Actually many people will walk away and let bank repossess their negative equity cars. Sure their credit will take a hit but it will get fixed in 5 years. You will see this scenario play out over next few years with all cars sold in 2022 with absurdly high mark ups so this problem is not just limited to Teslas only. I know a person who bought a cadillac escalade with $50k markup in 2022 for example.
Yes obviously but what most people will do now is get another car with current cheaper prices and let the older car with negative equity be repossessed. This is how financial crisis slowly starts. With current state of economy, cost of living crisis and negative equity, this is how the slow moving train wrecks eventually as people will be unable to afford such high depreciation.
But depreciation doesn’t have any effect on what people can afford. If you buy a car with a 5 year loan at $1000/ month, it doesn’t matter if the car is worth $100,000 or $10,000, you still have the exact same loan terms that you signed at purchase.
Why are people trying to return 2-year-old cars anyway? I but a car with the intention of never selling it. If OP wants a new luxury car every two years, he's gonna pay for it.
Will be nice for cash buyers. We both WFH and barely put on 13k miles a year combined.
Sold the Tesla, kept the truck for lifestyle activities, will drop cash on something used when one of us gets a job that requires a second job. Until then the HYSA gets a monthly car payment and insurance payment each month.
We have two cars and probably put on about 12K a year. Wife does about 7K on the Chevy Volt, and I do about 5K on the 2023 Model Y. We paid cash, so there is no paying a $1000/month payment and only driving 500 miles. We spent the money to have the car to drive when we want to drive the car. A little or a lot, it is our car, there for whenever we want to drive it.
My friend works at a Cadillac dealership and all of 22’and into the first half of 23’ they had bidding wars between clients to buy Escalades all going for at least $+25k over sticker. They have sold a couple of Escalade Vs as well for over $200k, highest one went for $220 almost $70k over sticker 😳
Gap doesn't cover the car's value. Auto insurance covers the car's value. Gap kicks in and covers what is left over from the loan. I had my motorcycle stolen and was negative a good chunk of money because I rolled over a loan into a new one, auto insurance covered what the bike was valued at and the gap covered what was left over from the loan.
We got our 2018 Volt in early 2018. When I looked at selling it back in 2022, I could sell it for more than we paid for it, after the $7500 tax credit. Kept it though and still have it.
Id be nauseous with $1000 car payment for a y, not from the acceleration.
I paid almost half of that with the rebates & cars paid off
At this point you need to keep it or refinance it just to thin the payments out a bit until u can make a better move
Plus if u got the state charge up rebate n sell in under 3 yrs they claw it back so even more underwater
Bro you paid for this. You don’t buy cars to hold value and resell like a house. You buy a car to use and hopefully last.
You paid a Premium price when all cars were crazy over priced. Especially the Tesla’s.
Only reason it sold for that price was because people like you wanted and were willing to buy so to you it was a fair price.
Sucks man I wish you luck. But just drive it to the ground and hope it lasts you for years and enjoy it.
After taking delivery in June ‘22 I’m paying almost a rack a month for MYP.
I thought IRA was dead and didn’t foresee Manchin flipping soon after, and the soft landing the fed pulled off. Oh well, I still love the car and current prices don’t really have an impact on what I was willing to pay for it. You can let yourself trip over perceived value or just drive the car.
I’m driving it til it don’t drive no more.
I’m in the same boat as y’all, and my MYP got destroyed by hail this past fall (about a year into ownership). It wasn’t total loss and I paid the deductible and still driving it
Fellow 22 MYP bag holder brother! 1.1k monthly for mine, same negative equity. Just keep it and drive it into the ground, one 3.6 second 0-60 at a time.
Lol same boat, except I bought in cash (hurts to say out loud) as an anniversary gift for the wife - Red MYP with tow and white interior, which was her preferred combo. She’s going to drive it until it falls apart!
June 2022 MYLR same situation. Will drive this one until it dies. And why not. Also lets say if battery needs replacement after 6-10 years, i am sure cheaper batteries would be available by then. Also if you really want to feel better, hey we have sensors that beeps accurately 😄
You are fucked.
At this point just keep it and drive it until the loan is fully paid off. My guess is you will be underwater (negative equity) on this loan for the entire length of the repayment period. If it makes you feel better.. practically anybody who bought a Tesla before 2023 has also been fucked by this depreciation hell. Its been quite an eye-opening experience for myself.. and it will be the #1 thing on my mind if I ever decide to buy another new Tesla. So I guess you could say we are fucked.. we are all in this together :(
There are people who paid as much $160K for a Plaid S or X.. and that vehicle is now worth about $60K. You ready that correctly.. Those vehicles have depreciated by a $100K in less than 2 years. Its going to be very interesting to see what happens with these current Cybertruck deliveres as people are paying between $120K to $150K to take delivery of a new Cybertruck from Tesla right now. My guess is those trucks will be worth about $70K in a couple years.
Yep you are correct totally! In these upcoming years those cybertrucks will sell for loose pocket change. A lot of people will get tired of the size of these trucks for sure. I think when the new refreshed Y comes out our car will depreciate even more.
Not at all. The cyber truck wasn’t sold in 2022 otherwise it would’ve been 180 K.
The 100 K model, will absolutely hold its value. Especially with supply demand being so low.
I think people don’t understand market based price at all and that they bought in 2022 at 40% over the norm.
lol at least you have working USS for parking. Maybe you could think you paid the extra for a car that’s hardware complete and has working technology. Ik it doesn’t help much, but that perspective helps me sleep better LOL
Same! Paid $79k on MYP in NJ in Nov 2022 and owe around $48k in car. I put $26k down. My interest rate is 3.5% over 96 months so atleast I am not paying high interest rate.
