[UK] used value of their Tesla cars plummeting?

[MadManMark]

I was going to lease. Let’s say 6x48 at a ballpark figure of £500 month. That’s £27,000.

Purchased instead for £41,000.

So after four years anything over £14,000 is a win.

I obviously I don’t know your specific financial circumstances, but I don’t think your calculation is quite that simple. Were you expecting to earn no interest on the £41k if you had left it in the bank? With interest rates as they are today that 41k could have earned 9k in interest over 4 years.

 

[James-R10]

I obviously I don’t know your specific financial circumstances, but I don’t think your calculation is quite that simple. Were you expecting to earn no interest on the £41k if you had left it in the bank? With interest rates as they are today that 41k could have earned 9k in interest over 4 years.

This 100%.

Leasing is normally the worst option though as you are paying more interest over the term of the ownership period. However, it can make sense to avoid having to put in larger deposits & higher monthly payments where your money is making more elsewhere. At the moment though, interest rates are 7% and up for cars and not quite that high except on riskier portfolios.

 

[page3]

I obviously I don’t know your specific financial circumstances, but I don’t think your calculation is quite that simple. Were you expecting to earn no interest on the £41k if you had left it in the bank? With interest rates as they are today that 41k could have earned 9k in interest over 4 years.

Valid point, but I was keeping it simple on purpose. Having spent over £40K on a car I find it best not to think about it too much!

 

[Mr Puzzles]

I had a very anti lease stance for years, I’m gutted I missed out on one of those incredible deals BMW, VAG and MB were offering.

 

[M3PBOSS]

WBAC valuation on my 22 plate Model Y with inductions and 3800 miles is £38,000. today This is very bad considering i really wanted to get back into a facelifted 2023 Model 3 Performance

Interestingly, Motorway's valuation on my Model Y today is £50,800 which is higher than Tesla's trade in of £49600 last week. Providing valuations hold or do not worsen significantly over the next 9-12 months then that isn't too bad. WBAC do not want electric cars right now!!

 

[Js1977]

Interestingly, Motorway's valuation on my Model Y today is £50,800 which is higher than Tesla's trade in of £49600 last week. Providing valuations hold or do not worsen significantly over the next 9-12 months then that isn't too bad. WBAC do not want electric cars right now!!

It was reported about 3 days ago that BCA (British Car Auctions who own WBAC) is overstocked.

 

[Limey]

These things come and go, new supply will be restricted again as factories slow down or divert to other markets and the value fluctuates.

 

[ZenRockGarden]

My Tesla works exactly as it did last year... I have no particular need to sell it - one of the reasons I bought it is Tesla makes the best battery packs in existence and their use of fewer parts means fewer things to break.

I would love to see a moderate drop in Tesla prices so that the company can succeed on it's mission to advance the best-in-class electric cars to the entire planet and get us off fossil fuels earlier than would have happened otherwise.

Next question?

 

[pgkevet]

300mill cars in Europe, 100 million in USA, 300 million road vehicles India (everything from moped to freight). Even if Tesla made 20 million a year with a 10 year lifespan they'd never manage it on their own. If they had the altruism to really want to change the world solo then they'd be knocking out a cheap, minimalist EV without fancy software for the high pollution 3rd world markets - some sort of EV tuk-tuk?
Forget the honeyed words.. Tesla is a business with one aim - talk the customer into buying their stuff at the highest price they can sell it, like most businesses.
If they ever succeed in creating a genuine self-driving vehicle - as opposed to persuading people to live with a poor imitation that generates data for them towards that aim - then they'll bring out a robust interior with heated, self-cleaning cameras and other sensors and fill the thing with advertising screens so that no-one needs to own their own.

 

[ACarneiro]

Not sure there would be queues to buy an electric tuk-tuk anywhere in Europe or North America…

 

[2020M3SR]

My Tesla works exactly as it did last year... I have no particular need to sell it - one of the reasons I bought it is Tesla makes the best battery packs in existence and their use of fewer parts means fewer things to break.

I would love to see a moderate drop in Tesla prices so that the company can succeed on it's mission to advance the best-in-class electric cars to the entire planet and get us off fossil fuels earlier than would have happened otherwise.

Next question?

Why y'all drive on the right hand side of the road? That's just crazy man!

 

[Zilla91]

My Tesla works exactly as it did last year... I have no particular need to sell it - one of the reasons I bought it is Tesla makes the best battery packs in existence and their use of fewer parts means fewer things to break.

I would love to see a moderate drop in Tesla prices so that the company can succeed on it's mission to advance the best-in-class electric cars to the entire planet and get us off fossil fuels earlier than would have happened otherwise.

Next question?

Not quite sure what the point of this post is or what it’s got to do with the topic at hand, nor why you feel it necessary to post on a UK specific thread from the US

 

[Mrklaw]

I’m considering it more a general correction. We’ve had artificially strong used prices due to both lack of supply (generally not just EV or Tesla), and increased demand allowing Tesla to put up retail prices.

