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Cancelation of order for car being build -- consequences?

Cancelation of order for car being build -- consequences?

Hello,

My Model S (P85 with all available options but third row seats, multicoat red)
is being build and it is scheduled to be delivered between May. 3rd - May. 17th.

Unfortunately, due to personal reasons, I will need to cancel my reservation.

Yesterday I have asked a question about consequences of doing so
via email (delivery@teslamotors.com), but got no answer yet.

I had read the contract which I have electronically signed,
and I understand that I am under it's terms, but
does anyone knows what are the consequences of canceling it?

Lost deposit? Anything else? Is my reservation transferable?
If so, maybe anyone would be interested to take delivery instead of me?

Thanks for sharing your knowledge and opinions,
Przemek

elguapo | April 23, 2013

Sorry to hear your story - hope everything turns out okay.

There was a thread on this a while ago and no one reported hearing of an instance where Tesla actually compelled someone to buy the car or even retained the $5,000 deposit. I think they'll likely let you out of it, especially since they now have an active program to sell cars like yours.

Noah.S | April 23, 2013

I don't know your situation, and it depends on what Tesla says in regards to penalties, but you could always take delivery and then sell it.
I don't know what kind of depreciation hit you'll take, but I know there were some posts on TMC forums of folks trying to actually make a profit selling to those who wanted to skip the line.

Longhorn92 | April 23, 2013

I would just call Tesla, tell them your circumstances, and see what they say.

mrspaghetti | April 23, 2013

It might depend on where the car is in production. I cancelled mine shortly after signing the pre-MVPA and they cheerfully refunded my deposit. If you call them and explain your situation I'd guess they will not screw you.

Good luck. Maybe we can both be back on the list soon :)

jat | April 23, 2013

I believe once you have signed the MVPA, your deposit is forfeit if you don't complete the purchase. As others have said, you might be able to talk them out of it depending on your circumstances.

hfcolvin | April 23, 2013

Sorry that you'll miss out on this car and hopefully this will be the only downside of your situation. Technically your $5000 deposit will be forfeit but Tesla is a "do the right thing" company IME and they will work with you to make things good for all parties.

I usually get response to email in about 36 hours from the east coast. Call if you don't hear back within 2 days. If your car is in production, the sooner you get on this the better your chances of getting the deposit back.

darobin77 | April 23, 2013

Hi

I place my deposit 2 weeks ago and i received a email that my car would go into production on the 20th if i needed to make a change call them.

I called to place my reservation on hold because i have to sell my existing vehicle for my Model S.

Anyway i asked your question, i said when is the absolute last min i can cancel my reservation and get my 5k back and the Tesla rep said you can the 5k back up to the second you take delivery of the vehicle.

Now you said you electronically signed some documents so I don't know what that would be but the info above is what i was told if it helps.

D

mtom007 | April 23, 2013

it takes the 3-4 days to build the car.. call Tesla soon.. It may not have hit the factory floor yet.

karwas | April 24, 2013

Update:

I have just got an answer from Tesla:
"We can cancel your order, though your $5,000 deposit will be kept
and used towards remarketing and selling the vehicle to a new owner."

Bummer....

Maybe I will just buy it after all and sell it when the time comes...

mrspaghetti | April 24, 2013

Out of curiosity, was that information obtained in a phone call or email? I'm just thinking that might be the general response to the general question "what would happen if...?" If you have not called your delivery specialist on the phone I would definitely do so.

If you have, and that was the answer, sorry to hear it.

soren | April 24, 2013

karwas,
I might be interested in taking your order.
Not sure if Tesla can handle the shift in ownership?
What leather and wood/carbon did you choose, when you designed the car?

jat | April 24, 2013

@karwas - since there isn't such a long wait any more, you will probably lose more reselling it than the $5k.

rochec | April 24, 2013

@soren - they can, I just bought one that someone backed out of.

soren | April 24, 2013

Ok. Then I just need your complete configuration carwas.
You can send it to my email: rynkebjerg@gmail.com or just list it here.
If it suites my taste, i'll contact Tesla, and we can set it in motion.

karwas | April 24, 2013

@mrspaghetti -- I have received an email reply to my phone inquiry about cancelation
@soren -- This is configuration from my The Pre-Delivery Motor Vehicle Purchase Agreement (MVPA)

Reservation: RN326797
Date priced: February 7th, 2013

Model S Performance $94,900.00
Red $1,500.00
All Glass Panoramic Roof $1,500.00
21" Grey Wheels $3,500.00
Tan Performance Interior -
Carbon Fiber Décor -
85 kWh Battery -
Tech Package $3,750.00
Sound Studio Package $950.00
Active Air Suspension -
Parcel Shelf $250.00
Paint Armor $950.00
Twin Chargers $1,500.00
High Power Wall Connector $1,200.00
Supercharger Hardware -
Subtotal $110,000.00
Tesla Personal Delivery $990.00
Final inspection, prep, and coordination $180.00
Cash price of motor vehicle and accessories $111,170.00

I will also contact you via email.