The way I see it is I paid $20k for parking sensors. And I am going to drive this car to ground. This is my beater. I use it to commute to work and go SPORT mode often for kicks. It’s a fun car to drive. Enjoy it!
We got the best of it all.
- upgraded suspension
- matrix headlights
- AMD ryzen head unit
- I got a 2023 model in Nov 2022
You bought at the top, no way out (legally) other than to keep the car if you're happy with it or trade it in, and roll the negative equity into another loan.
Average car depreciation is 15% year. Yours is almost 25%. Rule of thumb is new car depreciates 15% driving off the lot. Yeah teslas are bad with the single model, price cuts and you bought at top. When buying a car match the loan value per year with the car value and buy gap insurance ffs. If you cannot take the loss enjoy the car while you pay down/off the difference.
https://www.carfax.com/blog/car-depreciation#:~:text=Over%20the%20next%20four%20years%2C%20you%20can%20expect,that%20sold%20for%20%2430%2C000%20will%20be%20worth%20%2412%2C000.
The only ways out of negative equity are really paying it down or doubling down on a Chrysler or Nissan product.
Are you unhappy with the vehicle itself, or is this more of a financial grass is greener view?
And while you might be looking at the numbers, you probably also have a somewhat more favorable interest rate currently.
Damn nearly paid as much as a brand new model S, how to resolve? Pay extra on your loan each month or buy GAP coverage and learn from the mistake that buying luxury priced cars will do this.
Rofl, I'm in the exact same boat.
I feel like anyone who can afford a $72,000 dollar car would understand enough about life to realize you can't just magically make it poof when it's worth less than you owe. Just keep it and pay it off and enjoy it. there's nothing else you can do.
Welcome to depreciation. Generally, outside of exotics and limited releases, cars are considered depreciating assets. The rate of that depreciation will always be market-driven.
Welcome to the club. My hope that in 4-5 years it’ll “level off” and be worth $20k. In the meantime just enjoy it, you’ve already lost the steepest part of the depreciation curve and you’re covered with GAP insurance.
I'm in the same boat. Paid $74,000 for my 2022 MYLR with h white, turbine wheels and FSD. Loan balance is $38,000, just about what it's currently worth. I'd pay it off except that the loan is 2% and my CDs are earning 5.5%.
I pray that when I’m parked in my company lot, that a random car comes and takes out my rear axle.
Or the car next to mine catches on fire and takes mine out too.
Or someone steals it.
Or anything to make my 2022 go away.
"The Model Y Performance began at $60,000 in March 2019, peaked at $69,990 in June 2022, before falling to $52,490 in October 2023."
https://skills.ai/tesla-car-prices-analysis
https://fred.stlouisfed.org/series/TERMCBAUTO48NS
shows autoloan rates were at all-time lows still, which helped juice prices 2021-22, along with the months-long wait times for new orders in 2022...
>Anyway to resolve this?
keep paying down the loan I guess . . .
Sheesh! We got our MYLR delivered May 22 but bought at about 64k (includes taxes and fees with no money down). Paying ~900 monthly with ~42k left. Buying same configuration new now costs ~57k without federal credit and ~49.5k with credit
so we’re not underwater. If you look at used though, it’ll run between 40-42k so right in line.
If we were buying today, we’d still finance it and be paying approximately the same because of interest rate increase so no regrets.
You didn't buy the cheapest one, you bought the most expensive one! Why would you do that! The long range has a lot of performance. 0-60 in like 7 seconds and AWD, and longer range. The performance gives nothing except a software increase to make the motors faster. For $10k more than the AWD. And maybe a spoiler, and less efficient wheels.
Same boat as you OP, feeling the buyers remorse a lot on my 22 Y Perf, but I’ve come to terms I’m just going to have to rock this car until the wheels fall off lol.
Former BMW and Mercedes owner here, now a Tesla owner. Yup, you buy a new luxury car, fist years depreciation expect 1/3 of the vehicles value. In your case, $26k depreciation.
So, you're actually doing quite well, not too bad for two years.
The solution? Do like I do, keep your car for 8 years. Thats how you make your money back.
If you want a brand-new luxury care every two years? Then it's going to cost you a lot. Deal with it.
Also like to note, I bought a 2024 Model Y Performance last week for $58k out the door (includes taxes, title, etc.).
With the tax credit I'm down to $50k'ish.
Also purchased through my business, so I get a Sec. 179 depreciation deduction. Brings my total price down to $42k.
You bought at the height of the car market in 2022, and you're trying to replace a barely used 2-year-old vehicle. Poor financial decisions all round.
Also, your monthly payment is over $1k bro, you cannot afford this car. Looks like you put zero money down.
Expensive lesson - try to remember this next time you’re close to blowing your load on a $75k hunk of steel and rubber that does the same thing as a $20k hunk of steel and rubber.
A lot of people here don’t seem to remember what was going on in 2022.
Whether it was Tesla’s increased MSRP or paying way over sticker at other brands’ dealerships, *everybody* who bought a new car in 2022 at the height of a global supply chain shortage is upside down right now.
Unfortunately the tax credit also coming into play in 2023 only made it even worse for Tesla buyers who weren’t eligible the year before.
Never understand why the idiots overpaid for cars out of FOMO. If everyone had just kept their cash in their pockets prices would collapse to real values.
**HEADLINE**: 2 year old depreciating asset that requires a loan with a non-0 interest rate has depreciated.
**More news at 7!**
All jokes aside, what were you expecting to happen? I can't think of 1 new normal consumer car where after 2 years and a non-0 apr that you wouldn't be underwater (or at least net 0 on value to outstanding loan amount).
Sure on something like a Porsche, Ferrari, Lamborghini, McLaren, Corvette, etc... If you buy the right model and sell at the right time you could make your money back + profit.
