviously have more knowledge. However, are you saying that Porsche's don't have high maintenance costs compared to Teslas? I have never owned a Porsche, but know a handful of people who are loyalists and love the brand, but always complain at how high maintenance costs are...as well as parts/labor when it's out of warranty. Are you sure that part is not true?

 

[skilly]

Agreed on the resale value part of what you are saying; you said it better than I could have and obviously have more knowledge. However, are you saying that Porsche's don't have high maintenance costs compared to Teslas? I have never owned a Porsche, but know a handful of people who are loyalists and love the brand, but always complain at how high maintenance costs are...as well as parts/labor when it's out of warranty. Are you sure that part is not true?

The post went off topic and was comparing the maintenance costs to other ICE cars. Porsche isn't better or worse; they are the same costs and with more reliability, hence they are more predictable in their costs. Porsche is only different in that it doesn't fold its cost for maintenance into the cars like BMW does for example - you see your costs. The previous post claiming 250 to 850 a year was bang on. This again stems around their iconic 911. If it weren't for that car, Im not sure Porsche would even exist today....today the Cayenne and Panamera are simply incredible cars but like every new platform (hint hint, the Model X is new) they suffered in their infant years.

Lets face it, there is really no comparison on maintenance costs of a Tesla compared to anything on the road. I just put the better part of 40,000 miles on my P85D and did nothing but replace one set of tires over nearly 3 years. There is no car on the planet that can claim the same kind of maintenance.

 

[kort677]

Lets face it, there is really no comparison on maintenance costs of a Tesla compared to anything on the road.

there is no comparison between tesla and any other car on the road in any category of ownership

 

[skilly]

i disagree.

i owned a Range Rover Sport Autobiography in 2014 for 6 months. bought for $100k, sold for $96k.

i owned another Range Rover Sport in 2016 for 1.5 years. bought for $92k, sold for $82k.

i currently own a 2016 Land Rover LR4 Landmark (about a year) that is going for more on the used car market than i paid new for it.

These prices are used. The pricing on a RR Autobiography in 2014 was a base of $185,000.00! The one year loss was at minimum 30% and thats generous. Today they go for roughly 70,000.00 (depending on mileage and options). RR's are not a low depreciation example at all.

In fact, this proves my point. Assuming that you didn't have a stable of RRs you may have purchased this 1 year old puts their depreciation hovering in the 50% range; even at 2 years old thats a greater than 30% hit in the first year. Unlike the Model X, this brand and platform has been around for decades so the depreciation is predictable and HIGH.

 

[JohnnyCakes]

These prices are used. The pricing on a RR Autobiography in 2014 was a base of $185,000.00! The one year loss was at minimum 30% and thats generous. Today they go for roughly 70,000.00 (depending on mileage and options). RR's are not a low depreciation example at all.

In fact, this proves my point. Assuming that you didn't have a stable of RRs you may have purchased this 1 year old puts their depreciation hovering in the 50% range; even at 2 years old thats a greater than 30% hit in the first year. Unlike the Model X, this brand and platform has been around for decades so the depreciation is predictable and HIGH.

i said SPORT, sparky...

and they were all bought brand new.

 

[skilly]

i said SPORT, sparky...

and they were all bought brand new.

Don't get all bent outa shape. Just because you have magic pricing doesn't make it true for everyone else. Mannheim says otherwise.

"Sparky" that's cute...electric car forum and all. Pretty clever.

 

[tccartier]

All cars are depreciating assets. Buy what you like, drive it till it dies and it will owe you nothing! The most sought after vehicles will have the lowest depreciation rates because the secondary market of buyers will support the prices

Talk about loss of value My 2013 Volt stickered for north of $42k four years later I'll be lucky to get $10k for it... It's really a great car and has been flawless performing better than advertised but no one wants them so the depreciation curve was STEEP!!

 

[skilly]

All cars are depreciating assets. Buy what you like, drive it till it dies and it will owe you nothing! The most sought after vehicles will have the lowest depreciation rates because the secondary market of buyers will support the prices

Talk about loss of value My 2013 Volt stickered for north of $42k four years later I'll be lucky to get $10k for it... It's really a great car and has been flawless performing better than advertised but no one wants them so the depreciation curve was STEEP!!

