Resale Value of Base Model 3 in 6 years

[PNWLeccy]

Looks like 50% is optimistic.
Model S 85 | eBay

A consideration to keep in mind is that 2012/13 was the first year that Tesla started to mass produce vehicles so those should have less residual value than the more recent models where "most" of the manufacturing defects have been worked out generally.

 

[AlanSubie4Life]

Since you are in California, you have some regulatory risk here too. There is also federal regulatory risk. You'll be taking your rebate and such (so the car is worth ~$36k brand new, since that's what you're going to be paying not including tax). That $36k or whatever is the starting point for the depreciation, not the list price, since even if you hadn't driven it off the lot, that's the most someone would pay you for it.

I said less than $10k, but figure it'll be right around there. I don't agree with the people who think $15k or up.

Factors:
1) Doesn't sound like you're getting FSD so we don't have to worry about that factor.
2) Technology will change a lot in 6 years. Probably going to be a lot of ~200-mile range competition. Some of them may be eligible for the $7.5k federal credit if it still exists in 6 years (depending on elections/political situation, some large credit could be available, even for Teslas).
3) 90k miles is kind of a lot for that battery and it's nearing the end of the warranty, so there's going to be a penalty for that. Battery prices will come down but it'll still be cheaper to just take the cheap brand new battery in the brand new car.
4) Regulatory risk - If California manages to create huge credits/rebates for new EV buyers (they may be quite a lot larger than the existing $2.5k rebate + the now defunct electric bill carbon credit), that's going to depress the used EV car market quite a bit. They are considering doubling or tripling it from what I understand. So $4.5k to $7.5k.

Seems reasonable that since the Bolt is currently $30k...in 6 years...some car company will be making a $25k-$30k brand new EV with 200+ miles of range. In California, it's possible/likely that there will be $7500 + $5k credits available (hard to predict exactly, but it is possible). So that would make that car ~$12.5-$17.5k. The car companies will boost prices to harvest some of the credit of course, but there will be competition so there will be limits to how much they can harvest. So maybe $20k for a brand new EV, after credits?

Can't see someone paying more than $10k for a used 200-mile range EV with standard AP with 90k miles in that situation.

I could believe resale value could end up a little higher than $10k if the regulatory situation is actually not as favorable for new EV buyers, but not much.

 

[trm2]

According to KBB a $70k 2013 Model S with 90k miles on it is worth about $23K now. So if the Model 3 holds the same percentage of value it would be about $13k in 6 years.

That seems like a reasonable start, but I would adjust the 3 down from there. The S still has 2 years and unlimited miles left on the battery warranty. The 3 will have 2 years 10,000 miles left on the battery warranty.

 

[strykeroz]

I think nearer 30% granted I don't expect 3 to hold value as the S has (it won't have scarcity on its side and in 6 years there will be plenty of other options with similar range available to the standard 3's remaining pack life). It will still be a decent car, but I don't expect it to retain value like a Honda or Toyota once there are alternatives.

 

[David_Cary]

Comparing to an S is a bit unfair. More expensive cars depreciate faster.
The S has been hurt by the 3. This is unlikely to be repeated - it isn't even planned where the 3 was planned for a decade.
There is an enormous potential market for a 6 year old fast EV with good battery tech - at least in my crystal ball.
Gas will be in obvious decline. There will be no competing decent 6 year old EV. Sure there may be great new EV's - but anything decent will be $25k or more.
My vote is $15k range.

 

[Dan203]

Only time will tell. If the difference between $10k and $15k changes your decision then I'd personally error on the side of conservative and go with whatever decision you'd make if you only got $10k.

 

[Adam3]

Starting to wonder if it's better for me to lease - i drive low miles. P3D+ 3 year lease with $0 down (10k/yr) is $717 / mo. The lease is costing ~$26,700 after three years. Car would have to be worth $30k to "break even". In three years new P3D+ could be $49k or lower - I might be hard pressed to get a buyer at $30k...

 

[KenC]

I am considering buying a RWD Model 3 with a cost of about $40,000. For the past 21 years, I have leased a C class Mercedes and have gotten a new pone every three years.

I am running through various scenarios to determine how much I would save if I bought a Model 3 over 6 years, and resold it, versus leasing two Mercedes over 6 years.

The number in the spreadsheet that I would like to get your opinion on is this: What do you think the resale value of a 2019 Model 3 will be in 6 years? Assume the car is in good condition, and has 90,000 miles on it.

Thanks in advance

So, thanks to several people who looked up used S prices, I think $13k is a fair value in 6yrs. Someone else posted that he would spend $17k on leasing a C-class for 6 yrs, darn good deal if you ask me. So, in the roughest of terms, $27k vs $17k. But, we didn't factor in fuel savings. Could be significant in Cali, if you're on TOU or can charge at work. I figure $1500 to $2000 in potential savings a year, but you have to figure out your own fuel and energy costs, etc.. That could easily add up to $9k to $12k, which could wipe out the $10k depreciation advantage of the C-class. All in all, it could be a wash, but only you know your experience with the C-class lease, and what energy savings you might get with the Model 3.

