Evolution of the Tesla Trade In (or Sanity Check Please)

[MsElectric]

MsE,
I'll give you five points on the sale if you handle the retail sale, get my number and have it be as easy as a wholesale agree on a number and stick it on a truck

Ha haa... I'm not in the business of selling cars but I did privately sell my last 3 cars and know that if it is priced reasonably it will sell. My last 3 cars sold privately within about a week. I know you mentioned that your vehicle is on EBay. So why not list it there, on cars.com and the forum here at a bit over the wholesale price + your tax delta + plus a bit more and see what happens Can't be any worse than the status quo and if you find a buyer you can dispose of this whole situation with Tesla and your wholesaler. If you offer the car at the wholesale price + your tax delta I bet you will find a buyer very quickly.

 

[yak-55]

Up on Soapbox...
This situation strikes me as the development of plain old bad "(used) car dealer" behavior by Tesla. I would rather see them maintain the "factory showroom" (Apple store)
approach to selling new cars and stay away from any dealings in used cars. (Apple won't take your used mac or old junky Dell in trade in their stores).
Tesla's "best efforts to broker" your ICE trade is more than enough effort on their part for me (although in my case their ICE trade in offer to me was low balled also).
Selling used cars (CPO or otherwise) is a fools game, and competing with other "plain old car companies" will require the adoption of more of their bad practices.
Next well see "guaranteed offers on your late model car" and "end of month clearance sales" requiring "NO MONEY DOWN!" Tesla must have let a OSCG (old school
car guy) get into Palo Alto. I hope they root him (or her) out quickly.
BOO! to the whole revolting development.

Back down from the soapbox ...
I would politely press the point that you are an outstanding customer (5 Teslas and counting) and you'd like a little better than sleazy used car dealer behavior from
an "awesome car company". Ask them to take the trade and accept the external offer you arranged for the vehicle (perhaps less a couple hundred bucks for their trouble).
This a). Earns them a new D sale, b). saves you (most) of the sales tax and c). Gets the (independent) dealer the used car he wants to resell. Why would Tesla want to keep
that car out of his hands ... hes just going to sell it to (another new) Tesla convert who will come back for a new one next time. If that approach fails (likely) then I'd sell your
P85+ private party, buy the D and drive the hell out of it ... you'll feel better soon.

Best of luck.

30seconds,

I've had many good in-depth discussions with Seneca over the years. Once I learned he was responsible for the CPO program I reached out to him and we talked. At that point I had a good competing number for my car and was simply trying to get a courtesy trade for the sales tax credit. For the first time, the conversation was devoid of any real substance. It was more like speaking to a politician. However, it was clear that Tesla knew exactly what it was doing. He did offer to have the car evaluated to see if they could up their number. I asked him what that number would be if the car was a perfect 18K mile car. It was a direct question and yet I could not get an answer. I had already reached agreement with the other wholesale party and was not comfortable going back on my word so I declined.

This is where things have gone off the rails for me-
Tesla learned that competing wholesale bids are a requirement to get a correct trade valuation.
Tesla provides this service if you are coming to them with an ICE trade.
Tesla will not provide this service if you are coming with a MS trade. If you trusted Tesla and bought their product, you will receive a lesser service.
Tesla will underbid your MS trade. If you are not familiar with the whole process, you trust Tesla while they are taking money out of your pocket.
Tesla's relationship with my wholesale bidder killed the offer on my car.

Tesla knows exactly what they are doing here and they are doing it on purpose.

 

[MsElectric]

I still think that Tesla should very much deal in CPO cars and if they did do that they might have offered him a better trade in offer to begin with as then they'd have a way to turn that car around fairly quickly. I think it is this lack of a CPO program that is causing Tesla customers not being happy with trade in offers as Tesla doe snot have a straightforward and efficient way to sell the cars back.

And a CPO program is definitely no fools game. It is an opportunity to serve both existing and new customers fairly. Many might be apprehensive about buying a used Tesla but with an extended warranty Tesla can offer the cars to prospective buyers and help retain their resale values.

Up on Soapbox...
This situation strikes me as the development of plain old bad "(used) car dealer" behavior by Tesla. I would rather see them maintain the "factory showroom" (Apple store)
approach to selling new cars and stay away from any dealings in used cars. (Apple won't take your used mac or old junky Dell in trade in their stores).
Tesla's "best efforts to broker" your ICE trade is more than enough effort on their part for me (although in my case their ICE trade in offer to me was low balled also).
Selling used cars (CPO or otherwise) is a fools game, and competing with other "plain old car companies" will require the adoption of more of their bad practices.
Next well see "guaranteed offers on your late model car" and "end of month clearance sales" requiring "NO MONEY DOWN!" Tesla must have let a OSCG (old school
car guy) get into Palo Alto. I hope they root him (or her) out quickly.
BOO! to the whole revolting development.

