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Trade-in Value in 3 Years? (2018 Model S 100D )

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Daniellane

The Tesla Guy
Supporting Member
Trying to get a handle on what the trade-in value of this 2018 Model S 100D will be in 3 years to help with my Loan vs Lease decision. Loan has slight 3 year out of pocket advantage (~$1,500) over a 1,5000 mile/yr lease.

Ultimately, it really depends on what the trade-in value will be in 3 years on the Loan side.
Any educated guesses?
F5F8B663-FE8E-460C-A647-2878601ED9A8.jpeg
 
In 3 years it probably will not be minus the federal tax credit because it will not longer be an option for new buyers.

Expect it to depreciate around 40% if you sell it yourself, or a bit more if you wholesale it back to Tesla or CarMax.

Maybe more accurate to think the base car will depreciate 40% and options 50%
 
In 3 years it probably will not be minus the federal tax credit because it will not longer be an option for new buyers.

Expect it to depreciate around 40% if you sell it yourself, or a bit more if you wholesale it back to Tesla or CarMax.

Maybe more accurate to think the base car will depreciate 40% and options 50%
It's not if the tax credit will be there in the future, it's if it was taken when the car was purchased.
 
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It's not if the tax credit will be there in the future, it's if it was taken when the car was purchased.
I believe that the tax credit factor may be mute. If, in three years, Tesla’s aren’t eligible for a credit, they will likely adjust the price to be competitive with the other carmakers who will still offer credits due to a later start in the market. So for that reason, I believe the market value is still net of the tax credit. Assuming free Supercharging goes away by then, that will not be a factor either. A 2018 car only provides that perk to the original owner
 
I believe that the tax credit factor may be mute. If, in three years, Tesla’s aren’t eligible for a credit, they will likely adjust the price to be competitive with the other carmakers who will still offer credits due to a later start in the market. So for that reason, I believe the market value is still net of the tax credit. Assuming free Supercharging goes away by then, that will not be a factor either. A 2018 car only provides that perk to the original owner
The effective price of the car is minus the tax credit so that is were the deprecated value starts at. What happens in the future does not change that.
 
The effective price of the car is minus the tax credit so that is were the deprecated value starts at. What happens in the future does not change that.
It certainly does change. just because I bought a car for X amount less doesn't mean in the future you're going to get it for X amount less. A car is worth what someone is willing to pay. If someone want's to say 'well you paid 7,500 less for it in 2018' I'm just going to tell you well find one for that price in 2019 and let me know how it works.

And not everyone qualifies for tax credits ;)
 
It certainly does change. just because I bought a car for X amount less doesn't mean in the future you're going to get it for X amount less. A car is worth what someone is willing to pay. If someone want's to say 'well you paid 7,500 less for it in 2018' I'm just going to tell you well find one for that price in 2019 and let me know how it works.

And not everyone qualifies for tax credits ;)
Yes, every car qualifies for tax credits, it's the owner that may not. No matter what the car is "worth" in the future, the starting point to calculate the deprecation is the same. In the case of all Tesla's sold now and for the near future, starting point will be the MSRP minus the federal tax credit.
 
In nov '17 when I was buying my MS P100D and debating between loan vs lease, the total of the lease payments and the residual amount was more than the total of loan finance payments amount by about $5000. And when I asked about what happened to the federal tax credit of $7,500 during a lease, I was told it wasn't passed on to the lessee but kept by the lender (unlike my Chevy Volt lease where it was passed on to me by dropping the cap cost by $7,500). Timothy Knox (Tesla finance dept) can give you both scenarios. The actual value of the car in 2021 is anyones guess. Usually 40-50% of actual cost when purchased (no federal tax credit factored in). Hope this helps.
 
In nov '17 when I was buying my MS P100D and debating between loan vs lease, the total of the lease payments and the residual amount was more than the total of loan finance payments amount by about $5000. And when I asked about what happened to the federal tax credit of $7,500 during a lease, I was told it wasn't passed on to the lessee but kept by the lender (unlike my Chevy Volt lease where it was passed on to me by dropping the cap cost by $7,500). Timothy Knox (Tesla finance dept) can give you both scenarios. The actual value of the car in 2021 is anyones guess. Usually 40-50% of actual cost when purchased (no federal tax credit factored in). Hope this helps.
I was told that the 7500 is added to the residual, which reduces the portion you finance in your lease and the resulting monthly payments. So that it is how it passed onto the leasee.
On a Tesla 15,000 mile/yr lease of $111,050
that I was quoted last week the residual $65,246.
Sales tax was calculated on the balance.
((price -(residual-7,500 tax credit))x.087)/36=128.818/mo
Tax was $130/mo more on quote with tax.
So it’s safe to assume all monthly calculations exclude the tax credit.
The credit is pretty much wiped out by the 5.04% finance charge.
Lease vs loan comparison details can be viewed in this thread:
It looks like I may have been given misinformation.

I believe sales tax on a lease in Washington is based on ((price -(residual-7,500 tax credit))x.087)/36=128.818/mo
I got another breakdown excluding 8.7% Sales tax which seems to confirm this.
The difference per month is only $130
($4,680 over 36mos vs actual tax of $9,661)

36 month out of pocket on loan side in this example is actually.
$52,668+$9,661+$10,050=$72,379
($64,879 including tax credit)

Lease 36 month out of pocket
58,428+$7,959=$66,387
$1,508 more than a loan
So minimal.

No tax included in lease.
View attachment 281374

8.7 tax included in lease.
View attachment 281375
 
Yes, every car qualifies for tax credits, it's the owner that may not. No matter what the car is "worth" in the future, the starting point to calculate the deprecation is the same. In the case of all Tesla's sold now and for the near future, starting point will be the MSRP minus the federal tax credit.
Let me know how that works out. Seems to be working with model 3s being sold right now :rolleyes:
 
So do you trot out your straw man for every argument or is this a special occasion?
Not sure what you're talking about. The M3 obviously gets tax credits, people are buying them without regard to that tax credit being taken by the original purchaser, why would the same not apply to any other vehicle sold that gets a tax credit?

If the credit phases out in 20-whatever how are you going to price that car? how would you know if that person got credit or not?
 
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After several years, I've found that cars tend to depreciate about 2% per month (actual re-sale will be different due to high/low mileage and the overall condition of the car at re-sale - with some car models depreciating at a slightly higher or lower rate).

After 36 months, this projects the value will be around 48% of purchase price.

This formula has done pretty well in projecting the re-sale value of our 2012 S P85.
 
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I find Tesla Loan vs Lease decision a bit easier than other cars. Since the lease option isn't that much cheaper (~100/month) than most other cars, I went with financing the car rather than leasing it. Tesla hasn't made the lease option that much attractive.