Used Tesla Model 3 pricing is a roller coaster

One Elon Musk announcement is all it takes for Tesla’s ranking in the second-hand market to jump or fall. In this speculation game, there are sometimes winners, but usually more losers.

The announcement of the arrival of a Model Y for less than €50,000 on 26 August 2022 generated immediate excitement. Model 3 owners saw this as an opportunity to upgrade to a more familiar model and took out their credit card to order. Except he clearly played against them in the second-hand market. In the game of supply and demand, some are not immune to a cold shower.

Just like the stock market price, the value of second-hand Tesla models can fluctuate, away from the usual curves of the second-hand market from other manufacturers. Buying a Tesla is also a new way of approaching the car, with its good and bad sides.

If there are speculative bubbles in vehicles in the luxury and collection segment, Tesla is the first manufacturer to privilege them over consumer models. It’s not the first Model S buyers who will say otherwise: they were the first to experience the dizzying discounts following Elon Musk’s unpredictable announcements.

When the second hand price bubble will *plop*

In recent months, Tesla’s rating has followed an upward trend, as it has for many other recent vehicles. Faced with a shortage of components and extended deadlines for obtaining new vehicles, customers turned to the second-hand market. Demand was strong and sometimes difficult to meet, prices began to rise.

Model Y. // Source: Tesla live capture

After just over 6 months of driving their Model 3 or Y, some owners received trade-in offers at prices higher than the new purchase price. Several testimonies in private Tesla groups on Facebook attest to this possibility of easily realizing capital gains. An exceptional situation, which only works when demand exceeds supply.

Until then, the price curves followed a natural and gradual evolution, up or down. But Tesla’s specialty is surprising. That’s what the company did on August 26, when it launched the Tesla Model Y Propulsion for less than €50,000. With this offer, several Model 3 owners, or people in possession of purchase orders for the Model 3 or Y to be delivered later in the year, placed a new order on the American manufacturer’s website. If we can imagine this kind of spontaneous purchase for the new iPhone 14, it is always surprising to see it for cars that cost several tens of thousands of euros.

Testimonials on Facebook, about possible capital gains. // Source: FB private group capture

However, the Model Y purchase is generally used to replace the Model 3. Thus, many Model 3’s are likely to be simultaneously on sale in the second-hand market. Inevitably, when supply exceeds demand, the rating drops.

The value of a second-hand Model 3 Propulsion was over 43,000 euros the day before the Model Y was announced. A few days later, it dropped to less than 39,000 euros, within companies specializing in the export of Tesla to other markets. Again, there are many testimonials in private groups about Tesla. These companies even suspended resumptions, time to absorb the flow of orders. Between now and the delivery of the first Model Y Propulsion, the recovery rate curve will surely continue to fall, unless there is another outburst from Elon Musk announcing the stoppage of production of his cars, for example.

Examples of very recent Model 3 announcements. // Source: Leboncoin website capture

For sellers, the goal is to have a minimum gap between selling their vehicle and buying the Model Y. The market reality is likely to be significantly different, especially as many remain convinced that demand is strong. They didn’t necessarily see that within a few days the number of ads on leboncoin literally exploded (over 1,000 as of September 9). Ad pages and pages are only a few days old.

For €49,900, a new Tesla buyer is faced with an offer for a used Tesla Model 3 Grande Autonomie with 55,000 km on the odometer or a new Model Y.

A non-guaranteed trade-in offer on Tesla

It’s a small element that some Tesla customers are also figuring out a little the hard way. Many wanted to take advantage of the takeover offer offered by the American manufacturer. It must be said that the trade-in value estimates are quite good, compared to other rating services.

However, this is a temporary exchange offer, lasting 7 days. For a Model Y ordered for delivery between December 2022 and February 2023, the estimate provided by Tesla today will no longer be valid when the vehicle is actually returned. Prior to delivery of the new vehicle, a new estimate will be made according to the second-hand market price on that date. Suffice to say, some might be disappointed if the market is still so saturated with the used Model 3.

Testimonials in a Facebook group, about covers. // Source: FB private group capture

With each lower price announcement, it’s the same observation

At the beginning of this article, we talked about the example of the first Model S customers. Some were trying to resell their Tesla for €120,000, purchased at a higher price a few months earlier. But it was enough for Elon Musk to announce on the same day a significant drop in the prices of used models because they are more expensive than new ones. Nothing has changed for several years. There are just more models in the Tesla lineup and more and more price yo-yo risk.

Elon Musk Tesla Roadster
Elon Musk. // Source: YouTube screenshot

Both up and down, Tesla’s pricing policy is globally unpredictable. When prices drop, new buyers flock to new models, but used sellers lose money. On the other hand, when prices go up, second-hand sellers can get good deals.

This fairly regular fluctuation is really atypical in the automotive industry. Apparently, only Tesla is able to base the rating of its used vehicles on the same whims as its stock market quotes. It’s best to know before you buy to speculate.

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