Trade in value

[GPDP]

I filled in the Tesla trade in form this morning to see what I would be offered for my March 2020 M3 LR in Multi Coat Red with 43k miles which I purchased new for £53k.

£18,500.00 is the offer.... that's depreciation of £34,500 in 3 years and 9 months, that's a whopping £766 per month, £9,200 per year which equates to 17% loss per year..... bonkers, and needless to say I won't be rushing out to order a new highland model 3.

 

[Durzel]

Yup.

Would have been cheaper to lease it I suspect. So much for buying outright being the most cost effective way of owning one of these.

I definitely wouldn't buy another Tesla with cash. Not that I expected it to be some kind of freak appreciating asset (lol "Robotaxis" earning $100k a year), but the depreciation has been savage. As said it would have been cheaper to lease or PCP, and in the latter less risky.

 

[btc1k]

And yet many on the forum are quick to criticise leasing "because you never own it".

Stick with renting your depreciating assets and purchasing your appreciating ones.

 

[Kansalis]

And yet many on the forum are quick to criticise leasing "because you never own it".

Stick with renting your depreciating assets and purchasing your appreciating ones.

Before now, PCP has almost always been better on paper than leasing, even if you planned to return the car at the end of the agreement instead of paying the final figure. It's only in very recent months that leasing may look more attractive because the residuals on EVs (not just Teslas) are atrocious right now. I'm sure some who took out PCH in the past 12-18 months may be quids-in this time around.

Though I suspect lease prices will increase if they haven't already, due to the increased (decreased?) depreciation, which will likely level the field again. Leasing companies can only calculate their payment figures based on current market conditions and will increase payments in line with their total costs. If the depreciation trends back the other way again in 12-18 months time, we'll be having the opposite conversation again...

 

[PITA]

When I bought my Tesla, I paid £61,000 for it brand new, through my Company.

About £12,000 of that amount I would've lost to Corporation Tax. So although it isn't a discount as such, I would've lost the money anyway.

So £49,000 left in the car. Over the past 3 years, the 'Company' has paid my Insurance, Tyres, Accessories, without attracting Income Tax.

Admittedly the Benefits in Kind Tax offsets that a little bit.

But, my plan is to buy this car next year off the Company for as low a price that's legal.

Then just run it into the ground, for as long as that takes.

The Highland is new and shiny, but my ego has already had its fun, and doesn't mind waiting a while now I'm invested in the all-electric platform.

There's always going to be something new and shiny out there. But I'm not dropping £45k each time for a newer number plate. That's not a game I'm going to play.

For me personally, I want to see how much our integrated all-electric home can perform now. That's where my 'fun' and interest is.

With our setup, it'll pay for itself anyways, sooner or later. I can live with that.

 

[Rustybkts]

I was offered £20,000 by Tesla for trade in on my 42,000 mile early 2020 SR+ a month or so ago.

After trying WBAC and Motorway the outlook was worse and I doubt Tesla will hold that offer until my Highland arrives.

Looking down the texts from WBAC the past year or so was illuminating.

11th July 2022 I was offered £38,000!
17th October 2023 the offer was £18,500
27th October 2023 it was £16,950
21st November 2023 it was £15,605
Yesterday £16,000

I decided to offer the car to my very lucky daughter and swap with her 2017 Zoe as I would prefer my family to benefit from such crazy prices at the moment.

That's an awful lot of car for £16,000, great for people moving over to EV's and makes you wonder if the constant bombardment of lies from the oil lobby is working, especially with the ULEZ issues in London as you would expect the market to go the other way.

 

[Durzel]

And yet many on the forum are quick to criticise leasing "because you never own it".

Stick with renting your depreciating assets and purchasing your appreciating ones.

In an orderly world finance ought to be more expensive to the end user than buying outright, in terms of depreciation vs monthly costs (including the deposit spread over the term), because logically there has to be some cost for financing, and profit for the financiers. This also assumes a "normal" rate of return on the capital, if you have it.

Because of Tesla's antics with pricing, the cars have depreciated disproportionately to what you one would normally expect. When I was looking in late 2019 to buy my car I looked at leasing vs buying outright and it seemed to be more financially effective to do the latter. There wasn't a huge amount in it, though, I'll be honest.

As it turned out this considered bet was bad due to external factors.

There will be some who have capitalised and done disproportionately well out of finance arrangements, particularly those that got great deals during low interest rates, before Tesla started dropping prices and offering incentives. As @Kansalis said I suspect that ship has sailed now - finance companies will be pricing in lower residuals, Tesla's pricing antics and higher interest rates.

 

[Js1977]

This rabbit hole again...

Go and have a look and see what the cheapest car on autotrader for that year and mileage. Those figures will change.

Depreciation would likely be less on a cheaper car but not always.

You could have easily bought a 10k used car and done that mileage and relatively you would have been quids in but with this in mind where does it stop.

Most people on a lease or "buying" on PCP also dont have the right to moan imho since they dont own the car until they made the final payment which most dont. If you dont have the money to buy the car at the end of the term, its neither her nor there as to what residuals you have to go towards the next car since you have already removed that option at the beginning.

If I was in the trade or needed a car, I would be more than happy to pay what tesla have quoted you since I dont do much mileage and this would represent excellent value... Maybe still to expensive for someone else

 

[Leejmoff]

Yep trade in values are so low, I was shocked at mine £23k on a Dec'21 car. Not quite half but in two years thats shocking to be honest. Well it seems it to me. I'll send up just buying the car at the end if the value is low.

