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

[MsElectric]

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.

If you can afford a P85D, go for it. It will hold its value better as there will be fewer of them around and even if Tesla comes out with another improved Model, the P85D will be still ahead of the curve. The extra performance benefit is an incredible value at this price. You live only once. For a few thousand more feel what it is like to accelerate in a Lamborghini for less than half the price

I think the depreciation rates will be the same and whatever extra you pay to get the P85D you will get some of that back when you sell.

- - - Updated - - -

We are awaiting our P85D to be delivered in December but we have looked at used prices to see how the values are holding up. Yes, cars.com do have some ridiculous prices (some are on sale for about the same price as new and some don't factor in the $7,500 rebate) but these are all asking prices and we do not know how much the cars actually sell for. We've bought several premium luxury cars before and it is not unheard of to buy one for some times about $10K less than the asking price. The examples I gave are all from a thread on the Tesla Web site. Look at EBay for more realistic pricing.

Like I said earlier if someone is in the market to buy a used Tesla they should wait a month or two as the market seems to be on the verge of a price correction with so many vehicles coming up for sale. Until a couple of weeks ago there was no compelling reason to upgrade from a tesla and now there is.

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

 

[Genebe]

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.

Who knows what will actually happen, but historically, higher-optioned cars will depreciate proportionately more than the lesser equipped models.

 

[randompersonx]

Who knows what will actually happen, but historically, higher-optioned cars will depreciate proportionately more than the lesser equipped models.

Not in all cases.

A Porsche 997 Turbo certainly held it's value better than a 997 Carrera (base).

 

[scott jones]

Yes, cars.com do have some ridiculous prices.... The examples I gave are all from a thread on the Tesla Web site. Look at EBay for more realistic pricing.
Like I said earlier if someone is in the market to buy a used Tesla they should wait a month or two as the market seems to be on the verge of a price correction.

I would agree there is a chance of a "price correction," but that's hasn't happened yet.
Your "all" examples are a couple cars.

Here are about 200 examples.

Even Tesla, who needs to turn a profit, told me they'd give me low 70's for my S85, which means closer to 80 in the private market! ( I was curious, but not selling )

I just checked your example of Ebay, which you note is "more realistic pricing." Did you actually look at it?
** They are HIGHER than CARS.COM. They DON'T HAVE EVEN ONE Model S85 or P85 selling for under $79,000... out of 45 listed!
** & Autotrader.com is almost identical to that.

Again, that's about 200 real life examples.
People may or may not get their asking price, but those are the facts.
That's what the listings show from THE MAJOR car sites, not just one, with a couple examples. (that $62k one you mentioned had 31,000 miles)

To say S85's are "selling for" low to mid 60's and P85's 70's to low 80's... as if that's a general consensus, is not supported by the hundreds of listings otherwise.

I'm still getting the impression, you're hoping to buy a used one.
Maybe it's second one for a low price... and you're trying to convince people here what the going rate should be despite what they are.

I'm not being mean here, just so you don't get the wrong idea, just reporting what all the sites are showing in an overwhelming consensus.
Depending on options & mileage, I personally think most S85's would go for mid $70's and P85's closer to $90+.
I'm waiting for the P110D before I sell. I predict the 110 or 135kw will come out BEFORE THE MODEL 3. I want more than 300 miles without having to baby it.
Ciao for now.

 

[MsElectric]

You raise some excellent points and I realize I gave you just two data points but they are two data points after the announcement of the D. My point is that there will be hundreds, if not thousands of Model S customers who will upgrade to a D within the next few months and those cars will come on the market. Model S vehicles have not faced much depreciation because most who own them had no reason to sell them until now.

Like I said earlier if I were to advice a friend of family member on pricing mid 60s is what I'd advice them for an S85 and about the late 70s to early 80s for a P85. This is assuming they have a few thousand miles and are about a year old. Mileage and time in service would obviously affect those values up and down. Within the next few months I believe this is where the values will settle. I honestly don't find this that hard to believe given that most any car will loose about 25-30% of its value the first year. About 10% of that happens the moment you drive the car away.

