Model 3's being flipped for the rebate and used resale at MSRP, for how long?

[kotykb]

I've seen quite a few Model 3's listed for sale in the NorCal and SoCal areas that have hardly been driven (under 1k miles). Most owners are looking to recoup exactly what they paid to acquire the car (MSRP + Tax/Title/License).

2017 Tesla Model 3 | eBay

I've spoken to a few sellers and their response was that they didn't like the car or it doesn't fit their needs. Since they bought the car with the intent to not "flip" it, they can still get the $7500 federal rebate. I wonder how many of the initial buyers are purchasing the Model 3, just to flip them? I bet they could even drive the car for an entire year and with the backlog of buyers and federal rebates coming to an end soon, they could likely still sell at MSRP.

Thoughts?

 

[ölbrenner]

There is no federal rebate. And the federal tax credit can vary anywhere from $0-$7500 depending on an individuals tax situation.

 

[kotykb]

Yes you're correct, it is the federal tax credit. I don't see an income limit for this credit though. If there is information on this, do you want to attach the link?

 

[atlas310]

I don't think there's an income limit. The credit amount is called at $7500. The limiting factor is an individual's actual tax. If you only have $4000 in tax, you'll only get a credit for $4000.

 

[ölbrenner]

Yes you're correct, it is the federal tax credit. I don't see an income limit for this credit though. If there is information on this, do you want to attach the link?

Light reading:
Federal Tax Credits for Electric and Plug-in Hybrid Cars
Plug In Electric Vehicle Credit IRC 30 and IRC 30D | Internal Revenue Service

 

[voip-ninja]

There is no federal rebate. And the federal tax credit can vary anywhere from $0-$7500 depending on an individuals tax situation.

While correct, I imagine that nearly everyone that has a Model 3 right now, meaning they have already been a Tesla owner, will qualify for the full $7500 federal tax credit.

I don't think there are so many people buying $50,000+ tax +title +licensing +fees cars who don't make enough to pay $7500 in taxes. I'm sure they are out there, but not too damn many of them.

 

[ölbrenner]

While correct, I imagine that nearly everyone that has a Model 3 right now, meaning they have already been a Tesla owner, will qualify for the full $7500 federal tax credit.

I don't think there are so many people buying $50,000+ tax +title +licensing +fees cars who don't make enough to pay $7500 in taxes. I'm sure they are out there, but not too damn many of them.

Judging by the retiree's getting M3's on the various forums I visit, I think there's quite a few that don't qualify for the any/full credit. And I might be one of them (plan on retiring this year, and my delivery keeps getting pushed out past this year).

 

[kotykb]

Lets assume most of us will quality for the federal tax credit, lets keep this back on the original topic...

I've seen a California owner, register his car in Montana thus he pays no sales tax. If he can sell his car for $5k over MSRP, which is what he's firm on, he can then profit $12.5k including the tax credit.

 

[fseir]

Lets assume most of us will quality for the federal tax credit, lets keep this back on the original topic...

I've seen a California owner, register his car in Montana thus he pays no sales tax. If he can sell his car for $5k over MSRP, which is what he's firm on, he can then profit $12.5k including the tax credit.

Is he in the military? If not, I'm pretty sure that's illegal (registering in another state to avoid sales tax).

 

[kotykb]

Its pretty common in the exotic car world to register a car in Montana under an LLC.

https://jalopnik.com/here-are-the-fanciest-and-craziest-cars-registered-in-m-1794538583

 

[Uncle Paul]

There are a lot of people, right now, that for many reasons wish to purchase a Model 3 right now, instead of waiting in line. Getting them now is more valuable than getting them later.

Most of the competitors want to get one to tear it down and learn from it.
Met a guy at lunch today that customizes cars. Bought one off the market as he wanted to customize it to bring in additional customers to his business.
Some people just want the latest and greatest. Makes you super popular at the golf course when you talk about your new Tesla. For wealthy people the little extra they will get one early will be well spent.
Some just see one, and fall in love. They gotta get one, and have the money to get what they want, when they want it.

While most consumers spend their whole lives, searching out for the best deals, and gaining satisfaction from spending their money wisely. Others don't care about spending wisely, just getting what they want.

This is normal market activity for popular cars in short supply.

Just try to get a hot car, in short supply, from any dealership. They will quickly educate you on "Additional Dealer Markup". Many would never pay over sticker...but lots do.

 

[dhanson865]

While correct, I imagine that nearly everyone that has a Model 3 right now, meaning they have already been a Tesla owner, will qualify for the full $7500 federal tax credit.

