Tesla ends Resale Value Guarantee program

Things changed July 1.

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It's expected that a car loses much of its value the moment it leaves the dealership. When you're an upstart automaker with an alternative powertrain with not a lot of infrastructure to support it, the stakes of the depreciation game are even higher. Tesla, though, found a way to reassure buyers that its cars were a sound investment with its Resale Value Guarantee. The program, which began in early 2013, gave customers a guaranteed buyback price for their new Model S after 36 months, calculated at 50 percent of the base price, plus 43 percent of options, with a few stipulations.

With Tesla gaining momentum, credibility, and especially desirability, perhaps we shouldn't be surprised that it ended its Resale Value Guarantee program July 1, 2016. The EV landscape changed drastically in the last few years, and if buying a Tesla once felt like a gamble, the hundreds of thousands of Model 3 reservations show that consumers like their odds a lot better now. Reassuring them that their car will be worth more than other luxury automakers after three years is simply no longer necessary.

"We have discontinued the Resale Value Guarantee program as of July 1 so that we can keep interest rates as low as possible and offer a compelling lease and loan program to customers," Tesla said. "We will continue to support customers currently financed through the RVG program."

By ending the program, Tesla CEO Elon Musk should have some extra cash to spend as he pleases, as the program was backed by his own personal assets. It'll be interesting to see what he does with it.

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