So, it’s either getting around to that time where its time to buy a new vehicle. Or maybe you are hyped about the lifestyle choices offered by hybrid and electric vehicles. Either way, for some reason, you have thought about whether purchasing a used Tesla is a good investment opportunity.
Is a good idea to purchase a used Tesla? Buying a used Tesla depends on several factors, but Telsa’s, used and new, offer a solid design, the best electric engineering, and the chance to impact the environment in a positive way. In addition, they are reliable with low ongoing maintenance costs, and hold their value well, which means the cost of a used Tesla will be significant, but so will the resale value.
Being on the cutting edge of electric vehicle technology offers exciting opportunities for the purchasers of a Tesla vehicle. With Tesla being adamant about having all work done to maintain one of their vehicles, you can be ensured that a used Tesla will have the same care and quality as a brand new one rolling off the lot. However, because of the technology involved in electric vehicles, there are some costs to consider before making the purchase.
What to Look For in a Used Tesla
Purchasing a vehicle, new or used, is often an intimidating undertaking for many. Being such a large investment and being an investment that will determine your ability to get to work or home or social life even, it is right that it should be a little intimidating.
Since Tesla’s are strikingly different from their traditional, gasoline powered counterparts, many people are even more unsure when it comes to buying a used Tesla. When you buy new, you can be relatively sure that the car is in good condition, but when you buy used, you have to know what to look for, and if you’ve never driven a Tesla, this might be difficult.
One of the best things about electric vehicles is the fact that they require a lot less maintenance than gasoline powered vehicles. Oil and filter changes are things of the past, being as how electric vehicles don’t have a gas engine or oil. According to the Tesla website on maintenance, even brake pads will require less maintenance.
This means that when purchasing a used Tesla that there is a lot less to be worried about as far as parts failure and condition of the vehicle. This is a good thing; Tesla vehicles are relatively simple and are very reliable vehicles. Less complexity and moving parts ultimately mean that there is a lot less than can go wrong.
Inspecting a Used Tesla
So, when looking to purchase a used Tesla, you will be looking for many of the same issues as a traditional, gasoline powered vehicle:
- Exterior damage is a common problem with vehicles, looking for dents and paint chips is a good way to start diagnosing the overall health of the vehicle in question. Chipping in the paint isn’t a severe issue, since its common due to road debris, and fortunately, there are kits available to cover the unsightly spots.
- Rust is a big issue and a red flag. Surface rust is something to keep an eye out for, especially in colder regions of the country where salt is liberally used on road surfaces. If you happen to see rust make sure to d a thorough inspection of the vehicles frame, as rust on the frame can be a structural issue.
- The tires and wheels of the vehicle should be in good condition, as they can be costly to repair. 21” wheels and the tires that they use are prone to wearing out quickly and are notorious for cracking when they hit potholes. So, no matter what type of vehicle it is the wheels are an important factor when looking to purchase a used vehicle.
- Interior health of the vehicle’s upholstery and condition is also a good sign as to how well the vehicle was kept and maintained.
- Check the electronics. Since Tesla vehicles are electric and highly dependent on its electric systems to function smoothly, you will want to get in the vehicle and try out the onboard screen and give it a thorough run through to make sure it is functioning properly. Giving the windows a try and checking the blinkers and lights is a good idea while you are in the vehicle.
- Going for a test drive is something a person should do with any vehicle, making sure that the vehicle accelerates as advertised, that the brakes are in good health, and that the vehicle is in good performance condition.
- Don’t worry as much about mileage. With a gas or diesel vehicle, mileage often indicates the engine and transmissions health, which are both very costly to repair and replace in these kinds of vehicles. In a Tesla, the engine is replaced by electric motors in the wheels that have been designed to last for many hundreds of thousands of miles.
The motors will last so long in a Tesla vehicle that the battery packs will need to be replaced long before the motors ever encounter an issue. The warranty for Tesla batteries is at 120,000 miles. However, it is reported by Tesla that even at 500,000 miles, there may only be a 20% drop in the charge capacity of their batteries from the day they were brand new.