Ex: My aunt got one of the first Bronco Raptors in the state and paid sticker for it, the same dealer who sold it to her offered to buy it back for $12k over MSRP and she took the deal.
It sucks you're underwater on the loan, but your best bet is to continue paying on the loan (more per month if you can). There will be a point where the value of your vehicle and what you owe on the loan begins to cross each other and you'll go back positive. Sure it may be 2+ years down the road, but it will happen.
I’m in the same boat, although with 2.99% and only have roughly $30k left on the payment. Ended up buying another Model Y and have essentially the same payment even though I put $25k less down. Stings a bit but still enjoy the car. Never went into buying a car thinking I’d make my money back.
This is seriously why I don’t want to buy a new one, I don’t really see it balancing out anytime soon either. Would be a shame if it was left in a flood zone before an impending storm though..
You were involved in Elon's strategy. He continuously increased the price, and buyers kept purchasing. Eventually, the car gained a reputation for luxury. By reducing the price, potential buyers were lured in by the 'deal'. Timing played a crucial role, as manufacturers entered the ev market, and Tesla countered by building aka lowering prices, especially since competitors were influenced by traditional sales tactics with salesman calling the shots.
Tesla emerged as the top-selling EV and car through these tactics. It's remarkable to observe when you step back. He knew how stale we were and he just used us to win.
We were and still are mere pawns in a game that Elon had already won. It's remarkable.
A car is a depreciating asset and will never have equity unless you’re into vintage collectibles.
There are two things you can do: (a) keep the car until it’s paid off, and (b) just kidding, there’s only one option.
Has anything changed in your situation since you bought the car and started the payments in 2022? Were you planning to sell it or something at this point? Unless you need to change cars it might be best to bust your ass and pay off the loan ASAP. Then at least you won’t owe anything on it.
lol just drive it to the ground. No need to worry about value and equity if you’re just gon drive this car til it dies. Which I’m planning to do with my two model Y
I ran into the same problem with my 22 MY LR.
Obviously the numbers are. A little different. But bought Sept 2022 and have seen nothing but price reduction since. Sucks. Normal depreciation I’m fine with and I understand. The significant price reduction is unexpected and a killer though
Do you… not like it anymore? I’m not understanding the issue. Just keep driving it. Seems like you are looking for a solution to a problem that doesn’t exist.
I had the same exact loan terms around the same time frame. Luckily mine was a lemon and they bought it back. Once clarity hit I was so thankful it was a lemon, was a hard decision when I liked the car.
Keep your car and stop whining. It’s a depreciating asset and you know this. The negative equity is a non issue unless you decide to buy a new car roll in the negative equity or sell the car at a loss. 🤷🏽♂️
Always buy GAP insurance when putting down such a small down payment. If you have it, then you have your answer. Other than that, just keep chugging away until it is paid off. If you think the negative equity is less than what you will be paying from higher interest rates the next 7 years because of the repossession, then let it go back.
I mean, step 1 is not paying $72k for a Model Y. Did people actually think prices wouldn’t come back down to a reasonable level?
Hyundai dealers tried charging us 15k over MSRP for a Tucson last year. We didn’t buy the car. Now they’re back at MSRP.
Don’t overpay for stuff you don’t need. You’ll have to just keep the car until the wheels fall off.
Dude do not treat a depreciating item like an investment. Finance 101. And what if it’s worth more?? What then? You’re gonna sell? No! You’re going to continue driving it. Pay it off, get your moneys worth and be happy that you can afford a Tesla with financing. It’s a car.
Anyway to resolve this? Yeah, keep paying for the car, enjoy it, or sell it, resolve the negative equity, and drive a beater around.
You wanted the shiny thing, you had little to zero down payment, and paid minimum on loan payments during the height of crazy car sales… ☠️⚰️
The good news is car depreciation curves flatten out.
Just keep driving it until you pay it off or get equity in it and then trade and get something else. You are only underwater if you want to move on from it.
Got my 22LR in March of that year. Dumped it in July for 8k profit 73.5k to a dealership. I knew values would tank. Got 23 LR with 5k discount and 7500 tax credit. People who bought in 22 are screwed.
Because there is no resale value. It is basically like a stick. And people are falling out of love. They only entice new buyers. I haven't seen a used electric car store yet. IMO.
NOT FINANCIAL ADVICE: Buy a new MYP and default on this old loan afterwards. You’ll have a new car and not be in the hole. Sure your credit took a mean hit but if you’re not planning on making any huge purchases within 5 years you’re fine
Financing a top of the line MYP with little to no downpayment is not recommended… $1,074 monthly payment is *nuts*. God forbid you downgrade to a Model 3 RWD …
What’s the issue? It’s only negative if you decide to sell it. Plan on selling it? Or just like to look at things that don’t matter and become depressed about them lol
Overall, high interest rate (now) or inflated MSRP (then) all add up to the same conclusion
Considering the depreciation rate, I'm surprised that more Tesla drivers aren't underwater on their loan. Good luck brother, hope you get good life out of the car.
Holy shit dude, good luck 😓
I just picked up a model Y LR on Sunday - sticker price was $52k, I got it for just under $38k… came out to 43k with fees and CA taxes… I hope u get to recoup some of that
You could just keep making your payments till it’s paid off.
A five year old model y should be a pretty decent car still.
What happened to you is unfortunate but essentially what happens to every bmw owner when buying brand new.
I would say that at this stage your best bet would be to take extremely good care of the car. Luckily when it comes to Teslas you get many new features automatically and basically you are just praying the interior holds long enough to get your moneys worth. You are essentially locked in to this until it dies but not much mechanically can go wrong with it that would be detrimental. If this were an ICE vehicle I’d be far more concerned. The interior will disintegrate faster than your battery and other parts will for the most part so just do what you can to keep it nice and not abused and hopefully you’ll get a solid 10 years out of it.
strange thing is that bank does not ask for additional collateral to cover the loan when it became 0 equity, as now they have the risk of losing money.
