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Why would anyone buy Inventory over CPO or New?

Discussion in 'Model S: Ordering, Production, Delivery' started by Wshowell, Apr 28, 2016.

  1. Wshowell

    Wshowell Member

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    I'm really starting to think Tesla corporate doesn't have a strategy for the sales side of the business. I just checked out the 400+ inventory model S's. I found the car I would ideally want and then went into the site and did a custom order with the exact same features. To my surprise the savings to buy inventory was essentially nil, nada, zilch, zip, ZERO!

    Since the refresh there are some added goodies like the: new nose, new Bio filter, center console, wheels and just outright "new". The ONLY benefit I see is the fact that a buyer can get their car ASAP versus waiting two months. Not a deal maker in any way IMHO.

    I've bought almost all my Apple gear "refurbished' from Apple and its a great way to get last year's model at a significant discount with the manufacture's warranty. I would think the inventory cars that lack incremental improvements would be discounted in order to move the inventory. With this many "new" cars I'd think they would start the 1% a formula based price reduction program ando put them out in the showrooms to get them sold to impulse buyers.

    Then we have the CPO program that's fallen off the radar for five months... I think Tesla is sitting on hundreds of these mostly classic cars. These cars are probably depreciating at a very solid clip and accelerating with the leased cars starting to trickle back in along with the buy back guarantee cars. The folks that are planning to replace with a new Model S will NOT want an inventory car with the old style nose, they will want the latest iteration or even an X. These cars need to moved and probably represent a huge albatross around TSLA's neck. They are GREAT cars for those of us 400K people with Model 3 reservations even if just 10% buy one as a bridge To Model 3 EV.

    TSLA is full of brilliant people but I'm starting to think they lack what "brilliant"people sometimes do which is common sense (my son is an aspie, brilliant but he often wears his clothes inside out and backwards.).

    Come on Tesla, hack 10% off those inventory cars and offer 0% financing for 72 months and get them sold ASAP. Then, get those CPO cars refurbished and out to the SC's to be sold as is, where is with pricing established by formula (a 33% for 2014's, 40% discount for 2013's and 50% discount for 2012's off the original sticker price plus a $.50/mile discount for mileage > 12K/year) but with a CPO warranty AND finance those at 1.9% for 48 months and get those cars sold. Doing this would give people a reasonable and realistic pricing model to make informed decisions to buy custom, inventory or CPO. Maybe I'm missing something here....looking forward to comments.
     
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  2. BrianC

    BrianC Member

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    If you're looking at the ones with 50 miles on them they have not been driven, you need to look at the ones with a couple thousand miles on them to get a deal of any kind. Why would they sell a INV car for 10% off when it has 100 or under miles on it?
     
  3. Wshowell

    Wshowell Member

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    Actually I do get it. Why would I pay the same for the last iteration of the Model S all things being equal (zero miles)? Why did Apple discount their still new iPhone 6 when they released the 6S?
     
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  4. Zaphod

    Zaphod Galaxy President (former)

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    I totally agree with your thoughts. These inventory cars have been quite stagnant. Now with the refresh, the potential buyers may not be enticed as much for essentially the same money. Yes, they could get the car in matter of weeks versus 2 months, but don't think that is enough in itself.

    I agree, I think it would benefit them to have financing offers or lease deals to move these cars. Millions of dollars of inventory that is slow moving is just going to continue to lose money depreciating.

    I could be enticed for an S while waiting for the 3, but as it stands now, it doesn't make sense.
     
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  5. Alex D

    Alex D Member

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    Another thing is "What people don't know, won't bother them".

    Explanation: I am a member of several Tesla and Model S groups on Facebook. You'd be surprised how many of current owners still haven't heard about a refresh on the Model S, to this day! And we're talking about existing owners. Now enhance this factor to people, who don't drive a Model S yet. There's plenty of them to go around and making an uneducated decision to buy the "old" model, just simply because they don't know about the refresh.
     
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  6. Jeffgtx

    Jeffgtx Member

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    Because the inventory car is available today. The ordered car is not. That is a consideration for some people.
     
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  7. BEEZR

    BEEZR Member

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    To your point about the discount on basically new inventory cars... I expect they do not want to encourage the behavior of potential buyers delaying a purchase knowing they can get a new car without the very latest updates for a discount. So if you want the latest features as they exist today, just wait six months and there could be the same car in inventory at a discount. They want people to order custom, and for those who don't want to wait they will sell you an inventory car.

