Tesla Motors has been making headlines for selling its new cars to order online, and now, the automaker also wants a piece of the used car market. The EV manufacturer has just added a certified vehicle program to its website.
Tesla sells used cars
It’s a move that makes sense as Tesla has offered to buy back its used vehicles from their owners at guaranteed prices after they have owned them for a set amount of time. Now Tesla’s certified vehicle program enables buyers to purchase a used Model S sedan so they can still enjoy the luxury of a Tesla but at a lower price point, reports Mike Ramsey of The Wall Street Journal.
It’s been about a week since Tesla launched the certified used vehicle program on its website. The automaker started selling the used cars without really advertising the program.
Tesla still offers maintenance
Tesla is still offering the reliability and maintenance checks with its certified used Model S sedans. Just like other luxury automakers, the EV manufacturer is also offering a 500,000 or 4-year extended limited warranty on its used cars.
A Tesla spokesperson reportedly told Ramsey that the first set of Model S sedans that are up for sale on Tesla’s website are mostly cars that were traded in for the Model S P85D, which is the all-wheel drive version of the luxury sedan. The all-wheel drive version was launched more recently than the original Model S sedans, going up for sale for the first time toward the end of last year.
Tesla started offering a leasing program in mid-2012. The leases last three years, so this summer will bring the first set of formerly leased Model S sedans.
Tesla aims for growth
The automaker is still a baby company compared to virtually every other automaker in the world, and it’s now starting to feel the growing pains. Tesla has been seeking new ways to grow, and selling its own used vehicles is the next logical step. The automaker has been fighting to get its direct-to-consumer sales model approved throughout the U.S., as auto dealers fought back, saying the business model is anti-competitive. It seems likely now that used car dealers may join the cacophony raised by new car dealerships.
In most cases, used cars offer profit margins that are quite a bit higher than those on new cars. However, with Tesla selling electric vehicles, it’s unclear whether its used cars will have greater margins. The EV maker’s website lists used cars that are less expensive than those being sold by independent auto dealers or private sellers through AutoTrader.com.