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Used Model 3 market

Discussion in 'Model 3' started by aarons23, Jun 16, 2017.

  1. aarons23

    aarons23 Member

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    I had an early Model 3 reservation but decided to cancel it due to the pricing being fairly high for me as a middle class person. I am now considering the potential of waiting until the used Model 3's hit the market and snatching one up at a discount. I am curious to know what your guys' ideas are on what that market might look like. I understand that with the S and X the resale value is very good for the seller however, if the 3 has more cars on the road than the S and X I assume the pricing won't hold as high. Also curious what options and pricing you guys may expect on the used ones and how long until we start seeing them hitting the used market?
     
  2. MXWing

    MXWing Active Member

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    I don't think you will make any money flipping one once you jump through all the hopes. Sales tax is paid twice and the fed tax credit goes to you.

    Buying a CPO S would make way more sense than trying to scoop up a used Model 3.
     
  3. aarons23

    aarons23 Member

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    How would a CPO S make more sense? It's still a 35k + used vehicle which is around $450 a month in financing.
     
  4. Uncle Paul

    Uncle Paul Member

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    Expect little discounting until the supply catches up with the demand.

    Used 3's will sell very close to the price of new ones, as long as there is a long waiting period to order one.

    The people that got their orders in early will enjoy high resale values for quite a while, in additon to getting the tax credits before they are all used up.

    Tesla uses what they call demand levers to keep prices up. Initial cars will be in high demand until the supply catches up, then they will offer all wheel drive models, then high performance options, then maybe a convertible, then special colors or sun roof, then...

    They will also open up additional foreign markets as their supplies become sufficient to handle that additional demand.

    These guys know what they are doing, and have a pretty good track record of keeping demand above supply (kinda like Ferrari)

    This protects their customers, and also their profit margins.

    Other manufacturers tend to overproduce unpopular models, then need to discount heavily to move them off the dealers lots. Tesla does not have a history of doing this.

    Tesla has a fresh, new approach to offering their very popular all electric vehicles. You need to order, wait your turn, then get to enjoy some of the finest transportation vehicles ever produced. Those who wait, tend to need to wait forever, to get that deal they have been trained to value with other manufacturers. Tesla thinks differently. It is in the driving experience that is the value, not in getting some fantastic deal.
     
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  5. zenmaster

    zenmaster Member

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    It'll be a function of production rate. At the planned rate of 500k cars/yr, you'll see a certain % back on the used market in the same amount of time due to change of priorities, financing problems, etc. You won't have to wait for end of lease, but will have to wait until supply ramps up and demand levels off. Has nothing to do with "flipping".
    The question is, what percentage of cars will be put up for sale due to these issues.
     
  6. MXWing

    MXWing Active Member

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    Today, if you don't need the AP2 suite - a P85 S for under $40k demolishes the newest 3 off the line in every aspect.

    and that AP2 suite is going to cost you $8k+ on the Model 3.

    Maybe people think differently than me but thats how I would approach it.
     
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  7. pikachu

    pikachu Member

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    I would think that around the time when AWDs start rolling off the production line, you would start to see some used RWDs on the market. There would be early reservation holders who just couldn't wait for the AWD's wanting to trade up once its available. But that points only to availability of used cars. It's hard to see the pricing come down given the demand.
     
  8. abasile

    abasile Independent Software Eng.

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    You also have to consider the federal income tax credit, currently $7500, which applies only to new car purchases. On top of that, there are state incentives that apply only to new cars. I expect that the phase-out of those incentives in the next couple of years will help the value of used EVs; they won't follow the normal used-car depreciation patterns as a result.

    If I'm wanting to get into a Tesla in the next couple years, I'm either buying a new Model 3 or a used Model S.
     
  9. DurandalAI

    DurandalAI Member

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    I've yet to see any AP1 cars under $40k yet. AP1 is my minimum requirement in order to have automatic emergency braking. Have you found AP1 cars for under $40k?
     
  10. Trips

    Trips Member

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    Your best bet for a cheaper used Model 3 will be right after the tax rebate ends and new options comes out. When they give in and make a HUD you could see some individuals upgrading because it turns out the do care.
     
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  11. Runt8

    Runt8 Member

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    AP2 hardware is on all M3’s, and you have no idea how much it will cost to enable the software (unless you work for Tesla, in which case please start giving us some juicy details!).
     
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  12. MXWing

    MXWing Active Member

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    My thesis is if you are ok with driving the car yourself without AP like back in the Model T years and onwards, the CPO S is a better car than the Model 3.

