How can you get a Model 3 for less than $30,000?
When the Model 3 first came out from Tesla, Elon Musk promised that he will make a car for the masses. An electric car under $35,000 for an incredibly appealing offer, but now over 3 years after the car was released the low end model is still nowhere in sight. The models that first rolled off the assembly line were priced closer to a BMW 5 series than an affordable Camry. Now, after a couple of years of depreciation and the disappearance of the waiting list, you can finally get a Model 3 with low miles for under $30,000
What is the used Tesla car market like?
When doing my research, I tried to limit my search to just cars that were less than 5 years old and had less than 60,000 miles on them and were under $31,000. On my favorite car search site, that led to about 150 cars available across the country. This is not a lot of inventory, but it is enough to notice some trends and be able to find deals. There were quite a few 2019 and 2020 models with around 30-35,000 miles on them, leading me to believe we are starting to see an influx of lease returns hitting the market. Most of these cars are for sale through franchise dealers so it is a safe assumption that a lot were swapped out at the end of their lease for a conventional car.
Recent Tesla deals
Why do I think this is a good deal?
Over the past 2 years there have been many entrants into the EV market: we have seen Rivian, Mercedes, Ford, Genesis, and many more. Even with the high number of brands making EVs, very few of them have achieved any meaningful scale. Most cars still have long wait lists and are rarely spotted on the road. Tesla has been the only manufacturer that has made over 100,000 cars a year for several years and has a meaningful presence in the used car market, especially through lease returns. If you are considering an EV, a used Tesla is an appealing option as you are buying into a brand with an established dealer network and parts availability (although wait times seem to be getting longer for repairs). I think getting a Model 3 with over 200 miles of range for less than $30,000 is a great bargain considering a similar new car will still set you back at least $45,000 with comparable options.
What other cars would I consider at this price point?
If you are looking at EVs, used Ford Mustang Mach - Es are starting to come down in price, but most are still well over $35,000. I think a used Model 3 is a good rival against buying a similar priced used BMW 3 series or Mercedes C class. You are getting similar features and better tech with the Tesla, and also better performance as most used entry level luxury cars now tend to be smaller turbo 4 cylinder engines. If you are looking at new cars, finding something for less than $30,000 is incredibly difficult unless you start sacrificing quality or space. Even a Toyota Camry will be more expensive, and I think you get a lot less car for the price.
Do I think this deal will last?
I believe we will continue to see more and more Model 3s hit the used car market over the coming months. This quickly became Tesla’s best selling model and as leases end and owners get tired of their cars they will continue to increase in inventory on used car lots. I think most initial Tesla owners are wealthier individuals that will not own cars for a long period of time. I think used car prices on the Model 3 will keep dropping into the mid and low 20s, especially for higher mileage versions. You can find Model S options for under $30,000 as well, so it is safe to assume the Model 3 will follow a similar depreciation curve.