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Value of Autopilot and improvements .... Used S85 values.

Discussion in 'Model S' started by David_Cary, Oct 26, 2014.

  1. David_Cary

    David_Cary Member

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    I've been planning for awhile to get a used S85. My thought was that when the Model X delivers, a good proportion will upgrade for the size, AWD and whatever other new things are built into the X. This would finally lead to a robust used S85 market.

    The S 2.0 or D has changed the dynamic for me a bit.

    As I look at autopilot and numerous little upgrades that we haven't seen yet - these things I value at $5k. Most of the value is in the autopilot and enhanced safety.

    Then I never expected to want AWD but the range/efficiency increase was unexpected in its magnitude. The drivetrain warranty extension cuts the downside also.

    Then those seats....fixing one of the big things.

    So as I consider what I would pay for a 1 year old 15,000 mile Model S, I feel like I'd have to get it for $60k to make me not go for a new one. I'm guessing that we won't see good (and with tech) S85s at $60k for awhile. The new carrots are just making new worthwhile.

    After a few years of price increases, we have been gradually getting value increases. Making used harder to justify - and frankly impossible at today's values. I am thinking the used market will take a while to adequately (at least for me) adjust to increasing features in the newer models.

    Or will we see S85s with tech at $60k soon?
     
  2. murphyS85

    murphyS85 Member

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    Cars are being delivered with "autopilot" hardware but the software to make it work is not available. Maybe soon.

    If I was to order a new S85 today, that is exactly the same as the one I have now, it would have the autopilot hardware and cost $500 less than I paid for mine. The only part of "autopilot" that I wish I had is adaptive cruise control. All the rest of it would be disabled. Reading speed limit signs and automatic lane changing has no value for me. My other car has lane keeping and I rarely turn it on. It also has ACC which I use almost every time I drive it.
     
  3. scott jones

    scott jones Member

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    Potential customers are probably not going to find an 85 for under 70 from a private seller for a while... unless it has a lot of miles on it, or there are other unusual circumstances. Most people paid $90k for their S85 if it has most options, not including taxes of course. Out the door, my S85 was $99,000. And if others are like me, they probably don't want to sell for $60k or $39,000 less a short time later. True $7500 comes back in taxes, and depending on your state, probably $6,000 in sales tax. But people can "trade in" their older cars and avoid the tax penalty by just paying the difference. That's something you can't do thru a private sale. I'm guessing most are selling between 70 and 78 right now depending on options.
     
  4. viperboy

    viperboy Member

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    As a fuTire owner of a used s or model 3 (50k and under price range) all previous updates have been a nice to have option. The autopilot, eats and D shift this thinking a bit. These are large enough options I'd be willing to wait longer for a car to come into my price range. Unscientific I know, but just imo.
     
  5. Plug Me In

    Plug Me In Member

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    There's a thread on the official Tesla forums of a guy essentially asking for offers for used S85's. I haven't looked at in a couple of days but there were a few in the low 60's.
     
  6. zwede

    zwede 2013 P85+

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    I believe those were S60s though.
     
  7. MsElectric

    MsElectric Active Member

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    Based on the thread, P85s are going for the late 70s and the following S85 just sold for $62K. IMHO this sounds about right. New cars depreciate about 10% the moment you drive it off the lot and can expect a depreciation of about 25-30% the first year. With the D, autopilot features, and other enhancements we are likely looking at about a 25-30% depreciation for 1 year old Model S. You never come ahead selling a brand new car one year old. Yes, there are a bunch of overpriced Model S vehicles for sale but it does not mean they are selling.

    When the Ds start shipping in December through February the values of existing Model S vehicles for sale will likely drop further.

    I can't imagine buying a used Model S for only about 10-15% less with options and a color configuration I may not even like when for a little bit extra I can buy a new one exactly the way I want with the added Autopilot and other goodies. Here are the stats for the S85 that just sold for $62K:

    Pungoteague_Dave | October 23, 2014 Model S85
    31,000 miles, 20k on new B battery
    Pearl white
    Grey interior
    Obeche matte trim
    Extended leather
    Panoramic roof
    Dual chargers
    Supercharger enabled
    Tech package
    Air suspension
    Sound package
    DuPont window tint
    Xpel plastic paint protection entire front end
    Underbelly protection upgrade
    Eco hitch for light trailer or bike rack
    WeatherTech Floor mats, frunk, footwell liners
    Center console
    All upgrades, perfect as new condition
    Michelin Primacy tires have 10k miles
    Eight year extended warranty
    Four year ranger service plan, three of eight inspections used (ranger service is unique, no longer sold)
    Located Maryland or Virginia
    $62k cash
    No rear facing seats or roof rack, both can be added
     
  8. breser

    breser AutoPilot Nostradamus

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    Used Model S vehicles are artificially deflated due to the various government incentives being given only to new vehicles. On S85's 10% depreciation is going to be at or a little more than the $7,500 federal tax credit. Other states have their own incentives. I suspect if these incentives did not exist then the used market would be $8-10k higher than it is right now. I see plenty of people try to sell at what I think would be fair prices without those incentives that just can't move the vehicles. I don't think this is because of a lack of demand for the vehicles. Overall I think this is causing used Model S prices to be similar to what you would expect for a vehicle that has much better supply. Over time this will shift, more used vehicles will come into the market and the incentives will start disappearing. Between the D and the X I expect prices to drop some over 2015. Some regions will probably see prices rise after incentives expire (e.g. Washington State sales tax exemption going away in 2015) despite the supply increasing.