Some of the prices listed on cars.com are meaningless as they seem to assume that they can keep the $7,500 rebate and then sell a 6+ month old car with thousands of miles for more than 90% of the value of the car new and I think they will find out that it is just wishful thinking. Anyone looking to buy is much better off buying an inventory car and take advantage of the $7,500 rebate.

I think the listings and data points that matter are the ones after the D announcement came out and we are just now starting to get those numbers. Let's see where things settle in about 2-3 months. If someone is looking to buy a used Model S now they have to be careful not to get caught in a price correction.

I would agree there is a chance of a "price correction," but that's hasn't happened yet.
Your "all" examples are a couple cars.

Here are about 200 examples.

Even Tesla, who needs to turn a profit, told me they'd give me low 70's for my S85, which means closer to 80 in the private market! ( I was curious, but not selling )

I just checked your example of Ebay, which you note is "more realistic pricing." Did you actually look at it?
** They are HIGHER than CARS.COM. They DON'T HAVE EVEN ONE Model S85 or P85 selling for under $79,000... out of 45 listed!
** & Autotrader.com is almost identical to that.

Again, that's about 200 real life examples.
People may or may not get their asking price, but those are the facts.
That's what the listings show from THE MAJOR car sites, not just one, with a couple examples. (that $62k one you mentioned had 31,000 miles)

To say S85's are "selling for" low to mid 60's and P85's 70's to low 80's... as if that's a general consensus, is not supported by the hundreds of listings otherwise.

I'm still getting the impression, you're hoping to buy a used one.
Maybe it's second one for a low price... and you're trying to convince people here what the going rate should be despite what they are.

I'm not being mean here, just so you don't get the wrong idea, just reporting what all the sites are showing in an overwhelming consensus.
Depending on options & mileage, I personally think most S85's would go for mid $70's and P85's closer to $90+.
I'm waiting for the P110D before I sell. I predict the 110 or 135kw will come out BEFORE THE MODEL 3. I want more than 300 miles without having to baby it.
Ciao for now.

 

[AmpedRealtor]

One example from one online forum of a guy who basically gave away his car for $62k is just that.

Also to correct some earlier posters, just because there is a $7,500 tax credit available doesn't mean that every owner received that benefit. The $7,500 tax credit is a benefit if you have at least a $7,500 federal tax obligation. Some who are business owners with a ton of deductions may not have received any tax credit benefit. It's a shame that owners are factoring this credit into lowering their resale prices before any negotiation has even started. I'm just one person, but in my opinion any benefit I receive on my tax return is between me and Uncle Sam. A resale buyer is not looking for a new car, and as such, they should not be given the benefit of the tax credit in the resale price. A resale car buyer also does not have to pay sales tax, which we paid. So here we are volunteering to discount the car $7,500 plus depreciation before anyone has said boo, when we also had to pay sales tax, all to a buyer who doesn't have to pay any sales tax and is also receiving a $7,500 discount in addition to standard depreciation.

Here's a hypothetical parallel... I bought my Mercedes S Class for my business. As a result, I'm able to deduct $10,000 in MACRS depreciation from my taxable income the first year resulting in a $2,500 reduction in my tax obligation. When I resell that S Class one year later, I am supposed to pass on that $2,500 in tax savings to the next buyer when I price my car. I think most would disagree with this scenario, yet this is exactly what we are doing when we pass on the $7,500 tax credit to a subsequent buyer. We shouldn't.

But that ship has sailed and I acknowledge that. I just wish owners weren't so eager to voluntarily devalue their vehicles.

 

[robby]

One example from one online forum of a guy who basically gave away his car for $62k is just that.

