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What's better? Swap every three years or keep for the long-term?

Discussion in 'Model S' started by GreenPenguin, Mar 11, 2015.

  1. GreenPenguin

    GreenPenguin Member

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    So speaking w/ a friend and he felt that with a Model S you're better off flipping/swapping every three years vs keeping it for the long-term.

    For 8 years:
    1) Keep for entire 8 years
    vs.
    2) Swap every 3-4 years

    So I've seen many references of people doing total cost of ownership of the Model S for a 8 year time span (guess that's to line up with the warranty). But curious if anyone thought about keeping one for the full 8 years vs swapping every three?

    Since there is so much technology the depreciation curve can quickly accelerate with any new model (case in point the P85+ dropping with the intro of P85D).

    Seems if the Model S had an accelerated depreciation then swapping would actually put you ahead plus you get the benefits of a new car every three years. However, if we assume it's a straight depreciation then in theory it should be the same expect the transaction costs for swapping would make things more expensive vs just keeping it for the long-term.

    If you just assume a highly simplistic model of say $10K lost per year and you start at $100K then essentially if you can KEEP the car working past the 10 year mark you would be ahead, but that's betting a lot that it can last 10 years (with not much of a track record to go on).

    Does it even make sense (economically) to keep the car for the long-term say 8 to 10 or even till it dies? Or the smart play to actually swap out every 3 to 4 years to maybe 5 years?

    Thanks!
     
  2. robby

    robby Member

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    Here is a model you can play with that will give you cost per year and per mile driven over various timespans.

    Sign in - Google Accounts
     
  3. Cyclone

    Cyclone Active Member

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    That's the dilemma I run into in my potential purchase. I really want Autopilot and that is a game changer to my vehicle usage. Without it, I would love a MS, but it wouldn't put too many miles on because I hate long mundane road trips, at least when I'm the driver. Reducing the mental capacity of the drive would go greatly, not to mention the increase enjoyment of driving a better suited vehicle. When we had a VW Eos, road trips in that weren't a problem at all vs. in our 4Runner, we want to fall asleep after three hours.

    On the flip side, our budget just isn't prepared to order new from the factory. Just too far outside of comfort area where driving is not a big factor in my life. That said, we did budget for $45-$50k for our next vehicle. That isn't too far from getting a used MS without Autopilot. But there is the rub, without Autopilot, we worry that we will miss out on the main reason that a Tesla could make a value play for us - road trips for vacations and visiting family. Even if we do that and worry about it down the road, all our previous cars have been with us between 9 and 11 years. We'd end up likely wanting to stretch again and get an Autopilot one down the road. So are debating whether to wait until we can find some decent inventory discounts on an S85 with Autopilot or buy a used 2013/2014 S85 now. The depreciation with doing two purchases so quickly really messes with how we normally do cars.

    Oh the irony that in the other half's previous job, the Honda Fit alone racked in 35k miles a year. The Tesla would have been perfect for that, but there was absolutely no way we could afford it then. Now, combined, we both probably hit 18k miles a year.
     
  4. 647chang

    647chang Member

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    The big question is, would you buy an tesla after 8 years? I know i wouldnt. The only way I can see these cars sell is tesla buying them back, replacing the battery and the drive unit.
     
  5. schneiderjohn

    schneiderjohn Member

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    Between the 8 year battery warranty, battery swap (hopefully), and battery upgrades (similar to Roadster 3.0), I would see an 8 year old Tesla being quite reliable/desirable/valuable compared to an ICE equivalent.
     
  6. GreenPenguin

    GreenPenguin Member

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    If you're in that camp where after 8 years the vehicle will be "worthless" then it would seem that swapping every 3-4 years gives you the maximum benefit of always owning an "asset" that is still "relevant".

    Of course if you just own it till it dies... you're betting it can last plus 10 years for you to be ahead.

    - - - Updated - - -

    Thanks this is very useful.

    So looking at the numbers, if we assume the first year always have a bigger drop in appreciation and then goes linear that would mean you need to keep the car longer to spread out the initial cost. If you keep switching too soon then you end up "eating" the 1st year drop many times over so in the long run that hurts you. Of course you can argue that you get a new car each time so the additional cost incur is worth it.

    It is interesting that you have down the drivetrain expected life is 300,000; although don't think the battery will last that long or will it? Under the EV maintenance didn't see anything about needing to replace the battery.
     