    The Autopilot functionality coming on new vehicles is a bit of a wildcard here. It really depends on how much and how soon Tesla puts out the software to actually do these things. I believe that we'll have feature equivalence with most other brands sometime in 2015 (ACC, blindspot detection, emergency braking). With the convenience features (lane keeping, parallel parking, etc) coming towards the end of 2015. Plenty of people are going to not care about the sensors right now, but by the end of 2015, cars lacking them will probably take a few thousand dollar hit on the used market. I'd probably guess about $3k. That hit will go down as incentives expire because the incentives help prop up the new car over a used.

    I don't think the lack of the AWD feature will have much impact on the prices of the RWD used market. It adds to the price of the vehicle on the new vehicles, so I don't see vehicles without AWD being penalized. Though it probably will make the RWD vehicles harder to sell once AWD is common on the used market. But I doubt that will be the case until 2017 and by that point we should be getting close to a Model 3.

    So if you can wait till around this time next year I think you'll probably be able to get a good deal on a used Model S. If you're not willing to wait then I'd buy new now.
     
  9. MsElectric

    MsElectric Active Member

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    #9 MsElectric, Oct 26, 2014
    Last edited: Oct 26, 2014
    Nothing is "artificially" deflated. There's nothing "artificial" about the rebate. It is very real and it reduces the net cost, and therefore the underlying value of the car.

    The used car values represent the net cost to the owner. When we get our Model S delivered in December we are under no illusion that we get to "keep" the $7,500 rebate. If we decide to sell the car after 3 months we are likely looking at cost of car new - $7,500 - about an additional 10%. It is really strange when I heap people talk of "including" or "not including" the $7,500 rebate. Just by the virtue that virtually all Model S owners are in a financial position to take advantage of the $7,500 rebate, any used Model S is immediately $7,500 less than new because the second owner can't claim that deduction.

    If someone is selling a Model S, they'd need to find a borderline idiot who would not factor in the rebate AND depreciation :) But as you pointed out, people who think they can sell a used Model S with just the depreciation for a few months and not include the $7,500 rebate are likely not going to see their car sold anytime soon and the values will only further depreciate when more owners upgrade to the D and later next year to the MX.

    Also the value of RWD Model S vehicles are going to depreciate further because the D is available. More existing customers will sell their cars for the D and create a surplus of RWD Model S vehicles up for sale. A month ago nationwide on cars.com there were about 40 Model S vehicles for sale. That number is now about 110 and will likely grow to the hundreds. It's basically supply and demand. Basically cars priced reasonably will sell and cars priced just a few thousand less than a new car will sit there.

    If someone wants to buy a used Model S now, I see no particular reason to wait a year. You can get a well equipped S85 now for around the mid to low 60s and a well equipped P85 for the late 70s to early 80s.
     
  10. breser

    breser AutoPilot Nostradamus

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    It's artificial compared to a market not being influenced by government tax incentives. It's artificial compared to most people's experience with used vehicles. It's also artificial in the standpoint that you only have to subtract that value out as long as it's available on new vehicles. Once it's gone then the whole fleet basically appreciates by that value. Granted by the time that happens most of the vehicles will have depreciated to the point where you probably could have ignored the tax incentive anyway.

    The RWD vehicles only lose value against the AWD vehicles once the AWD vehicles enter the used market. Which is at best 2-3 years down the line. Given that Tesla is charging at least a $4k premium for AWD, I don't see the RWD vehicles losing much value immediately. People wanting a cheap Tesla are not going to compare the cost of a RWD vehicle to a new AWD vehicle unless the RWD vehicle is already overpriced in the current market. At current nobody has an AWD Model S and the earliest vehicles will come in December. With 60D and 85D only coming in February. I honestly suspect that the X will trigger more trades than the D. But those trades won't happen until the X is at least shipping. So that's why I think vehicle prices will be a lot better in a year for used Model S.
     
  11. MsElectric

    MsElectric Active Member

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    Well, the Model S used market has grown by 3X over just a few weeks and that will bring down prices. As I just mentioned S85s are being sold for the low 60s and P85s are being sold for the high 70s now. This is real and represents a big depreciation since the D came out. Yes there are vehicles for sale at higher prices but that does not mean they are selling.

    I still believe a Model S depreciates from the net price you pay for it, including the tax rebate. Anyone planning to sell a Model S with the hope of keeping of the tax rebate is likely in for a rude awakening.

     
  12. jvonbokel

    jvonbokel John VonBokel

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    What happens in a couple years or so when Tesla cracks the 200k sales barrier and the credit starts phasing out? Will resale values actually go up?

