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Model X Buy Back

Discussion in 'Model X' started by NewTMSMan, Dec 23, 2017.

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  1. NewTMSMan

    NewTMSMan Member

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    Curious about opinions regarding a potential buy back offer from Tesla.

    First, they are reducing their proposed offer by the $7500 Tax Credit. My opinion is that the tax credit is not guaranteed and they should not be unduly enriched by me passing through the tax credit that is related to the sale of a vehicle that they are buying back. Their argument is that the tax credit is built in to the depreciation of the vehicle and every Model X sold is worth $7500 less than what everyone paid immediately. Thoughts?

    Second I have spent unrecoverable money on registration fees and on Xpel and paint coating, totalling approximately $4,000, which Tesla has not offered to compensate for. Thoughts?

    Interested also in any experience anyone can share on this process.
     
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  2. GOPJEW

    GOPJEW Member

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    The $7500 is BS unless they are discounting cars by $7500 when this goes away and they put that in writing.

    The $7500 is a federal tax credit and that can ONLY be claimed by the ORIGINAL purchaser (i.e. - you DON’T get that value on the old leases and I bet they don’t give a $7500 credit off of the lease now - It’d be interesting to see someone’s new lease documents to see if Tesla is putting the price of the car minus the $7500 or at full value as they get the $7500 credit - I bet they aren’t).

    I don’t think you can hold them accountable for your aftermarket purchases - i would check your state’s lemon laws to see what it says - if the lemon law allows for this you may have some recourse.

    Sorry to hear about your pain.
     
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  3. NewTMSMan

    NewTMSMan Member

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    Thanks for the reply. Interestingly they do increase the residual for leases by $7500, to basically reduce your payments, but I still agree with your thoughts on this.
     
  4. GOPJEW

    GOPJEW Member

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    That’s good to hear about the leases - US Bank definitely did NOT in my lease with them - but this was early on and I am glad to see Tesla taking care of it’s customers that way - it would have been an easy sleight of hand for them and I am glad to see they are being above board.

    Regarding yours, assuming they are simply deducting a reasonable mileage/time factor in the payment to you, in reality the $7500 tax credit saves you A LOT more in post-tax dollars so I’d consider that a bonus to you (my CPA was all over me to buy my new one this year in case it went away).

    Good luck!
     
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  5. Eclectic

    Eclectic Member

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    The tax credit is none of Tesla's business. It is a payment that goes from taxpayers to you, with the only intermediary being the government. Tesla doesn't pay for it and they shouldn't expect to profit from it in a buyback. If the credit came from Tesla, that's another story. It doesn't. They're trying to confuse and rip you off.
     
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  6. verygreen

    verygreen Curious member

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    It's a given they'll try to lowball you. Whenever you blink first or not on the other hand is up to you and some other circumstances. I.e. is the car a lemon-law buyback or for some other reasons, how many miles did you put on the car and so on.
     
  7. S4WRXTTCS

    S4WRXTTCS Active Member

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    #7 S4WRXTTCS, Dec 23, 2017
    Last edited: Dec 23, 2017
    The $7500 tax credit was always a gift to the manufacture.

    That's just how it works. It's an instantaneous depreciation that the federal government typically pays for through you.

    I fail to see how the math works out if Tesla doesn't remove it from the buy back offer. The price of it has to compete with new cars where a new customer can benefit from the $7500 tax credit.

    For customers that can't take advantage of the $7500 tax credit then a CPO would be a much better deal as a CPO already has the $7500 removed.,

    Is there anything you had that's recoverable?

    Registration Fee's? Probably not
    Xpel Ultimate? Probably not
    Paint Coating? Probably not
     
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  8. verygreen

    verygreen Curious member

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    Lemon Law for example is there to punish manufacturer for bad cars, so it's only fair the gifts are taken away too (let alone the credit is not guaranteed, and on top of it - it seems iffy for me to claim the credit when you no longer have a car even - but when buying a car you don't know it's a lemon and your tax situation would have allowed you to claim the credit otherwise).
     
