Trade-In Values Plummet

[Knightshade]

What does 3-year old Model 3 really mean here anyways, given Tesla only delivered about 1700 of them in 2017 and all but 200 were in Q4?

I.e. there really aren't 3-year old Model 3's, at best there would be 1 or 2 data points, literally - truly only a handful 3-year old ones that have actually re-sold.

I would assume that's them then.

No reason Q4 wouldn't count, ones from Dec 31, 2017 are still considered 2017s since Tesla didn't start changing model years before Jan 1 until the 2020 models.

Also I just checked Autotrader- there's 10 2017 Model 3s for sale just there alone, right now... so I think your "one or two" might be a bit low an estimate.

 

[ahhlun]

was $55k new in 2018 is ... ready for this?

$17,000.

The deer collision in October made it undesirable; COVID-19 made it unsaleable.
.

Was gonna say that's how depreciation work, but 55k to 17k in 2 years, thats rough ...

 

[wwu123]

I would assume that's them then.

No reason Q4 wouldn't count, ones from Dec 31, 2017 are still considered 2017s since Tesla didn't start changing model years before Jan 1 until the 2020 models.

Also I just checked Autotrader- there's 10 2017 Model 3s for sale just there alone, right now... so I think your "one or two" might be a bit low an estimate.

You're calling out exactly what I'm calling out. My quip on "1 to 2" was that there's not many Model 3's actually three years from date of sale - in fact there are none (1st delivery was July 2017). Due to the way the car industry defines model years, 3-year old there means any Model 3 from 2017, being offered for sale in 2020, not three years from date of sale.

I didn't realize the chart was not actual sales but just seller asking prices, but probably many of the data points used there were cars less than 2 1/2 years old. My practical point is that the chart shows about $10-13K depreciation on the Model 3 in year 1, and less than $3500 depreciation combined in "year 2 and 3". Both future buyers and sellers want to understand what Year 3 means here, and whether the depreciation in Year 3 is truly <$1750. Moreso if extrapolating to Year 4 or later, or if estimating future resale value of a new Model 3 one may be buying today.

 

[dmurphy]

Was gonna say that's how depreciation work, but 55k to 17k in 2 years, thats rough ...

The deer incident was the nail in the coffin.
If the market’s depressed for “clean” vehicles ... one that’s been repaired - albeit as good or better than new - is disastrous.

First offer at $26k gets it. LOL

 

[dslem]

So. I did an We’ll Buy Your Car - Sell My Car | AutoNation online trade-in estimate and they sent an offer of $25,500 vs Tesla's trade-in offer of $19,000.... Offer is good for a week. Suggests that Tesla's current trade-in values do NOT represent current market value or conditions.

Pays to shop it around.

 

[mreynolds767]

Got a trade-in quote 5 weeks ago.... $24k... waited to order and had the trade-in quote updated, now $19k...!

Me thinks Tesla 'might' be taking advantage of the situation, or simply doesn't want to deal with trade-ins.

Tesla in my limited knowledge / experience offers fair prices for other brand's cars that are destined for the auction block. Older cars, very high mileage cars, etc... If your car could be sold at a used dealership than Telsa is not going to give you a fair trade as they are not in the business of selling used cars.

 

[jjrandorin]

So. I did an We’ll Buy Your Car - Sell My Car | AutoNation online trade-in estimate and they sent an offer of $25,500 vs Tesla's trade-in offer of $19,000.... Offer is good for a week. Suggests that Tesla's current trade-in values do NOT represent current market value or conditions.

Pays to shop it around.

Be interesting to hear if they give you that price without you buying a car from them. Let us know.

 

[TheWulf]

Definitely shop around, but most new car dealers (including Tesla) use the exact same valuation process: they call up an auction house, send photos and a description, and wait for bids to come back.

The price you get will vary based on demand that day at whichever auction house your dealer works with, and really has nothing to do with Tesla itself.

I agree prices are low in general, but that's the price of convenience. I traded in my 2014 Mazda 6 GT for ~$5500 when I bought my P3. Not a great price at all but it definitely beats trying to sell it in the current market, and paying for insurance during that entire time.

 

[Robert A]

The question in my mind is the depreciation on the Model 3. With other carmakers, we can hedge that risk with leasing combined with a buy-out option at the end. Not so with M3.

 

[mreynolds767]

Right now depreciation on Model 3 is extremely low.
They are in high demand and have a great reputation.

The pandemic could of course change all that but at least up until last week the factory was closed so was not making more so there were likely many used 3 potential buyers through all of April and so far in May. FYI: the Beemer fans on here go nuts when people abbreviate the Model 3 as M3.

I could see Elon changing his tune and coming up with a buyout option before all of those 3's come off lease. His original plan of Telsa wanting them for a robo fleet is a pipe dream.

 

[Robert A]

But is there any real data that shows current transaction prices for used Model 3s, aside from the offer prices on Tesla's website?


Btw, I come from the BMW group.

 

[bpobill]

Definitely shop around, but most new car dealers (including Tesla) use the exact same valuation process: they call up an auction house, send photos and a description, and wait for bids to come back.

The price you get will vary based on demand that day at whichever auction house your dealer works with, and really has nothing to do with Tesla itself.

I agree prices are low in general, but that's the price of convenience. I traded in my 2014 Mazda 6 GT for ~$5500 when I bought my P3. Not a great price at all but it definitely beats trying to sell it in the current market, and paying for insurance during that entire time.

