[UK] used value of their Tesla cars plummeting?

[MashinBenzin]

Tesla pricing has reflected market demands since at least 2014 when I first started looking at ordering one.

I'm not sure why people don't understand the fundamentals of demand vs price.

Pay what you think something is worth, and it's fine. We cancelled a Model 3 order because the final analysis showed it was over priced. But Tesla are far from the only brand feeling the squeeze of lower consumer spending power. I just paid just over 50% of the list price for a Specialized eBike, 3 months ago no chance there was 0% discount.

If you have the means to buy, now is a great time, as most vendors of everything is keen to sell. The big ticket item though is still to come, houses.......there might be real 'opportunities' in the housing market later this year, so spending capital on a car regardless of current discounts probably still isn't the best thing to do right now if you have the means.

But no one can predict anything, employeement is still high, inflation will fall quickly now, and interest rates are stable. So the housing market drop might not actually materialise.

What was list and deal price for that bike?

 

[Js1977]

Saving paying 4.9% or 6.9% to avoid making 8% or 12% is wasting money. HTH.

Im sure your man maths work for you as to whatever you are applying that calculation to. Car dealerships aren't interested in selling you a car at all as there isn't much money in it. Instead they are focused in selling you financial package.

My Maths are simple. I can still make the 8 or 12% and pocket the extra 4.9 or 6.9%. Thats what my savings are there for

 

[candida]

You say that you are 'still within the chunk' you'd have had to pay the taxman? I don't get it? You only save the tax on the depreciation long term. Whatever you sell the car for you will be taxable as profit.

Yeah, it’s within the amount (45% of 50k) that in 2020 I’d have had to pay the taxman. That gives me a nice feeling. And the balancing charge makes me feel better about the depreciation!

 

[MashinBenzin]

Im sure your man maths work for you as to whatever you are applying that calculation to. Car dealerships aren't interested in selling you a car at all as there isn't much money in it. Instead they are focused in selling you financial package.

My Maths are simple. I can still make the 8 or 12% and pocket the extra 4.9 or 6.9%. Thats what my savings are there for

It’s simple maths, not man maths.

Pay 5% APR on £50k for 4 years on PCP with £18k balloon. Pay £6973 in interest.

Earn 8% on £50k for 4 years. Earn £16k. Have £66k. Pay balloon, have car plus £48k in savings.

Spend £811 pm on PCP payments or use it to refill savings. Savings end up at £38928 plus accrued interest. Call it £40-£41k at cash savings rates. Have £41k plus car.

Tesla have made money. I’ve made money. Everyone is a winner. I have no issue with other people making money if I do too.

 

[Js1977]

It’s simple maths, not man maths.

Pay 5% APR on £50k for 4 years on PCP with £18k balloon. Pay £6973 in interest.

Earn 8% on £50k for 4 years. Earn £16k. Have £66k. Pay balloon, have car plus £48k in savings.

Spend £811 pm on PCP payments or use it to refill savings. Savings end up at £38928 plus accrued interest. Call it £40-£41k at cash savings rates. Have £41k plus car.

Tesla have made money. I’ve made money. Everyone is a winner. I have no issue with other people making money if I do too.

You're just not "listening"are you? .... What makes you think I would want to pay interest when I dont have or choose not to. Tesla already made 30% on selling me two cars hence Im not obliged to give them the odd 15k in interest as a gesture of goodwill... what Ive done with that interest money was lend it to my children interest free hence they both now have EV's and that was my investment

 

[GeorgeSymonds]

Mod comment:
Internet financial advice from any source needs to be taken with a large dose of caution. To earn 8% (presumably ~12% or so before tax) a year without risk,. where you have liquidity and where the capital won't reduce, and which doesn't involve a Nigerian Prince, is unheard of, otherwise I imagine everybody would do it. That's just one example, but not the only one. Add to that, everyones position is different.

So while the discussion is fine up to a point, please tread carefully.