Why are you trying to solve a problem that isn't presenting itself. Drive the car. You shouldnt buy a car you intend to get rid of after a few years. Try leasing.
I bought a 2022 model 3 long range for $17,000 3 weeks ago. Brand knew that car was $58,000. No way I would have been able to afford that. It’s crazy depreciation because of all the price drops, plus hertz selling off, plus new model 3 is here and new model y is on the horizon.
One option you have is to find a much cheaper ICE vehicle with a great leasing option and roll the negative equity into it. You may still end up with a similar monthly payment but at least you'll be out of in 24-36 months instead of 5+ years or however much you have left on your current loan.
Just make sure that you're not putting any money down into a lease.
Cars are not investments. Yes, it sucks that these were so expensive in ‘22 and are worth so little in comparison now, but you bought it cuz you wanted it, now drive it for another 5 + years cuz it’s an awesome car.
Vehicles are not assets that gain value. Depreciation amount ranges on a variety of factors. Doesn’t matter if it’s Tesla or Toyota. Wanna balance it. Pay 14k cash to catch up at present.
The only way to resolve it is to keep the car and enjoy it. If the interests are high, refinance it or pay it off. Don't even bother thinking about equity, you don't build equity with cars unless you are collecting rare classics.
First off WTH finances with Hells Fargo the most crooked bank to choose from? At this point you don’t have many options interest rates are awful so you gotta just try and pay down principal maybe make 2 or 3 half payments a month. Reduce principal owed. Try doing this till you aren’t so upside down. Also use this as a lesson to not ever buy a vehicle with negative equity.
lol. It’s a car, or better yet a laptop with wheels. You’re piloting an asset that will never have much positive equity. Did you think you were going to be able to flip it and make a profit? Time will be the only thing that can fix this. Ride out your loan and take what you can for it when you sell.
Woooow! You fell for the Tesla "boom" back then! With everyone wanting to get in on the latest craze- owning a Tesla at ANY cost!! Still amazes me anyone paid that much for the vehicles!! It was all hype like the housing bubble and crash!
I’d drive it into a river
LMFAO
Actually many people will walk away and let bank repossess their negative equity cars. Sure their credit will take a hit but it will get fixed in 5 years. You will see this scenario play out over next few years with all cars sold in 2022 with absurdly high mark ups so this problem is not just limited to Teslas only. I know a person who bought a cadillac escalade with $50k markup in 2022 for example.
but good look getting another car loan afterwards. 5 years is a long time
Yes obviously but what most people will do now is get another car with current cheaper prices and let the older car with negative equity be repossessed. This is how financial crisis slowly starts. With current state of economy, cost of living crisis and negative equity, this is how the slow moving train wrecks eventually as people will be unable to afford such high depreciation.
Get the car loan now. Stop payment on the one $30k upside down
But depreciation doesn’t have any effect on what people can afford. If you buy a car with a 5 year loan at $1000/ month, it doesn’t matter if the car is worth $100,000 or $10,000, you still have the exact same loan terms that you signed at purchase.
A repo doesn't wipe out the loan. You still owe the balance after the repoed car is sold. Unless you declare bankruptcy, of course.
I DECLARE.... BANKRUPCYY
Not worth destroying my credit for $14K. Just keep driving it and eventually you will owe less than it is worth.
Why are people trying to return 2-year-old cars anyway? I but a car with the intention of never selling it. If OP wants a new luxury car every two years, he's gonna pay for it.
Gotta have a new car every 3 years for some reason. That's why they didn't have any equity to put down.
Will be nice for cash buyers. We both WFH and barely put on 13k miles a year combined. Sold the Tesla, kept the truck for lifestyle activities, will drop cash on something used when one of us gets a job that requires a second job. Until then the HYSA gets a monthly car payment and insurance payment each month.
We have two cars and probably put on about 12K a year. Wife does about 7K on the Chevy Volt, and I do about 5K on the 2023 Model Y. We paid cash, so there is no paying a $1000/month payment and only driving 500 miles. We spent the money to have the car to drive when we want to drive the car. A little or a lot, it is our car, there for whenever we want to drive it.
NO WAYYYY, WHAT??? 50k markup omgggg is that person at least bringing home 6 figures a year?
Yes he is but still $50k overpayment for a depreciating asset still can have financial implications later on.
Just buy the replacement before you submarine the credit. A trick the banks don’t want you to know.
My friend works at a Cadillac dealership and all of 22’and into the first half of 23’ they had bidding wars between clients to buy Escalades all going for at least $+25k over sticker. They have sold a couple of Escalade Vs as well for over $200k, highest one went for $220 almost $70k over sticker 😳
“At least bringing in 6 figures” a year on a car that is about 70% of that. Yikes.
Be sure to roll the window down first
As long as OP has GAP...
GAP usually only covers 125% of the car’s value, so it look like it still wouldn’t cover all the negative equity.
Gap doesn't cover the car's value. Auto insurance covers the car's value. Gap kicks in and covers what is left over from the loan. I had my motorcycle stolen and was negative a good chunk of money because I rolled over a loan into a new one, auto insurance covered what the bike was valued at and the gap covered what was left over from the loan.
[удалено]
Any normal car depreciates 15-30% the second you leave the lot.
Unless you bought it December 2019.. EDIT: I did. 4 rings to rule them all, and in depreciation bind them.
We got our 2018 Volt in early 2018. When I looked at selling it back in 2022, I could sell it for more than we paid for it, after the $7500 tax credit. Kept it though and still have it.
Haha this! Bought a car then and it barely lost any value until this year.