I don't think there are so many people buying $50,000+ tax +title +licensing +fees cars who don't make enough to pay $7500 in taxes. I'm sure they are out there, but not too damn many of them.

I agree with that so long as Premium Upgrade Package (PUP) and Long Range battery pack (LR) are in the mix. But as soon as the config opens up and people can buy the sub $40,000 configs you are going to see a lot of people getting one that don't qualify for the full $7,500 off. I would be one of them (except I don't have an early reservation). Still it's a decent credit even if it is somewhere between $3,750 and $7,500.

And when the $3,750 level kicks in I'd say the vast majority would qualify for the full credit amount again.

So the question is how much time will there be a sub $40K config and a $7,500 credit. I suppose the time for that will be less than the 6 month phase out if at all.

but for the OP question, @kotykb This flipper situation won't last 6 months. I'd guess between 2 to 4 months from now the flipping will be pretty low key. You might get some that try to flip during the lower price config and lower tax credit periods but I'm thinking both the lower dollar amount and the wider availability of the Model 3 by then will shut down most of the flipping.

 

[Msjulie]

I always wondered about this - from Federal Tax Credits for Electric and Plug-in Hybrid Cars

• The vehicle is acquired for use or lease by the taxpayer, and not for resale. (The credit is only available to the original purchaser of a new, qualifying vehicle. If a qualifying vehicle is leased to a consumer, the leasing company may claim the credit.)

I guess there is no time or mileage limit mentioned above so it's legal after the 1k or so miles.. just seems a kind of loop hole in the law...

I have no skin in the flipping game and don't actually care either way, just a curiosity.

 

[R.S]

I always wondered about this - from Federal Tax Credits for Electric and Plug-in Hybrid Cars

• The vehicle is acquired for use or lease by the taxpayer, and not for resale. (The credit is only available to the original purchaser of a new, qualifying vehicle. If a qualifying vehicle is leased to a consumer, the leasing company may claim the credit.)

I guess there is no time or mileage limit mentioned above so it's legal after the 1k or so miles.. just seems a kind of loop hole in the law...

I have no skin in the flipping game and don't actually care either way, just a curiosity.

I think this is just a clause that is used to avoid dealers claiming the tax credit.

So as long as it isn't a business, like you being a car dealer, I doubt someone could argue that you violate that law. If you bought like 40 of them, then it might be different, but selling one single car after a month probably isn't enough to argue you bought it for resale.

 

[kotykb]

I think if you acquire a loaded Model 3 now for $56.5k and quality for the $7.5k rebate, bringing your coast down to $49k, it will hold its resale pretty well for 6-12 months with moderate milage considering the backlog of customers waiting the 1-1.5 years. If there were no backlog, the cars would depreciate like any other Tesla but the Model 3 is unique with its insane queue.

In my case, I don't need the car but if I can buy it and have a zero depreciation vehicle for one year, why not?! Yes I'll lose out on paying tax/title/registration but all of that considered, its still a great value.

 

[Trips]

Cars.com has 18 listed ranging from $56k to $85k. Average is around $65k.

I would expect the premium prices to last for another 3 months or when the AWD or white interior comes out.

 

[cwerdna]

I think if you acquire a loaded Model 3 now for $56.5k and quality for the $7.5k rebate,

Can people stop using the wrong words/terminology? The $7500 is a Federal tax CREDIT, not a rebate.

 

[kotykb]

With my Model 3 being ready in the April-June time frame, likely I won't get the white interior option. I'd prefer the AWD and white interior but I'm not willing to give up the $7500 tax CREDIT... which is pretty much like giving us a free long range battery.

 

[kotykb]

I went and looked at a Model 3 today in LA and I can't wait to order mine : )

 

[S4WRXTTCS]

I imagine a lot of the early buyers are selling because the car wasn't exactly what they expected. It's pretty easy to justify selling if you end up walking away in the black by thousands of dollars. It's not like they ever got the chance to test drive it before buying it.

The expected tax credit elimination plays heavily into why the depreciation is next to none. It's creating a situation where new buyers without a reservation know they're going to miss out on the tax credit so they pay MSRP for something barely used to get it sooner.

The only competition it really has is the Model S, and that's overpriced for the range. I don't really see the situation changing for the next 1-2 years. Probably extremely low depreciation (or negative depreciation if you count the tax credit) in the first year, and low depreciation the second year.

I'm beginning to wonder if the Model 3 will set any records in terms of low depreciation for a moderate volume production car.