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Early reservations are worth more than $1,000

Discussion in 'Model 3' started by doctoxics, May 1, 2016.

  1. doctoxics

    doctoxics Member

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    For those who reserved on the first day, your reservation is probably now worth more than $1,000. Future reservations will probably miss the Federal tax credit and will have a much longer wait time. If you are an early reservationist and are considering cancelling, you might want to hold on to your reservation to cash in when production starts. At that time, Tesla will require you to buy your Model 3. You can take the Federal tax credit and the state (California up to $4,000) rebate and then sell the car to a family member or friend for the list price (I would recommend configuring your Model 3 with the buyer together at a computer to be sure of agreement on the options and price). The buyer gains by getting the car sooner. You gain by the Federal and state incentives (could easily be $10,000) - a win win! Or better yet just buy the car for yourself - YOU WILL LOVE THE CAR. Do not cancel your order (unless you need the $1,000).
     
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  2. def47

    def47 New Member

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    People who were thinking about canceling never ever thought of that. so informative
     
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  3. HenryNDH

    HenryNDH Member

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    You forget the State sales tax and registration - for this scheme, you and your friend/relative pay twice. That could be upward $5K depending on the configuration.
     
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  4. FirstSea

    FirstSea Member

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    I just met someone today who also pre-ordered, but has already canceled since "it isn't worth it." He seemed to believe the tax credit magically disappears after they built the 200k car. I didn't even bother to correct him, since it's too late for him to change his mind and pre-order again and hope for a tax credit. Plus, it looked like he just pre-ordered it after the unveil and without having any kind of knowledge as to how Tesla works.

    I'm expecting a lot of people to cancel their reservation because they just jumped on the bandwagon without any real motivation to purchase the vehicle, but by the second unveil only serious buyers will remain.
     
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  5. chipmunk

    chipmunk Member

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    #5 chipmunk, May 1, 2016
    Last edited: May 1, 2016
    You cannot legally take either the federal tax credit or the California rebate if you're buying it with the intent to immediately re-sell. For the California rebate it must be registered to you in California for 30 months.

    Per irs.gov: The vehicles must be acquired for use or lease and not for resale.

    Per CA Clean Vehicle Rebate Program Requirements: Retain ownership of the vehicle in California for a minimum of 30 consecutive months immediately after the vehicle purchase or lease date. Original lease terms of at least 30 months are required for program eligibility.
     
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  6. voip-ninja

    voip-ninja Member

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    You are right but it won't stop people from flipping orders and claiming rebates. It's up to the government (state & fed) to find out about the wrongdoing.
     
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  7. Drivin

    Drivin Member

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    For Federal taxes there is no restriction if you intended to use it and changed your mind.

    For California, that is a different story. Is that 30 month requirement new? If not, I wonder if they are going after all the people who sold their MS within 30 months. If not, someone could help the State by reporting those VINs.

    As for family members, in California, you can transfer the title to some family members and isn't treated as a car sale with respect to taxes, etc.
     
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  8. anhnguyen

    anhnguyen Member

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    ...I reserved two being the 21st person in line in brea,ca..card was swiped at 10:21..i intend on selling..
     
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  9. chipmunk

    chipmunk Member

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    The OP was clearly suggesting buying it with the intent to resell it. It's a little obvious if you're having the person who's buying it pick the options out. Also, if you own it for less than a week and you sell it for a profit I think you'd have a hard time with an IRS auditor. I know the 30 month requirement goes back to at least 2013 when I got my first rebate. The page I linked states they monitor the DMV database. These things combined with the double taxation mentioned above (depending on the state) seem to suggest this is not a wise way to try and make money....especially if you're not a risk taker.
     
  10. Sharkbait

    Sharkbait Member

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    Yes, I too would like the source of this requirement to have the car for 30 months before CA will provide the CRVP (Clean Vehicle Rebate Project) credit of $2,500.

    As for the federal credit, even you're lucky enough to get the $7,500 credit, the sales taxes and registration will wipe out most of that benefit at the time of delivery, which could be as high as 9.5% based on the county of registration or where you claim to live.
     
  11. chipmunk

    chipmunk Member

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    Ok, so I linked to the current language on the CRVP website above. I've been able to trace this requirement back to 2010 when it actually stated 36 months. Here's the source (bottom of page 12).
     
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  12. Sharkbait

    Sharkbait Member

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    How typical for California to make you wait for 36 months to get your credit. I'll bet they're hoping you forget about it and never claim it. Well, my reservation deposit wasn't based on getting anything from anyone. I'm fully expecting to pay around $60K for my configured vehicle before taxes. Anything I get from the feds and the state will be extra but I'm not counting on it. Nothing in this world is guaranteed except death and taxes.
     
  13. McRat

    McRat Active Member

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    No, it takes under a month to get your check. It's not tax rebate like the Fed is, it's a paper check.

    You simply promise not sell it within the specified period, otherwise you are supposed to notify them to prorate the credit.

    I don't expect the first TM3's to be under $60k either, but it sort of defeats the concept.
     
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  14. MitchB

    MitchB Member

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    I was first in line at the Dallas store on the 31st. I think there is a lot of education to be given to those who don't understand the tax credit phase out. At the same time, if they want to cancel their reservations because they think they won't get any credit at all, I have a hard time telling them otherwise because I can't wait to get my car and hopefully the full tax credit. I feel bad saying that, but it's true. This wouldn't be so tough if the wait wasn't nearly a year and a half. It's going to be a long hard wait. I need my TMC community to keep my busy until it's time to take delivery.
     
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  15. doctoxics

    doctoxics Member

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    So I started this thread with the idea that the state and federal incentives could be transferred to a buyer. Looks like that won't work. Thanks to all above for your input.
     
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  16. Lunarx

    Lunarx Member

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    I think this can work:
    Purchase car, with your buyers money.
    Register the car in your name, but put your buyer down as leinholder.
    They then legally own car and become loss payee.
    You draw up a lease agreement, to "lease" car from them for 30 months.
    You secretly let them drive car and keep it at their house and they forgive all your lease payments.
    You get state rebate, they get tax credit.
    After 30 months, they take you off the registration and terminate the"lease".
     
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  17. Dan Detweiler

    Dan Detweiler Member

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    No chance of a tax credit here, being somewhere in the early 400,000s. Never planned on getting a tax credit. Never budgeted for a tax credit. No way in hell I am giving up my spot in line! This car is going to be amazing!

    Dan
     
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  18. flamingoezz

    flamingoezz Member

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    hey doc, some of us in the 300,000's are anxiously awaiting our car and would prefer you not tell others who may be ahead of us and lost interest in the car to sell their reservation.

    1) It's obviously not Elon's intent -- he only takes 2 reservations per person and cancelled orders of more than 2.

    2) He made an affordable Tesla so that people who can't manage a 80-100K tesla could still drive a practical electric vehicle. If people start paying premiums to skip the line and be one of the first to drive a model 3, they can probably afford a model S already -- it misses the point even further.



     
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  19. HanSolo

    HanSolo Member

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    Don't be surprised if your scheme ends up backfiring because many others had the same intent as you. When the Sony Playstation 3 came out, it backfired on scalpers big time as it turns out from the data we saw that there were more scalpers than actual buyers.
     
  20. Drucifer

    Drucifer Active Member

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    I am considering getting Model X next year instead of 3 in 2018. I am not cancelling my option to buy the 3, however.
     

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