Used cars are directly impacted by the price of their newer models. So when a manufacturer drops the prices it negatively effects used cars of the same model. For some OEMs that drop prices often, it negatively impacts the entire brand.
Tesla does not have to worry about negative brand equity with its price drops. Where they are different is that their cars depreciate the least and during the pandemic, Teslas have held their value better than many other OEMs' models.
A look at a Used Tesla Model S Performance
With the price drop announced Oct 12, 2020 for Model S, we look at how it would predict the price of a used Tesla Model S Performance for one month out. Using the Keemut valuation engine (beta) we were able to enter in the parameters and do a forward looking valuation.
We entered in data for a 2020 Model S Performance and its price came to show a drop of nearly 4%, vs. a normal drop of around 0.2% to 0.5%.
Earlier in 2020 when Tesla dropped prices, there was a 5% drop over the following few months, as we go into the end of 2020, the value for a used Tesla will drop a bit more than they have in the previous months and our model is showing about 6.5% drop in the next two months.
Also, if you see the 'Old MSRP' valuation, we were only predicting a 0.2% drop in value for November.
Is this a Good Time To Buy a Used Model S?
In the next few weeks, there should be a small drop in used Model S pricing, and you could find some deals. Other than price, make sure that the vehicles have a Keemut report so you can get a good history of the battery life, driving life, and more.