According to a new study, Tesla Model 3 retains almost 90% of its value over three years, which is five times better than other electric vehicles.
Earlier this year, we reported on an iSeeCars.com study showing that Model 3 had very little depreciation over the first year.
Some Model 3 vehicles are now reaching 3-years-old, and they have more data to work with.
In a new study, they have analyzed more data and are looking at value over three years since it’s a popular timeline for used cars due to vehicles coming off their leases:
“iSeeCars.com analyzed more than 6.9 million car sales to identify models with the greatest loss in value after three years. “Three years is a popular age for used car buyers because the cars have taken a major depreciation hit, but likely have many of the latest modern safety and technology features,” said iSeeCars CEO Phong Ly. “ Some of these bargains provide good opportunities for car shoppers as reliable vehicles that are discounted because they simply aren’t as popular in their vehicle segments.”
They came to the conclusion that the average vehicle depreciates 39.1 percent after the average car lease term of three years.
For electric vehicles, the average depreciation goes up to 59.2%:
|Best Bargains on Almost-New Electric Vehicles – iSeeCars Study|
|Rank||Car||Avg. 3-Year-Old Used Price||% 3-Year Depreciation||$ Savings Over New Car Price|
|EV Segment Average||59.2%|
|3||Kia Soul EV||$14,862||58.7%||$21,098|
|4||Hyundai Ioniq Electric||$18,532||47.7%||$16,899|
|5||Tesla Model S*||$59,246||36.3%||$33,760|
|6||Tesla Model X*||$69,070||33.9%||$35,391|
|7||Tesla Model 3*||$41,734||10.2%||$4,720|
|Average for Electric Vehicles||52.9%|
That’s partly due to tax incentives making used electric cars less attractive than new ones.
Tesla is definitely leading the segment when it comes to value retention, but that’s also partly because Tesla buyers don’t have access to the federal tax credit anymore.
iSeeCars.com wrote about Model 3:
“The Tesla Model 3 is the vehicle with the lowest depreciation overall, depreciating more than 5 times less than the average for the segment. “The Tesla Model 3 is still very much in high demand since it started production in 2017. Even though it doesn’t present a bargain compared to its new car price, it offers consumers a more affordable option for owning a Tesla.”
To be fair, the look at three-year depreciation due to off-lease vehicles doesn’t really apply to Model 3.
While the vehicle has been in production since 2017, Tesla actually only started offering leases for Model 3 in April of 2019 — meaning that the first Model 3 vehicles on leases will be off their leases in April 2022.
Anecdotal data definitely supports some of those findings – though 90% seems high to me.
It is really difficult to find a really good deal on a Model 3. There are unique circumstances contributing to that though, like the fact that Tesla discontinued the configuration, Long Range RWD, that was offered for early Model 3 vehicles.
I don’t know if they are comparing it to the original prices or new ones, but what I’m seeing is closer to 80%.
Without an exactly comparable option available new, it helps the price of early used Model 3 vehicles. But in general, it looks like Model 3 vehicles hold their value much better than the rest of the industry — though they are not quite “appreciating assets” like Musk claimed.
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