 

[LJS22]

The 3 should hold its value well. When you get down in the $20k-$15k Range it opens up a lot more buyers. However, charging stations at apartments will need to be ramped up or atleast proximity chargers. But fuel savings will be a huge plus. Transportation will be cheap in this range and that opens up competition to buy one.

But as many have said it depends on the competition of other ev’s. Can they make affordable ev’s That can compete with a 6 year old Tesla? There’s a possibility of battery constraints, charging stations may not be as implemented as Tesla and in 6 years Tesla may provide the best service for their cars.

If Tesla’s brand holds strong there’s going to be a bunch of 12-14 year olds currently that looked at Tesla’s in awe growing up. I think they could be on the higher end of resale value in the $15k-20k range. But I agree I’m looking at an optimistic timeline. This price range would go against decades of car evaluation.

 

[Dan203]

Starting to wonder if it's better for me to lease - i drive low miles. P3D+ 3 year lease with $0 down (10k/yr) is $717 / mo. The lease is costing ~$26,700 after three years. Car would have to be worth $30k to "break even". In three years new P3D+ could be $49k or lower - I might be hard pressed to get a buyer at $30k...

That's essentially the math I came up with as well. If you're going to trade up in 3 years anyway the lease is cheaper as the sale price in 3 years would need to be quite high just to break even.

 

[Petrocelli]

Thanks for all the great responses. To be safe, I am going to use a $10,000 figure for my calculations of the cost difference between leasing a two Mercedes c300 Coupes (over a 6 year period) and buying a Model 3 on a 6 year loan.

Comparing the two, the Tesla is less expensive by 24% a month ($1,011 vs. $767). This includes every cost or benefit I could think of including payments, insurance, fuel, subsidies, and charging station installation.

However, keep in mind that the Mercedes has a sticker price that is about 20% higher.

 

[M3BlueGeorgia]

lol, @M3BlueGeorgia going hard on the disagrees to keep his residual value distortion field intact

Heck, I don't care about residual value.

We buy new (or once nearly new) and then keep the vehicle for 10+ years.
Our second car is a 2004 Saturn Vue with 210K miles, and its wholesale value is less than $1K.
The car we traded in for the Model 3 was a 2008 Honda Accord with 160K miles on it.

In a year, we've already put over 23K miles on the Model 3.

 

[KenC]

Just because a car stickers higher doesn't mean it's worth more! Look at the I-Pace! They've got to reduce it by $15k to get it to move off lots.

 

[Uncle Paul]

Model 3 will probably save you about $2,000 per year in reduced fuel and maintenance costs over the Mercedes. YMMV

 

[insaneoctane]

There are a LOT of unknowns in predicting the future value of a model 3. If FSD works per Tesla’s plans, then it would seriously change the calculus of the future value in 6 years from today vs typical. 6 years really gives Tesla a fighting chance to have a real FSD product IMO. Also reliability track record will impact future value. If the model 3 proves to be reliable and low cost over the next few years (including battery degradation) then 90K miles won’t be a problem, but if the reliability proves to be problematic then that will drive your future value on your 90K EV down. IMO I think Tesla has created a VERY reliable vehicle. There’s already a model 3 out there with over 71K!

For planning purposes I’d be conservative at $10K but know you have lots of upside to that!

 

[AlanSubie4Life]

If FSD works per Tesla’s plans, then it would seriously change the calculus of the future value in 6 years from today vs typical.

know you have lots of upside to that!

The OP is not purchasing FSD.

 

[insaneoctane]

The OP is not purchasing FSD.

Still impacts future value IMO. If FSD works per Tesla’s current marketing, then the ability to add it as an option in the future (to a prospective buyer) is potentially valuable.

 

[pdx_m3s]

The answer is you're probably going to pay more..

I am a lease hacker, and currently pay about $5000 every 2 years for a loaner Mercedes C class myself, 12k/year. I don't have to buy tires and do one maintenance during that period that costs $400. So, total cost of ownership (including all fees and taxes is $5700 (another year registration). Keep in mind I also got 25k UAL miles thrown my way. If I extrapolate that, over a 6 year period, It costs me $17,100 to lease the Mercedes all in. I'd like to see anyone get close to that on any Tesla.

In the end, you have to do it because you prefer the car and are willing to pay a premium for it, rather than as a money saver. Mercedes also gives me loaners for service, does not nickel and dime on lease returns, etc.

Yeah but then you have to drive a Mercedes instead of a Tesla... No thanks.

 

[Runarbt]

Yeah but then you have to drive a Mercedes instead of a Tesla... No thanks.

so true!

 

[ezevphl]

Its impossible to predict with any real certainty.
You can look at resale value of a 1 year old Model 3 or a 6 year old Model S.
Battery prices are coming down and there are a dozen other cars with 200+ range out right now.
Will FSD actually work on your car and will regulations allow it in a meaningful way? No way to tell.
What will the competition look like for a 200 mile EV? No way to tell.

I have a feeling that a 6 year old Model 3 will probably old its value better than a 6 year old BMW 3 Series, but not as well as an Accord or Civic.