Very well said!! After all that is the point isn't it!!

 

[Canuck]

3) So it seems basically you get ****ed on the back end with a Tesla. I have read on this very forum some people were offered 70% of new price after just 6 months of ownership by their local Tesla store. That is an egregiously low trade-in offer.

While it is true that a 1 year old Mercedes might sell at 80% of original MSRP, the difference is that you don't pay MSRP. I can get 10% off on a new Mercedes (i.e. buy it new at 90% of MSRP), and sell it a year later for 80% of MSRP. I've done it several times before.

So you're concerned about resale value at 70% after 6 months, because you've bought and sold other new vehicles several time before after owing them new for one year and it's important to you that the depreciation is less? That way you'll throw less money away? I'm having a real hard time following your logic here.

First, a car is pretty much throw away money any way you look at it. And, Im not sure of the logic in looking at 1yr depreciation values on a car purchased new - who on earth would do that...not sure of the use case but it reminds me of that commercial where theres a guy at an art auction bidding on a painting. He wins the auction and then declares immediately that he wants to sell it.

Exactly -- this is why I was having a hard time following his logic. People who get a new car every year either have brains and money to burn, or no money to burn and thus no brains. Your art auction analogy actually makes some sense since art can be an investment and some art does appreciate -- and significantly. However, unlike art work, vehicles can never be investments. They are depreciating assets. In fact, automobile depreciation is the single most expensive cost of owning a new car.

Porsche doesn't depreciate anywhere near what a Tesla does. My 3 year old 911 Turbo S is still worth 70% of the new price.

Yes, but then you're driving an ICE. And after owing and driving a Tesla, that's out for many of us. You can't pay me to drive my wife's BMW, and I won't drive my Tahoe hybrid unless I have to tow my boat, or when there's a lot of snow. Before I got my Tesla, I thought I'd still use my Tahoe for renovation projects at my cabin but it's amazing what you can fit into a Model S, especially the older, large frunk ones like mine. I'll stuff my Tesla full rather than having to drive my ICE and I never thought that would happen before I bought.

Porsche does have good resale value. But despite that good resale value, they rank under Tesla when it comes to what most people consider to be the number one determination of customer satisfaction - the "would you buy again" question to owners. Tesla is at 91% and Porsche is at 84%. That's probably because Tesla is a game changer. The propulsion system is entirely different. Instant fast and silent torque, one pedal driving because of regen makes driving so much better, no more gas station stops, no oil changes, and list goes on and on. I just love being able to get up to speed really fast without drawing any attention to myself like an ICE does when you gun it, not to mention that you throw your gas mileage out the window driving like that in an ICE and I drive like that a lot.

The last time we change our propulsion system it was from horses to ICE. Now it's ICE to electric. With new technology, depreciation is more significant, especially when you compare it to an automaker like Porsche that has been building the same propulsion system since the 1930's. It's like comparing a home phone to a cell phone. My home phone hasn't changed much over the past decade, much like a Porsche. But my Tesla is more like my cell phone and it's depreciated more than my home phone.

Having said the foregoing, if you buy and keep a Tesla for a number of years, I doubt the depreciation will be all that different from other vehicles.

 

[kort677]

The last time we change our propulsion system it was from horses to ICE. Now it's ICE to electric.

since I rarely play the pedantic role, do you realize that the first autos were either steam or electric powered? ICE was an afterthought

 

[outie]

I just love being able to get up to speed really fast without drawing any attention to myself like an ICE does when you gun it, not to mention that you throw your gas mileage out the window driving like that in an ICE and I drive like that a lot.

Right, but how is that different than throwing your Wh/mi away on an EV?

When I drive in the city doing errands I need to recharge every other day. If I was driving an ICE I can go a week or 1.5 without refueling.

 

[MXWing]

Tesla is in a market dominated by perfect substitutes and perfectly competitive EVs.

Since I can practically buy any other vehicle that has all of Tesla's pros without all the cons of a Tesla.

Since the cons outweigh the ownership benefits of OP,

OP should not buy a Tesla.

'Tis better to have loved and lost than never to have loved at all.'

Quote may or may not be relevant to the discussion at hand.