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Tesla Is Starting a Certified Preowned Program

Posted by Soulskill on from the making-it-cheaper dept.

cartechboy writes Most luxury automakers have a Certified Previously Owned (CPO) program. Tesla isn't like a normal luxury automakers, in fact, it's not really like any automaker out there. It doesn't have franchises and it sells its own vehicles through its network of galleries. Now, it plans to create its own CPO program. There are a great deal of Model S sedans out there currently under lease contracts. When those cars are ready to come back, Tesla has guaranteed that it will purchase them for a figure that falls somewhere between 43 and 50 percent of the original purchase price. This is exactly how Tesla's going to create its CPO fleet. Tesla seems to do everything in an unconventional manner, so we'll have to see if its CPO program behaves like every other automaker's, or if it's different somehow as well.

19 of 126 comments (clear)

  1. A lease on a CPO might be interesting... by FlyHelicopters · · Score: 3, Interesting

    I have not found the Tesla S to be all that interesting due to price. For what you pay, it is expensive, in my opinion.

    That being said, if they do a lease on a 3 year old copy for half the price of a new one, the monthly payment might get into an area that I'd be interested in.

    I would expect a 3 year old Tesla S to be in better shape than your average 3 year old car, the early buyers are going to likely have taken good care of it and if it comes with another 3 year warranty, then no worries.

    I actually wouldn't mind owning an electric, price is the primary issue right now.

    1. Re:A lease on a CPO might be interesting... by TWX · · Score: 4, Insightful

      On top of that, electric cars don't need the sort of fluids monitoring and maintenance that can make lease cars with gas engines undesirable; there's no, "don't change the oil for 50,000 miles, change it right before turning it back in" crap.

      Obviously regular wear items like interior parts, tires/suspension/alignment, and such will still be the same, but I'm used to driving cars up close to 200,000 miles anyway, so that's not such a big deal.

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    2. Re:A lease on a CPO might be interesting... by Alomex · · Score: 2

      Additionally to fluids, electric cars are subject to much less vibration than combustion engines, which is one of the main causes of wear and tear in automotive parts.

    3. Re:A lease on a CPO might be interesting... by TWX · · Score: 2

      I'm not so sure that's as significant as you state.

      Powerplants of every kind take a certain amount of mass, and as they rotate they induce a certain amount of vibration. Electric motors over certain sizes or power levels are often isolated with their own shock-absorbing motor mounts, even if they're not much more than bushings or pillow-blocks. Even devices as lowly and underpowered as squirrel-cage fans in evap coolers and air handlers have bushings.

      With an electric car, you're deciding between using gearing to achieve optimal engine RPM at every speed, or you're suffering when you're at lower speeds, getting suboptimal RPM and suboptimal power consumption. This precludes wheel-motors (and has the side benefit of preventing excessive unsprung weight) but means that the drivetrain now has to be located somewhere amongst the body/frame of the car, and has to use shafts to deliver the power. This means that there's still going to be vibration, there's still going to be force applied to motor mounts in the form of torque, and it means that any accessories deriving power off of the main motor will still have to handle having a part that moves (on the motor) and a part that doesn't move (on the body) to work. Otherwise one has to have an accessory motor (which may still be necessary anyway) and would have to drag along more mass.

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    4. Re:A lease on a CPO might be interesting... by Alomex · · Score: 4, Informative

      Powerplants of every kind take a certain amount of mass, and as they rotate they induce a certain amount of vibration.

      Wrong: a free spinning wheel creates no vibration.

      Combustion engines create a lot of vibration by their very design with a crankshaft and four strokes pistons. Have you been on an electric car? the reduced vibration is notable. Other readers might have been on a dual diesel/electric train while traveling in Europe? One can tell when they switch to the diesel power plant on the station at the end of the electric line because of the increase in carriage vibration.

    5. Re:A lease on a CPO might be interesting... by Anubis+IV · · Score: 2

      I was curious, so I followed your link. What I quickly discovered is that your link goes to entirely optional service plans that include WAY more than typical maintenance, and even if it were only maintenance, it'd actually be significantly better than what I'm paying out-of-pocket now. If my auto manufacturer offered a plan that covered those same features at that same cost, I would have saved $825 in the last three years alone!

      Specifically, I just pulled up the numbers, and in the last three years I've spent about $1800 on oil, repairs, and other similar maintenance on my current vehicle that has about 70,000 miles on it, all of which would be covered if I owned a Tesla. That ends up averaging to $600/year, obviously. In addition to that, I pay about $100/year for AAA's roadside assistance, and I've also had to pay an average of about $50/year for rental cars when mine has been in the shop overnight. Which means I'm paying about $750/year on stuff that Tesla's plans cover. Given that Tesla's 4-year and 8-year plans average out to $475/year and would cover ALL of that (as well as offering a few things I don't currently have, like automated vehicle diagnostics and hardware upgrades), it'd mean I could cut my costs by $275/year while gaining access to new features/services.

      Besides which, the previous poster never mentioned costs at all, so even if you were correct, it'd still be an entirely unrelated conversation. He was talking about the fact that the sorts of maintenance that people neglect with leased ICE vehicles which can cause major issues for second hand buyers is a non-issue for Teslas, given that they don't need that sort of maintenance. That's it. Suggesting he's "hiding the truth" is an act of hyperbole for its own sake.