    Another problem, which supports your point, is that if you want any of these inventory cars that are not at your local store, you have to pay extra for shipping (up to $1500). So, in effect, the car will cost MORE than if you custom ordered the same configuration and you don't get the latest updates.

    I expect there are a lot of potential customers among the 400K of us who have reservations on Model 3 (though, it's likely fewer people if it's 400K cars -- I reserved two), looking to bridge the time from now until then. Tesla could have a special offer to anyone who reserved a 3, with a lease or purchase incentive on the S, for two years or until their reservation is called. Might be tricky to calculate and most of the 3 reservation holders cannot afford a car at that price point, but it seems to be a ripe market.
     
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  8. BEEZR

    BEEZR Member

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    FWIW, of the inventory cars a very large % are 90s...

    According to Tesla Inventory Search:

    S70 (5)
    S70D (28)
    S85 (2)
    P85D (11)
    S85D (6)
    P90D (143)
    S90D (214)
     
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  9. Spidy

    Spidy Member

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    I don't think Tesla cares if these cars get sold or not at the moment. Most of them are used as loaners, they are not just sitting as dead inventory on a lot. Once they have a few thousand miles they will get more attractive as they took the large big first depreciation hit and there will be more demand.
     
  10. MorrisonHiker

    MorrisonHiker Beta Tester

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    Of the 409 inventory and CPO cars currently available, it looks like 321 of them are having miles (or kms) added to the odometer. We can't tell if those increases are due to test drives or if they are being used as loaners. That means the other 88 are still essentially brand new.
     
  11. Porfiry

    Porfiry Member

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    That's pretty weird considering they've twice sent me a marketing email advertising that 'classic' inventory cars are supposedly discounted:

    "Get the classic before it’s gone. Still interested in buying the original Model S? Click the link below to browse showroom vehicles available for immediate delivery. Prices on these vehicles are lower than for the newly updated Model S."
     
  12. Panthers1521

    Panthers1521 Member

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    #12 Panthers1521, Apr 30, 2016
    Last edited: Apr 30, 2016
    I agree, Tesla will sell it's current loaners for a discount, then the new built cars will be sent to service centers as replacement loaners.

    It just hit me, these cars may have been built and people walked away losing their deposit. So tesla does not care if the cars sit because they made an extra $2500 per car.
     
  13. Gentilly7

    Gentilly7 Member

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    I agree with this thread. When it comes to car sales, time is money. Tesla should want to consistently move cars. Mixing inventory loaners in with new inventory and not clearly depicting the price difference is a sure way to lose money. Listing cars that you really do not have interest in selling is also a problem. Tesla also needs to leverage 0% to low interest financing for well qualified buyers instead of having large price reductions on cars, especially new cars lacking refresh features. This is how most luxury brands operate in order to keep value high. We all know the negatives of the dealer model but this lack of attention to selling cars that are not custom built is something dealers would not do. As a shareholder I am concerned how this will unnecessarily impact Teslas fiancial numbers.
     
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  14. DougH

    DougH Active Member

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    The Inventory cars are not a good deal. They have the old nose, no CC, older head lights and no BIO. For the same price as new, why would someone buy them when it's the same wait as new. Makes no sense.
     
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  15. K_style

    K_style Member

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    Inventory ones are eligible for those "referral" program when available.
     
  16. Blueeyedme

    Blueeyedme Member

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    They are still at the "old" price. There was a price increase with the refresh.

    I went with an undriven inventory because:
    1. I could have it now
    2. Took advantage of favorable Q1 lease promotion.
     
  17. Vik Patel

    Vik Patel P90D

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    I found an inventory car that I'm purchasing - $12k off w/4500 miles.
     
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  18. DougH

    DougH Active Member

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    I have a white P90DL for $118 that seems like a good deal, if you like white with tan leather.
     
  19. BEEZR

    BEEZR Member

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    Is that one that was listed on their site and the price is $12K off same as configured new? Or did they take some additional amount off once you asked about the car? Curious on how the sales process works...
     
  20. Vik Patel

    Vik Patel P90D

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    It was listed on their site as $12k off same as configured new. I had found it pre-update to the MS so I compared it to the pricing before the new MS. For it being similarly equipped compared to the redesigned MS it is about $13,200 less.
     
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