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Will there be a correction the MS market?
- Thread starter Jomak
- Start date
CapeOne
Active Member
Absolutely. Someone who may have been asking $75k for a used 2020 MS LR+ back before May (when the starting price new was $81,190) wouldn't be able to get that today when the starting price is $70,620 and that impact would affect values of 2019s, 2018s, etc. as well. The newer the car, the bigger the impact on price/value.
VaztheDad
Member
One would debate that when the price originally dropped sustainably (optioned cars were easily well over $100k, now in the $80s), there should have been a correction. Instead prices held.
If you're shopping, buy to your budget and enjoy what you find!
It's not just the price, but also the warranty.
I have a MS '13, bought used two years ago, and the warranty is up at the end of the year. I love the car, but the expiring warranty, lack of range, etc, has me looking to replace.
I had been looking at used 90s or 100s with under 50K miles, so I would get 4 years or 50,000 additional miles, for 55K-60k, versus 75k-80k new.
Now, I still have to pay 55-60K for used with that profile, except I only get an additional year and 10,000 warrant over expiring factory, and a new one with full warranty, better range, etc is only 69,420. That $10-$15K gap is way too low.
Also, being in CA, to get HOV access, I would likely have to buy used out of state and pay shipping fees (unless I could find an in-state used without stickers, but that is more difficult now because Tesla doesn't post pictures anymore, and the VIN lookup is unreliable).
So now, I am about to order new. For me, the used price would have to not just be lower by an amount equal to the price drop on the new, but by an additional $3-$5K to compensate for the lack of warranty (I have had at least $3K of repairs on my '13 since I bought it, including the MCU). So for a 90 or 100 with reasonable miles, i would only pay $45-50K max. And I suspect there are a lot of buyers like me out there, making the same calculation.
Cheburashka
Active Member
FSD price is going up to 10k isn't it?
So 80K is a more realistic new base price. I doubt there will be a big correction.
So 80K is a more realistic new base price. I doubt there will be a big correction.
CapeOne
Active Member
You wouldn't have to pay $55k to $60k. Tesla currently has several MS 90Ds with under 50k miles for under $50k. One example in your state is a 2017 with 46k miles and FSD for $49,200: 2017 Model S | Tesla
That’s nearly $30k less than the price of a new LR+ with FSD right now.
CapeOne
Active Member
Base price is still $69,420. Many customers choose not to get FSD. Besides, even if you include FSD (WITH its upcoming price increase) the retail price of the MS LR+ has still dropped around $7,500 since May which affects resale, especially on later model cars.
I for one put no value on FSD, it is not something I would ever trust. If I could buy a used car without it, at a reduced price, that would be one thing. Instead it is forced on me and I presumably have to pay for a feature I do not want (I presumably as I presume the prices are increased because it is added). Perhaps it adds resale value, but by the time I intend to resell, it's value will be diminished.
Also, as mentioned, myself, and many other buyers in CA, value HOV access, so that also weighs in favor of new, and further reduces the value of a used car.
The used car that was listed above:
$20K cheaper than new
100 miles / 25% less range
Unknown HOV access
14,000 left on the warranty vs 50,000 left on warranty new
Previously repaired
That car would have to drop by $5K to be even a consideration versus new to me.
With the 4 year / 50,000 warranty, that extra $5K is less necessary.
Also, as mentioned, myself, and many other buyers in CA, value HOV access, so that also weighs in favor of new, and further reduces the value of a used car.
The used car that was listed above:
$20K cheaper than new
100 miles / 25% less range
Unknown HOV access
14,000 left on the warranty vs 50,000 left on warranty new
Previously repaired
That car would have to drop by $5K to be even a consideration versus new to me.
With the 4 year / 50,000 warranty, that extra $5K is less necessary.
Here's an example of a car that previously would have seemed attractive vs new, with a 4 year, 50,000 mile warranty, and new prices where they were. Now, no way does this make sense to me at this price, it would have to be at least $5K cheaper.
2017 Model S | Tesla
2017 Model S | Tesla
whitex
Well-Known Member
What percentage of people pay for FSD today? I suspect less than 50%. Increasing the price probably won't change that percentage byw, those who bought it would have paid $10K just as likely as they did $8K.