     
  13. breser

    breser AutoPilot Nostradamus

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    Yes and no. The need to account for the credit in a private sale slowly diminishes as the depreciation gets to be enough that the car is no longer competing with new sales. Cars with low mileage or that are fairly new will probably see their resale value rise. But all of this assumes that Tesla doesn't lower the price of the car to compensate. If they do that then there will be effectively no change in resale value.
     
  14. 3mp_kwh

    3mp_kwh Member

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    Links, please.
     
  15. Skotty

    Skotty 2014 Model S P85

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    Where do you guys look for used Teslas?

    Just for kicks, I tried Autotrader with a range of 500 miles. There were 44 listings. S85 ranged from $70K to $98K. P85 ranged from $77K to $112K, but the $77K was an outlier with the next cheapest being $88K. Overall average for all Model S $90K.
     
  16. MsElectric

    MsElectric Active Member

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    There is a thread on the TMC forum. A well-equipped S85 was sold for $62K by a well known TMC forum member @Pungoteague_Dave. A P85 was offered on sale on the same thread for $78K. You can also look at sold listings on eBay. The used Model S market grew by about 300% over the last 2 weeks and more will come on the market. While we are awaiting our P85D to be delivered in December I would not pay more than the mid 60s for a S85 and more than late 70s or early 80s for a P85 based on the prices I see now. These prices are likely going to go down further as current Tesla owners take delivery of their Ds in December, January, and February.

    - - - Updated - - -

    Keep in mind that a lot of prices you see are overly inflated and you will have to negotiate. You can try eBay and cars.com. Another idea is to post a thread that is a reverse auction on the TMC forum or here by stating the specs you want and let people make offers to sell their cars. That's what someone did on the TMC Web site and he got some very attractive offers.

    The used Model S market is on the verge of a price correction because up until now there was no compelling reason for anyone to sell their Model S and the D changed that. While the demand for a used Model S has not changed all that much the last 3 weeks, supply is almost at 300%. If you are looking for an S85 make offers in the low to mid 60s and if you are looking for a P85 make offers in the mid to late 70s. Someone will accept your offer.
     
  17. breser

    breser AutoPilot Nostradamus

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    Sorry but the numbers just don't back this up. This is the only $60k or less sold listing on eBay right now:
    S40: Tesla Model s 4 Door Sedan Model S | eBay

    This S60 has been relisted several times in the high $60k range:
    Tesla Model s 60 kWh 4 Door Sedan | eBay

    Every other vehicle is in the high $70s to $80s.

    Tesla has been offering people prices in the $60s for trade, which seems to be about $10k under wholesale. Retail is of course going to obviously be higher.

    Whoever bought that car for $62k on the official forums got a deal unless it was very high mileage. (Side note usually when people refer to TMC forums they mean here, but I think you're talking about Tesla's forums).
     
  18. MsElectric

    MsElectric Active Member

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    Ah yes, that was my mistake. I was referring to the actual Tesla Corporation's forum. All I know is that it took @Pungoteague_Dave some time to find a buyer and if you are on the other forum, he seems to know what he's doing.

    I still stand by the numbers I gave. Most of the asking prices and sale figures you see now are based on before the D came out. The used Tesla market has expanded quite a bit since then. If I were advising a friend or family member on the purchase of a used Model S, I would say buy an S85 for around the mid 60s and don't pay more than late 70s or early 80s for a P85. If they can't find one within that price range I'd advice them to wait a month or two and I bet they will find one. Many more Model S vehicles will come on the market as existing customers take deliveries of the D.

     
  19. majorlance

    majorlance Member

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    I have an S85D on order (February delivery) and am debating changing it to a P85D... I'd like to have the improved seats and the extra performance is interesting (though not necessarily in my best interest ;) ).

    Any thoughts on whether the S85D and P85D will depreciate at the same rate (percentage) or will one take a larger haircut than the other over the next 36 or 48 months? (I realize that the same percentage will mean a greater real dollar loss on the more expensive car.)

    I guess I'm looking for reasons to upgrade to the P85D but I don't want to take a complete bath if I upgrade in four years vs. the more conservative approach with the S85D.
     
  20. scott jones

    scott jones Member

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    #20 scott jones, Oct 28, 2014
    Last edited: Oct 28, 2014
    Are you trying to buy a used one? You say you've ordered one.
    Because S85's are not being sold for the low 60s.

    That's just not accurate.... not even close!

    I just searched CARS.COM (any mileage from area code 46236)
    And of the 105 Model S's, ONLY ONE is below $67,000

    95 of 105 are ABOVE $77,000!!! That means, more than 90% are above $77k!

    Most are in 80's and 90's... many performance, but many are S85s.
    Please show us a link (not to a random car, but many Model S's that prove a pattern where they are being sold in the low 60's.)

    HERE'S THE LINK TO THE 105 CARS, OR JUST TYPE IN CARS.COM AND SEARCH 46236 AREA CODE AND ANY MILES
    Used Tesla Model S - in 46236 - on Cars.com
     

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