Przemek

karwas | April 24, 2013

@ darobin77 -- The moment you sign The Pre-Delivery Motor Vehicle Purchase Agreement (MVPA)
you are under contract with a following clause:
No Cancellation. This Agreement is binding and you may not cancel.
This Agreement is not conditioned upon your obtaining financing
from us or any other source. If you fail or refuse to accept delivery of the Vehicle,
we may retain as liquidated damages any cash down payment or deposit made by you,
to the extent not prohibited by law. We may reimburse ourselves for any expenses and
losses we incur or suffer as a result of your failure or refusal.
Such expenses may include our reasonable attorneys’ fees,
reasonable collection fees and court costs.

It is also reiterated just over a bottom line where you sign a contract:
THERE IS NO COOLING OFF PERIOD. California does not provide for a “cooling off”
or other cancellation period for vehicle sales.
Therefore, you cannot later cancel this contract simply because you change your mind,
decide the vehicle costs too much, or you wish you had acquired a different vehicle.
After you sign below, you may only cancel this contract with the agreement of Tesla Motors
or for legal cause, such as fraud.

So, I think that "Tesla rep said you can the 5k back up to the second you take delivery"
was incorrect and wrong

diegoPasadena | April 24, 2013

karwas
If you bring them a willing buyer that will step in for you, their justification (remarketing costs) falls away and they might be persuaded to let you off the hook.

DouglasR | April 24, 2013

@karwas - Tell them you expect them to deliver the car with fog lights as promised. If they can't perform that promise, offer to settle by canceling with full refund of your deposit.

chicago.ev | April 24, 2013

@DouglasR- that's a good idea. Tesla is an innovative company and the product is cool. However, the level of misinformation by the company is ridiculous. This is a publicly traded company, and a high-profile one at that. I was explicitly told by the rep at a Tesla store that you could cancel your order at any time prior to delivery and receive your deposit back in full. These reps at the stores know so little. I ask them basic questions and they shrug their shoulders and give me the look like- hey dude it'll be cool. you can trust the engineers and the company. surf's up bro' .
I'm very concerned that I'm going to get screwed by this company. I take delivery in a couple weeks. If 12 months from now I find that my range is nowhere near what was advertised, I'm going to be pissed. They better hope that Toyota/Lexus doesn't develop a better battery technology- that will mean game over for Tesla.

jjaeger | April 24, 2013

yeah that's a great idea - don't get what everyone who has one says is such a thrilling ride because of fog lights. abnsolutely right - cancel your order, makes perfect sense. A balanced trade under any set of review conditions. It's the principle that matters.

Oh wait, that would be foolish and silly - only some 'make a statement' over-reacting sentiment move. Have it your way, and I'll drive my MS with the fog ligjts off in solidarity of your positon. I'm right behind you...

DouglasR | April 24, 2013

@jjaeger - He's canceling anyway. The question is whether he gets his $5k back.

soren | April 24, 2013

@karwas + others.
I can't see the "cold weather package" (PPP)is in the configuration.
Performance package plus also not chosen? This is not a must for me, but would guess I would chose the 19" wheels if no PPP. It should be easy for Tesla to swap 21" to 19" wheels.
Is the car all done, or can they add this feature?

I live in Denmark, Europe. Will this cause problems for Tesla? (US(/EU version?)

soren | April 24, 2013

Edit:
PPP should be after the "Performance Package Plus",
Not the "cold weather package"

Carefree | April 25, 2013

soren, it makes most likely no sense for you to buy a US version of this car. You NEED the European version - it is entirely possible that charging technology between US and Europe will be different. There will be other differences as well. I can almost guarantee you that Tesla will not allow you to swap karwas' car. Don't get your hopes up.

European deliveries will start in July (according to Tesla). Just get in line for a European car.

darobin77 | April 26, 2013

@karwas thanks for the information. I am learning that the tesla reps do know recite from the same manual.

I placed my reservation on hold because i want financing in place before i get locked in a situation.

D

L8MDL | April 26, 2013

Always be aware that a written, signed contract trumps a sales person. Caveat Emptor!

karwas | April 26, 2013

@ L8MDL -- I agree completely!
This lesson will cost me $5k, so I think I will remember it well for the rest of my life :-)

Some more thoughts, explaining why I want to cancel
(BTW, I have funds for this car, and I was approved for financing as well)

My way of thinking about cost of ownership is quite simple.
I acquire a nice car and sponsor development of cool technology for: $120k.
I am receiving some incentives from federal and state government: ($10k)
I need to pay upfront the whole sales tax because car is technically not leased: 10k

Total cost of acquisition: $120k
After 3 years car guaranteed to be worth 43% of 120k = $50k

---

Cost of ownership for 3 years: $70k, $23 per year, or $2k per month.