 

[Mark89052]

Depreciation now will be very low if you keep it, if you were leasing you would still have to pay the same monthlies locked into at the start of term and then have to start all over again when having to hand car back

It’s a bit of a unusual situation currently, normally new car list price goes up annually which can make depreciation look better than it is but a new M3 is about the same price now as it was 3 or 4 years ago so cost to change to same model would be similar to a different brand that on paper had lower depreciation but would now cost an extra 10-20% to buy new because of inflation

 

[PITA]

I feel for those people that paid over RRP not long ago, with short supply...

Ooofffft....

But then again, if they can afford it, fair enough. It's not a problem.

 

[GPDP]

2020 M3 LR cars advertised on autotrader range from £21k to £30k, although I doubt they'll achieve the higher end of the prices.
I think I may keep the car another few years, surely the rate of depreciation from now moving forward should dramatically reduce.

 

[Durzel]

Depreciation naturally gets less intense the older a car is. Are Teslas natural though?

The counterpoint to "depreciation should get less" is that to some people believe EVs have a finite lifetime. I'm not sure I would want to run one outside of the battery warranty (8 years) given the cost of a refurbished replacement, which is circa £18k last I checked. I don't think I'd want to try selling one in the final year of the battery warranty either, or afterwards.

Would you want to buy a Tesla that was out of battery warranty, or verging on it?

 

[Kansalis]

Depreciation naturally gets less intense the older a car is. Are Teslas natural though?

I haven't looked into it in any detail, but from snippets I've picked up online, there seems to be an issue with EVs in general at the moment. Obviously we know that online posts are often utter nonsense, but there's enough noise to suggest there's a wider issue. If I were to guess, it seems the primary drivers might be the very high insurance costs in recent months (for all cars, not just Tesla), combined with the general spread of dis/misinformation by some of the press about EVs. Perhaps it's started a downward spiral.

Just guessing & conjecture on my part, but if the online postings are believed by even some who read them, it doesn't take long to spread FUD.

 

[Jason71]

I was offered £20,000 by Tesla for trade in on my 42,000 mile early 2020 SR+ a month or so ago.

After trying WBAC and Motorway the outlook was worse and I doubt Tesla will hold that offer until my Highland arrives.

Looking down the texts from WBAC the past year or so was illuminating.

11th July 2022 I was offered £38,000!
17th October 2023 the offer was £18,500
27th October 2023 it was £16,950
21st November 2023 it was £15,605
Yesterday £16,000

I decided to offer the car to my very lucky daughter and swap with her 2017 Zoe as I would prefer my family to benefit from such crazy prices at the moment.

That's an awful lot of car for £16,000, great for people moving over to EV's and makes you wonder if the constant bombardment of lies from the oil lobby is working, especially with the ULEZ issues in London as you would expect the market to go the other way.

Cars like yours from Private sellers are currently retailing on Autotrader for about £23000.
I am not saying that you would definitely get that for it but if you did what where they new back then? £41K
That would be 44% depreciation. Not great but historically not out of the bounds of what one would expect on a nearly 4 year old car with over 40K miles.
Yes I was one of the lucky ones who sold a 2019 car after 3 years and only lost 8%. but that was a crazy time never likely to be repeated on mass market cars any time soon.
WBAC and the likes are traders. Traders have always low balled everyone all the time. Except in the last couple of years.
This is not crazy depreciation its a lot of money granted but financially speaking, buying new cars has always been a mugs game which is why I never bought a new car until my two Tesla's and why I will almost certainly revert to buying used next time I need a new car.

 

[pdk42]

I'm currently umm-ing and ahh-ing about swapping my 2019 Model 3 for a new or nearly-new Model Y so this thread is very relevant. For sure the depreciation on my current car isn't pretty, but TBH it's in the same sort of ballpark as previous cars. The car before the Model 3 was a BMW 335i and the stats on the two are:

OK, so the BMW was a little older and slightly more miles, but the depreciation was a bit higher too.

Let's face it, cars are just a terrible depreciating asset. If you want to keep it cheap, run an older car. If you want something nice and new, then you need to pay for it. Consider it an operational cost and weight it against your other priorities.

Based on both these figures, I've come to the conclusion that buying new cars with cash/loan doesn't make a lot of sense. The lease model (esp if you can do it via a salary sacrifice model) is no worse and the risks of unknown depreciation are someone else's problem.

 

[WannabeOwner]

I'm not dropping £45k each time for a newer number plate

DVLA will let you keep the old one for £80 ...

... I'll get my coat

I'm not sure I would want to run one outside of the battery warranty

My expectation is that independents will spring up that will repair batteries by replacing duff cells, rather than the whole thing.

Of course chicken-and-egg for early adopters, until that industry gets established ... so a bit early-doors just at present. But for a 4 year old car, will that industry be there in 4 year's time?

 

[Whyone]

....

I decided to offer the car to my very lucky daughter and swap with her 2017 Zoe as I would prefer my family to benefit from such crazy prices at the moment.
......

Make sure she runs the insurance numbers before accepting this potentially poison chalice.

 

[kelvin 660]

My expectation is that independents will spring up that will repair batteries by replacing duff cells, rather than the whole thing.

Unfortunately repairing a Model 3/Y battery is virtually impossible due to the way they have been manufactured. They are not designed to be taken apart. If you are unlucky to get a battery failure outside of warranty its curtains for the car. This is another reason why deprication is so high for EV's...

 

[xreyuk]

My company stopped offering them on the company car scheme due to the depreciation. They were buying up loads when the price was 47k for SR+, obviously they announced the price cuts where they went down to 43k, and now I believe highland is slightly cheaper.

Seems like the price fluctuations really caused some problems.