Also to correct some earlier posters, just because there is a $7,500 tax credit available doesn't mean that every owner received that benefit. The $7,500 tax credit is a benefit if you have at least a $7,500 federal tax obligation. Some who are business owners with a ton of deductions may not have received any tax credit benefit. It's a shame that owners are factoring this credit into lowering their resale prices before any negotiation has even started. I'm just one person, but in my opinion any benefit I receive on my tax return is between me and Uncle Sam. A resale buyer is not looking for a new car, and as such, they should not be given the benefit of the tax credit in the resale price. A resale car buyer also does not have to pay sales tax, which we paid. So here we are volunteering to discount the car $7,500 plus depreciation before anyone has said boo, when we also had to pay sales tax, all to a buyer who doesn't have to pay any sales tax and is also receiving a $7,500 discount in addition to standard depreciation.

Here's a hypothetical parallel... I bought my Mercedes S Class for my business. As a result, I'm able to deduct $10,000 in MACRS depreciation from my taxable income the first year resulting in a $2,500 reduction in my tax obligation. When I resell that S Class one year later, I am supposed to pass on that $2,500 in tax savings to the next buyer when I price my car. I think most would disagree with this scenario, yet this is exactly what we are doing when we pass on the $7,500 tax credit to a subsequent buyer. We shouldn't.

But that ship has sailed and I acknowledge that. I just wish owners weren't so eager to voluntarily devalue their vehicles.

I don't understand your objection. It's not an issue of opinion or merit or some deal between you and Uncle Sam; it's just economics. People factor in the $7500 tax credit because it is measurably worth $7500 to them. How can you expect someone not to consider that cost difference when deciding whether to buy new or used? Sure, there is some small number of people who are not eligible for the credit, but it's the other overwhelming majority of buyers and sellers who are eligible who are setting the market prices.

 

[AmpedRealtor]

I don't understand your objection. It's not an issue of opinion or merit or some deal between you and Uncle Sam; it's just economics. People factor in the $7500 tax credit because it is measurably worth $7500 to them. How can you expect someone not to consider that cost difference when deciding whether to buy new or used? Sure, there is some small number of people who are not eligible for the credit, but it's the other overwhelming majority of buyers and sellers who are eligible who are setting the market prices.

I have no objection. Obviously the free market will decide, and resale values are going to be what they are going to be. I'm just saying that resale values would be higher if owners weren't so willing to immediately take $7,500 off the top when pricing their cars for resale. I was provided an incentive to purchase this vehicle as new, but the price I paid is the price I paid.

Do you agree or disagree with my Mercedes S analogy? Because if we are to behave consistently, we then need to pass on any tax savings ever received on any item we are reselling because at some point in time, we received that incentive or benefit. It doesn't make sense to me conceptually. But I understand that's how people are pricing their Teslas and that we now have resale values based upon this practice.

If my sister tells me hey, I'm going to give you $1,000 if you buy a camel. So I buy the camel and I get $1,000. A week later I decide to sell the camel, but have no frame of reference for pricing because nobody has sold a camel yet. So the first thing I do when pricing my camel is take $1,000 off the price I paid, then subtract an appropriate amount for the used state of the camel. Isn't that how the first used Model S was priced? All I'm saying is, that $1,000 is nobody's business but mine. If the very first used Model S cars were priced this way, without volunteering a $7,500 discount that was never asked for through negotiation, our cars might be worth more.

Like I said, this ship has already sailed. I just don't agree with how owners priced their cars early on, which set the standard for how our cars are valued.

 

[AmpedRealtor]

Like I said earlier if I were to advice a friend of family member on pricing mid 60s is what I'd advice them for an S85 and about the late 70s to early 80s for a P85. This is assuming they have a few thousand miles and are about a year old. Mileage and time in service would obviously affect those values up and down. Within the next few months I believe this is where the values will settle. I honestly don't find this that hard to believe given that most any car will loose about 25-30% of its value the first year. About 10% of that happens the moment you drive the car away.

These assumptions are based on ICE vehicles. Why are we depreciating our cars like ICE vehicles? The only reason these depreciation numbers are being talked about is because we have taken them on as if they were our own. They aren't. We are out there telling prospective buyers that EVs have lower maintenance and operating costs, will last much longer due to the much simpler motor and single gear, and what a great world we live in. But then when we go to sell our uber reliable, low maintenance and low operating cost vehicles, we price them just like ICE cars. This makes no sense to me.

