TMC is an independent, primarily volunteer organization that relies on ad revenue to cover its operating costs. Please consider whitelisting TMC on your ad blocker or making a Paypal contribution here:

The value of a trade in

Discussion in 'Model S' started by Im_Ace, Jan 14, 2016.

  1. Im_Ace

    Im_Ace New Member

    Oct 21, 2015
    Atlanta, GA
    I traded in my first Model S, P85, on June 30, last year. Did it on the last day that Georgia offered a $5,000 tax credit. My original Model S was built 3 months before the hardware for AP began. I drive a lot around the highways of Atlanta and AP was something I was really interested in. Yesterday, after receiving the email from corporate announcing Summon, I browsed around the website for a bit. Decided to look at CPOs in my area. To my disbelief, my original S is still for sale (VIN 41119). To further my amazement, the offering price is $6,000 LESS than what they gave me for my trade in. As an owner, I'm feeling really good that I got such a great value on the trade in. As an investor, I'm saddened that Tesla is now taking a big hit on the trade ins.

    In the meantime, I'm REALLY enjoying the AP and all of the newest features.

    85D, Pearl White, Pano, 21" Silver Wheels, Tan Nappa, Obeche Wood Gloss, Dual Chargers, Tech Package, Smart Air, Ultra High Fidelity Sound, Subzero Weather, 73206
  2. tstafford

    tstafford Member

    Jul 4, 2015
    Nashville, TN
    Seems like AP going live has crushed the value of your old car - and probably ones like it.
  3. NewCow

    NewCow Member

    Dec 3, 2015
    Aurora, CO
    #3 NewCow, Jan 14, 2016
    Last edited: Jan 14, 2016
    I wouldn't worry too much about them taking the hit. They had ~$692 million of finished goods inventory at the end of last quarter (9/30/15), which is all the new vehicles in transit for delivery and all units on hand (new and CPO). Overall, the CPO activity is pretty small, they took in <$5 million in trade-in inventory during the quarter. I don't believe they ever talk about the gross margin on the CPO side, which I'd be interested in finding out. Also, remember that they only accept trade-ins if you're upgrading to a newer S, so the gross margin on the new model (~24% last quarter automotive ex-ZEV) would help offset any minor hit they take selling the CPO. (10-Q)
  4. SmartElectric

    SmartElectric Active Member

    Jul 9, 2014
    As per EV CPO:

    85 kWh Performance Model S P41119 | Tesla Motors

    Your old car is near the lowest price for a 2014 P85 with pano. Currently 5th on the list.
    Your car is also in the top ten cars with highest mileage (22 K miles).
    You were given ~ $72 K as part of a trade in for a 85D that likely retailed for $110 K.
    Tesla makes ~ $25 K margin on a $100 K car sale.

    The P85 was offered for $76K by Tesla CPO originally, and it has been price reduced to $66K.
    Tesla may possibly lose $10 K on the trade in if they need to recondition anything (tires, brakes, etc might add another $4 K to their costs).

    So, they made $25 K on your original P85, then another $25 K on the 85D and lost $10 K on the trade in (for your convenience of course).

    That's still $40K margin on two sales, about $20 K each.
    Makes sense for them to offer the trade in for your convenience and as an incentive to upgrade.

    My suggestion/guidance is to upgrade yearly, and therefore giving a buying opportunity for us CPO buyers.
    Cheers! ;-)
  5. Mike K

    Mike K Member

    May 15, 2013
    Los Angeles
    There was an interesting article somewhere about Tesla not offering discounts directly but perhaps offering discounts indirectly in the form of offering inflated values for used cars. This makes sense because when I was shopping, a couple people I made offers to declined my offer because they had much higher offers from Tesla. In one case, someone with a 2013 P85 was sitting on a 72k offer for a no parking sensor, no folding mirrors car. So an early build. As that was just two months ago, that seemed like a silly offer to me, especially when Tesla was basically selling the same car on the CPO site for $67,000.

    I think at best Tesla is slow at adapting to market value or was trying (and failing) to inflate the market of the used cars. I think they're simply discounting new cars in the form of inflated trade in values though. So they might have entered into that transaction knowing full well they were going to lose money.
  6. ChadFeldheimer

    Oct 25, 2015
    Chicago, IL
    How many miles were on your car when you traded it in?

    Is it possible Tesla has used it as a loaner for the past 6 months?

Share This Page