Currently reading: From an Aston Martin to a Tesla Model S: why one owner made the change
Tesla is flouting industry wisdom by not offering discounts on its cars – but buyers aren’t deterred, as we discover
Autocar
News
5 mins read
28 July 2018

Peter Thompson always haggles a discount on his new cars but when it came to his latest model, a Tesla Model S 90D, the businessman was forced to admit defeat.

“I pride myself on the discounts I negotiate but this is the first time I’ve paid list price for a vehicle,” he says.

But if he thought that, as compensation, he might be offered a discount by the ‘back door’ in the form of a little extra for his trade-in, an Aston Martin V8 Vantage S Sportshift II, he was to be disappointed again.

Tesla Model 3 review

Thompson says: “The Aston was a beautiful car which, new, cost me £112,000. It had loads of extras including interior upgrades and a black, aluminium grille. I chose Volcano Red with a black leather interior, and the ‘waterfall fascia’ from the Vanquish.

“I part-exchanged it when it was 18 months old. According to my research, it could command a dealer forecourt price of around £81,000. In my experience, high-end dealers will look to have around £4500 in a car when they buy it, so I guessed an Aston dealer would have offered me around £76,500 for it. Tesla offered me £76,000 which, by my reckoning, meant they weren’t giving me any additional allowance.

“The thing is, I can live with not getting a discount or a trade-in allowance as long as I don’t find out later that other customers have. I’m a member of the Tesla UK online forum, and I’ve certainly not heard even a whisper that anyone has.”

Tesla’s sales are bundled together with ‘Other Imports’ in the monthly new car registration figures issued by the Society of Motor Manufacturers and Traders but account for most of them. On this basis, Tesla had sold about 1800 cars by the end of May, down 19% on the same period in 2017 – a trend echoed by a 4.9% fall in the sales of electric cars overall.

Why doesn’t Tesla do what just about every other car maker does and force sales by inflating discounts and trade-in allowances, and hang the consequences? It’s not as if it doesn’t need the income. At the end of the first quarter of 2018, the company’s debt stood at £1.5 billion.

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“We don’t discount because Tesla is a mission-driven company,” explains a spokesperson.

“We want to accelerate the transition to sustainable transport and energy, but not by profiting on things like vehicle trade-ins and discounting. The aim of our trade-in programme is to get the best price for the customer, not for Tesla. There is no profit angle. The service is to help customers get out of their current car and into a Tesla. There is no negotiating; simply the best price, first time.”

It’s why Tesla claims not to run its service departments as a profit centre (it says it runs them at break-even) and why it doesn’t insist on an annual service to maintain its new-car warranty. It recommends having one, but says that missing a service will not invalidate the warranty.

The UK government has told motorists they have until 2040, when it bans the sale of new petrol and diesel cars, to wean themselves off the internal combustion engine. If the used cars that Tesla’s trade- in programme is attracting are anything to go by, many drivers have already given up the habit. In addition to Thompson’s Vantage, the car maker claims to have taken in supercars including Bentleys, Lamborghinis and Ferraris, in addition to more mainstream part-exchanges including Range Rovers, Jaguars, Mercedes and BMWs.

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Tesla trade-ins are prepared and retailed by the company and non-Tesla cars sold to a network of buyers. It’s difficult to believe the company wouldn’t strive to turn a profit on them but while Tesla’s spokesperson admits that occasionally it does, she insists it doesn’t seek to.

Having worked in the renewables sector Russell Harper was already sold on sustainable transport and couldn’t wait to swap his diesel for a Tesla Model X. “My old diesel was smelly, and required regular fill-ups and servicing,” he says. “Tesla does away with these problems and just provides a great driving experience.”

He won’t say what his trade-in motor was, just that Tesla gave him less for it than he hoped. He didn’t get a discount, either. “I wasn’t bothered about that,” he says. “It was the transparency I liked; everyone pays the same price. I’m through with haggling and worrying someone else got a better deal than me.”

At least while Tesla can balance its mission-driven approach to business against the need to service its growing debt, the company will continue to satisfy haggle-weary souls like Russell and Peter. Or perhaps reality will one day bite. Anyone fancy 10% off a Model 3?

Making the numbers stack up: 

IT consultant Dave Talbot says he was drawn to Tesla not only by the technology incorporated into its cars but what he believes the company is doing for the environment.

However, he also realised that, after crunching the numbers, he’d be £300 a month better off buying and running a new Tesla Model S 90D over the cost of his old Mercedes-Benz ML250.

“I really bought into the Tesla deal,” he says. “Mercedes discounts its cars to keep you away from BMW, and vice versa, but with Tesla the list price is the price you pay.

“They tell me even the staff don’t get a discount. I like that. I get around 300 miles of driving range from a fully charged battery and to recharge from 20% to 80% takes 40 minutes, during which time I have a break and catch up with work.