- One of the most important things to do when purchasing a used vehicle is to do a search for the vehicle’s history. Getting a copy of the VIN number and running it through CARFAX will get a clear image of the vehicle’s history.
With all of that being laid out, it is easy to see that Tesla’s vehicle has a lot less to worry about when it comes the mechanical functionality of their vehicles. There are, however, a few other things to look out for before purchasing one of these vehicles.
Vertical Integration of Tesla
Since Tesla’s company is vertically integrated, this means that all manufacturing, selling, and maintenance is covered in house. They do not offer repair manuals, let alone parts, for non-authorized providers or service centers to diagnose and complete repairs on their vehicles.
Vertical integration in Tesla affects a few things:
- Maintenance Costs
- Insurance costs
- Availability of repairs
One of the largest issues that this causes is an increase in repair costs and maintenance costs. If an issue does occur with a Tesla vehicle, the owner has to make a scheduled appointment with a service center in order to get a repair completed. With the parts of these vehicles being controlled entirely by Tesla, the costs can quite high while even be covered by warranty.
If your vehicle is out of warranty, the replacement of damaged parts can be astronomical or even impossible to get through a certified service center. This is the largest cause of frustration from Tesla owners that have had issues with their Tesla vehicles.
When purchasing a used Tesla vehicle, it is very important to make sure that the vehicle is under warranty. The original Tesla models came with an 8-year battery and motor warranty, so these vehicles are still covered under the original Tesla warranty.
When looking to purchase a used Tesla, a warranty is incredibly important. It would be awful to purchase a Tesla only to have an issue that you couldn’t have fixed, and your whole investment would go down the drain in a matter of minutes. Luckily Tesla offers a CPO warranty program for those looking to purchase a pre-owned Tesla vehicle.
The CPO warranty starts the instant you buy the car and lasts up to 4 years or up to 50,000 miles. Since these vehicles have passed a 70-point inspection, any vehicle that has a CPO warranty the only thing that a purchaser will have to worry about is the expected wear and tear that comes with any vehicle that has been on the road.
It should go without saying that if you are considering purchasing a used Tesla from a third-party or owner, then you should be very wary of what you might be getting yourself into.
Pricing for a Used Tesla
Tesla is a relatively new automobile company compared to other manufacturers of vehicles currently on the market. Coupled with the fact that Tesla develops and has the patent for many of the new technologies that go into the production of one of their vehicles, the price for a new Tesla ranges from $35,000 for a Model 3, to $81,000 for a Model X in the year 2019.
These prices can be a little misleading, as the options available for each model are just baseline. With the addition of upgraded battery packs and other options, the average pay out for a Model 3 can reach up to $50,000.
Often used Tesla Model 3’s can be found at the price range of around $40,000. These vehicles really do manage to hold their value well. These prices reflect their quality as vehicles and market value. Tesla has provided to the world a fully functioning all-electric vehicle and proven that the is a market demand for electric vehicle in the same move.
This has led to a bottlenecking in supply and demand where the demand for these vehicles is currently much higher than the company’s ability to produce. This is part of the reason Tesla vehicles enjoy such a premium price, new or used. Another reason is because of the uniqueness of their vehicles. Not many companies have enjoyed the position that Tesla has, by being the producer of a feasible all-electric vehicle.
Another thing that keeps the value of Tesla vehicles high is that the company is adamant that all repairs and maintenance go through the Tesla company and its authorized provider and service centers, like how Apple works with its products. They do not provide parts or manuals for those who want to repair their vehicles on their own.
While this may be frustrating for many Tesla owners, it also keeps the quality of maintenance and repairs of Tesla vehicles high.
Tesla and Right to Repair
Tesla is a company that has dedicated itself to the creation of electric vehicles in order to usher in an era of sustainable transportation. However, they were not a company that supported the Right to Repair for aftermarket repair shops. They have a history of retaining all their information on repair and manufacturing of parts for their vehicles.