  7. robby

    robby Member

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    Tesla claims the 85 pack (and I assume the drivetrain since they put it under the same warranty) is capable of over a half million miles before failure (note: failure != diminished capacity). Musk, quoted in USA Today:

    I used the 300k figure rather than the 500k figure from Musk because I wanted to be more conservative than Tesla's benchmark in a lab. I initially included a $10,000 battery every 200k miles on the maintenance page, but others pointed out that should only apply if people need the maximal range of a new car; if they can live with degradation it should not be necessary. If you want to do some napkin math on the battery, you can copy the spreadsheet and re-add it. It adds about $0.05 per mile over the lifetime of the car based on my numbers above.
     
  8. Ride Long

    Ride Long Member

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    The expected life span of the battery and drive system of an EV is how I decided to wait for the dual-motor MS and buy new. I tend to hold my vehicles for a long time and what distinguishes the MS from its high-priced brethren is the pleasure of driving / total cost of ownership equation over a decade. This assumes even that the state of high-capacity batteries does not change materially in the next ten years (and I would NOT put money on that bet; I think developments will only advance). Getting into a new $95k vehicle is a hard swallow for just about anyone, so I could not imagine it being the optimal choice to repeat the process every 3-5 years. Good luck to you in whatever you choose.
     
  9. Gizmotoy

    Gizmotoy Active Member

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    I'm more worried about public perception than the reality. If EVs are a phenomenal success over the coming years it might not be an issue, but if they only have moderate growth, I suspect the used car buying public is generally going to be wary of them. I think they'll be extremely wary of an 8 year old Tesla where a battery failure would cost them tens of thousands of dollars.

    I generally keep my vehicles for a long time, but currently plan to sell the car sometime between when the bumper-to-bumper warranty expires and when the powertrain warranty expires. I had originally intended to keep it for the long haul, but it just hasn't been reliable enough. The pitfalls of buying early, though. I knew what I was getting in to.
     
  10. mikeash

    mikeash Active Member

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    In 8 years, I'd bet that there will be much better tools for measuring just how healthy a battery pack is at the moment, and the cost of replacement will be much more tolerable.
     
  11. SmartElectric

    SmartElectric Active Member

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    Very much contemplating the same thing, namely, when to buy, and how long to keep my future Tesla (not a matter of if, but when I buy one).

    I've done the math on a new car, and regardless of the math, my logical brain can't get over the initial depreciation, even though I could afford it.

    I've only ever bought two new cars in my life.
    My Smart Electric Drive at $19K was more of an "impulse buy" (HAD to have it) that meant I could break the rule... ;-)


    What I'd like : 85D worth $100K Canadian with a few options (pano, tech, rims)

    Option 1. Lease at ~$1500/mo, approximately $50K in payments over 3 years.

    Option 2. Purchase new with cheap finance (home eq line credit at <3%) and have the same $1500/mo payments for 7 years and own the car outright, but close to out of warranty.

    Option 3. Buy used. Not really compelling at the moment, given the "over the top" used Tesla Model S prices which don't seem to take reality and the Ontario EV rebate ($8500) into account.

    Option 3. Wait and post uselessly on TMC. (Goal achieved) Constantly mention the impending purchase of a Tesla to the wife/kids, effectively making it an eventuality they will need to accept (work in progress).


    Logically, I'm in a wait and see mode. It is almost certain I will buy used and keep very long term, perhaps 10 years or more.

    I've driven most of my cars to 200,000km before becoming "bored" with them.
    The likelyhood of me becoming "tired" of the Model S is very low with that in mind.

    Meanwhile, I look forward to getting in my Smart ED every day and using all of the instant torque without worry that I am attracting too much attention. And of course, grudgingly getting into the family Mercedes SUV on the weekends and suffering from "gas anxiety".
     
  12. ChadS

    ChadS Petroleum is for sissies

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    Another thing to consider: what if, in 10 years, battery prices have dropped enough and EV volumes have gone up enough that there is no initial price premium and the infrastructure is built out enough that you can travel anywhere on electricity. And another war drives up gas prices again. What will the resale value of an old gas car be at that point? There might be trouble meeting demand for new EVs, so old EVs may be in high demand.

    It's hard predicting how things will look several years in the future, especially with techologies and industries that are in flux. Spreadsheets deliver specific numbers, but nobody really knows what will happen. If you like adopting new technology, leasing an EV will be more fun than buying one to keep your cars fresh. If you like holding on to cars to be practical and save money, buying an EV and holding will almost definitely be better than leasing it as long as it continues to meet your needs. Comparing long-term costs between an EV and ICE has so many variables I'll just pick the better car (EV, of course) and stick with it.
     
  13. jcaspar

    jcaspar Member

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    My last new car was my 1993 Chevy K2500. It is still going strong and I expect to keep my Tesla at least half as long. I tend to get attached to my cars...
     
  14. William13

    William13 Member

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    my brother bought a used Volvo SUI with 8 cylinders on the cheap due to high gas prices a few years ago.
     

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