Used Teslas Are Getting Very Cheap, But Buying One Can Be Risky

Enlarge / Used Tesla Model 3s can now be had for under $20,000.

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Nowadays, the launch of a new electric vehicle is invariably greeted with a chorus of “this car is too expensive”, and rightly so. But for used EVs, it’s a completely different story, particularly used Teslas, thanks to a glut of former fleets and rental cars that are now ready for their second owner.

“Due to a variety of reasons, Tesla resale values ​​have plummeted, making many Tesla models very affordable now. Additionally, for some consumers, an additional $4,000 federal electric vehicle tax credit may apply used, which further sweetens the deal. It may be a great deal for the savvy buyer, but there are important things to pay attention to,” says Ed Kim, president and chief analyst at AutoPacific.

In fact, a quick search on the topic easily reveals some horror stories of ex-leased Teslas, so here are a few things to consider if you’re looking for a cheap Model 3 or Model Y.

For more than a year, Tesla has been involved in an electric vehicle price war, driven primarily by its attempt to maintain sales in China. Sharply cutting the price of new cars is a good way to devalue used ones, and Hertz’s decision to sell at least 20,000 of its Teslas was partly a response to lower residual values.

What to be attentive

“The prices are very attractive, but buyers should be aware that rental cars can and are abused, and that some of these former rental units may have unpleasant surprises stemming from their hard lives. .Be sure to have yours thoroughly checked by a mechanic before purchasing,” says Kim.

Mismatched tires and minor dents, scratches, and chips are fairly common minor problems. Many of the Teslas Hertz sells have been used as Ubers; You can tell it’s one of these if the odometer gets close to 100,000 miles. Battery degradation could be an issue, although most cars won’t have lost more than 4-5 percent of their capacity, and long-range Teslas should have a powertrain warranty of up to 120,000 miles (or eight years).

“A side effect of Tesla’s extensive and reliable DC fast charging network is that many owners end up relying on it to keep their cars charged rather than dealing with the often considerable expense of installing a home charger and upgrades.” associated power plants,” Kim told Ars. . As such, you should be sure to check the battery status (which can be done on the touch screen or as part of the inspection) before purchasing.

Rental cars can suffer from too many slamming doors and slamming trunks; Slamming the latter can damage the motorized strut. Inside, expect heavy signs of wear on some touch points, especially the steering wheel and rear door cards, which may bubble or peel, especially if the Tesla was used as a ride-sharing vehicle.

Other possible headaches

Teslas are highly connected cars, and many of their convenience features are accessed through smartphone apps. But that requires Tesla’s database to show you as the owner of the car, and there are many reports online that transferring ownership from Hertz can take time.

Unfortunately, this also leaves the car stuck in Chill driving mode (which restricts power, acceleration and top speed) and puts some car settings out of the new owner’s access level. You also won’t be able to use Tesla Superchargers while the car is still listed as belonging to Hertz. According to forum reports, contacting Tesla directly is the way to resolve this issue, but the process may take several days; longer if there is a mismatch in the documentation.

Once you’ve transferred ownership to Tesla’s satisfaction, it’s time to reset the car’s software to remove the fleet version.

Not all cars will qualify for the $4,000 IRS Clean Used Vehicle Tax Credit. It has to be at least two model years older than the calendar year in which it is purchased used, so currently only MY2022 and earlier electric vehicles are eligible, and it cannot be offered for sale for more than $25,000. The income limits are also half that of the new clean vehicle tax credit, meaning a single filer can’t earn more than $75,000 a year to qualify.

There are many complaints among the Tesla community that Hertz was not created to deal with the tax credit, although more recent buyers have reported that this has become much easier. It’s worth planning ahead and contacting the specific sales branch where you plan to purchase the Tesla to make sure they can process that paperwork, especially if you expect the credit to be applied to the price of the car at the point of sale rather than waiting. until you file your taxes next year.

Buying an ex-lease or ex-fleet Tesla from an independent dealer is also an option. Many used car lots have purchased Teslas at Hertz auctions and elsewhere, and online anecdotes suggest this is often a smoother experience, particularly when ownership is transferred and the new owner registered with Tesla. On the other hand, you’re more likely to encounter useless third-party warranties and the like if you go this route.

Rental or fleet cars may have had a difficult life, but they also tend to receive much more regular maintenance than most privately owned vehicles. As long as you make sure you don’t buy a lemon, it’s a good way to get an electric vehicle for under $20,000.

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