    6. Re:A lease on a CPO might be interesting... by FlyHelicopters · · Score: 2

      :) I worked for awhile in the Gulf of Mexico as a helicopter pilot... There is tons and tons of oil yet to be extracted from there, including from fields they once thought were done.

      10 years ago companies like Apache and Baker were buying up "old spent" fields from the big boys and employing new technology to get more out of them.

      One platform I flew to was built in the 70s, it still produces about a million dollars a day in oil, long after the "experts" predicted it would run dry.

      Colorado is swimming on top of oil, so is Canada... So is the arctic... There are trillions and trillions of barrels of oil to be found...

      Of course, that is another question, do we want to pull it ALL out and burn it all?

      No, I don't want to, and I'm NOT a greenie. I do drive a 3 ton SUV after all! :)

      But I get it, even if CO2 isn't an issue, burning all that oil isn't clean, it does polute...

      So I'm all for better technology. Lets start with our power plants... If I buy a Tesla, my primary concern beyond cost is that I get my power from the wall from a coal power plant.

      Yea, maybe it is "cleaner" somehow than a small ICE engine in my truck, but it feels a lot like rearranging the deck chairs on the Titanic...

      Why don't we build more nuclear? Lets have the Navy run them, they have a very good record with their reactors and aren't limited in the type they can build, so they could run breeder reactors.

  2. Re:Battery Life by Alomex · · Score: 2

    Nope, battery warranty is eight years, so you are far off the mark.

  3. Re:Battery Life by TWX · · Score: 2

    This isn't anything about owners, this is about off-lease cars. Leases are for predictable durations, so remaining battery life should be easy enough to determine.

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  4. It's a "used car", stupid. by Animats · · Score: 2

    "Pre-owned" - come on.

    1. Re:It's a "used car", stupid. by geekmux · · Score: 2

      "Pre-owned" - come on.

      C'mon. All luxury vehicles are either new or "pre-owned".

      Only peasants drive used shit. The yuppies would never stand for such a moniker.

      Oh, and that's Certified Pre-owned to you, buddy. You know, 'cause we need another reason to charge $400/month for some used shit...

    2. Re:It's a "used car", stupid. by OzPeter · · Score: 2

      "Pre-owned" - come on.

      Yeah .. but it's "Certified Pre-owned". How else are you supposed to know that it was actually pre-owned. They might be lying about that. This way you are 100% guaranteed that it actually is a pre-owned Tesla. And that's good to know. Being able to sleep soundly at night knowing that your car is really pre-owned is well worth the money you pay for it being Certified!

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  5. You don't purchase back leased cars by gurps_npc · · Score: 4, Interesting
    The lease ends and the cars are returned to the company that already owned them.

    I know corporations like to pretend that lease = own, but they are not the same.

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    1. Re:You don't purchase back leased cars by Paco103 · · Score: 2

      When I bought my car I had title in hand in my name. It had a lien on the back, but the title had my name on the front.

      And there are some other differences, much like in the home market. I own my home, but the bank has a lien on it. I get to decide what colors I paint the walls, any upgrades or additions I want to do, if pets or guests are allowed, etc. The bank doesn't make those decisions like the landlord did for my apartment or rental house.

      Similarly, a leased car has many restrictions. Usually something like 15,000 miles per year maximum without penalties. I drive too much for that. Modifications are usually not allowed or heavily restricted. I have radio equipment and auxiliary lighting installed in mine, as well as customized interior shelving in the cargo area (SUV). Trailer towing equipment is often not allowed unless it's a truck with a specific towing package at the time of lease. My loan agreement also specified either 30 or 60 days default for repossession. I don't remember exactly, it's been paid off for years and I have no payments. With a leased car, the payments never end in a situation where you get to keep a car. Sometimes the lease buyout option is more than buying the similar car. I know someone that wanted to keep her leased car, but due to the lease buyout price she ended up giving it back and just going to buy the same used car somewhere else.

  6. Re:Really? by gurps_npc · · Score: 2
    You are ignoring leases, which in particular are common for Tesla.

    Like all leases, you don't 'sell' the car back or 'trade' the car in. Instead, your lease ends and the car returns to the owner. Despite their propaganda, if you leased a car, that means you never actually owned the car.

    This is not a Tesla's assault on 1st sale doctrine. Instead, it is a common practice, which I like to call the ZERO sale doctrine. The cars - in both Tesla's program and more traditional programs never were sold at all.

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  7. Opportunity by ArcadeMan · · Score: 2

    Who's going to be the first to open "Stan's Previously Used Teslas"?

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    1. Re:Opportunity by Anonymous Coward · · Score: 4, Funny

      Stan.

  8. Re:Really? by gurps_npc · · Score: 2
    In generally, leases give huge benefits to the leaser at the cost of guy doing the leasing.

    Leases usually overcharge the 'renter'. The renter is pushing off risk from themselves to the leasing company and they pay HIGHLY for that.

    Let's face it, those situations where people turn in and buy or buy it back then sell it at a profit mean the company screwed up somehow - or intentionally overpriced things.

    Basically, leases are designed by the companies to make THEM money. They throw in added complexity which always makes it harder for a person to make decisions.

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  9. Leasing a car... by MMC+Monster · · Score: 2

    I never understoof the fascination of leasing a car for an individual. I can understand for a company, but most cars are worth something at the time the lease is over. Why give it back or have to go through more tortuous negotiating to buy the car then?

    If you can't afford to buy a car, perhaps you should look into a cheaper car.

    (I'm discounting those that lease $15K cars, since most leases are for more expensive models.)

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