Difference in trade value vs dealer prices ?

[Avalyn]

I don't really want this to go down the same route or as the same question as 'why are Tesla trade in prices in the toilet' also known as I'll give you 50p and a bag of maltesers BUT can anyone explain why current trade in prices, for example, for my 2021/22 M3 LR (new one with heat pump etc.), 4k miles can be as low at 26k/the wrong side of £30k yet if you look at Autotrader the cheapest one is @£40k?

When I'm trading in a car, I quite often look at AT dealers prices, assume there's £3-4k in there for warranty, check over etc etc. so would think OK, £40k for 'my car' - I'd be guessing I'd be getting offered @£35-36?

A dealer could literally wash my car and stick it on their showroom floor and what, expect to make £10-12k profit?

Is there a lag somewhere? If there's such an over supply why are used prices online still reasonable?

 

[phil4]

Autrotrader and the like are the asking price people (and dealers) put on their cars, firstly they're high as they're firstly optimistic, and secondly expecting to be knocked down. They aren't what they sell for.
Tesla are the other way, they aren't going to sell your car themselves, it goes off to auction. There the buyer has much less chance to check over the car, probably won't be able to drive it, won't be able to ask the owner questions. Thus they usually go for very low prices, this is even more so as the dealers then want to put their markup on it to sell at a healthy profit on their forecourt (or via Autotrader).

So you're looking at the cheapest price cars will change hands, vs the highest price asked for cars.

If you think your car is worth that much more, and you can sell it for that, pop it on autotrader and do that. If you've ever done a trade in via a normal dealer, you'll likely find any extra given for your trade in is countered with a reduction in any discount you'll get on the new car. They have to make their margin and profit, and will do so by reducing discounts or selling other high profit things like tyre insurance, autoglym treatment etc.

 

[UrbanSplash]

There was a long thread on this a few days ago. It got locked for some reason but some comments on there worth reading.

Seems there is a huge over supply in the trade. So WBAC etc are putting extremely low values on used Tesla’s as they don’t want stuck with them. As for Auto Trader, no idea how much they are actually selling for, probs not the asking prices. On a less than year old YLR, WBAC are currently at £39k from a list price of £55k. So a £16k ‘loss’ in less than a year. WBAC are probs rock bottom (bar Tesla’s own trade in ironically) so maybe could sell privately for £45k being optimistic. So perhaps lost £10k in less than a year. Not ideal but that’s the way of the world. In 4 years of Tesla ownership I’ve not seen such a hit. Maybe that’s how it is now. Tesla aren’t going to stop cranking cars out the factory as quickly as possible..

 

[CWT3LR]

There was a long thread on this a few days ago. It got locked for some reason but some comments on there worth reading.

Seems there is a huge over supply in the trade. So WBAC etc are putting extremely low values on used Tesla’s as they don’t want stuck with them. As for Auto Trader, no idea how much they are actually selling for, probs not the asking prices. On a less than year old YLR, WBAC are currently at £39k from a list price of £55k. So a £16k ‘loss’ in less than a year. WBAC are probs rock bottom (bar Tesla’s own trade in ironically) so maybe could sell privately for £45k being optimistic. So perhaps lost £10k in less than a year. Not ideal but that’s the way of the world. In 4 years of Tesla ownership I’ve not seen such a hit. Maybe that’s how it is now. Tesla aren’t going to stop cranking cars out the factory as quickly as possible..

Got locked due to people like me,. Promise to keep away from this one.

 

[UrbanSplash]

I personally don’t think there was anything there that was particularly controversial. It’s valid people can discuss and explore resale values etc. There is a current issue with over supply.

 

[qwickshot]

Autrotrader and the like are the asking price people (and dealers) put on their cars, firstly they're high as they're firstly optimistic, and secondly expecting to be knocked down. They aren't what they sell for.
Tesla are the other way, they aren't going to sell your car themselves, it goes off to auction. There the buyer has much less chance to check over the car, probably won't be able to drive it, won't be able to ask the owner questions. Thus they usually go for very low prices, this is even more so as the dealers then want to put their markup on it to sell at a healthy profit on their forecourt (or via Autotrader).