DanCar
Active Member
It is all about supply and demand. Currently 400 cars with PSD (partial self driving). I have to think Tesla is motivated to sell these cars.
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For years, Tesla maintained a price point around $100K for S & X, each year adding new functionality and increasing range, without increasing (or decreasing the price). And when AP1 was introduced, prices went up for a fully loaded vehicle with AP1.
Then when Tesla introduced 3/Y, they reduced the price of S/X - and now that competitors are coming to market, we've seen that again.
But Tesla is still getting around 27% profit margin from their vehicle sales...
This has and will impact the resale value of our 2017 S and 2018 X. Though because we purchased FSD for $3K for both vehicles, now sold for $10K, that could help to soften the blow when we sell or trade-in our S or X in a few years.
However... If a current S/X owner plans to trade in their S/X for a new S/X, the reduction in resale value will probably not have a huge impact on the net cost of a new vehicle. While the old S/X will be worth less - a new S/X (or competing EV) will also likely cost less - and could come out close to a wash.
Then when Tesla introduced 3/Y, they reduced the price of S/X - and now that competitors are coming to market, we've seen that again.
But Tesla is still getting around 27% profit margin from their vehicle sales...
This has and will impact the resale value of our 2017 S and 2018 X. Though because we purchased FSD for $3K for both vehicles, now sold for $10K, that could help to soften the blow when we sell or trade-in our S or X in a few years.
However... If a current S/X owner plans to trade in their S/X for a new S/X, the reduction in resale value will probably not have a huge impact on the net cost of a new vehicle. While the old S/X will be worth less - a new S/X (or competing EV) will also likely cost less - and could come out close to a wash.
Slightly off-topic, but this has me curious. Why would buying from out-of-state impact your HOV access? [I assume it's a CA thing, since you mention it--I have no experience....]
HOV access in CA ("Clean Air Vehicle decals") lasts for a few years. It goes by the VIN, and doesn't matter when the car was made; the clock starts ticking when you get the stickers. So if you're buying a used car, it may have already expired.. but out of state cars never issued decals in CA are still eligible.
ADEEL421
Member
my buddy just picked up a 75D with 29k miles with FSD, air suspension and heated weather package with 4 year 50k warranty right before they stopped for 52k which was a sweet deal as compared to mine. i doubt prices on used one will drop much.
CapeOne
Active Member
This car had been priced at around $68k a month ago when a comparably equipped new one was $91,690. Now it's under $60k when a new one is $86,120. If we attribute a few thousand dollars of the drop to the used warranty change then the rest of the percentage price reduction so far is pretty much the same as (or even more than) the percentage price reduction of new.
Just checked KBB and our 2017 S is still priced where I expected - no change yet.
When Tesla made the large price decrease in early 2019, our 2017 S and 2018 X lost about 14% of resale value.
Other than that, resale value of our Tesla vehicles has been around 2% per month - which is about the same depreciation rate we've seen in our high-end ICEs in the past.
If Tesla is able to get FSD working - and they increase the price to $10K this week, it's possible vehicles with FSD activated could actually see some increase in resale value...
When Tesla made the large price decrease in early 2019, our 2017 S and 2018 X lost about 14% of resale value.
Other than that, resale value of our Tesla vehicles has been around 2% per month - which is about the same depreciation rate we've seen in our high-end ICEs in the past.
If Tesla is able to get FSD working - and they increase the price to $10K this week, it's possible vehicles with FSD activated could actually see some increase in resale value...
Wait: so, a zero-emission vehicle (eg, Tesla) "expires" on its "Clean Air" status, based on how long a sticker has been on the windshield...??
Indeed...!
CapeOne
Active Member
KBB can be very unreliable and quirky regarding Tesla values. For example, look at how they value a 2016 MS 85 versus a 90D. With 38k miles and before adjusting for options, they have "fair purchase price" (from a dealer) listed at around $56,900 (may vary slightly by location) for the 85 but a 90D is $49,300. On what planet should a similar 2016 90D be worth less than an 85? And not just less but ~13% less!