Back down from the soapbox ...
I would politely press the point that you are an outstanding customer (5 Teslas and counting) and you'd like a little better than sleazy used car dealer behavior from
an "awesome car company". Ask them to take the trade and accept the external offer you arranged for the vehicle (perhaps less a couple hundred bucks for their trouble).
This a). Earns them a new D sale, b). saves you (most) of the sales tax and c). Gets the (independent) dealer the used car he wants to resell. Why would Tesla want to keep
that car out of his hands ... hes just going to sell it to (another new) Tesla convert who will come back for a new one next time. If that approach fails (likely) then I'd sell your
P85+ private party, buy the D and drive the hell out of it ... you'll feel better soon.

Best of luck.

 

[randompersonx]

I still think that Tesla should very much deal in CPO cars and if they did do that they might have offered him a better trade in offer to begin with as then they'd have a way to turn that car around fairly quickly. I think it is this lack of a CPO program that is causing Tesla customers not being happy with trade in offers as Tesla doe snot have a straightforward and efficient way to sell the cars back.

And a CPO program is definitely no fools game. It is an opportunity to serve both existing and new customers fairly. Many might be apprehensive about buying a used Tesla but with an extended warranty Tesla can offer the cars to prospective buyers and help retain their resale values.

Totally agree. I have experience with Porsche CPO, and that program has treated me even better than the regular new car experience with Porsche (which was also great)

 

[lolachampcar]

Tesla is entering the CPO business just like you guys want. They are doing it by low balling your trade in. You may want that; I do not so I went and got another wholesale bid which was $9500 higher than Tesla's bid. Tesla killed that bid.

This is not what I expect nor want from Tesla and their CPO program.

 

[randompersonx]

I agree it's wrong for Tesla to interfere with the bid from another wholesaler. I would certainly be very unhappy about that.

As far as low-balling ... it's unfortunate but I think it's actually speaking more to a business failure in general around the P85D launch. If Tesla priced the car $10k higher than they did, they would have still received a huge number of orders. With the higher pricing, there would be plenty more room for margin on used P85's, which would have allowed for a higher bid.

Instead, tesla looks to be taking out the effects of their mistake (underpricing the very popular p85d) on previously loyal customers.

 

[andrewket]

Tesla is entering the CPO business just like you guys want. They are doing it by low balling your trade in. You may want that; I do not so I went and got another wholesale bid which was $9500 higher than Tesla's bid. Tesla killed that bid.

This is not what I expect nor want from Tesla and their CPO program.

Do you know for sure Tesla killed it? Is there a chance the wholesaler wanted out and blaming tesla was a convenient excuse?

 

[lolachampcar]

I just got off the phone with KJ at Earth. Like Frank, he is a very nice, knowledgable guy and easy to work with. The misunderstanding about my car has been cleared up.


I've had the chance to talk with a few other Tesla customers throughout the last few days and they too have found Earth good to work with. They seem like very good people.

 

[yak-55]

Let me choose my words more carefully. Offering a CPO program may not be a fools game from Tesla's perspective in the short run (I am sure it could be profitable). But it may well be very damaging to their current brand promise. In essence these programs amount to overcharging loyal new car buyers for the convenience of accepting their trade (low balling) with an over priced service contract sold to the buyer of the "refurbished" CPO vehicle. Anyone who believes that a CPO car is "renovated," or selected in any way that makes it on average of higher quality or more reliable than any other used car is being deluded. From my perspective this business model is much of what is wrong with every other ("independent") car dealer/manufacturer in the world. Tesla has started out with a better (more customer respectful, direct, factory showroom) distribution model. Their CPO program, unless strongly differentiated from the examples provided (Mercedes, BMW, any of the US big 3) is a fools game in that it devalues their currently attractive brand promise. Tesla's behavior as outlined in this thread does NOTHING to differentiate themselves from these poor examples.

Your opinion (and watt hours /mile) my vary.

