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Appreciation

The only good thing about Tesla’s new financing is how much a Mercedes is worth

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Tesla yesterday launched a new financing scheme for its $70,000 2013 Model S electric sports car, which combines a down-payment financed by Wells Fargo and US Bank, federal and state tax incentives, and a collection of creative, if not downright wacky, calculations of opportunity cost to make the car’s $1,199 a month financing cost look like $500. Part of the discount stems from the fact that the program includes a certain guarantee of the car’s future value: a right to sell it back to Tesla for what it would cost had it depreciated at the same rate, in percentage terms, as a $95,000 Mercedes-Benz S-Class.

For those willing to accept Tesla’s deal, then, there is one piece of good news: S-Classes have been holding more value for longer in recent years. Where a 2011 model had a 36-month residual value (what it will be worth three years hence) equal to 42% of the Mercedes suggested retail price (MSRP) in March of that year, the 2013 model has retained 47%, according to the Kelley Blue Book, the standard US car price database. (In 2011 and 2012, the Mercedes S-Class was not featured in the Blue Book until March, but in 2013 it first appeared in January, hence the chart above.)

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