They only have a handful of Tesla Certified Service Centers in the United States that Tesla owners use in order to get the necessary repairs for their vehicles. In Massachusetts of 2012, the state enacted a Right to Repair bill, requiring automakers to provide independent shop owners and vehicle owners to have access to the same diagnostic and repair information that Tesla provided for their certified service centers.
Since then, Tesla has begun to relax the stranglehold that it has on this critical information. For a subscription, owners and shops can now access repair manuals, diagrams, and parts information. This information can be access through Tesla’s service website.
If you already happen to be an owner of a Tesla that has gone out of warranty and has no other option but to perform the repairs yourself, this is a good place to start before tearing down your car.
If you are thinking about taking the riskier option of purchasing a used Tesla that is out of warranty, then this is great information to have. One man from Massachusetts who has a YouTube Channel, Rich Rebuilds, has rebuilt many Tesla vehicle models and has a few videos showing just how he did the repairs himself.
Cost of Yearly Maintenance for a Used Tesla
When looking to purchase a new vehicle, something that plays a heavy role in whether a vehicle is a worthy buy is how much yearly maintenance is going to cost. Depending on the model of car, this can be very nominal or astronomical.
For instance, I once had a Chrysler Crossfire that lasted for several years. Once I began to have issues with the vehicle, the costs of repair easily overshadowed the price of the vehicle itself. Needless to say, I had to sell the vehicle as is to get something more practical.
The same philosophy is extended to Tesla’s vehicles. With insurance companies using Tesla’s vertical integration and Tesla’s approach on the Right to Repair to their advantage, the prices of repairing and maintaining a used Tesla can climb rapidly. Some horror-stories that owners of Tesla have to share when it comes to repairs are repair bills that approach tens of thousands of dollars, as well as long wait times at the repair center.
What you can expect to pay for a Tesla Model 3 in yearly maintenance is roughly $3,000, shown here in maintenance and repairs. Over the course of 5 years, you can expect to pay about $10,000 to about $15,000, which is roughly about 30% of the original cost of a used or new Tesla. This is about how much a person could expect to pay for the cost of maintenance of other luxury vehicles such as a BMWs.
This is also affected by the warranty, which may not cover certain damaged parts or repairs, leading to a much higher cost of repair. This is where some of the horror stories of purchasing a Tesla come from. When a part of a Tesla vehicle is damage that is not covered under the typical warranty, then the price for repairs can skyrocket.
Insurance Premiums for a Used Tesla
Insurance for Tesla vehicles is reported to come in at a relatively high price at roughly around $375 a month. This is affected by your typical factors as well as some that are actually caused by the company and their vehicles.
However, my personal 2019 Tesla Model 3 Performance with 50,000 miles on it is only $110 a month through State Farm (Geico quoted $275 a month for the same coverage!).
Your typical factors in deciding how much the average person will pay for insurance on a used Tesla are:
- Options included in the vehicle.
- Model of the vehicle
- Driver history
- The kind of coverage you choose.
Again, Tesla’s grip on diagnostic and repair information for their vehicles is a large force in driving up the cost of the insurance for their vehicles. The insurance companies have caught on and take advantage of this.
However, Tesla has recently begun to move in the direction of providing insurance for the drivers of their vehicles. This service will tap into the car’s computer systems to analyze just how well the driver of the vehicle performs, this leading to Tesla being able to reduce the cost of their customer’s insurance by a reported 20%.
This is good news for those looking to get a Tesla vehicle in the future, as the lower cost of insurance will hopefully drive the amount more potential buyers up.
Do You Have Access to Charging?
Another large factor that should be taken into consideration when looking to purchase an electric vehicle is how accessible electric charging is for you.
One of the great benefits of having a Tesla is that they can be charged by any electrical outlet. Tesla provides a breakdown of how different voltages can affect the rate of charging for their vehicles:
Level 1 Charging
This includes your standard home 120v, albeit at the slow rate of getting approximately 3-5 miles per hour charge. This means that to fully charge a Tesla with a standard 120v outlet, it could take up to 4 days to reach maximum charge.
