Why is Tesla not using used cars as loaners?

[AMPd]

So many service centers don’t have enough loaners, yet they have a lot of used cars in storage at manheim.

Why not spread them out to service centers and use them as a loaner?
That would also add the benefit of being able to allow potential buyers to come in and look at the vehicle and sell it to them on the spot.

I wish I was in charge of that department! Not only would customer service improve, but id be slinging used cars left and right to walk ins!

 

[Patrick W]

So many service centers don’t have enough loaners, yet they have a lot of used cars in storage at manheim.

Why not spread them out to service centers and use them as a loaner?
That would also add the benefit of being able to allow potential buyers to come in and look at the vehicle and sell it to them on the spot.

I wish I was in charge of that department! Not only would customer service improve, but id be slinging used cars left and right to walk ins!

My local (Salt Lake City) has done that. One of the loaners I got belonged to some famous basketball person (I'm not a sports person so don't remember who it was. I only remember what I do because the service center person made a big deal over it.)

 

[PhilDavid]

So many service centers don’t have enough loaners, yet they have a lot of used cars in storage at manheim.

Why not spread them out to service centers and use them as a loaner?
That would also add the benefit of being able to allow potential buyers to come in and look at the vehicle and sell it to them on the spot.

I wish I was in charge of that department! Not only would customer service improve, but id be slinging used cars left and right to walk ins!

For the simple reason that they would get ridiculously trashed. Every time I received a Model S loaner, I felt so bad for that car. I take care of a loaner at least as well as my own car because it is someone else's property but it's like some people have absolutely no respect for someone else's property. Some of these Model S loaners look like they came from a war zone with virtually every body panel scratched/damaged, The interiors were trashed

This is what they used to do and this is what led to so many Tesla CPO/used customers getting cars that look like they came from a garbage dump. These "used cars" end up being someone's "baby" when they buy that car and we've read so many sad stories of people who expressed dismay after finding out they bought a car that had been trashed,

I think a better solution is to build a fleet of "basic" Model 3s at a far lower cost to be used as Service Loaners and they can then convert those vehicles for use in the Tesla ride share program when FSD is implemented.

Use of Model S vehicles as Service Loaners really trashes their value. IMHO it is better to put that wear and tear on a $35K Model 3 rather than a $50-70K+ used Model S.

 

[kev1n]

have you seen those "used" cars as loaners before they stopped? they all get trashed. I've seen 1 year old cars that look worse than my 2014. since they are not doing CPO anymore, i doubt its worth it for them to have owners destroy the cars they are trying to sell.

 

[Tam]

...Why not spread them out to service centers and use them as a loaner?...

I guess it's more profitable to sell them used rather than let them be loaners.

 

[SSonnentag]

Yep, free loaners is a very bad business decision and is not sustainable. It's much cheaper to give out Uber credits as many people won't use them and Tesla isn't on the hook to clean up or maintain the cars afterward.

 

[ucmndd]

They just don’t care. They’ve made a conscious choice that losing the business of a few folks used to getting fluffed by Maserati and the like is a sound business decision.

 

[Cheburashka]

Considering every other manufacturer does give free loaners, I don't see how it's a bad business decision.

 

[AMPd]

have you seen those "used" cars as loaners before they stopped? they all get trashed. I've seen 1 year old cars that look worse than my 2014. since they are not doing CPO anymore, i doubt its worth it for them to have owners destroy the cars they are trying to sell.

Back in 2014 I got a loaner a few times and each time the service advisor came out with me and inspected the vehicle when I got it and dropped it off. A policy requiring customers to return the vehicle in a clean condition or be charged a cleaning fee would go a long way in solving the trashing problem.

Use of Model S vehicles as Service Loaners really trashes their value. IMHO it is better to put that wear and tear on a $35K Model 3 rather than a $50-70K+ used Model S.

Wasn’t there talk of Tesla not having enough capacity to build spare vehicles. Of course if they have the capacity then I agree a bare bones model 3 would be better/cheaper option for Tesla.

Yep, free loaners is a very bad business decision and is not sustainable. It's much cheaper to give out Uber credits as many people won't use them and Tesla isn't on the hook to clean up or maintain the cars afterward.

I disagree. Lots of dealerships provide loaners, I wouldn’t necessarily say it’s a bad business decision. It’s definitely more complicated than that, is a happy customer worth a few hundred miles worth of depreciation? I’m not in the car selling business so I can’t answer that but since most dealerships offer loaners then it must be worth it.

 

[ucmndd]

I disagree. Lots of dealerships provide loaners, I wouldn’t necessarily say it’s a bad business decision. It’s definitely more complicated than that, is a happy customer worth a few hundred miles worth of depreciation? I’m not in the car selling business so I can’t answer that but since most dealerships offer loaners then it must be worth it.

This is where the dealership vs first party sales model really diverges. The dealership makes essentially all their money on servicing your car - either via warranty reimbursement from the manufacturer or by fleecing you as a “valued customer” and keeping you from going to the other dealership down the road. They have every incentive to eat the cost of a big loaner fleet to keep people happy.

Tesla doesn’t have any of that incentive, in the model where everything is a cost absorbed directly by them. Loaners cost them at least $1/mile. If they can reduce that cost by pushing people toward Uber or having them figure out their own transport, even if they lose a Karen or two that refuses to get in an Uber, they’ve obviously decided that pencils out.