    I'm guessing the AP cost based on what it cost for the S and X. It might be cheaper by 1-2K maximum but I doubt this since the feature is too desirable to skip so less price inelastic.

    It won't be more than 8000. and it won't be 4K for EAP and FSDC - that I am certain about. Cheaper options would also cannibalize the S which makes it even less likely to discount this.
     
  13. timk225

    timk225 Member

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    If I get my 3 and decide I don't like it after 6 months to a year, I will put it up for sale at full sticker new car price. With no allocation for my $7500 tax credit. Someone will pay full new car sticker price on it. Supply and demand. :)
     
  14. ecarfan

    ecarfan Well-Known Member

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    In 2026. Maybe.

    At the moment the Model 3 appears to be sold out through 2018, and very few people outside of Tesla have even sat in one. No one outside of Tesla has driven a Model 3.

    Now envision what happens over the next year as Model 3s start to seep into the public consciousness because they are seen up close on the street, in Tesla showrooms, a friend has one, road tests are published, etc. Demand will accelerate. But there is only one production line, in Fremont, with a capacity of 10,000 cars/week. In the automotive manufacturing world that's not high volume.

    So Tesla starts building a new manufacturing plant in 2018 (while also starting to sell the Model 3 in Dual Motor and Performance versions), perhaps in the eastern US somewhere. The plant comes online maybe in 2020. By then over one million Model 3s have been built and most people are aware of them and many realize that they are a better car than any $25,000 ICE and cost less to own and operate. Tesla still won't be able to get ahead of demand.

    At the same time, Tesla starts building new Gigafactories because the Reno factory is maxed out supplying car and storage product batteries.

    Yes, by 2020 there will finally be some serious EV competition but Tesla never stands still and the Model 3 will be much improved over the launch version in the same way that the current Model S is vastly improved over the 2012 launch version. Right now Tesla has a huge lead in EV technology and charging networks compared to every other car company. I don't see that lead going away.

    I am not claiming I can predict the future. But that is the Tesla future I anticipate. Obviously I am long TSLA.

    Don't expect to be able to easily buy a used Model 3 for much less than new cost any time soon...
     
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  15. MXWing

    MXWing Active Member

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    I don't expect AP1 vehicles to be under $60k. Before last November, AP1 Teslas were still 80-100k new. We can't expect them to drop that much value.

    A P85 without any AP at all hits the sweet spot in terms of value for just raw car and performance. Beyond that, I think either way for AP2 Model 3 or upgrade to the newest generation S.
     
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  16. kelver777

    kelver777 Member

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    I'll add my 2 cents into this. Having just ordered a 2013 CPO P85 (VIN 14xxx) for $43,000. Hope to take delivery next month.

    I'd have loved to get AP1, but the cheapest I've seen is $56,500 S85 (didn't last long), my plan is to drive this well optioned P85 for the next 2 to 3 years, trade it in on either an AP2 M3 or an AP2 S. So I'm looking at roughly 2020. I think we will see lots of M3 and MS with AP2 for about $25,000 - $30,000 at that time. Course I'm betting my P85 will be worth about high teens or low twenties.

    Using the car that I just snapped up, it was about $100,500 new, take the tax rebate it was $93,000. I was able to get it for less than half the original price. We all know how that happened, better versions came out, first AP1, then AWD, then AP2. Model 3 is not going to be any different, by the time 2020 hits, I'm betting that there will be AP3 or higher, better KW batteries, faster charging batteries, possible Model Y. I look at driving an electric car, kind of like driving my phone, as soon as a new model comes out, mine is now worth a lot less...

    That said - looking forward to the P85!
     
  17. SMSMD

    SMSMD Active Member

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    Congratulations..you will love your P85.
     
  18. dsvick

    dsvick Active Member

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    I agree with this. You'll see some on the market fairly quickly after production begins, those will be from the people that reserved early and bought without a test drive, then decided they didn't really like it. However, the ones you see that early will be pretty close to full price and will get snatched up pretty fast. You'll be looking at, at least 2 or 3 years to see anything with a substantial discount and even then it won't be that much.
     
  19. internalaudit

    internalaudit Member

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    Good idea. I might as well get a Tesla Model 3 if I can get my hands on the $10k (approx) rebate here and just sell it (not sure how likely though) one year down the road and get a different EV (but may no longer have any government incentive by then):(
     
  20. cizUK

    cizUK Member

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    Ctrl A, ctrl U :p:D
     

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