I traded my car to them in November. They did none of this. They put in my vin and other info and offered me KBB trade in value. No calls or anything, I had my price in under a minute. They said if I get a higher offer they will match it.

 

[mreynolds767]

But is there any real data that shows current transaction prices for used Model 3s, aside from the offer prices on Tesla's website?


Btw, I come from the BMW group.

None I know of. But in 2019 I monitored the used car market for Model 3's and dealerships with them were selling 98% of the time for far more than Telsa was. The pricing was changing (lowering) quicker than the used dealerships could keep pace yet it appeared based on listings they were still moving them easily at inflated rates.
The 2% were some bargains, almost always centered around the car having full FSD and the dealer not understanding that extra value.

Likely a combination of public perception that the car had a year plus wait, people thinking the price was less than they thought a Telsa cost, or the ease of financing offered by these dealerships.
Either way I was convinced that the retained value of a Model 3 was likely higher than any other mass produced car made in the last couple of years.
Has that changed in 2020 ; I am not sure as I have not paid attention to it at all but I see no reason why it would have. The pandemic hurts all brands, hurt demand for Model 3 less though as there was/is still a backlog of unfulfilled orders and the factory in the US was closed so some of those buyers might have gotten impatient and shopped used.
Additionally I think this pandemic will derail other large brands planned investment to Electric. The lower gas prices as well as less free cash will cause them to scale back any huge plans. That helps Telsa over the next couple of years.

 

[dmurphy]

None I know of. But in 2019 I monitored the used car market for Model 3's and dealerships with them were selling 98% of the time for far more than Telsa was. The pricing was changing (lowering) quicker than the used dealerships could keep pace yet it appeared based on listings they were still moving them easily at inflated rates.
The 2% were some bargains, almost always centered around the car having full FSD and the dealer not understanding that extra value.

Likely a combination of public perception that the car had a year plus wait, people thinking the price was less than they thought a Telsa cost, or the ease of financing offered by these dealerships.
Either way I was convinced that the retained value of a Model 3 was likely higher than any other mass produced car made in the last couple of years.
Has that changed in 2020 ; I am not sure as I have not paid attention to it at all but I see no reason why it would have. The pandemic hurts all brands, hurt demand for Model 3 less though as there was/is still a backlog of unfulfilled orders and the factory in the US was closed so some of those buyers might have gotten impatient and shopped used.
Additionally I think this pandemic will derail other large brands planned investment to Electric. The lower gas prices as well as less free cash will cause them to scale back any huge plans. That helps Telsa over the next couple of years.

Sold listings on eBay?

2018 Tesla 3 | eBay
2018 Tesla 3 Model 3 Performance AWD | eBay
2019 Tesla 3 Premium | eBay

 

[Stickboy46]

Remember, it never hurts to ask Tesla to match any written offer from another vendor. I know they will match Carmax on non-Tesla trade ins. Got me an extra 3k over what Tesla was offer on my Taurus. Then you still get the tax benefit of trading in too.

 

[dmurphy]

Then you still get the tax benefit of trading in too.

Unless you live in a state, like NJ, where there is no sales tax on EVs.

(Hey, there's gotta be SOME upside to living here... in the COVID epicenter...)

 

[MXLRplus]

So right now, the trade in value I get for our 2018 Enclave Premium AWD, 25k miles - which was $55k new in 2018 is ... ready for this?

$17,000.

The deer collision in October made it undesirable; COVID-19 made it unsaleable.

I wanted to replace it with a Model X, but this makes that a completely unrealistic idea at that kind of price. Going to have to drive this thing till the wheels come off. Then put them back on, and keep going.

Unless the used market comes back strong, I'm stuck with it.

Ouch. It's a triple whammy. New cars are being discounted, used cars are being discounted, and people who are struggling are forced to sell a car.
But at least we kept the nursing homes safe. Errr... scratch that.

 

[dmurphy]

Ouch. It's a triple whammy. New cars are being discounted, used cars are being discounted, and people who are struggling are forced to sell a car.
But at least we kept the nursing homes safe. Errr... scratch that.

Yeah, this one hurts. I feel incredibly trapped by it; especially if we're thinking about buying an overpriced replacement (Model X) anyway - that expensive vehicle AND the massive hurt on the Buick just combines to make the whole thing unfeasible right now. Maybe by the end of the year it'll improve... we'll see. I'd like to hope so.

Stay safe out there - we know nobody else is going to look out for you, but you ...

 

[RScottyL]

What type of car are you trying to trade-in? It really has little to do with Tesla and more to do with the market.

Got a trade-in quote 5 weeks ago.... $24k... waited to order and had the trade-in quote updated, now $19k...!

Me thinks Tesla 'might' be taking advantage of the situation, or simply doesn't want to deal with trade-ins.

Not sure if you have heard, but all manufacturers are having issues selling cars, that is why you see things such as:

0% financing up to 84 months

Up to 3 months without payments!

Obviously Tesla doesn't have that issue, as they have less supply than demand at this point!

Luckily, I am leasing a car and my lease is up in July, so I can just turn it in.

 

[Robert A]

[QUOTE="mreynolds767, post: 4707621, member: 109220"

Either way I was convinced that the retained value of a Model 3 was likely higher than any other mass produced car made in the last couple of years.
Has that changed in 2020 ; I am not sure ...[/QUOTE]

The problem comparing retained value figures between Tesla and other manufacturers is that the figure is always measured in reference to MSRP, not to average transaction price. If Teslas are sold at MSRP and others are discounted, the retained value percentages need to be adjusted to make a meaningful comparison.