 

[AMPd]

This is where the dealership vs first party sales model really diverges. The dealership makes essentially all their money on servicing your car - either via warranty reimbursement from the manufacturer or by fleecing you as a “valued customer” and keeping you from going to the other dealership down the road. They have every incentive to eat the cost of a big loaner fleet to keep people happy.

Tesla doesn’t have any of that incentive, in the model where everything is a cost absorbed directly by them. Loaners cost them at least $1/mile. If they can mitigate that cost by pushing people toward Uber or having them figure out their own transport, even if they lose a Karen or two that refuses to get in an Uber, they’ve obviously decided that pencils out.

You’re using logic and I for one do not appreciate it!

so basically when Elon said he will address the loaner issue he was just giving us an answer we wanted to hear?

 

[ucmndd]

You’re using logic and I for one do not appreciate it!

so basically when Elon said he will address the loaner issue he was just giving us an answer we wanted to hear?

I mean, that’s the only way I can read his response. Just fluff. Remember when he told us every single loaner was going to be a top of the line P100D, because everybody should have the best?

It was just a plain and simple lie, like so much else has been. It was never feasible. It’s never going to be.

 

[kev1n]

Back in 2014 I got a loaner a few times and each time the service advisor came out with me and inspected the vehicle when I got it and dropped it off. A policy requiring customers to return the vehicle in a clean condition or be charged a cleaning fee would go a long way in solving the trashing problem

ive gotten loaners at least 5+ times in the past 3 years. they do not check the cars, they just hand me the key and tell me where the car is. even when i tell them there is damage on it. they just brush it off and say "its ok, dont worry about it, you wont be held liable."

 

[AMPd]

ive gotten loaners at least 5+ times in the past 3 years. they do not check the cars, they just hand me the key and tell me where the car is. even when i tell them there is damage on it. they just brush it off and say "its ok, dont worry about it, you wont be held liable."

Whaaat! That’s crazy, I didn’t know that’s how it’s done now and explains the trashing. That’s unfortunate as it ruins the experience for the next driver, not to mention the extra depreciation.
I haven’t gotten a Tesla loaner in a long time.

 

[AMPd]

I mean, that’s the only way I can read his response. Just fluff. Remember when he told us every single loaner was going to be a top of the line P100D, because everybody should have the best?

It was just a plain and simple lie, like so much else has been. It was never feasible. It’s never going to be.

Yeah the top of the line model is definitely not feasible, and I don’t mean to bring up dealerships again but even they don’t offer top of the line models as loaners.
But even a used 75d would be great.

I’m just saying, they have used cars parked waiting to be sold. Might as well put them to good use. But as you’ve said they’ve decided customer service is not one of their priorities right now.

 

[beatle]

What happens when someone comes to buy the used car and it's not there because it's loaned out and that person is driving it around while they wait for a part or parts to arrive? Does Tesla say to the person, "hey, can you bring back that loaner? Someone wants to buy it." Do they tell the prospective buyer, "Yeah, it might be a little while before we can sell you that car - it's on loan to someone right now." The buyer may go somewhere else and they could lose a sale. This is a bad idea all around.

 

[powaking]

I've been fortunate with my SC in that every time I needed to leave my MS there I was always provided a loaner which ranged from a MS 75D, MS P90D and even a MX. They may not have always been given in the best of conditions but I always made sure they were returned cleaner than when I took it. Having 3 kids and needing to cart them around having Uber credits would be a useless to me. I don't expect to get the top of the line Tesla as a loaner, I am most appreciative to have ANY Tesla as a loaner regardless of trim level.

 

[CapeOne]

I can understand a hesitancy to use for sale cars as loaners, except maybe in an emergency, but if loaners are given at some locations they should be given at all locations. All Tesla service centers are owned/operated by Tesla and should have similar policies when it comes to things like loaners. There should be more consistency here. Customer experiences seem to vary too much with Tesla when it comes to both sales and service.

 

[SSonnentag]

I disagree. Lots of dealerships provide loaners, I wouldn’t necessarily say it’s a bad business decision. It’s definitely more complicated than that, is a happy customer worth a few hundred miles worth of depreciation? I’m not in the car selling business so I can’t answer that but since most dealerships offer loaners then it must be worth it.

Apparently I've always bought cars from the wrong dealers. Chevy, Dodge, Toyota, Nissan and Honda never provided me with a loaner for warranty work, let alone out-of-warranty work. Having never owned or driven a Mercedes, BMW, Lexus or other higher end vehicle before, I can't speak as to their practices.

 

[AMPd]

What happens when someone comes to buy the used car and it's not there because it's loaned out and that person is driving it around while they wait for a part or parts to arrive? Does Tesla say to the person, "hey, can you bring back that loaner? Someone wants to buy it." Do they tell the prospective buyer, "Yeah, it might be a little while before we can sell you that car - it's on loan to someone right now." The buyer may go somewhere else and they could lose a sale. This is a bad idea all around.

It already takes weeks to get the car, I don’t see how a day or two would make any significant impact. Once someone places a deposit yes Tesla does exactly that, they request that you return the loaner.
In fact I’ve read stories on here about people being asked to bring back loaners because they were sold.