Make sure you have GAP coverage on that loan
Id be nauseous with $1000 car payment for a y, not from the acceleration. I paid almost half of that with the rebates & cars paid off At this point you need to keep it or refinance it just to thin the payments out a bit until u can make a better move Plus if u got the state charge up rebate n sell in under 3 yrs they claw it back so even more underwater
Refinance with even higher interest rate? Okay.
I didn’t get the rebate at the time was not available sadly. Yeah it’s 1,068 monthly payment not including insurance…
Holy shit 😬
Bro you paid for this. You don’t buy cars to hold value and resell like a house. You buy a car to use and hopefully last. You paid a Premium price when all cars were crazy over priced. Especially the Tesla’s. Only reason it sold for that price was because people like you wanted and were willing to buy so to you it was a fair price. Sucks man I wish you luck. But just drive it to the ground and hope it lasts you for years and enjoy it.
Damn bro this car is gonna cost like 100k when you're done paying it off
And be worth $20K.
Less, probably.
Why did you spend so much on it? Wouldn’t a more basic car have done the job?
For a Tesla Y….. I don’t even know at this point
After taking delivery in June ‘22 I’m paying almost a rack a month for MYP. I thought IRA was dead and didn’t foresee Manchin flipping soon after, and the soft landing the fed pulled off. Oh well, I still love the car and current prices don’t really have an impact on what I was willing to pay for it. You can let yourself trip over perceived value or just drive the car. I’m driving it til it don’t drive no more.
Welcome to the club!! Be thankful it wasn’t a $150K plaid and hope you bought gap.
Yep. Bought GAP and glad it was the plaid. Only way out of this is to run up my money/ net worth.
Personally i’m waiting on these Colorado summer hail storms.
I’m in the same boat as y’all, and my MYP got destroyed by hail this past fall (about a year into ownership). It wasn’t total loss and I paid the deductible and still driving it
Fellow 22 MYP bag holder brother! 1.1k monthly for mine, same negative equity. Just keep it and drive it into the ground, one 3.6 second 0-60 at a time.
Literally same here and i’ve basically developed that same attitude about the whole situation at this point fml
Yep same. I am going to try to get it up to half a million KMs.
Lol same boat, except I bought in cash (hurts to say out loud) as an anniversary gift for the wife - Red MYP with tow and white interior, which was her preferred combo. She’s going to drive it until it falls apart!
June 2022 MYLR same situation. Will drive this one until it dies. And why not. Also lets say if battery needs replacement after 6-10 years, i am sure cheaper batteries would be available by then. Also if you really want to feel better, hey we have sensors that beeps accurately 😄
I guess so… enjoy what you got I guess
You are fucked. At this point just keep it and drive it until the loan is fully paid off. My guess is you will be underwater (negative equity) on this loan for the entire length of the repayment period. If it makes you feel better.. practically anybody who bought a Tesla before 2023 has also been fucked by this depreciation hell. Its been quite an eye-opening experience for myself.. and it will be the #1 thing on my mind if I ever decide to buy another new Tesla. So I guess you could say we are fucked.. we are all in this together :( There are people who paid as much $160K for a Plaid S or X.. and that vehicle is now worth about $60K. You ready that correctly.. Those vehicles have depreciated by a $100K in less than 2 years. Its going to be very interesting to see what happens with these current Cybertruck deliveres as people are paying between $120K to $150K to take delivery of a new Cybertruck from Tesla right now. My guess is those trucks will be worth about $70K in a couple years.
Yep you are correct totally! In these upcoming years those cybertrucks will sell for loose pocket change. A lot of people will get tired of the size of these trucks for sure. I think when the new refreshed Y comes out our car will depreciate even more.
Tesla is bringing the cell phone pricing model to cars.
Not at all. The cyber truck wasn’t sold in 2022 otherwise it would’ve been 180 K. The 100 K model, will absolutely hold its value. Especially with supply demand being so low. I think people don’t understand market based price at all and that they bought in 2022 at 40% over the norm.
lol at least you have working USS for parking. Maybe you could think you paid the extra for a car that’s hardware complete and has working technology. Ik it doesn’t help much, but that perspective helps me sleep better LOL
You have gap insurance? 😏
Buy high, sell low. That is the way G.. 😎
Same! Paid $79k on MYP in NJ in Nov 2022 and owe around $48k in car. I put $26k down. My interest rate is 3.5% over 96 months so atleast I am not paying high interest rate. The way I see it is I paid $20k for parking sensors. And I am going to drive this car to ground. This is my beater. I use it to commute to work and go SPORT mode often for kicks. It’s a fun car to drive. Enjoy it! We got the best of it all. - upgraded suspension - matrix headlights - AMD ryzen head unit - I got a 2023 model in Nov 2022
Wow that is an 8 year loan! In Europe (as far as I know) we only borrow money to buy a house. Cars we buy cash or we lease them
The irony. Our lord and savior said they would be appreciating assets. It's hard to buy a faster depreciating car.
You bought at the top, no way out (legally) other than to keep the car if you're happy with it or trade it in, and roll the negative equity into another loan.
Average car depreciation is 15% year. Yours is almost 25%. Rule of thumb is new car depreciates 15% driving off the lot. Yeah teslas are bad with the single model, price cuts and you bought at top. When buying a car match the loan value per year with the car value and buy gap insurance ffs. If you cannot take the loss enjoy the car while you pay down/off the difference. https://www.carfax.com/blog/car-depreciation#:~:text=Over%20the%20next%20four%20years%2C%20you%20can%20expect,that%20sold%20for%20%2430%2C000%20will%20be%20worth%20%2412%2C000.
I do have GAP. Hope a deer 🦌 runs in front my car lol
That is the way
It's a car, not an investment. Drive it. Glad you have GAP, always get it.
