Used Tesla Prices Are Dropping Fast: Should You Buy New or Used?

Hey everyone, DennisCW here! Today, I’m diving into a hot topic that’s been making waves in the electric vehicle (EV) community: the rapid decline in used Tesla prices. According to a recent post by a value analyst, used Tesla prices are falling at a staggering rate—six times faster than the overall vehicle market. Let’s unpack this trend, look at some jaw-dropping numbers, and figure out whether buying a new Tesla or a discounted used one makes more financial sense for you.

The Shocking Decline in Used Tesla Values

The data is clear: Tesla resale values have dropped by 7.3%, while the overall market has only seen a 1.1% decline. That’s a massive gap, and the decline in Tesla values is accelerating. Take the Cybertruck, for example. In just one year, Cybertruck values have halved. I recently came across a Foundation Series Cybertruck listed for $66,000—a steep drop from its original price. It’s wild to see such depreciation in such a short time.

But it’s not just the Cybertruck. Listings for used Tesla Model Ys are popping up at unbelievable prices. We’re talking about 2023 Model Ys for $24,000 and 2024 models for $29,000. These are vehicles that are barely a year or two old, already selling at a fraction of their original cost. So, this raises a big question: with prices this low, should you jump on a used Tesla deal, or is it smarter to go for a brand-new Tesla with perks like low financing rates and full warranties?

New vs. Used Tesla: Breaking Down the Costs

Let’s crunch some numbers to compare the two options. I’ll focus on a used Tesla priced between $25,000 and $30,000 versus a new Tesla Model Y at around $43,000 to $44,000. At first glance, the used option seems like a no-brainer, but when you factor in financing and opportunity costs, the picture gets a bit more complicated.

Financing a Used Tesla

If you’re financing the full amount of a used Tesla at $30,000, keep in mind that interest rates on used vehicles are significantly higher than on new ones. You’re unlikely to get rates like 0% or 1.99%—even 5% might be a stretch unless you’re working with a credit union (check out our Patreon group in the description for resources on this). Using California sales tax as a baseline and a 60-month loan term at a higher interest rate, here’s what the numbers look like:

• Monthly Payment: Approximately $615
• Total Interest Paid: Around $6,700
• Total Cost After Everything: About $42,000

Of course, these numbers will vary based on your down payment, credit score, and financing options. I encourage you to plug your own figures into an auto loan calculator to get a personalized estimate.

Financing a New Tesla

Now, let’s look at a new Tesla Model Y priced at $50,000. Thanks to the $7,500 federal tax credit, the effective cost drops to around $42,000. To qualify for Tesla’s fantastic 1.99% financing rate, you’ll likely need to put down $10,000. Keeping the loan term at 60 months for consistency, here’s the breakdown (including sales tax and registration fees):

• Monthly Payment: Lower than the used option due to the low interest rate
• Total Interest Paid: Significantly less than the used Tesla
• Total Cost After Everything: Approximately $50,500

So, while the upfront cost of a new Tesla is higher, you’re looking at an $8,000 difference in total cost compared to the used Tesla ($50,500 vs. $42,000). However, with the new Tesla, you’re getting the latest technology, a full 4-year/50,000-mile warranty, and peace of mind. The used Tesla, on the other hand, might be a bit of an “old and busted” model with no warranty remaining.

Key Considerations: What’s Right for You?

The decision between new and used isn’t just about the numbers—it’s also about your personal situation and priorities. Here are a few things to think about:

• Budget and Financing: Can you afford the higher upfront cost of a new Tesla to take advantage of low interest rates and tax credits? Or does a lower initial price on a used Tesla fit your budget better, even with higher interest?
• Warranty and Reliability: A new Tesla comes with a full warranty, while a used one might not. If you’re eyeing a super cheap, high-mileage Tesla (like a 2020 Model 3 or Model S for $10,000), the risk of repairs could add up quickly.
• Technology and Features: Newer Tesla models often have updated tech, better range, and improved features. Is that worth the extra cost to you?

Ultimately, every situation is different. I recommend taking these numbers as a starting point, plugging in your own data, and considering your comfort level with potential repairs or older tech.

Protecting Your Investment: Warranty Options for Used Teslas

If you’re leaning toward a used Tesla—especially one of those dirt-cheap, high-mileage options—I strongly recommend getting some form of warranty protection. That’s where my channel partner, Amber, comes in. Amber offers month-to-month warranty coverage for Tesla vehicles, unlike other companies that charge thousands upfront for long-term plans. Think of Amber as “Apple Care for your Tesla.”

Amber has three packages to choose from—Basic, Essentials, and Premium—with Basic starting at just $65 per month. It’s a flexible, no-obligation way to protect yourself from unexpected repair costs. Plus, Amber offers benefits that even Tesla’s service warranty can’t match. Check out the link in the description below to get a free quote and see how Amber can help safeguard your used Tesla.

A huge thanks to Amber for partnering with us on this content!

Final Thoughts

The plummeting prices of used Teslas are creating some incredible buying opportunities, but they also come with trade-offs. While a $24,000 Model Y from 2023 sounds like a steal, financing costs and potential repair risks could make a new Tesla a smarter long-term investment for some buyers. Take the time to run the numbers, consider your needs, and weigh the pros and cons of warranty coverage.

What do you think—would you go for a discounted used Tesla or splurge on a brand-new one with all the perks? Drop your thoughts in the comments below, and don’t forget to check out the resources in the description, including Amber’s warranty options and our Patreon group for financing tips.

Thanks for reading, and I’ll catch you in the next post!

-DennisCW