So you're looking at the cheapest price cars will change hands, vs the highest price asked for cars.

If you think your car is worth that much more, and you can sell it for that, pop it on autotrader and do that. If you've ever done a trade in via a normal dealer, you'll likely find any extra given for your trade in is countered with a reduction in any discount you'll get on the new car. They have to make their margin and profit, and will do so by reducing discounts or selling other high profit things like tyre insurance, autoglym treatment etc.

All true but the gap isn’t usually this significant, it’s typically half the gap it is at the moment.

Dealers are also currently selling cars for asking or near to asking because of a lack of used stock generally.

A dealers seem to have got burnt on EVs (not just Tesla’s) having paid top dollar for them and then loads more coming to the used market and prices crashing.

All the media hysteria about charging queues and high electricity prices are having a downward pressure on used prices.

Ultimately prices coming down on used cars is a good thing in the long term.

@UrbanSplash Historically speaking losing £10k on a £55k car in a year is good depreciation. Back in the day aka early 2020, you’d lose not far off that much the day you drive it off the forecourt.

 

[Jason71]

I thought this article was interesting:

Used electric car prices caught in vicious downward cycle as experts warn of trouble ahead – Car Dealer Magazine

Plummeting used electric car values are in danger of knocking the wind out of the sails of the new EV market, warn experts. Speaking to Car Dealer,

cardealermagazine.co.uk

Prices were too high for too long then dropped too much too fast and it has scared off the dealers. They don't want them until the prices stabilise but that does not mean they want to give away the ones they have.

 

[UrbanSplash]

All true but the gap isn’t usually this significant, it’s typically half the gap it is at the moment.

Dealers are also currently selling cars for asking or near to asking because of a lack of used stock generally.

A dealers seem to have got burnt on EVs (not just Tesla’s) having paid top dollar for them and then loads more coming to the used market and prices crashing.

All the media hysteria about charging queues and high electricity prices are having a downward pressure on used prices.

Ultimately prices coming down on used cars is a good thing in the long term.

@UrbanSplash Historically speaking losing £10k on a £55k car in a year is good depreciation. Back in the day aka early 2020, you’d lose not far off that much the day you drive it off the forecourt.

Agreed but this hit is new for used 3/Y which have historically held their value very well.

 

[qwickshot]

Agreed but this hit is new for used 3/Y which have historically held their value very well.

Yup, again true but it was never going to last.

The best analogy I can think of is when the new (BMW) Mini launched. For quite a few years the used market was crazy, even 6 month old ones going for more than new. Eventually they ramped production and cars penetrated into the used market and they got in line with the industry norm.

 

[GeorgeSymonds]

They’re simply not selling very quickly on places like AT

This is the data for your model M3 LR 2021. There are cars listed back in Sept, listed af 40k (although may have been higher). Dealers won’t want more cars like that

 

[UrbanSplash]

Yikes. Not good at all

 

[thewishy]

A dealers seem to have got burnt on EVs (not just Tesla’s) having paid top dollar for them and then loads more coming to the used market and prices crashing.

All the media hysteria about charging queues and high electricity prices are having a downward pressure on used prices.

Ultimately prices coming down on used cars is a good thing in the long term.

I'll add that Ukraine caused oil and gas prices to spike. Oil price rises very quickly translate into petrol prices, which went mental for a bit. April last year, everybody was saying "2 quid a litre for diesel, I'm going to buy an EV and pay 15p / kWh at home or 30-40p /kWh at a public charger". Demand spikes, prices went crazy, lead times were a year.
Go forward to winter this year, and the oil price is somewhat corrected with additional supplies from other countries, but gas and electric prices lag by 6 months due to price caps and lower seasonal demand over the summer. Now diesel is £1.60/l and people have got used to the increase, home charging is 35p/kWh, rapid 65-80p, and at peaks there are some queues at chargers.

EV demand goes down, queues for new goes down, new prices go down, and dealers who were paying close to new prices for used cars are left with expensive stock they make a loss on.

It's a classic demand bubble