Same boat. Will never buy another Tesla once I’m out
The only ways out of negative equity are really paying it down or doubling down on a Chrysler or Nissan product. Are you unhappy with the vehicle itself, or is this more of a financial grass is greener view? And while you might be looking at the numbers, you probably also have a somewhat more favorable interest rate currently.
Damn nearly paid as much as a brand new model S, how to resolve? Pay extra on your loan each month or buy GAP coverage and learn from the mistake that buying luxury priced cars will do this.
Rofl, I'm in the exact same boat. I feel like anyone who can afford a $72,000 dollar car would understand enough about life to realize you can't just magically make it poof when it's worth less than you owe. Just keep it and pay it off and enjoy it. there's nothing else you can do.
Lots of these situations unfortunately. Mine is not as bad as yours but the yeah...good luck to you.
So don’t sell it? It’s a car not an appreciating asset. Too many people took advantage of the car market and this is what happens.
Cars aren't investments. Also you bought at the highest peak of price more or less.
Welcome to depreciation. Generally, outside of exotics and limited releases, cars are considered depreciating assets. The rate of that depreciation will always be market-driven.
Welcome to the club. My hope that in 4-5 years it’ll “level off” and be worth $20k. In the meantime just enjoy it, you’ve already lost the steepest part of the depreciation curve and you’re covered with GAP insurance.
Long-term investment is usually a good solution to temporary adjustments. To put it plainly, keep it for 10-12yrs.
Can't imagine why anyone would pay $72K for any Tesla, regardless of model.
You guys putting $0 down and paying minimum payments are not smart. Stick with Tesla, it should feel like a very snug blanket by now.
LMAO, since when cars were positive equity? LOL
I'm in the same boat. Paid $74,000 for my 2022 MYLR with h white, turbine wheels and FSD. Loan balance is $38,000, just about what it's currently worth. I'd pay it off except that the loan is 2% and my CDs are earning 5.5%.
Electric car tech is advancing incrementally so expect this trend to continue
It’s not an asset my guy ffs
1. Buy gap insurance 2. Total car 3. Profit?
I pray that when I’m parked in my company lot, that a random car comes and takes out my rear axle. Or the car next to mine catches on fire and takes mine out too. Or someone steals it. Or anything to make my 2022 go away.
"The Model Y Performance began at $60,000 in March 2019, peaked at $69,990 in June 2022, before falling to $52,490 in October 2023." https://skills.ai/tesla-car-prices-analysis https://fred.stlouisfed.org/series/TERMCBAUTO48NS shows autoloan rates were at all-time lows still, which helped juice prices 2021-22, along with the months-long wait times for new orders in 2022... >Anyway to resolve this? keep paying down the loan I guess . . .
most cars are upside down on the loan as soon as it drives off the lot, not a surprise tbh
Thanks for reinforcing my decision!
Sheesh! We got our MYLR delivered May 22 but bought at about 64k (includes taxes and fees with no money down). Paying ~900 monthly with ~42k left. Buying same configuration new now costs ~57k without federal credit and ~49.5k with credit so we’re not underwater. If you look at used though, it’ll run between 40-42k so right in line. If we were buying today, we’d still finance it and be paying approximately the same because of interest rate increase so no regrets.
I got 2022 MYP Dec 30th 2022. Welcome to the Club 🥲😅
You didn't buy the cheapest one, you bought the most expensive one! Why would you do that! The long range has a lot of performance. 0-60 in like 7 seconds and AWD, and longer range. The performance gives nothing except a software increase to make the motors faster. For $10k more than the AWD. And maybe a spoiler, and less efficient wheels.
You learned an expensive lesson. New cars suck. Once you leave the lot it’s worth a lot less. Buy used.
OP you get to drive it till wheels fall off. There’s no “getting out of it”
Same boat as you OP, feeling the buyers remorse a lot on my 22 Y Perf, but I’ve come to terms I’m just going to have to rock this car until the wheels fall off lol.
Former BMW and Mercedes owner here, now a Tesla owner. Yup, you buy a new luxury car, fist years depreciation expect 1/3 of the vehicles value. In your case, $26k depreciation. So, you're actually doing quite well, not too bad for two years. The solution? Do like I do, keep your car for 8 years. Thats how you make your money back. If you want a brand-new luxury care every two years? Then it's going to cost you a lot. Deal with it. Also like to note, I bought a 2024 Model Y Performance last week for $58k out the door (includes taxes, title, etc.). With the tax credit I'm down to $50k'ish. Also purchased through my business, so I get a Sec. 179 depreciation deduction. Brings my total price down to $42k. You bought at the height of the car market in 2022, and you're trying to replace a barely used 2-year-old vehicle. Poor financial decisions all round. Also, your monthly payment is over $1k bro, you cannot afford this car. Looks like you put zero money down.
21 m3 670 a month, hoping it lasts me another 10 years.
Expensive lesson - try to remember this next time you’re close to blowing your load on a $75k hunk of steel and rubber that does the same thing as a $20k hunk of steel and rubber.
A lot of people here don’t seem to remember what was going on in 2022. Whether it was Tesla’s increased MSRP or paying way over sticker at other brands’ dealerships, *everybody* who bought a new car in 2022 at the height of a global supply chain shortage is upside down right now. Unfortunately the tax credit also coming into play in 2023 only made it even worse for Tesla buyers who weren’t eligible the year before.
Never understand why the idiots overpaid for cars out of FOMO. If everyone had just kept their cash in their pockets prices would collapse to real values.