  9. S4WRXTTCS

    S4WRXTTCS Active Member

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    The fault is with the way the tax rebate credit was written.

    If Tesla didn't subtract out the Tax Credit it would create situations where people were purposely trying to lemon the vehicle to take advantage of the $7500 tax credit. So Tesla has to assume the position that the buyer is eligible for the Tax credit, and will take it.

    On a lemon buyback Tesla does lose from the normal depreciation of the vehicle just like an ICE manufacture would.

    I am curious about how Nissan handles it, but I imagine it's the same as Tesla.
     
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  10. verygreen

    verygreen Curious member

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    I think what you are saying works even if we take the tax credit out of the equation:
    Buy a car, hold it for a year (or two, depends on jurisdiction), then use lemon buyback => very cheap alternative to leasing.

    On the other hand you cannot just declare "this car is a lemon", you need existing documented history of problems, how do you manufacture those problems to take advantage of them? The only somewhat relevant case I remember was this "lemon law king":
    Tesla Responds To "Lemon Law King" - Disputes Allegations (video)
    As you can see, it's somewhat hard to pull a fast one on a car that logs everything and then some (granted I have no idea what was the end of that story).
     
  11. S4WRXTTCS

    S4WRXTTCS Active Member

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    I stated the possibility of that knowing that a lot of people won't go through the effort, but it does add incentive to do that. So anything that reduces incentive to try to unfairly lemon a car is a path car manufactures will take. Plus with Tesla I imagine there are a lot of edge cases. Cases where people that are torn between legitimately wanting to keep it, and being angry at Tesla for taking too long to fix an issue.

    It would be interesting to see what Nissan or GM does when it comes to this issue.

    But, from the math as I see it the only choice Tesla has is to remove $7500 from the buy back.
     
  12. verygreen

    verygreen Curious member

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    How much they can actually force this is everybody's guess.
    I wonder if @Debaser can tell us about his buyback where he was fighting this exact thing too (I assume he's done by now).
     
  13. S4WRXTTCS

    S4WRXTTCS Active Member

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    #13 S4WRXTTCS, Dec 23, 2017
    Last edited: Dec 23, 2017
    After googling Lemon'ing a leaf I came across this.

    $7500 Tax Credit Taken Back

    Edit: That was a lease so there was never the taken back part. I can't seem to find how Nissan handles the tax rebate on a car they buy back. I find that surprising as Nissan has bought a lot of Leafs back due to battery degradation issues.
     
  14. verygreen

    verygreen Curious member

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    reportedly both Nissan and BMW don't try to claw back the tax credit (as reported on reddit on similar Tesla topics).
     
  15. Lbkmxp100d

    Lbkmxp100d Member

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    [QUOTE="Eclectic, post: 2474939, member: 29923"

    The tax credit is none of Tesla's business. It is a payment that goes from taxpayers to you, with the only intermediary being the government. Tesla doesn't pay for it and they shouldn't expect to profit from it in a buyback. If the credit came from Tesla, that's another story. It doesn't. They're trying to confuse and rip you off.[/QUOTE]
    I agree! The tax credit in my opinion is btw you and the federal gov't. Let's say your retired and have no income and therefore you were unable to receive the $7,500 tax credit. I would fight that hard and tell them your not going to fight for your 4K expenses but your not willing to accept the $7.5k reduction in buy-back.

    Are you replacing w/ new Tesla? If so, I would ask for even trade but want Tesla to install the Xpel and any other upgrades you had done on your current T. I don't know your circumstances w/ the buy-back but I will tell you I bought my first MX P100D last Dec. and have 26k miles. I purchased our 2nd MX 100D in June '17 for my wife and currently have 8.5k miles. The fit and finish on both were excellent and we have had no problem except for replacement of both touchscreen abc of yellowing our border. Tesla sent mobile service out to fix both screens in our driveway. If your not considering purchasing another vehicle I would encourage you to consider.
     
