Tesla Motors Offers Used Cars in a Strategic Move

tesla motors offers used cars

Electric-car make Tesla Motors has just started selling used model of its Model S vehicle directly from the website.

This is an important move for the luxury car maker and shows signs of their business maturing. Although it’s unclear how much profit the certified vehicle program will bring, it will likely increase interest in the Model S and Tesla as a whole.

Tesla Continues To Mature

The program was announced last month without a lot of media attention. The used models are available for a lower price than new, and Tesla offers a four-year 50,000 mile limited warranty for the used cars. This is in line with most other luxury car markers.

The vehicles in the certified vehicle program are mostly cars that were “swapped in” for the new all-wheel drive Model S that came to the market in late 2014. As leases from 2012 and 2013 come back in the coming years, there will be an even bigger pool of used cars to choose from.

Used Car Sales Important For Tesla

The used car sales are important for Tesla as they try to break into the crowded auto market. Typically, used vehicles have higher profit margins than new car sales at traditional dealerships. Tesla doesn’t use independent dealers, however, so the revenue from all used car sales will stay in house.

The offerings on the website for used Model S cars were less than those listed on AutoTrader.com by private sellers and used car dealers. Tesla’s site offers cars in 11 U.S. metropolitan areas, due to a limited supply of the Model S nationwide.

“There are a whole new set of buyers potentially exposed to the brand now,” said Alec Gutierrez, an analyst with automotive researcher Kelley Blue Book. BMW, Mercedes-Benz and other luxury car makers have been very successful with their similar certified pre-owned vehicle sales, and Tesla is likely to follow suit.

Buying A Certified Used Car

Buying a certified used car gives consumers the peace of mind knowing that they have the manufacturer guarantees. In addition, the increased demand for used cars helps car companies like Tesla push residual values higher – which in turn lowers the lease price for new cars.


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