Even with the corrections we’re still probably pretty ok. And nobody shoudl be spending £50k on a new car hoping it’ll be an investment or relying on unusually high residuals (other than purely a possible bonus)

 

[pgkevet]

Not sure there would be queues to buy an electric tuk-tuk anywhere in Europe or North America…

You know full well for the 3rd world markets but a cheap no-frills car for the second car market would probably sell well

 

[Mullermn]

Tesla second hand values in recent months have been high to an extent that's virtually unprecedented. I've read of people who've had a Tesla and then sold it years later for enough money to cover the initial purchase price AND the cost of running it in the interim. Clearly that's unsustainable and a short term thing resulting from supply/demand imbalance and other global events.

We know that Tesla have actively raised their prices 'just because they could' because the demand was so strong, and we also know that they're massively ramping up production to meet that demand, so clearly the prices we're going to drop again at some point when the two things met in the middle.

You can't come off the back of a freakishly positive set of events and then view a swing back towards normality as if it's a crisis.

 

[qwickshot]

I’m not sure it’s even positive, there were obviously huge winners and loosers to what happened.

Don’t forget, most ‘owners’ leased them so they massively over paid for the privilege.

They paid £600-800+/month to rent a car for 2/3 years which the lease company then sold for more than they paid for it and netted them a massive profit at the drivers expense. I’d have been gutted if I leased a Model 3 in 2019/20.

All those owners that bought those used cars at the nearly new price will see the the biggest correction.

I wanted to buy a used one in 2021, I ended up just buying a new one because used prices were just insane.

 

[GlynG]

I've lost money - indeed lots of it on every single car I've owned since my first car in 1972, My cars are never assets, always liabilities but i love cars and whatever your hobby is it costs money - all i really care about is did that car provide value for money.

Cars are not a tool to get somewhere in for me- and never have been, though i did depend on them to get me to and from work daily - they have always been a labour of love - so after 50 years of loosing money I'm well acclimatised to the fact they are worth less when i sell them - so i really don't care too much whatever happens. I start to get ichy feet after 3 to 4 years and whatever I decide is my next car becomes the sole focus rather than the return on the old car being sold.

The Tesla has been the most I've paid for a car, though a couple of other purchases have been pretty close. I know that as production ramps up around the world (and the introduction of other marques upping their offerings) my car is going to plummet in value and indeed desirability - just supply and demand, but am I worried? Not a jot. worrying wont change anything, all i can do is keep the car in the best condition I can and hope that when the time comes to sell someone will buy my car at a fair price in comparison to similar cars available.
I have FSD which we all know is a complete waste of money and adds nothing to a car, not in terms of value or desirability, If two cars of equal condition were up for sale and one had FSD - it wouldn't influence a buyer to select the one with FSD - a bigger draw would probably be the white interior. I did sort of hope Elon's mutterings regarding FSD would eventually bear fruit and i would be the proud owner of a very desirable car and it would hold its value better - it was a gamble and I lost on that one.

 

[GeorgeSymonds]

I bought a used M3 from Tesla abut 18 months ago, I knew it was a good price but even so, 6 months later Tesla bought it back from me for nearly 4k more than they sold it to me when I bought a new MY. Happy days. The MY went up in value almost straight away, and I could have probably sold it for 4k more than I paid only a few months ago. I'd now be lucky to get 6k less than I paid for it.

The point of all this... timing. If I take a 6 month view the car has depreciated 10k (against what I could have sold it for) which is horrible, a 9 month view 6k which is good for a new car, an 18 month view and I'm only 2k down which is remarkable. The trend isn't pretty but I'm rational about it, and in practice, if it dropped another 10k by June, I'd have had 2 years motoring for 12k which I shouldn't be too upset by. I'm sure I would be upset, but I have to remind myself.

Now if you'd bought a MY from a flipper for over the odds back in Sept, you're sitting on an ugly loss. Never buy from a flipper at a premium.

 

[Adopado]

I’m considering it more a general correction. We’ve had artificially strong used prices due to both lack of supply (generally not just EV or Tesla), and increased demand allowing Tesla to put up retail prices.

Even with the corrections we’re still probably pretty ok. And nobody shoudl be spending £50k on a new car hoping it’ll be an investment or relying on unusually high residuals (other than purely a possible bonus)

True but for ordinary car buyers at the moment a big factor is that they are still being staggered by the size of their recent domestic electricity bills. Even if in reality the economics still work this is going to stop many people from even considering an electric vehicle. The only close friend that I have who drives electric is seriously considering* swapping to a hybrid when his contract finishes (despite a positive and financially beneficial experience of his first EV).

*just popped that in there with an edit!

 

[Jason71]

True but for ordinary car buyers at the moment a big factor is that they are still being staggered by the size of their recent domestic electricity bills. Even if in reality the economics still work this is going to stop many people from even considering an electric vehicle. The only close friend that I have who drives electric is seriously considering* swapping to a hybrid when his contract finishes (despite a positive and financially beneficial experience of his first EV).

*just popped that in there with an edit!

I think the massive tax breaks on company cars which can be in the order of £6000-£8000 per year on a car of the value of a Model 3/Y LR will continue to drive demand for now. The sums for private buyers are a lot less favourable. I have considered getting a second EV for my wife so that she stops taking my (company) MY all the time and leaving me with her Mini One. I might do it but I cannot make it make any sort of financial sense right now.