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“I’m fortunate I bought my car in March 2017 before Tesla withdrew the offer of free electricity from its superchargers on cars registered after 1 April. There are no superchargers south of Exeter, though, so I use Ecotricity’s chargers to top up. So far that’s cost me £80.”

John Evans

Read more 

Tesla Model S review 

Aston Martin Vantage review 

Mercedes-Benz ML review

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Oilit 1 August 2018

Apples to oranges

when I looked at buying a Tesla I became incredibly frustrated with the constant changing of what was and what wasn’t included as standard and in certain bundles/packs it became impossible to accurately compare two cars.

 

This is just like the IT industry which is of course where he is from.

 

that was a good enough reason for me to avoid buying a Tesla - and I have to say I have never looked back!!

poetical 31 July 2018

It's my Tesla

Hi, I'm Peter - I'm the guy in the article.

Got a far bit of stick in the comments - I totally get why too :)

I'm a 20yr Autocar reader, and I'm so happy to have an article in it however it came about, but I thought I might answer a bit of what was said in the comments.

- That's a lot of money to lose on a car / more money than sense / why did you sell the Aston / why would you ever part-ex and not sell / bit of a nob etc

You're not wrong and believe me it hurts. I've been running my own business for 14yrs and it's been incredibly challenging over those years financially, but cars are my number 1 passion first and foremost and yes, I defintely waste money on them. Always have, and always will. Forget new clothes, or hobbies, cars are what I care about! There's this assumption that people buying expensive cars buy them outright, but I buy mine like many of you. I put money in, and finance the rest. This is not unusual at any level of purchase.

The Aston Martin was quite literally my pride and joy, and the night I bought that car - I got it in the garage and pulled up a deckchair and a bottle of beer and spent 2hrs hours staring at it. Only disturbed by stroking the badge and looking around because no-one was going to tell me to get off the Aston! It was amazing!

The finance I had meant after 3yrs it was my responsibility to pay outright (no handing back). So half-way through I panicked a little bit at the responsibility and part-ex for the Tesla.

I run a technology company and it was the perfect car. I had a Volvo S90 for a company car, which was superb but boring day to day, and the Aston for weekends. I swapped both for the Tesla, which I didn't do to save money on fuel (It's actually broadly equivalent to running a good mpg diesel when you analyse it properly). I bought it beause I'm a 'petrol head' and loved the performance blended with tech. I was somewhat obesessed with the AutoPilot!

The comment about why did I part-ex, more money than sense etc I totally get. Being a regular buyer, I've got very good at selling cars to fund my habit. I use Autotrader and I reckon I'm as good as any dealer at marketing and selling. Unfortunately, over around £40k car value it becomes very hard to sell privately. People simply want the comfort of a dealer, and as very few people above this level buy solely with cash they also need finance facilities. It's just a reality and the £4.5k from Tesla was actually really decent to a dealer, the dealer had fairly tight margin on it and I don't think Tesla made a penny. Shame I panicked - as it turned out prices hardened a little on the Vantage and I could have got the same as I sold it for after another 18 months usage.

I quite literally have a budget every year to lose on my car obsession, because if I can afford it I will change every year. The Tesla is actually a pain because no-one in the motor industry knows how to price it. So I either need to sell on a commission through a dealer (sale or return) or sit out my 3yrs PCP (or take a huge hit from a dealer who low ball it). Or hand it back as I'm now over 18 months. I'm loathe to do that however as it's actually a really decent daily car and I put a large deposit in the PCP which means losing more money. I'll see it out and enjoy a 4sec 0-60, with loads of space and low cost to run. The image is good for business too. I genuienly get nearly as much love as the Aston.

I did really miss the Aston though. I've just bought a 5 year old Vanquish which is my new garage queen. I'm absolutely over the moon and reckon my co2 profile is just about neutral now  ;)

5yrs ago, fairly shortly after the Vanquish came out, the Aston dealer ushered me out my local with a brochure of the Aston history in my hand quite clearly thinking I was a waste of space. I laughed it off, but a bit humiliating! To be fair, he had me down and I couldn't afford it! Since then I bought a new Vantage in 2015, and my old beauty Vanquish 3 years later. Good times, shows we can't always judge a book by it's cover and you never know when things might change for the better or worse in your personal situation. Live for the day I say.

Maybe things or people aren't always as they seem when you read an article. Do I consider myself absolutely uniquivocally privelidged to have had the cars I do? Yes! I've been lucky - worked no harder than many others who have but haven't had my luck to go with it, but I've done with that luck what I'd imagine many a petrol head would do with it too. I've bought every car I possibly can and loved them all from Insignia to Vanquish. Same goes for bikes, just love motors.

 

 

fadyady 29 July 2018

A good piece

People trading in their upmarket branded cars for Teslas is a testament to how far ahead they are of the curve. Mainstream brands have a lot of ground to cover.

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