You are using an older browser version. Please use a supported version for the best MSN experience.

Tesla no longer guarantees your electric car's resale value

Engadget Engadget 13/07/2016 Jon Fingas
© Provided by Engadget

Tesla introduced its Resale Value Guarantee in 2013, when buying an upscale electric car was a riskier prospect. What if your Model S was worth less than a tried-and-true German sedan? However, the market has clearly grown up since then... and Tesla is changing accordingly. The automaker tellsThe Verge that it has discontinued the program for any new car bought after July 1st. The move will reduce interest rates "as low as possible" and sweeten leases and loans, a spokesperson says. You're still protected if you bought a car under the guarantee, but any relative latecomers will just have to trust that the used EV market will work in their favor.

Maintaining the program was potentially very expensive. Tesla promised that you'd get at least 50 percent of the base price as well as 43 percent of the options pricing. That wasn't a huge hit to the bottom line when the company was selling a relatively small number of luxury cars (Elon Musk even backed it with his own money), but it could cut much deeper when Tesla starts selling hundreds of thousands of Model 3s.

Look at it this way, though: while the move is unfortunate if you liked the idea of your car maintaining a high minimum worth, it's also a sign that the EV market is growing up. Tesla has enough demand that it can ditch the guarantee without worrying that sales will drop off a cliff. And with these kinds of volumes, resale value might not be an issue in the first place. There's clearly an audience for these vehicles, so you shouldn't have to lower your asking price just to attract a buyer.

The Verge

More from Engadget

image beaconimage beaconimage beacon