I still think that Tesla should very much deal in CPO cars and if they did do that they might have offered him a better trade in offer to begin with as then they'd have a way to turn that car around fairly quickly. I think it is this lack of a CPO program that is causing Tesla customers not being happy with trade in offers as Tesla doe snot have a straightforward and efficient way to sell the cars back.

And a CPO program is definitely no fools game. It is an opportunity to serve both existing and new customers fairly. Many might be apprehensive about buying a used Tesla but with an extended warranty Tesla can offer the cars to prospective buyers and help retain their resale values.

 

[randompersonx]

Let me choose my words more carefully. Offering a CPO program may not be a fools game from Tesla's perspective in the short run (I am sure it could be profitable). But it may well be very damaging to their current brand promise. In essence these programs amount to overcharging loyal new car buyers for the convenience of accepting their trade (low balling) with an over priced service contract sold to the buyer of the "refurbished" CPO vehicle. Anyone who believes that a CPO car is "renovated," or selected in any way that makes it on average of higher quality or more reliable than any other used car is being deluded. From my perspective this business model is much of what is wrong with every other ("independent") car dealer/manufacturer in the world. Tesla has started out with a better (more customer respectful, direct, factory showroom) distribution model. Their CPO program, unless strongly differentiated from the examples provided (Mercedes, BMW, any of the US big 3) is a fools game in that it devalues their currently attractive brand promise. Tesla's behavior as outlined in this thread does NOTHING to differentiate themselves from these poor examples.

Your opinion (and watt hours /mile) my vary.

I wholeheartedly disagree. My current daily driver is a Porsche 997 Turbo -- my second of this model, the first one was ordered new -- so I was very familiar with this car at the purchase time.

The dealership showed me an invoice detailing almost $8,000 worth of parts replaced on the car in the refurbishment process, and other than a few small things, the car was in nearly "like new" condition. In addition, the CPO process extended the warranty far past the original warranty. The product was absolutely head and shoulders above what was available at non-Porsche dealers. In fact, until the new body type (991 Turbo) started hitting the streets, I still had people asking me if my car was brand new because of the condition it was/is still in.

Tesla certainly has the opportunity to provide this same level of service. Wether or not they do, is a guess -- but to say that CPO is just always automatically a scam is wrong.

 

[breser]

I just got off the phone with KJ at Earth. Like Frank, he is a very nice, knowledgable guy and easy to work with. The misunderstanding about my car has been cleared up.


I've had the chance to talk with a few other Tesla customers throughout the last few days and they too have found Earth good to work with. They seem like very good people.

Glad to hear that you've got things worked out. Have you made a new P85D order?

 

[lolachampcar]

I have asked about the status of my reservation. I am a huge fan of MS and will be without one for the bare minimum amount of time.

 

[techimo]

I love Tesla, ordered a Roadster Sport in 2010 from Tesla, and ordered a 2013 Model S P85 early last year. Their trade-in program, on the other hand, blows. I have been complaining to them about it for years after I checked on the trade-in value for the Roadster a year or so ago and was offered something terrible.

I went to order a P85D last week, and wanted to get a trade-in value on both my roadster sport with 11k miles ($142k new) and P85 with 21k miles ($102k new). They offered $63,300 for the P85 and $51,000 for the Roadster Sport. I headed over to an Audi dealership and traded both cars in for $71,500 for the Roadster and $84,000 for the P85, netting me $41,200 higher than Tesla offered.

I don't like doing private party sales on this level of vehicle for a variety of reasons. I'm ok losing a few $k by trading in (I know that's not the norm). But I'm not ok losing $41,200.

I get that Tesla isn't in the used car business but this isn't about used cars: if they were smart, they would see offering fair market trade-in values as a) building customer loyalty, b) opening up a new market of Tesla buyers: those that want an S but can't afford a $80k-$100k+ car.

Any case, I'll keep buying Teslas because they are amazingly engineered clean supercars. I do hope to see their CPO program evolve, though.

 

[lolachampcar]

techimo,
I disagree with you on one point. When you are talking $100K assets, you are likely more normal than you think. I too have no interest in retail and will accept a reasonable amount of depreciation to play with certain toys.

Life is short. Keep playing

 

[David_Cary]

Yeah - you don't really see that many used private party vehicle sales in the $60-$80 range.

I'm one of the few that would sell a $70k car on the private market but wouldn't call it normal. Just like forum posters are not normal.

As far as Porsche CPO program goes $8k in parts got replaced (incl labor?). Something that perhaps cost Porsche $2k. They then sold the CPO car for $20k in profit. They gave an extended warranty that costs them another $2k. $16k net. I think everyone knows that a dealer makes a boatload more cash on a used car sale than a new car sale. So I don't see how that example shows that a CPO program is not a scam.

