Slap in the face by Tesla - Trade-in value £20k less than I paid Tesla just 18 months ago.

[intothesunset]

I've been looking at my options of potentially upgrading to a new Model 3 and so requested a trade-in valuation of my December 2016 Model S P90 upgraded to HW3 and MCU2 and has Enhanced Autopilot. I purchased this from Tesla directly 18 months ago for £37,000 and paid about another £2000 for the hardware upgrades and have not had any accidents in it and just had a couple of minor sensor issues which Tesla fixed.

Their trade-in valuation just came through and was £13,875.

Now I understand that Tesla has no responsibility to make a good offer or even any offer at all, but given that the vehicle is worth something like £30k privately and given that they would be making a sizeable profit off the purchase of a new Model 3 it seems incredibly insulting to me to make such an offer. Worse is that is basically sending me the signal that their vehicles are an absolutely terrible investment and will almost immediately become worthless after purchase. Given this, why would I ever purchase another Tesla, let alone trade-in my current one to them?

In a best case scenario the vehicle just lost £9k (25%) in value in just 18 months, but according to Tesla themselves it lost £25k (65%) in value in that time.

I just can't wrap my head around it. No one in their right mind would accept that offer. So why even make the offer at all? Why even offer a trade-in when all you are doing is slapping your existing custom in the face who's shown an interest in purchasing a new vehicle from you. It's making me want to sell my Model S immediately (not to Tesla) and never buy a Tesla product again.

Anyone have an insight on this? I just can't even...

 

[shahryaran]

True.
Tesla's trade in value for a car that I bought 4 months ago for $35k is $24k.
Tesla is killing their own product.
There is only one explanation for this. That their cars is very cheap to make. A model 3 is probably cost $18k to built.

 

[Nick77]

I drove past a car sales forecourt today and there was a 2020 plate white model three, with a sticker in the window of £27,999.

I guess it must be very high mileage or an ex company car for that sort of price.

 

[intothesunset]

True.
Tesla's trade in value for a car that I bought 4 months ago for $35k is $24k.
Tesla is killing their own product.
There is only one explanation for this. That their cars is very cheap to make. A model 3 is probably cost $18k to built.

But why would they do this? This has literally turned me from a Tesla fan into someone who would never buy a Tesla again within a day.

It's like they think their cars are disposable or something. The battery alone is worth the trade-in valuation.

 

[shahryaran]

But why would they do this? This has literally turned me from a Tesla fan into someone who would never buy a Tesla again within a day.

It's like they think their cars are disposable or something. The battery alone is worth the trade-in valuation.

Because they are getting bigger and bigger.
The bigger, the more employee.
More employee, more cost

 

[bhav]

I've been looking at my options of potentially upgrading to a new Model 3 and so requested a trade-in valuation of my December 2016 Model S P90 upgraded to HW3 and MCU2 and has Enhanced Autopilot. I purchased this from Tesla directly 18 months ago for £37,000 and paid about another £2000 for the hardware upgrades and have not had any accidents in it and just had a couple of minor sensor issues which Tesla fixed.

Their trade-in valuation just came through and was £13,875.

Now I understand that Tesla has no responsibility to make a good offer or even any offer at all, but given that the vehicle is worth something like £30k privately and given that they would be making a sizeable profit off the purchase of a new Model 3 it seems incredibly insulting to me to make such an offer. Worse is that is basically sending me the signal that their vehicles are an absolutely terrible investment and will almost immediately become worthless after purchase. Given this, why would I ever purchase another Tesla, let alone trade-in my current one to them?

In a best case scenario the vehicle just lost £9k (25%) in value in just 18 months, but according to Tesla themselves it lost £25k (65%) in value in that time.

I just can't wrap my head around it. No one in their right mind would accept that offer. So why even make the offer at all? Why even offer a trade-in when all you are doing is slapping your existing custom in the face who's shown an interest in purchasing a new vehicle from you. It's making me want to sell my Model S immediately (not to Tesla) and never buy a Tesla product again.

Anyone have an insight on this? I just can't even...

Why would anyone buy a guaranteed depreciating asset as an "investment"?

 

[Black306]

I've been looking at my options of potentially upgrading to a new Model 3 and so requested a trade-in valuation of my December 2016 Model S P90 upgraded to HW3 and MCU2 and has Enhanced Autopilot. I purchased this from Tesla directly 18 months ago for £37,000 and paid about another £2000 for the hardware upgrades and have not had any accidents in it and just had a couple of minor sensor issues which Tesla fixed.

Their trade-in valuation just came through and was £13,875.

