Buying a Tesla for another person

[Eddie Aziz]

I’m purchasing a Tesla for a friend. But can the title be in his name? Can the car be registered in his name? Who applies for the $7,500 federal tax credit?

If the title is in my name can it be transferred to my friends name? How about the registration?

I just want to make sure the title and registration is in his name since he’ll be the owner and that one of us gets the $7,500 tax credit

 

[JCtx]

Only the official registered owner on the paperwork would get the rebate. And I'd guess if your friend provides all the information needed (driver's license, etc), you could do it, but not sure if Tesla requires a power of attorney or not. Call them. Good luck.

 

[Eddie Aziz]

Thanks! The car will be registered in his name since he’ll be driving and he insuring it. I’d like the title to be in his name. I’m only paying for the car and he’ll be paying me back. I’m not sure if the title can be put in his name. If it can does he apply for the tax credit or do I?

 

[ucmndd]

Sounds like you want to give a friend an unsecured loan on a new car. If that’s the case:

1) Hope it’s a really good friend. Get a written loan agreement.

2) The most straightforward way to do this is for your friend to buy the car. Their account, their registration, they’re on the title, etc etc etc. When it’s time to pay you either process the ACH from your account or produce the cashier’s check. Tesla doesn’t really care where the money comes from so long as they get it.

Your friend then, for all intents and purposes, owns the car. They will need to claim the tax credit.

 

[Eddie Aziz]

Sounds like you want to give a friend an unsecured loan on a new car. If that’s the case:

1) Hope it’s a really good friend. Get a written loan agreement.

2) The most straightforward way to do this is for your friend to buy the car. Their account, their registration, they’re on the title, etc etc etc. When it’s time to pay you either process the ACH from your account or produce the cashier’s check. Tesla doesn’t really care where the money comes from so long as they get it.

Your friend then, for all intents and purposes, owns the car. They will need to claim the tax credit.

That’s all I really needed to know. If the account, title, registration etc.. can be in his name and I’ll just process the ACH. But can he apply for tax credit if he didn’t actually pay for the car?

Or since I will pay for the car do I need to apply for the tax credit even though I’m not the owner.

Last thing I want is for neither of us to receive the $7,500 because of clerical error.

thanks in advance!

 

[ucmndd]

That’s all I really needed to know. If the account, title, registration etc.. can be in his name and I’ll just process the ACH. But can he apply for tax credit if he didn’t actually pay for the car?

Or since I will pay for the car do I need to apply for the tax credit even though I’m not the owner.

Last thing I want is for neither of us to receive the $7,500 because of clerical error.

thanks in advance!

The IRS cares about the titled and registered owner - i.e. the person that bought the car. Fundamentally I don’t see anything different about this than if your friend went to a bank and got a loan from them instead of you. “Someone else” is paying in either case, but your friend is still the one who claims the credit.

 

[Eddie Aziz]

The IRS cares about the titled and registered owner - i.e. the person that bought the car. Fundamentally I don’t see anything different about this than if your friend went to a bank and got a loan from them instead of you. “Someone else” is paying in either case, but your friend is still the one who claims the credit.

Thanks! Just to clarify the person who owns the car meaning the title holder and the person who is registering the vehicle claims the credit and not the person actually paying for the car?

My other question would be if Tesla allows for the title to be in the name of the person not paying for the car.

If a loan was gotten through a bank wouldn’t the title be in the banks name?

 

[jjrandorin]

If a loan was gotten through a bank wouldn’t the title be in the banks name?

No, the title would be in the purchasers name but the bank would be a Lienholder .

Other than that, you are aware that anything you read here is just "rando person online providing advice that may or may not be correct" right? If you are loaning someone 40K+ or something, perhaps you should talk to your accountant on how you should structure this and what you should do.

 

[JCtx]

One other fact: In order to get the $7,500 rebate, he'd have to actually have paid at least that much in federal taxes, or he would only get up to what he paid (and file EV tax form 8936 with his '23 tax return). And I mentioned that, because if he cannot pay for the car, he's probably not making the 80 grand (or more, depending on deductions) needed to pay $7,500 in federal income taxes. And if he didn't, then you'd have some important decisions to make. If you get on the title, you could be held liable if the guy does anything stupid. The most logical thing to do would be to get a lien on the title, so you don't have ownership. And yes, whatever you decide to do, please seek professional help first. Good luck.

 

[carl82590]

Here is a weird tangent that I had a problem with (not relating to the rebate or anything). When you order the car, I suggest you order under your friends name(even though he will be registered owner). We ordered the car under my wife’s name, different last name, and Tesla has refused to talk to me over the phone since I was not the “orderer” even though I was the registered owner and my wife was on the insurance.

 

[Eddie Aziz]

Here is a weird tangent that I had a problem with (not relating to the rebate or anything). When you order the car, I suggest you order under your friends name(even though he will be registered owner). We ordered the car under my wife’s name, different last name, and Tesla has refused to talk to me over the phone since I was not the “orderer” even though I was the registered owner and my wife was on the insurance.

I want nothing to do with the car. I’m just paying for it and being reimbursed in a few months. I just need to know who needs to apply for the rebate. The person paying for the car or the person whose name will be on the title and registration. I don’t want to be stuck in a situation where neither of us can apply for the rebate because of a clerical error

 

[Unclepaul]

Neither Tesla, nor the government care who pays for the car, only who it is registered to.

The tax credit goes only to the person registered. Nobody cares who pays for it.

Example. If your boss gives you a $50,000 bonus, and you use that money to buy a Tesla. The car is registered to you, and you get the tax credit.

Only issue for the OP is wether he is generating a taxable event with his gift to a friend. That is another issue.

 

[eleison]

Neither Tesla, nor the government care who pays for the car, only who it is registered to.

The tax credit goes only to the person registered. Nobody cares who pays for it.

Example. If your boss gives you a $50,000 bonus, and you use that money to buy a Tesla. The car is registered to you, and you get the tax credit.

Only issue for the OP is wether he is generating a taxable event with his gift to a friend. That is another issue.

It's actually a loan... so I don't think it's a taxable event.

 

[hey kupo]

It's actually a loan... so I don't think it's a taxable event.

You will likely need to charge your friend interest. Look up "Applicable Federal Rate", e.g. What Are Minimum-Interest Rules?, and probably should talk to an accountant or the like. The IRS hates a no-interest solid to anyone.