Is The Pre-Owned Tesla Program To Blame For Low-ball Trade-Ins?


Tesla Motors doesn’t operate like a traditional car company, though it still offers a trade-in program that lets buyers bring their old cars, which are bid on by local car dealers. But with Tesla preparing to roll out a pre-owned car program, owners trying to upgrade to the Dual Motor Model S are complaining of low-ball offers from the electric automaker.

A Tesla Motors Club post by four-time Model S buyer Bill Hart recounts how Tesla offered him $9,500 under the wholesale market value of his Model S P85+ when he approached them about upgrade to a Dual Motor P85D. He then found a dealer that would pay a higher bid, and asked Tesla to facilitate a “courtesy trade” to save Hart $4,000 in Florida sales taxes. The automaker denied his request for a courtesy trade, telling him it was not in Tesla’s best interests to used Model S sedans to other dealers. The outside dealer then pulled his offer on Hart’s Model S, leaving him back at square one, saying he was worried it would affect his future access to the inventory of conventional trade-ins he got from Tesla.

Why wouldn’t it be in Tesla’s interest to see the Model S going to other dealers? Because of the recently-announced pre-owned program, which gives Tesla the opportunity to make even more money off the second sale of a Model S. By some estimates, each pre-owned Model S could bring the company as much as $10,000 or more in pure profit…which is about the same amount that Bill Hart claims he was lowballed by Tesla.

He’s not alone either. Other Model S owners looking to trade in their vehicles for the Dual Motor Model S have found the costs to be too high, and there’s a whole subset of recent owners upset that they weren’t warned all-wheel drive and autopilot features would be available options. In the end, instead of offering Hart more money and to honor the courtesy trade, they returned his deposit on what would have been his fifth Model S purchase. Tesla has an exceptional record of customer service, even offering a “happiness guarantee” to new buyers, but this worrying trend seems to be sacrificing current customer satisfaction in an effort to attract all new customers.

I want to add that nobody should feel TOO bad for a four-time Model S owner. That said, this behavior seems to be about offering lower-cost used Teslas at the expense of Model S owners wanting to trade up. One can understand why this might feel unfair to loyal customers.

The thread Hart started is now 11 pages long, with other Model S owners recounting similar experiences with low trade-in offers, and shockingly, the conversation actually takes a turn towards agreeing with the assertions of the National Automobile Dealership Association. Yes, Tesla owners are actually siding with car dealers in the argument that Tesla’s no-dealer model could be a bad thing for customers when it comes to trade-ins, price, and service. That’s kinda frightening, and it’s kind of amazing how people can change their opinions once the money starts coming out of their own wallets.

Is the sheen and wonder of Tesla Motors starting to wear off as the realities of being in the car business rub up against owners and buyers in the wrong way? Or are current Model S owners just being a bit greedy?

Christopher DeMorro

A writer and gearhead who loves all things automotive, from hybrids to HEMIs, can be found wrenching or writing- or else, he's running, because he's one of those crazy people who gets enjoyment from running insane distances.