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A $TSLA bro comes into my store yesterday wanting to trade his M3 for a Dodge Charger. My sales mgr calls me asking me to get involved in the valuation. I laugh, thinking he& #39;s harassing me, but then remember that none of my employees know anything about the $TSLAQ cabal.
So, the customer brings the car to my building and I begin to evaluate. I& #39;ve basically never been close to a M3. I& #39;ve only ever driven one $TSLA & that was a MS, and only once. Keep in mind that we& #39;re in semi-rural Alabama. I own two domestic stores & sell primarily used trucks.
As I circle the car, the customer educates me on franchise laws and explains that $TSLA doesn& #39;t sell cars in AL for that reason. I don& #39;t share my thoughts on the subject ("duh, who do you think pays to keep those laws in force???" - maybe he doesn& #39;t realize I& #39;m the dealer).
This is bc all car mfrs would F every dealer into oblivion given the opportunity. They already put us in the hole on EVs & hybrids by requiring massive investment in tools & training, & allow almost no markup (<1% in some cases), based on the rationale that they& #39;re losing $$$...
in production of the vehicles. But, I digress.... The M3 in question is perfect. No dings, no scratches, no curb rash - immaculately clean interior. It does have 32k miles, however. The cust says he wants $40k for the car. I look it up on MMR and get these results:
From this, I think he may not be far off on his valuation. The highest mile result had <19k miles, but sold for $43.5k a few weeks ago. $40k still feels a little high to me, however. I tell him I want to do a little more research and head back to my office.
On my way back, I recall him explaining that his phone was the key and I think, "how the F am I going to deal with this car if I trade for it? I have 500 cars on my lot and am not going to install some damn s/w on my phone so I can drive just this one!"
Additionally, I& #39;ll point out that the problems customers experience in getting warranty/svc work via $TSLA would be magnified if I owned the car. If it had any problem, I& #39;d have to ship it to Atlanta and would expect to be the last priority in their shop given that I& #39;m a dealer.
Finally, while appraising, I noticed that there& #39;s not a digit in the VIN differentiating between mid range and long range. I had to take the customer& #39;s word for it. But it made me curious as to what would happen if I sent this car to auction.
Bidders get about 30 seconds/car at auction. How would anyone determine if the car was actually a LR car while it& #39;s running through the lane? Take my word for it?? Doubtful.
I get to my office and decide to do some retail research. This is what I find on Autotrader:
I get to my office and decide to do some retail research. This is what I find on Autotrader:
There are 163 2018/2019 M3s w <15k miles currently for sale on AT. Most of them are listed by $CVNA. We& #39;ve debated the nature of the $CVNA/$TSLA relationship here a bit, and I have no knowledge who actually owns the Teslas being offered by $CVNA. It& #39;s worth considering however...
that auction values of $40k+ for 2018 M3s with 20k miles must decrease, so long as there are 2019s with <500 miles being retailed by $CVNA for <$42k. Based on the AT results, I advise my sales mgr that this 2018 M3 is worth $30k at most - not $40k. Knowing this isn& #39;t a car deal,
I advise my sls mgr to educate the cust via the AT results. My short thesis has never been about the product or the mission - only the financials. (I actually have env science in my background, but $TSLA is an amazing short from a finance perspective.)
I did gain some useful takeaways from this brief encounter that inform my thesis:
- A car needs a f& #39;ing key
- The MR/LR issue is a problem in the aftermkt
- 1 yr depr on a M3 w/ avg usage is >40%
- The $CVNA/ $TSLA relationship is a small scale liquidation experiment
- A car needs a f& #39;ing key
- The MR/LR issue is a problem in the aftermkt
- 1 yr depr on a M3 w/ avg usage is >40%
- The $CVNA/ $TSLA relationship is a small scale liquidation experiment
There’s a photo of the car with my Ford store in the background - for the skeptics. We use an appraisal tool that allows salesppl to submit photos of cars. Didn’t expect this thread to be considered fake news. Go figure.