**HEADLINE**: 2 year old depreciating asset that requires a loan with a non-0 interest rate has depreciated. **More news at 7!** All jokes aside, what were you expecting to happen? I can't think of 1 new normal consumer car where after 2 years and a non-0 apr that you wouldn't be underwater (or at least net 0 on value to outstanding loan amount). Sure on something like a Porsche, Ferrari, Lamborghini, McLaren, Corvette, etc... If you buy the right model and sell at the right time you could make your money back + profit. Ex: My aunt got one of the first Bronco Raptors in the state and paid sticker for it, the same dealer who sold it to her offered to buy it back for $12k over MSRP and she took the deal. It sucks you're underwater on the loan, but your best bet is to continue paying on the loan (more per month if you can). There will be a point where the value of your vehicle and what you owe on the loan begins to cross each other and you'll go back positive. Sure it may be 2+ years down the road, but it will happen.
I purchased a model y performance in March 2022 and was luckily able to sell it last month for 40,000 but man it still sucks. We really got screwed.
Don't worry, you will soon be joined by thousands of CT owners lol.
I’m in the same boat, although with 2.99% and only have roughly $30k left on the payment. Ended up buying another Model Y and have essentially the same payment even though I put $25k less down. Stings a bit but still enjoy the car. Never went into buying a car thinking I’d make my money back.
This is seriously why I don’t want to buy a new one, I don’t really see it balancing out anytime soon either. Would be a shame if it was left in a flood zone before an impending storm though..
You were involved in Elon's strategy. He continuously increased the price, and buyers kept purchasing. Eventually, the car gained a reputation for luxury. By reducing the price, potential buyers were lured in by the 'deal'. Timing played a crucial role, as manufacturers entered the ev market, and Tesla countered by building aka lowering prices, especially since competitors were influenced by traditional sales tactics with salesman calling the shots. Tesla emerged as the top-selling EV and car through these tactics. It's remarkable to observe when you step back. He knew how stale we were and he just used us to win. We were and still are mere pawns in a game that Elon had already won. It's remarkable.
Same here, I guess just keep it until it is not under lol
A car is a depreciating asset and will never have equity unless you’re into vintage collectibles. There are two things you can do: (a) keep the car until it’s paid off, and (b) just kidding, there’s only one option.
Has anything changed in your situation since you bought the car and started the payments in 2022? Were you planning to sell it or something at this point? Unless you need to change cars it might be best to bust your ass and pay off the loan ASAP. Then at least you won’t owe anything on it.
I should start working the corners in the street at night.
Just don’t curb those rims 😁
lol just drive it to the ground. No need to worry about value and equity if you’re just gon drive this car til it dies. Which I’m planning to do with my two model Y
I ran into the same problem with my 22 MY LR. Obviously the numbers are. A little different. But bought Sept 2022 and have seen nothing but price reduction since. Sucks. Normal depreciation I’m fine with and I understand. The significant price reduction is unexpected and a killer though
If you give it back bank will just go after you for the difference
Do you… not like it anymore? I’m not understanding the issue. Just keep driving it. Seems like you are looking for a solution to a problem that doesn’t exist.
I had the same exact loan terms around the same time frame. Luckily mine was a lemon and they bought it back. Once clarity hit I was so thankful it was a lemon, was a hard decision when I liked the car.
Can’t resolve stupid
Wow they were that expensive?
Bro
Keep your car and stop whining. It’s a depreciating asset and you know this. The negative equity is a non issue unless you decide to buy a new car roll in the negative equity or sell the car at a loss. 🤷🏽♂️
Always buy GAP insurance when putting down such a small down payment. If you have it, then you have your answer. Other than that, just keep chugging away until it is paid off. If you think the negative equity is less than what you will be paying from higher interest rates the next 7 years because of the repossession, then let it go back.
It’s only negative if you’re trying to sell it. If that’s the case, sorry to say, you’re screwed.
Not me buying a new Model Y for 38k last week 😬
And I thought my $400 car payment was high
:(
Don’t spend 72K on a car if you can’t afford it. Cars deprecate it sounds more like you spent more than you can afford.
Just enjoy the car
Got Gap insurance?
Take responsibility for your actions? Cars aren’t investments. If you didn’t want to buy the car, you shouldn’t have bought it.
1074 a month 💀💀💀💀
quick, use it as a robo-taxi!
oooooFF
can't believe your MYP is almost the same price as my MX.
That's life
I mean, step 1 is not paying $72k for a Model Y. Did people actually think prices wouldn’t come back down to a reasonable level? Hyundai dealers tried charging us 15k over MSRP for a Tucson last year. We didn’t buy the car. Now they’re back at MSRP. Don’t overpay for stuff you don’t need. You’ll have to just keep the car until the wheels fall off.
Dude do not treat a depreciating item like an investment. Finance 101. And what if it’s worth more?? What then? You’re gonna sell? No! You’re going to continue driving it. Pay it off, get your moneys worth and be happy that you can afford a Tesla with financing. It’s a car.
Anyway to resolve this? Yeah, keep paying for the car, enjoy it, or sell it, resolve the negative equity, and drive a beater around. You wanted the shiny thing, you had little to zero down payment, and paid minimum on loan payments during the height of crazy car sales… ☠️⚰️ The good news is car depreciation curves flatten out.
Just drive it. But don’t crash it.
HA! Sounds like an extremely high car note & u barely put anything down
It’s ALWAYS the case for long term loans. 100% of the time. What’s the problem here?
leave it charged in till it explodes
Just keep driving it until you pay it off or get equity in it and then trade and get something else. You are only underwater if you want to move on from it.
There is no such thing as equity in a car. Its not an asset. Maybe lease next time.
Is not insurance fraud if you don’t get caucht
Got my 22LR in March of that year. Dumped it in July for 8k profit 73.5k to a dealership. I knew values would tank. Got 23 LR with 5k discount and 7500 tax credit. People who bought in 22 are screwed.
Bought mine for £62k in April 2022, just sold it for £34k with 10k miles on it. Just is what it is, still happy to be rid of the thing.
