Tesla and the price of ICE trade ins

[FutureBoy]

So I had started a thread about Tesla calling to ask me if I wanted to get another Tesla while I waited for my CT to come in. Along the way though the thread started getting more detailed about the price of trade in ICE vehicles when upgrading to a Tesla.

Plus I've been listening to various VLOGs about future Tesla plans (somewhat speculative but informative).

From this I am getting that at some point EVs (and to a large extent those will probably be Teslas) will end up taking over. And ICE vehicles will basically become persona non grata on the roads. How long that takes can be anyone's guess. But assuming that this scenario is true, I would assume that the trade-in value (and even just the general resale value) of ICE vehicles is going to continue dropping. I get that traditional ICE manufacturers are currently selling a lot of vehicles at pretty high prices but it seems to me like the idea of taking out a 60 month loan on a new ICE vehicle right now might not be a good idea.

So then on the thread I read this:

I ordered a M3 months ago. I submitted my 2019 Volvo XC90 with about 15k miles for a trad-in and
got a non-negotiable offer that was about $10k under Car Max. I got two Vin #S for my M3 which I had hoped to drive and trade on my Cybertruck. I met with local sales rep (Houston Galeria) and asked if they would/could match Car Max. I was told that Tesla "used" to match legit offers for trade, but not any more. Their trade offer was take it or leave it. Well since Tesla's Autopilot is not
as good as Volvo's, I definitely have to have FSD. Faced with an additional 6.25% local sales tax and
the possibility that the value of FSD would be lost in the trade of the M3, I was looking at loosing
$11,000 to $15,000 in a year of ownership of the M3. So I was sad to cancel the order for the M3 which was on it's way to be delivered and loose the $100 deposit because Tesla has no desire/need to help owner buy their vehicle.

The idea that Tesla

that Tesla "used" to match legit offers for trade, but not any more. Their trade offer was take it or leave it.

sounds to me like Tesla is starting to see the price of ICE vehicles drop and they are just acting upon that. It may be that the rest of the world just isn't seeing the same thing yet.

What do you think? I've got a CT on order. I have a top line Toyota Sienna with just over 100k miles on it and its still looking great. Would it be financially wise to retail sell the Toyota now and replace with a cheapo vehicle till my CT gets delivered?

 

[Cyber_Dav]

I think you're timeline is way too short. EV sales won't affect ICE trade-in values for 15 to 20 years.

 

[Crissa]

I think you're timeline is way too short. EV sales won't affect ICE trade-in values for 15 to 20 years.

One in eight cars sold in the UK this year have been EV.

EVs have already cannibalized Hybrid sales in several years, the only one where hybrids did well was 2019 - when there were a huge number of new hybrid models.

EVs hold their value very well... As long as they're a model that doesn't suffer heavy battery degradation, they're usually above the battery pack replacement cost at five years. They also are selling on the used market above their gasoline competition, despite the same level of features.

And this year, EV sales didn't drop or dropped very little while internal combustion car sales cratered. That reveals a huge weakness in the pir sales which will catch most by surprise as EV prices start coming down. https://www.globenewswire.com/news-...2020-Marking-Strong-Auto-Retail-Recovery.html

-Crissa

 

[MEDICALJMP]

I think Cyber_Dav is off by 5 years on both the low to higher brackets, but agree with his premise that EV will not suppress ICE prices in the time it take you to get your Cybertruck. Croissant is right about he adoption rate in the UK, but that is a much smaller and very different market that the US.


Use your current truck, it is already depreciated. If you have an accident in the current vehicle you say a few cuss words and get a beater until CT Time. If you get a new Tesla for a year you have higher insurance costs, taxes, risk of depreciation; and if an accident occurs in to your M3 you shed many tears due to diminished value and resulting higher insurance. Stay the course.

And it’s my personal opinion is that if people are taking out a five-year loan for a vehicle that are buying more vehicle than they can afford.