 

[MashinBenzin]

You're just not "listening"are you? .... What makes you think I would want to pay interest when I dont have or choose not to. Tesla already made 30% on selling me two cars hence Im not obliged to give them the odd 15k in interest as a gesture of goodwill... what Ive done with that interest money was lend it to my children interest free hence they both now have EV's and that was my investment

You’re the one not listening what you’ve done is reduced your pot of money. Your act of goodwill was to give Tesla your hard earned cash and give up your investment opportunities and income and the opportunity to give your children more.

Now, if your answer was that investing is not within your risk appetite I would agree. Some people sleep better at night knowing that everything is locked down and not subject to the vagaries of investment.

But just writing off the paying of any interest as money lost is incorrect when the opposite can be true.

 

[MashinBenzin]

Mod comment:
Internet financial advice from any source needs to be taken with a large dose of caution. To earn 8% (presumably ~12% or so before tax) a year without risk,. where you have liquidity and where the capital won't reduce, and which doesn't involve a Nigerian Prince, is unheard of, otherwise I imagine everybody would do it. That's just one example, but not the only one. Add to that, everyones position is different.

So while the discussion is fine up to a point, please tread carefully.

Read this after my last post, so apologies for not being clear enough. It wasn’t financial advice, rather an illustrative example in the context of the discussion that JS1977 raised. I’ve happened to cover everyone different in the next post. I haven’t mentioned anywhere that everything I am talking about in terms of investments would be within a tax free wrapper.

 

[Js1977]

Now, if your answer was that investing is not within your risk appetite I would agree

what are you? a loan shark?...I make investments. I just dont borrow the money to do so and thats how I choose to do things and it works for me.

Like I said many times before this is not financial advice I just take my advice from themoneysavingexpert

 

[MashinBenzin]

what are you? a loan shark?...I make investments. I just dont borrow the money to do so and thats how I choose to do things and it works for me.

Like I said many times before this is not financial advice I just take my advice from themoneysavingexpert

I love how insults get thrown around on this forum. Even an attempt at a factual financial discussion descends into name calling. *sigh*

 

[colt033]

Anyone else put off buying a Tesla because of instability in used values? Bought my first Tesla (M3 RWD) 16 months ago. It’s already depreciated 25% and that’s before the new price reductions. If it’s worth less than 50% after 3 years I’ll go back to ICE or buy an EV from another manufacturer.

 

[DoricJim]

Anyone else put off buying a Tesla because of instability in used values? Bought my first Tesla (M3 RWD) 16 months ago. It’s already depreciated 25% and that’s before the new price reductions. If it’s worth less than 50% after 3 years I’ll go back to ICE or buy an EV from another manufacturer.

Don’t understand that logic as historically very few cars could hold as much as 50% lost price after 3y. From my 30y of car buying experience closer to 40% retained was normal and this will start to be the case for all EVs the more mainstream they become. Used to be that as soon as you drove a new car off the garage forecourt the least you immediately lose is the VAT and OTR costs. 25% after 16 months really isn’t that bad.

I also really don’t get all the hysteria on this forum caused by folks worrying about depreciation. It is a fact of life when buying new cars and if you worry about this then buy second hand after a chunk has already happened

 

[colt033]

Don’t understand that logic as historically very few cars could hold as much as 50% lost price after 3y. From my 30y of car buying experience closer to 40% retained was normal and this will start to be the case for all EVs the more mainstream they become. Used to be that as soon as you drove a new car off the garage forecourt the least you immediately lose is the VAT and OTR costs. 25% after 16 months really isn’t that bad.

I also really don’t get all the hysteria on this forum caused by folks worrying about depreciation. It is a fact of life when buying new cars and if you worry about this then buy second hand after a chunk has already happened

Last couple of BMW and MB I’ve owned retained 55-60%. Thought that was typical of premium cars, hence the lower than expected leasing costs on Range Rovers,etc.

I expect significant depreciation but if a Tesla ends up depreciating like a Vauxhall then something doesn’t seem right.

Six months ago I would have bought a second Tesla without hesitation. Now it’s barely on my radar.

 

[DoricJim]

Last couple of BMW and MB I’ve owned retained 55-60%. Thought that was typical of premium cars, hence the lower than expected leasing costs on Range Rovers,etc.