Used cars at dealers (ie any non private sale) is one of the biggest "scams" out there. Ridiculous markups. The branded dealer with CPO programs is just a license to scam people for that much more.

It would be nice to see Tesla do something completely different. How about a consignment program where Tesla acts as the middleman and inspects the cars. They can grade interior and exterior appearance on an objective scale for out of town purchases. Help arrange financing and of course deal with the sales tax trade in issue that some states have. Charge a flat percentage (5%?). That would be a novel CPO program. Transparent profits.

 

[RiverBrick]

Too bad you can't trade in to the Quebec SAAQ (DMV). They assess a luxury tax of 1% per year for the first seven years of a car's life on (valuation - $40,000). Registration periods end in the month of your birthday, so I recently got my second bill. They consider that my Model S has only lost 7% of its value in its first eight months.

 

[Madartist]

Like many Tesla owners here, I am very disappointed at the current Tesla trade-in program as well. The trade-in offer I received from Tesla was about $10K less than what I could get from a local dealer. While Tesla is free to offer whatever it chooses for trade-ins, I think the business model for the CPO program needs to be reconsidered if it requires offering Tesla's best (repeat) customers anything less than a fair market price for their cars. That is all any of us is asking for. I believe, as a whole, Tesla owners are sophisticated consumers and understand that we can get better prices for our cars by selling it privately. However, the huge discrepancy between Tesla's offer and the general wholesale market place is hard to justify. For those of us living in states that offer an offset of the sales tax when trading-in an used car at the time of a new car purchase, the cost difference can be even more substantial (~$4,000-$5,000 depending on the trade amount and the tax rate) without going through Tesla's trade-in. These low ball trade-in offers hurt the customers and further send a conflicting message to the public that while their new cars are premium vehicles, the used one are not. Ultimately, a low resale value is against both Tesla's and the owner's interests.

 

[3mp_kwh]

Having recently bought, it was clear to me Tesla was reaching a critical point. Inventory discounts were still competing with the used market. That had to end, at some point.


Tesla sort of shares Steinway's predicament. Their salesmen know well the the sale they stand to lose, may be to their own brand. With the inevitable inability to compete on price, voila - we have a new strategy. CPO makes perfect sense, to me, because if they don't, they'll be in a position to watch what other dealers do, plus share in talking down their own product (ala Steinway). I find Musk's resemblance to the 19th centry industrialist fascinating, but that's another story.


It is very true that the bid I got for my non-Tesla, through Tesla, was far more competitive than the bid I got from Tesla, for my Tesla. I sympathize with that one. But like I said, too, the inventory discount was very competitive with the used market AND featured a fresh warranty. So, in my case I'm not only going to judge their bid.


Another issue that comes up is over the optics of re-assuming the tax-credits. It won't look very good if Tesla inventories cars on the cheap, from states with large incentives, and then resells them to others without. They really have to be careful. None of these credits were scripted for their direct benefit, yet their itemizing them that way. That's a little too bold, IMO.


Good luck, lolachampcar. We're all watching how this big supply/demand change works out. I think 87-90k was recently a fast sale for a P85+.

[EDIT, I'd encourage not just personal sale, but also making noise about the dealers (and now Tesla's) entitlement to bid market value, minus sales tax. All part of the network welfare system.]

 

[lolachampcar]

I think I have danced around this enough.


Speaking only to the below wholesale trade in numbers-
Tesla is using their position as the first point of contact, the trust the customer has in them, their leverage to deny a perfectly valid sales tax credit and is relying on the customers lack of familiarity with the wholesale market to undercut the wholesale market by roughly $10K.

I believe that sentence is an accurate assessment of the facts. Tesla may have every reason in the world to HAVE TO do this but the bottom line is they are unfairly treating those who have put their trust in Tesla. In my book, that is wrong and I am reasonably sure it will come back to bite them. Musk can not bemoan how NADA dealers use their position and power to mistreat customers then turn around and DO THE EXACT SAME THING. I'm not talking about coming out with a new option and not letting customers upgrade. I'm talking about reaching into their pocket and extracting $10,000.

Sorry for the rant but I needed to take some of the PC polish off what is happening.

 

[EarlyAdopter]

lolachampcar - Did you find a good resolution? Back on the wagon for a P85D? It's going to be amazing.