 

[Crissa]

Yeah, don't buy more than you absolutely need while waiting for a specific vehicle. You want to be ready to make that leap.

-Crissa

Also... I'm a centauress, not a croissant. ^-^

 

[MEDICALJMP]

Yeah, don't buy more than you absolutely need while waiting for a specific vehicle. You want to be ready to make that leap.

-Crissa

Also... I'm a centauress, not a croissant. ^-^

Damn autocorrect!?

 

[Tinker71]

I think you're timeline is way too short. EV sales won't affect ICE trade-in values for 15 to 20 years.

You are wrong. EV will affect ICE values greatly in 2 years.

 

[FullyGrounded]

Yes, EV interest and sales are impacting ICE valuations today. My plan, when the time is right, is to offer my vehicles to people that need them at a deep discount. peace

 

[Tinker71]

Yes, EV interest and sales are impacting ICE valuations today. My plan, when the time is right, is to offer my vehicles to people that need them at a deep discount. peace

I have a choice of a $1000 month truck allowance or company provided truck. While the company truck has use limitations for liability which I hate. I won't think about using that money to buy a new truck because of the depreciation hit I will take when I get my CT. I am going to try to buy the 2018 F150 with 100k miles off them with the idea that I can almost give it away in 2 years when I get my CT and not feel bad about it. New truck prices are going to take a huge hit. New/used will take a huge hit. People are going to be stuck in their $1000 truck payments and be pissed. As I have said in my post about how many people actually buy. I don't think many will be able to afford it because they are counting on $30,000 for their existing truck they will be stuck in a loan.

 

[FullyGrounded]

...New truck prices are going to take a huge hit. New/used will take a huge hit. People are going to be stuck in their $1000 truck payments and be pissed. As I have said in my post about how many people actually buy. I don't think many will be able to afford it because they are counting on $30,000 for their existing truck they will be stuck in a loan.

That's the problem with not keeping up with the goings on in the world, right? peace

 

[alan auerbach]

You are wrong. EV will affect ICE values greatly in 2 years.

Will likely depend on two unknowns: the price of liquid fuel and the success of vaccines.

 

[Cybertruck Hawaii]

Rich people usually drive a Tesla and don’t want to be bothered with the trade in process. They will take any trade in value at the time of delivery of their new Tesla. It’s us poor folks that will be nickel and diming the most value out of a trade in vehicle. So shameful to be among the poor.

 

[Crissa]

Rich people usually drive a Tesla and don’t want to be bothered with the trade in process. They will take any trade in value at the time of delivery of their new Tesla. It’s us poor folks that will be nickel and diming the most value out of a trade in vehicle. So shameful to be among the poor.

Well, that's true, but private sales exist, so no worries.

-Crissa

 

[Ed Harris]

Yes, EV interest and sales are impacting ICE valuations today. My plan, when the time is right, is to offer my vehicles to people that need them at a deep discount. peace

Been babying our vehicles so when the day comes I didn't go out with a new vehicle and take a bath on resale. I picked up a low mileage minivan after my wife gave her Jeep to our son in the Air Force. She got my Jeep and I refuse to spend a lot for a new vehicle. I would rather put in $2K a year in fixes and repairs waiting for the CT. I see it as the least expensive way to go. Personally, I don't care cause anyone who knows me just laughs cause they know the CT will eventually come. And in the meantime, I have saved a fortune in payments and insurance. My least expensive option when not knowing when it might come.

 

[CyberGus]

You should be wary of my forward-looking statements:

Nov 2019 - "I reserved a Cybertruck!"
Dec 2019 - "Wow, $TSLA will never get any higher"
Jan 2020 - "My auto lease is over, I'll just turn it in and wait for the CT"
Jul 2020 - "Pandemic will be over soon"
Dec 2020 - "CT delayed, but it's only 1 year"
Jul 2021 - "Buy a car? Nah, prices will go down soon"
Dec 2021 - "CT deliveries any day now!!!"