I expect significant depreciation but if a Tesla ends up depreciating like a Vauxhall then something doesn’t seem right.

Six months ago I would have bought a second Tesla without hesitation. Now it’s barely on my radar.

Was that 55% of the price you paid (with what I assume is decent discount) or RRP? E.g. My prior car before the Tesla was an ex demo fully loaded 3 series that retailed at around 45k. I bought it at 6 months old with 5k miles for 26k.

What you are saying seems at odds for the 10 BMWs I’ve had over the years since even beemers and mercs historically have been subject to heavy depreciation from retail price.

 

[colt033]

Was that 55% of the price you paid (with what I assume is decent discount) or RRP? E.g. My prior car before the Tesla was an ex demo fully loaded 3 series that retailed at around 45k. I bought it at 6 months old with 5k miles for 26k.

What you are saying seems at odds for the 10 BMWs I’ve had over the years since even beemers and mercs historically have been subject to heavy depreciation from retail price.

Hi. Yes, I’m factoring in a discount on the retail price.

If I look at PCP deals for a 320i Sport Auto. The GMFV is just over 45% of the on the road price after 4 years. I couldn’t find any figures for 3 years but I’m assuming it’s still around 55% of the price you pay.

My last ICE car I made a profit after 2 years but that was when the market was crazy.

 

[DoricJim]

Hi. Yes, I’m factoring in a discount on the retail price.

If I look at PCP deals for a 320i Sport Auto. The GMFV is just over 45% of the on the road price after 4 years. I couldn’t find any figures for 3 years but I’m assuming it’s still around 55% of the price you pay.

My last ICE car I made a profit after 2 years but that was when the market was crazy.

Fair enough but I reckon you risk being under water with those deals. As it happens I also cashed in and sold the 3 to Cazoo to buy the Tesla for only a couple of grand less after 2 1/2 years of running and 30000 miles. Those were unusual times!

 

[Durzel]

Don’t understand that logic as historically very few cars could hold as much as 50% lost price after 3y. From my 30y of car buying experience closer to 40% retained was normal and this will start to be the case for all EVs the more mainstream they become. Used to be that as soon as you drove a new car off the garage forecourt the least you immediately lose is the VAT and OTR costs. 25% after 16 months really isn’t that bad.

I also really don’t get all the hysteria on this forum caused by folks worrying about depreciation. It is a fact of life when buying new cars and if you worry about this then buy second hand after a chunk has already happened

A lot of people got it into their heads that Teslas were some kind of limited edition appreciating or depreciation-immune asset, despite the fact that Tesla are very obviously obsessed with delivering as many cars as they possibly can, all year round (and particularly end of quarter).

Teslas are not a boutique brand, the 3 and Y are mass produced cars. They are a relatively common sight on the roads nowadays.

This delusion was buoyed by the freak parts shortage supply/demand skew last year, where people were trading in 2-3 year old cars to Tesla for more money than it cost them to buy in the first place. The trade in prices we were all getting last year were artificial, and obviously extraordinary.

 

[Exy1]

Don’t understand that logic as historically very few cars could hold as much as 50% lost price after 3y. From my 30y of car buying experience closer to 40% retained was normal and this will start to be the case for all EVs the more mainstream they become. Used to be that as soon as you drove a new car off the garage forecourt the least you immediately lose is the VAT and OTR costs. 25% after 16 months really isn’t that bad.

I also really don’t get all the hysteria on this forum caused by folks worrying about depreciation. It is a fact of life when buying new cars and if you worry about this then buy second hand after a chunk has already happened

I for one am greatly looking forward to all of these £20k M3's that should now be appearing.

 

[qwickshot]

I for one am greatly looking forward to all of these £20k M3's that should now be appearing.

Me to, I would never have bought a new one if I could have got a used one for a reasonable price.

I remember 1 year old etron 55’s were dropping nearly £20k from list before things got crazy.

 

[DoricJim]

I for one am greatly looking forward to all of these £20k M3's that should now be appearing.

Well early ones start at the £26k mark on AutoTrader and there is only one way they can go…