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Anyone thought about how tax credit can impact your resale value?

vtjl

New Member
Sep 5, 2022
3
0
SLC
Plenty discussions on buying new/used cars with the tax credit, or if they should hold their money for next year.

I'm more concerning from an onwer's perspective.

I know used Tesla 3/Y wouldn't go below $25000 hence won't qualify tax credit.

But I believe 2023 will have huge impact on used Tesla --- if people can buy a Tesla 3/Y with msrp minus $7500, they're much less likely to choose a used one.

If you think the current used car = msrp is crazy, it's crazier that people are willing to pay for a used car that's $7500 more than msrp, which is very unlikely to happen.

Sure, people can save wait time on buying used cars. I guess the increasing Tesla factories and Tesla models neutralize each other on wait time in some ways. But tax credit will always be a huge negative impact on how much you can sell/tradein your used Tesla 3/Y.

Market price is determined by supply and demand if we're discussing one specific thing being sold. But it's also determined by whether you can get a better one with same or lower price.

In this case I'm pretty pessimistic on the used Tesla 3/Y value from now on. It still holds value. But the conclusion is, expect a steep decrease from next year.

You may say you're not going to sell your car anyways. But tax credit lasts 10+ years without sales cap, if not further canceled. All of us will suffer from msrp - $7500 at some point in our life.

I really hope to hear disagreement and be corrected. But I don't see that coming.
 

Tam

Well-Known Member
Nov 25, 2012
11,857
10,877
Visalia, CA
...I really hope to hear disagreement and be corrected. But I don't see that coming.

The impact on the used cars will be:

Tesla will increase its used car price to compensate for the used car $4,000 tax credit qualification.

Private used cars will compete with Tesla used car webpage's price.

Without the used car credit and when the pandemic effects are over that result in surplus parts, including chips, surplus new car inventory... then of course both new and used cars' prices will be pressured down.
 

Tam

Well-Known Member
Nov 25, 2012
11,857
10,877
Visalia, CA
Plenty discussions on buying new/used cars with the tax credit, or if they should hold their money for next year.

I'm more concerning from an onwer's perspective.

I know used Tesla 3/Y wouldn't go below $25000 hence won't qualify tax credit.

But I believe 2023 will have huge impact on used Tesla --- if people can buy a Tesla 3/Y with msrp minus $7500, they're much less likely to choose a used one.

If you think the current used car = msrp is crazy, it's crazier that people are willing to pay for a used car that's $7500 more than msrp, which is very unlikely to happen.

Sure, people can save wait time on buying used cars credit. I guess the increasing Tesla factories and Tesla models neutralize each other on wait time in some ways. But tax credit will always be a huge negative impact on how much you can sell/tradein your used Tesla 3/Y.

Market price is determined by supply and demand if we're discussing one specific thing being sold. But it's also determined by whether you can get a better one with same or lower price.

In this case I'm pretty pessimistic on the used Tesla 3/Y value from now on. It still holds value. But the conclusion is, expect a steep decrease from next year.

You may say you're not going to sell your car anyways. But tax credit lasts 10+ years without sales cap, if not further canceled. All of us will suffer from msrp - $7500 at some point in our life.

I really hope to hear disagreement and be corrected. But I don't see that coming.

New car tax credit is quite complex.

If Tesla is qualified for $7,500, of course people would want to buy new. In this case, the used car price still can be up to compensate for $4,000 used car credit.


If Tesla will not be qualified for $7,500, consumers might want to take the second best incentive: $4,000 used cars credit. The only requirement is it must be used cars from dealers (private sales do not qualify.) In this case, the used car price is pressured up.
 

Tam

Well-Known Member
Nov 25, 2012
11,857
10,877
Visalia, CA
If I remember the bill right, you won't get $4000 credit if the used car is sold for more than $25000 right? The 1st owner rule won't bother me that much compared to it.
Thanks for the clarification. I missed that completely.

Most used Tesla are above the used car price cap of $25,000 so it's a moot point to think that would increase the used car demand.
 

glide

Well-Known Member
Jun 6, 2018
5,524
7,808
USA
Plenty discussions on buying new/used cars with the tax credit, or if they should hold their money for next year.

I'm more concerning from an onwer's perspective.

I know used Tesla 3/Y wouldn't go below $25000 hence won't qualify tax credit.

But I believe 2023 will have huge impact on used Tesla --- if people can buy a Tesla 3/Y with msrp minus $7500, they're much less likely to choose a used one.

If you think the current used car = msrp is crazy, it's crazier that people are willing to pay for a used car that's $7500 more than msrp, which is very unlikely to happen.

Sure, people can save wait time on buying used cars. I guess the increasing Tesla factories and Tesla models neutralize each other on wait time in some ways. But tax credit will always be a huge negative impact on how much you can sell/tradein your used Tesla 3/Y.

Market price is determined by supply and demand if we're discussing one specific thing being sold. But it's also determined by whether you can get a better one with same or lower price.

In this case I'm pretty pessimistic on the used Tesla 3/Y value from now on. It still holds value. But the conclusion is, expect a steep decrease from next year.

You may say you're not going to sell your car anyways. But tax credit lasts 10+ years without sales cap, if not further canceled. All of us will suffer from msrp - $7500 at some point in our life.

I really hope to hear disagreement and be corrected. But I don't see that coming.
No need to think about it. We’ve seen it happen before when the last tax incentive was in play and when it expired.

Tesla has been rapidly raising prices to account for inflation and the potential tax credit coming back into play. Now they just don’t have an excuse to lower them.

Some folks who bought in 2021-2022 are going to be hit the hardest in terms of depreciation from the credit AND standard depreciation (which is already coming back).

I hope everyone enjoyed the brief period where their vehicles were appreciating assists. Because that is over.
 

vickh

Active Member
Dec 16, 2018
3,519
790
az
You can get a used 2019 Model S for less than they cost new back then.

Granted you won’t see much in the way of depreciation, but it’s still less and technically below “2019 pricing”

i meant used back then to now. I bought a 2016 CPO S for $35k, 4 year warranty. Went with a new 3 instead. Wish I'd bought both now that we need another car. I wonder if /when used car pricing will come back to earth, I'm ok w/ TSLA's 1 yr warranty, but not paying out the nose for used.
 
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