Level 2 Charging
With a 240v charge, the amount of time it takes to fully charge a Tesla drops down to about 6-30 hours. This provides anywhere from 9-50 miles per hour charged. If you are going to be using your Tesla vehicle for daily commuting to work or where-ever then it would be a good idea to just go ahead and install a 240v outlet in your garage or an exterior 240v outlet.
Most of your public charging stations that aren’t a Tesla Supercharging station will charge at about this rate.
Level 3 Charging
When tesla began to roll out their electric vehicles, they also had to start building their own charging stations in order to make the vehicle feasible for distance traveling. These charging stations that are owned and operated by Tesla are known as Tesla Superchargers. These high power and time efficient stations are being built in a network across the United States and elsewhere.
At one of these Tesla Supercharger stations, a Tesla vehicle can be charged at a rate of 170 miles per 20 minutes. This is an incredibly fast charging rate for any kind of battery and makes long distance traveling or road trips much more feasible for these vehicles.
Tesla has made a map of their Supercharger stations that they have built that can be accessed on this website. They have managed to make this network along popularly traveled routes and continue to expand the scope of this network, providing higher availability and speed of charging for their vehicles.
This map is also available via the console inside of every Tesla vehicle.
What is the Yearly Cost of Charging a Tesla?
Another big advantage of having an electric vehicle is how much the cost of travel is reduced when compared to a traditional gasoline powered vehicle. Even when gas prices are low, electricity will still be far lower in price. As battery technology and efficiency improve, so will the mileage a person can expect from their electric vehicles.
As Tesla is at the forefront of developing these technologies for vehicles, those who are Tesla loyalists will be among the first to benefit from these technologies. With the current batteries supplied by Tesla you can expect to get around 300 to a proposed 620 miles per maximum charge, depending on the model. They are also designed to last for many hundreds of thousands of miles, with some customers claiming they have over 500,000 miles on their Tesla vehicles.
Charging an electric vehicle is much more affordable than filling a gas vehicle. With the Long-Range Model 3, with a total distance of 310 miles, you can expect to pay about $13 based on the countries average rate of electricity costs. This comes down to about $0.20 per mile.
So, if you have an average driving range of about 15,000 miles per year, then your yearly charging costs for your Tesla should be approximately $650.
If you happen to already have a home solar panel array, this price can be driven down even further.
Here’s a calculator to see how much money you’d save driving a Tesla vs gas car.
Is Buying a Used Tesla Worth It?
If you are able to afford the costs of purchasing a used Tesla vehicle, then I would say absolutely. Just be sure to do a little research and check the availability of local charging stations and make sure that the model you are going to purchase comes with a warranty.
If you happen to live in Massachusetts, then repairs for an out of warranty Tesla are even less of an issue, creating a more stable service life for your vehicle. With more independent shops gaining access to repair manuals and diagnostic information this is only going to increase availability of quality repairs.
Due to the solid engineering of Tesla’s vehicles and reliability, they are some of the most reliable vehicles on the market, even with a used model.
Even if the information in this article scares you away from purchasing a Tesla right now, then be aware that as production levels and availability increase, then eventually prices will also lower. As time goes on and the company matures, it will eventually become a much more logical step for them to release the right to repair their vehicles to independent shops and after-market suppliers.
An exciting thing to consider as well is that electric vehicle technology is still relatively new in the realm of things. As time goes on and more money is spent on this technology, the quality and availability will only increase. So, while Tesla may be a flagship that has no real competition in the manufacturing of electric vehicles, when competition does come along, it will force their hand when it comes to their business practices.
This will cause a few things to occur:
- Increased availability of Tesla vehicles.
- Lower price of insurance.
- Lower cost and availability of repairs.
Not only will this cause their customer base to be more excited and content with their vehicle purchases than they already are, but it will ensure that Tesla continues to enjoy its lead in the electric vehicle market. Already Tesla boasts some of the finest and best engineered vehicles on the road. It can be assured that they will continue to do such for many decades to come.
So, if you aren’t going to dive in and get a used Tesla today, in the future it will most likely become an investment opportunity that’s simply too good to pass up.