Now I understand that Tesla has no responsibility to make a good offer or even any offer at all, but given that the vehicle is worth something like £30k privately and given that they would be making a sizeable profit off the purchase of a new Model 3 it seems incredibly insulting to me to make such an offer. Worse is that is basically sending me the signal that their vehicles are an absolutely terrible investment and will almost immediately become worthless after purchase. Given this, why would I ever purchase another Tesla, let alone trade-in my current one to them?

In a best case scenario the vehicle just lost £9k (25%) in value in just 18 months, but according to Tesla themselves it lost £25k (65%) in value in that time.

I just can't wrap my head around it. No one in their right mind would accept that offer. So why even make the offer at all? Why even offer a trade-in when all you are doing is slapping your existing custom in the face who's shown an interest in purchasing a new vehicle from you. It's making me want to sell my Model S immediately (not to Tesla) and never buy a Tesla product again.

Anyone have an insight on this? I just can't even...

Three thoughts; 1) Cars are [typically] not an investment. Thinking so is just going to get you frustrated. B) Used car market has changed A LOT in 18 months. Single data point, I was offered $64k USD for my '20 about 18 months ago. Now, I'd be lucky to get $40k. C'est la vie. 3rd) Tesla is in the new car market, not used car market. There is no incentive for them to be competitive. Go to a 3rd party used car buyer if you want top dollar. Better yet, sell it privately.

 

[shahryaran]

Why would anyone buy a guaranteed depreciating asset as an "investment"?

By anyone you mean Tesla?

 

[shahryaran]

Three thoughts; 1) Cars are [typically] not an investment. Thinking so is just going to get you frustrated. B) Used car market has changed A LOT in 18 months. Single data point, I was offered $64k USD for my '20 about 18 months ago. Now, I'd be lucky to get $40k. C'est la vie. 3rd) Tesla is in the new car market, not used car market. There is no incentive for them to be competitive. Go to a 3rd party used car buyer if you want top dollar.

Tesla sells used cars

 

[bhav]

Tesla sells used cars

Tesla buys and sells used cars to make a profit on the same car twice. Same as any other manufacturer.

My point was individuals should not buy cars as "investments". They are no such thing. You go into it *knowing* it will depreciate, the only question is by how much. I don't think anyone should be expecting not to be shafted.

 

[Black306]

Tesla sells used cars

That's not their primary business.

 

[M1tch]

Every car I’ve ever traded in has been well below market value. It’s for the convenience of dropping it off the day you get your new one and not having to try and sell it before to make up the deposit. I know full well those cars have been on a showroom lot for significantly more than I sold it just hours later.

Just life - but that was a very low offer to the OP IMO. The world is run by money and there is nothing people won’t do for it.

 

[shahryaran]

Tesla buys and sells used cars to make a profit on the same car twice. Same as any other manufacturer.

My point was individuals should not buy cars as "investments". They are no such thing. You go into it *knowing* it will depreciate, the only question is by how much. I don't think anyone should be expecting not to be shafted.

I bought a used M3 from Tesla for $35k 4 months ago and not they value it for $24

 

[M1tch]

I bought a used M3 from Tesla for $35k 4 months ago and not they value it for $24

New M3 highland is out so the older model prices will crash.

 

[Wattsisname]

True.
Tesla's trade in value for a car that I bought 4 months ago for $35k is $24k.
Tesla is killing their own product.
There is only one explanation for this. That their cars is very cheap to make. A model 3 is probably cost $18k to built.

Tesla profit on new cars is high but this ought to mitigate in favour of a decent trade in to encourage the OP to buy a new car. They can still make a turn on reselling his S. A paradoxical way to go about business but then, I am not the worlds most successful businessman ( in terms of accrued wealth at least).

 

[Wattsisname]

New M3 highland is out so the older model prices will crash.

The OP is trading in an S.

 

[shahryaran]

The OP is trading in an S.

Even worse

 

[Wattsisname]

Why would anyone buy a guaranteed depreciating asset as an "investment"?

I think the term investment is used very loosely when applied to new cars. We look for the least depreciation possible as it is the major component of true total cost of owner ship.

 

[Wattsisname]

Even worse

Not if you are referring specifically to the value drop when a model is replaced by an improved ( matter of opinion) version of an existing model; a 3 for a 3.
With the demise of new RHD S cars, I would have expected used prices to firm up. ( BTW, the OP is in the RHD UK ).

 

[Kansalis]

I think you are in part a victim of unfortunate timing. You bought the car at the very top of the COVID-fuelled sky high prices for EVs in general, when all new cars had 12+ months waiting time (except Tesla). At that point, all used EVs were in incredibly high demand and prices were artificially high. 18 months ago I traded in my ID3 to Tesla for more than I paid for it 12 months previously, and actually made a profit on it even after the PCP finance interest. That is pretty much unheard of in the history of the new car market.

Their quote is obviously lowballed too, but the difference is likely exacerbated by the price bubble around that time.