Model 3 immediate resale value

[JeffK]

But it is unlikely that just one car is going to bump over the line. And Elon has already said that they will try to cross the 200k threshold at the beginning of a quarter so that the most people possible can take advantage of the credit.

One car is going to bump someone. It's a mathematical certainty. There inevitably has to be a last car delivered in any given quarter. Whether it's a matter of a car not fitting on a transport truck, the service center not being able to get to your car that day, etc.

That said I have supreme confidence in Tesla being able to fill ALL current US preorders before the tax credit runs out. This could be blind faith in the cult of Elon I don't know.

 

[GregRF]

Yes, thats exactly how the tax credit expires... by date!

Fair enough. I guess I didn't follow what you were writing. If they are indeed close to a 500k cars per year run rate by that point, one guy flipping a car is just noise.

 

[JeffK]

Fair enough. I guess I didn't follow what you were writing. If they are indeed close to a 500k cars per year run rate by that point, one guy flipping a car is just noise.

It's noise for us pre-order people, I worry about a poor sap later down the line who needs the money. To flip the car wastes the credit unless they're trying to commit tax fraud.

btw this is the wording from the IRS website regarding the tax credit:

(2) The original use of the vehicle commences with the taxpayer;
(3) The vehicle is acquired for use or lease by the taxpayer, and not for resale; and
(4) The vehicle is used predominantly in the United States.

 

[EXOTIC1]

if you have an early vin/build as in the first 3-6 months of deliveries (demand will be huge)
you'll be able to flip your entry level car for 5k-15k over sticker. a more loaded up version 15-20 k
this will be the minimum
book it!

 

[Booga]

If someone gets the tax credit, then they may not have to even sell it for more than their sticker cost. If they sell it at cost, they'll walk away with the $7,500 tax credit.

 

[ChadS]

Except for the fact that you are not allowed to take the tax credit if you bought the car just to flip it.

And the car will be harder to sell at sticker because the buyer won't be able to take the tax credit either.

I am afraid the tax credit does not make it easier to make easy money.

 

[shrspeedblade]

California specifies how long you have to keep the car, does the Federal tax credit do the same? What if you bought it, drove it a month, and then financial hardship (illness, etc.) forced you to sell? Sometimes a quick sale, especially with cars, isn't speculating.

I can't believe it, you guys are tempting me to be naughty and put a couple of FOR SALE MAKE OFFER! signs in the car for the first few months to see if I run into someone with more money than patience!

 

[Red Sage]

Hello, assume someone with an earlier reservation number receives their model 3 in late 2017. Wouldn't the car's value immediate appreciate upon delivery? Considering demand will be greatly backed up what do you think a 50k model 3 would sale for if the owner immediately put it on the market?

The resale value would be whatever amount someone could give you so that you would happily give it up. Me? Keeping the Model ☰ and knowing someone who wanted to spend a gozillion bucks to get one, so he could do something stupid with it, won't be able to fulfill that goal...? Priceless.

 

[alseTrick]

Some idiot may overpay for the car but I don't think very many will. I certainly wouldn't employ that expectation when ordering.

I sure as heck wouldn't pay more for the car than the owner paid.

 

[timk225]

My Model 3 will be a base model or very nearly so. If I buy it, drive it for a while, and decide I don't like it, it will definitely go up for sale at a profit to me. Supply and demand.

 

[JeffK]

My Model 3 will be a base model or very nearly so. If I buy it, drive it for a while, and decide I don't like it, it will definitely go up for sale at a profit to me. Supply and demand.

Who knows, supply might be so good that if you don't sell it in less than six months the wait time for new orders would be minimal for a potentially better built later version.

 

[ModelNforNerd]

Your resale value may take a hit, because in your scenario, neither you nor your buyer would qualify for the various tax credits. So, just in MA alone, you'd have to sell your $50,000 car for ~$63,000 to break even. The $3125 in sales tax you'll have to pay when you take delivery, and the $10,000 in federal and state tax credits you'd qualify for if you kept the car.

It's doubtful you'd find someone willing to pay that premium. Just buy the car and enjoy it.

 

[jonnyg]

California specifies how long you have to keep the car, does the Federal tax credit do the same? What if you bought it, drove it a month, and then financial hardship (illness, etc.) forced you to sell? Sometimes a quick sale, especially with cars, isn't speculating.

According to https://www.irs.gov/pub/irs-pdf/i8936.pdf:

The following requirements must be met to qualify for the credit:
You are the owner of the vehicle. If the vehicle is leased, only the lessor and not the lessee, is entitled to the credit;
You placed the vehicle in service during your tax year;
The vehicle is manufactured primarily for use on public streets, roads, and highways;
The original use of the vehicle began with you;
You acquired the vehicle for use or to lease to others, and not for resale; and
You use the vehicle primarily in the United States.

Doesn't really say anything about if you originally planned to use it and then decided to sell within the same year, as far as I can tell.

 

[MXWing]

One COULD try to speculate on reselling a M3 but I think there are far better options than getting an asset that deappreciates immediately when titled.

For the Prius example, were there other mitigating factors like limit on HOV stickers or something like that?

The MSRP of a Prius is much lower than a Tesla.

 

[3s-a-charm]

For what it's worth I knew an early Model X reservation holder who was trying to sell his configuration (with the ability for the buyer to configure the vehicle as they wish) for more than retail but nobody took him up on it. Little different story with the 3 of course but the Model X wasn't that hot to command a premium (at least from this seller).

 

[deonb]

It's noise for us pre-order people, I worry about a poor sap later down the line who needs the money. To flip the car wastes the credit unless they're trying to commit tax fraud.

If you flip the car you cant claim the credit, and if you dont claim the credit its not counted as part of the 200'000 limit.

 

[JeffK]

If you flip the car you cant claim the credit, and if you dont claim the credit its not counted as part of the 200'000 limit.

That's not true unfortunately. It counts whether you claim it or not. It also counts whether or not you can get the full $7500.

Here's the wording:
"The credit begins to phase out for a manufacturer’s vehicles when at least 200,000 qualifying vehicles have been sold for use in the United States"

 

[zenmaster]

No supply problem with a ridiculous amount planned for production. There will be some willing to pay a premium for earlier ownership, but with many available that premium goes down. 10% at most over MSRP for first 6 months, then below MSRP.

 

[shrspeedblade]

At least we don't have stealerships slapping a 30%+ markup early on!

Can you imagine what they would do in the first few months with this car?

 

[zenmaster]

At least we don't have stealerships slapping a 30%+ markup early on!

Can you imagine what they would do in the first few months with this car?

What car with this production volume has ever gotten a 30% markup? Does not make sense.