Some of the prices listed on cars.com are meaningless as they seem to assume that they can keep the $7,500 rebate and then sell a 6+ month old car with thousands of miles for more than 90% of the value of the car new and I think they will find out that it is just wishful thinking. Anyone looking to buy is much better off buying an inventory car and take advantage of the $7,500 rebate.

So my suggestion in a previous post that the tax credit should not be passed on to a subsequent buyer is not unheard of? For a minute there, I felt pretty lonely!

I agree with how they are pricing the cars. I agree with them that a subsequent buyer is not entitled to the tax credit. I'm glad they are trying to resell the cars for higher than what we are reading about here in the forums. This is good for us as owners. Keep the value as high as possible, why not? The only person who would disagree with such a view would be the buyer of a used vehicle, not the original owner who would love to maximize his or her resale value.

 

[breser]

A resale buyer is not looking for a new car, and as such, they should not be given the benefit of the tax credit in the resale price. A resale car buyer also does not have to pay sales tax, which we paid. So here we are volunteering to discount the car $7,500 plus depreciation before anyone has said boo, when we also had to pay sales tax, all to a buyer who doesn't have to pay any sales tax and is also receiving a $7,500 discount in addition to standard depreciation.

I think Arizona is rather unusual in not applying sales tax to private party sales. Here in Washington all vehicle sales (used, new, dealer and private party) pay the sales tax. The only exceptions to that is the alternative fuel exception for new vehicles and the trade-in value exclusion.

I can see why in Arizona with new vehicles paying the sales tax and used buyers in private party sales not paying it, that you wouldn't subtract the $7,500 tax credit since the two basically wipe each other out. But in other states I think things are going to be looked at differently.

The combination of avoiding sales tax here due to the alternative fuel exception on new vehicles and the federal tax credit, makes it very hard to justify buying a used Model S here unless it is considerably cheaper.

 

[robby]

Do you agree or disagree with my Mercedes S analogy?

I don't think the Mercedes analogy works because most people don't have a way to deduct the cost of a car lease, so it doesn't factor into the new vs used prices for them like the $7500 does for the Tesla. The camel analogy fails for the same reason -- your sister would have to give everyone $1000 to buy a camel for buyers of your camel to be affected.

 

[David_Cary]

On the TC - When I option out my prospective new car - I of course use the post TC price. It was about $80k (tech+AWD). Then I look at $70k for a used S85 and I think - who are they kidding? No AWD, no sensors, etc. So this prospective buyer absolutely counts the TC.

And when it comes to it, I will absolutely count the lease option as I am a small business owner.

In NC, I'm pretty sure we pay 3% sales tax on everything - including lease payments, new sales, used sales. So that isn't a factor in new vs used except for the price difference.

 

[MsElectric]

I don't think the Mercedes analogy works because most people don't have a way to deduct the cost of a car lease, so it doesn't factor into the new vs used prices for them like the $7500 does for the Tesla. The camel analogy fails for the same reason -- your sister would have to give everyone $1000 to buy a camel for buyers of your camel to be affected.

I agree. The Tesla $7,500 rebate applies to both individuals and business. The vast majority of those who could afford to buy one would qualify. All this is a moot point though as prices are determined by the market. If someone is planning to sell a Model S without including the rebate, good luck to them as a buyer will simply buy one from a seller who figures out the depreciation from the net price they actually paid for the car inclusive of incentives. Some people even include the sales tax they paid on the car for determining the base value of the car You can ask any price you want but it does not mean you will get it.

In the next 3-4 months I think the used Model S prices will settle down to the mid to low 60s for a S60 and mid to low 70s for an S85 and mid to low 80s for a P85 given the vehicle is about a year old. With some recent sales we are already there to some extent and it is natural to see this after the D models came out and the used Tesla market grew by about 3X over just a few weeks. If a friend or family member was looking to buy a used Model S now, I'd ask them to be really careful so they don't end up paying for someone else's depreciation.