I don't buy twisted and fuzzy logic about "value spend at gas station etc.",
and gas savings are somehow negligible in comparison to total cost of ownership.
I am conscious about environment, but I don't think that spending $70k for replacing
one Prius with one Tesla is the most efficient way to take care of environment.

---

One extra fact: The lack of direct interest in taking over my reservation or indirect
assessment made by Tesla that it will cost them $5k to find another interested person
to buy this car makes me believe that my way of thinking about TCO is somehow valid.

---

Lesson to learn: Don't make any decisions with serious financial impact based on emotions only.

karwas | April 26, 2013

small correction: "value spend at gas station etc." should read ""value of time saved by eliminating visits to gas station etc."

pebell | April 26, 2013

@karwas, it sounds like you are somehow blaming TM for you failing to do some simple math _before_ placing your order. Any >100k premium performance car will mean a serious write-off for its first owner - why would the Model S be different? And there is nothing "fuzzy" about fuel costs - again some very basic math will tell you how much you save each month. And yes, if you only use it to drive to supermarket that will not amount to much. If you put 3000 miles down each month, it will. Finally, if you look at the maintenance costs for any ICE car that will bring you from 0-60 under 5 seconds, you can make a pretty educated guess about how much you save there when driving a Model S.

So basically what you are saying is that you expected TM to provide you with the opportunity to drive a large, ultra fast luxury performance car with a TCO of a compact, slow, "sensible" family car.. If they could do that, they'ld better ramp up to producing 20 million cars per year instead of 20.000.

karwas | April 26, 2013

@pebell - you are correct on all accounts. I didn't want to sound like this. All blame is on me.
I was too emotional and excited when I placed my order. But it is only my fault, not TM.
I also accept that I will loose my deposit. Bitter pill to swallow, but I put myself in this situation.

So, you may ask -- why I am writing this?

It is simple -- I started this thread in parallel with
asking the same question to deleivery@teslamotor.com,
because I was curious if anyone else in this group had any experience
with canceling their order.

Then I somehow wanted to rationalize why I am canceling,
so I had shared my thoughts and calculations, but you are right
-- it was unnecessary, not called for, and sounded wrong.

Let's close this case -- I had a lesson, and I hope I will be wiser next time.

Przemek

pebell | April 26, 2013

Przemek, I am really sorry that your initial excitement turned into this bitter pill. After reading your concerns about TCO, I just was very confused by the order you placed: you went all-out and ordered the most expensive version with every option in the book - behaviour one would typically associate with someone for whom TCO is the absolute least of his concerns.

I can personally relate to your excitement very much. For at least half a year I have visited this site and the "design configurator" pretty much daily. Because to be frank, I can't really afford this car - not without giving up a lot of other things for it, at least. So I have had make prudent choices. Sure, I clicked together "your" configuration many times too. But then I had to get sensible, choose a battery pack that matches my needs, and choose only the options I feel I can't live without.

This week, I finally finalized my order with the lease company. And although it is not the fastest and most luxurious configuration there is, it's still WAY faster and more beautiful than anything I have every dreamt about driving. And now that I've made my choices and have peace with them, I am absolutely excited again, can't WAIT for it to be delivered..

So I guess what I want to say is: are you sure you need to go from "all" to "nothing"? That there is nothing inbetween that will make you almost as excited, and will not be a $5000 bitter pil that will always leave a bad taste in your mouth every time you think about it?

All the best,

Peter

Brian H | April 26, 2013

I think the fuzziness referred to was re time spent pumping gas.

But it all skirts the issue of getting what you pay for. Driving experience, even up to the level of therapeutic sanity boosting is a very real motivation for spending the $$ for many/most. Read owner testimonies with that POV, and they just shout in agreement. As in, "I will never by an ICE car again."

pebell | April 26, 2013

@Brian H: yes, the fuzziness referred to the time spent at gas stations. Unfortunately, I was already typing my comment when karwas posted his correction where he elaborated on that, so I saw it only after I posted.

cloroxbb | April 26, 2013

Still think it sucks that you will lose 5K though... you would think they would already have someone in the queue for the exact same configuration you wanted, and just move the car into said fictional person's reservation...

Brian H | April 26, 2013

They have to enforce the policy sometimes, or people will just ignore it.

DouglasR | April 26, 2013

I suspect that people with a better story get more sympathy. Sounds like the reason here is "I changed my mind."

herkimer | April 26, 2013

I think you missed an opportunity of a lifetime.
Sorry you didn't have the courage to follow through with your convictions.
You lost more than 5000 dollars, you missed the opportunity to own the car of the future and one of the very best automobiles ever made, a unique and peerless game changing company and technology!
I am sure someone will love your car which you designed by your specifications!
Maybe it will be a great loaner at a service center and someone will say " trade mine! I want this one! "
Enjoy your Prius!