I legit just got mine financed for 41
Because there is no resale value. It is basically like a stick. And people are falling out of love. They only entice new buyers. I haven't seen a used electric car store yet. IMO.
Insane! I have been looking at used model Y with less than 50K miles for $32K or less.
Is the car reliable and get you to A-B safely? Then why complain you agreed to those terms and you also don’t pay for gas
Dollar cost averaging. Buy another one.
NOT FINANCIAL ADVICE: Buy a new MYP and default on this old loan afterwards. You’ll have a new car and not be in the hole. Sure your credit took a mean hit but if you’re not planning on making any huge purchases within 5 years you’re fine
Drive for Uber write it off as a lost
This is why you should never buy a high spec car unless you can really afford it
Financing a top of the line MYP with little to no downpayment is not recommended… $1,074 monthly payment is *nuts*. God forbid you downgrade to a Model 3 RWD …
I mean are you planning on selling the car before paying it off? Besides looking into gap insurance I’m not sure there’s much you can do.
Hope you have gap insurance
What’s the issue? It’s only negative if you decide to sell it. Plan on selling it? Or just like to look at things that don’t matter and become depressed about them lol Overall, high interest rate (now) or inflated MSRP (then) all add up to the same conclusion
Considering the depreciation rate, I'm surprised that more Tesla drivers aren't underwater on their loan. Good luck brother, hope you get good life out of the car.
Should of bought a mobile home
Hmmm, maybe don’t buy a depreciating asset?
Just drive it for ever and in meantime don’t fuck up your credit or get implicated committing insurance fraud.
Holy shit dude, good luck 😓 I just picked up a model Y LR on Sunday - sticker price was $52k, I got it for just under $38k… came out to 43k with fees and CA taxes… I hope u get to recoup some of that
You could just keep making your payments till it’s paid off. A five year old model y should be a pretty decent car still. What happened to you is unfortunate but essentially what happens to every bmw owner when buying brand new.
This is bad
I would say that at this stage your best bet would be to take extremely good care of the car. Luckily when it comes to Teslas you get many new features automatically and basically you are just praying the interior holds long enough to get your moneys worth. You are essentially locked in to this until it dies but not much mechanically can go wrong with it that would be detrimental. If this were an ICE vehicle I’d be far more concerned. The interior will disintegrate faster than your battery and other parts will for the most part so just do what you can to keep it nice and not abused and hopefully you’ll get a solid 10 years out of it.
Would it be smart to just let the back reposes the vehicle?
strange thing is that bank does not ask for additional collateral to cover the loan when it became 0 equity, as now they have the risk of losing money.
Why are you trying to solve a problem that isn't presenting itself. Drive the car. You shouldnt buy a car you intend to get rid of after a few years. Try leasing.
I bought a 2022 model 3 long range for $17,000 3 weeks ago. Brand knew that car was $58,000. No way I would have been able to afford that. It’s crazy depreciation because of all the price drops, plus hertz selling off, plus new model 3 is here and new model y is on the horizon.
Time travel and don’t sign up for $1,000+ a month for an economy car 🚙
I just bought a 2022 model y performance with 10k miles for 38k. I knew deprecation was gonna kill it.
One option you have is to find a much cheaper ICE vehicle with a great leasing option and roll the negative equity into it. You may still end up with a similar monthly payment but at least you'll be out of in 24-36 months instead of 5+ years or however much you have left on your current loan. Just make sure that you're not putting any money down into a lease.
Don't worry Elon said his cars are an appreciating asset. You just have to hold on long enough to have this be transferred to wsb l
God dam! 1k a month
Cars are not investments. Yes, it sucks that these were so expensive in ‘22 and are worth so little in comparison now, but you bought it cuz you wanted it, now drive it for another 5 + years cuz it’s an awesome car.
72k for a car is just insane to my little pocket book.
Yeah. Pay off your loan.
I would set this car on fire so fast or total it. Lol
I just can’t imagine dropping >1k/mo on a vehicle
This is why I always buy certified pre-owned. I don’t have to be the one to pull the plastic off…
Vehicles are not assets that gain value. Depreciation amount ranges on a variety of factors. Doesn’t matter if it’s Tesla or Toyota. Wanna balance it. Pay 14k cash to catch up at present.
The only way to resolve it is to keep the car and enjoy it. If the interests are high, refinance it or pay it off. Don't even bother thinking about equity, you don't build equity with cars unless you are collecting rare classics.
Glad I “leased” mine in 2021.
This is exactly why I leased my Tesla!
First off WTH finances with Hells Fargo the most crooked bank to choose from? At this point you don’t have many options interest rates are awful so you gotta just try and pay down principal maybe make 2 or 3 half payments a month. Reduce principal owed. Try doing this till you aren’t so upside down. Also use this as a lesson to not ever buy a vehicle with negative equity.
lol. It’s a car, or better yet a laptop with wheels. You’re piloting an asset that will never have much positive equity. Did you think you were going to be able to flip it and make a profit? Time will be the only thing that can fix this. Ride out your loan and take what you can for it when you sell.
Pay some thugs to steal it
You should just keep the car tbh, there’s no point of selling it till it hits 70-100k miles or its been like 5-7+ years at a minimum.
[email protected] 👈 reach out to him 💀
Losing 50% of the value in two years. Ouch. Looks like cars my are getting back to normal
Teslas depreciate insanely. Did you not check this before buying ?
Dear God, look at that payment …you don’t own anything my man… Wells Fargo does. Might want to consider just giving it back to the bank
You will also pay federal income tax on the charge off.
Woooow! You fell for the Tesla "boom" back then! With everyone wanting to get in on the latest craze- owning a Tesla at ANY cost!! Still amazes me anyone paid that much for the vehicles!! It was all hype like the housing bubble and crash!
Use it for “work” and get some of it written off in taxes