2016 Tesla Model X: Selling Process
by Ronald Montoya, Senior Consumer Advice Editor
The resale value of electric vehicles has a notorious reputation for sinking like a stone in water. The incentives to buy are geared toward the first owner; there are still questions about the long-term durability of EV batteries; and overall used-car shoppers are more focused on finding a vehicle that will fit their family needs than reducing their carbon footprint.
I had all that in mind when I took our 2016 Tesla Model X to CarMax for an appraisal.
We typically start at the used-car store whenever we sell a car from the fleet. It's fast and easy and gives us a baseline for value. It also gives us an offer that's good for a week, even if we don't ultimately sell the car to CarMax.
And so, knowing what I know about EVs, I was expecting a lowball offer from CarMax. It was more like being hit by the pitch.
CarMax offered us $66,000 for the Model X. For reference, the Edmunds trade-in True Market Value for the SUV in average condition is $86,566. And given that we paid $144,950 when the vehicle was new, CarMax's offer was a drop in value of nearly 55 percent in about 20 months. It was even less than the used-car store offered us for our Model S back in 2014.
In all fairness, we should note that CarMax doesn't sell Teslas, so if it had bought it, the Model X would have headed straight to its auction house. Still, the offer was a nosedive that would make a peregrine falcon jealous. We thanked the CarMax rep for his time and let him know we'd try our luck in other places.
Tesla offers a trade-in program for customers purchasing a new vehicle. We were a couple months away from buying our Model 3, so I figured it was worth a shot to see what the carmaker would offer.
Here's how it works: You email your vehicle information to Tesla, then a representative replies to explain the process and, more importantly, to set your expectations. Tesla would then list the vehicle on its own internal resale site and come back to you with an offer that it says will be lower than a private-party value. (That's the "set your expectations" part.) I mentioned to the representative that we'd taken the vehicle to CarMax and wanted to improve on the offer. "We usually end up close to what CarMax would offer," said the Tesla rep. With that in mind, we decided to keep searching for a better method.
Remember when Tesla was so proud of its resale value that it would guarantee "that the resale value will be higher than that of BMW, Audi, Mercedes, Lexus or Jaguar"? Those days are long gone.
After researching the market, we decided that eBay was a good place to list our Model X. We ran a seven-day auction and set the reserve at $67,000. At worst, we'd improve on the CarMax offer by $1,000. That would justify the effort of setting up the auction.
Things got off to a great start when the auction met its reserve on the first day. The top bid hovered around $80,000 for a few days after that. Along the way, I answered a bevy of questions: "What's the 'Buy It Now' price?" (There wasn't one.) "What will you take for it?" (Whatever people will pay; it's an auction.) And "Does it have Autopilot 2.0 hardware?" ( It has 1.0.)
The last few minutes of the auction were the most frantic as the bids came in faster. At one point, I received this troubling message from the then-highest bidder: "Do you have access to financing? I have not arranged for any at this time and not sure how long that would take, would I be able to get an extension on payment if it's delayed?"
Um, no and no. I thankfully dodged this bullet when the final highest offer came in from another bidder, willing to pay $90,101. He then put down the required $1,000 deposit via PayPal.
Scott, the buyer, contacted me soon after to discuss payment and when he could pick it up. I had the vehicle detailed for him while he made arrangements. He flew down from Northern California to pick up his Model X and drive it back. He brought a cashier's check for the balance. I had contacted his bank earlier that day to verify the authenticity of the check. Scott looked over the vehicle, I handed him the title, and he set his navigation for the long drive home.
Our persistence and extra legwork made for a $24,000 improvement over the CarMax offer. The effective depreciation was now about 38 percent, still high but not nearly as bad as before.
We wish Scott well and hope he and his family enjoy their Model X.
Ronald Montoya, senior consumer advice editor @ 26,288 miles