  16. TaoJones

    TaoJones Beyond Driven

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    As much as the $7500 remains very much at issue, you may have more luck securing a concession to have Tesla agree be be invoiced directly by the/a vendor for subsequent paint correction, protection, and glass tint. Don’t forget to use C-Bond as the carrier for the tint (search forums or Google for C-Bond, Extreme Autowerks).

    The $7500 is vexing. Maybe someone has had luck with arbitration or with crafting the magic words to get that handled with or without the aid of an attorney.

    Meanwhile, it sounds like they’re $11,500 away from a deal.
     
  17. Canuck

    Canuck Well-Known Member

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    No it's not. It's a consumer protection law that is compensatory in nature and not punitive -- although the California lemon law contains a provision that permits a consumer who purchased a lemon car or truck to obtain a “civil penalty” of up to two times the amount of actual damages if the consumer proves that the manufacturer “willfully” violated the California lemon law. As a result, in the case of Kwan v. Mercedes-Benz of North America, Inc.., 23 Cal. App. 4th 174 (1994) the California Court of Appeal interpreted the civil penalty provision to be roughly equivalent to punitive damages, and therefore concluded that the California legislature intended the civil penalty provision to be a substitute for punitive damages. As a result, while a consumer can recover a civil penalty, they cannot recover punitive damages.

    It seems highly unlikely to me that there would be a finding of willful violation of the lemon law by Tesla.

    For me, the answer at law is simple. Whatever the purchaser can claim back must be taken into account. If you have no tax room to claim it, then Tesla should not take it into account but whatever you can claim back, up to $7,500, goes as credit to Tesla and not the purchaser. The objective of consumer protection law when the breach is not wilful is the same as tort law -- to put the plaintiff back in the position had the tort not occurred, as far as can be done with compensatory damages. In this case, it's a simple calculation unlike non-pecuniary damages in personal injury matters. The plaintiff can't profit from a tort, nor can they with the lemon law, unless you can show willfulness, at least in California.
     
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  18. verygreen

    verygreen Curious member

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    I really mean "punish" not in legalese, but as in "force the vendor to buy back the car and suffer the loss via that, as opposed to consumer suffering the loss", note that the law also provides for the special title for such lemon cars, not unsimilar to salvage title, but a lot of manufacturers (Tesla included) try to do a "voluntary" buyback that avoids such branding so they can stick the car to some other unsuspecting person (or who knows what they do to them in the end).

    Returning to the tax credit - that's one thing if you don't have enough income to claim the tax credit and then there's the question of can you actually claim it if you no longer possess the car at the time of filing the return. The credit is for cars purchased not for resale, and buyback is a resale, what if there's an audit later on? Who's going to guarantee you the outcome? Would Tesla refund you $7500+ penalties should IRS decide the credit should not have been claimed in those circumstances (I am pretty sure in the case we are discussing the credit was not claimed yet since the car was likely purchased in 2017 that did not end yet)?
     
  19. Canuck

    Canuck Well-Known Member

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    I'm dealing with the issue of damages which are compensatory, statutory or punitive in nature so when you say "punish" you are speaking of punitive damages which do not apply.

    I assumed it was already claimed by the purchaser but if not then it's real simple and it shouldn't be taken into account at all.

    To answer your question, if I claimed it, I wouldn't expect it to be taken into account in case of an audit since that's not how the law works. Any claim for future damages must be proved on a balance of probabilities -- not possibilities. I can't see the government claiming it back in this bona fide transaction but I would put it in writing to Tesla that if the gov't claimed it back I am reserving my right to claim it back from Tesla, including interest, penalties and any other costs. That seems unlikely but prudent to consider as a possibility.
     
  20. Tiger

    Tiger Member

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    Yes, xpel and paint coating are not good investments, they are unrecoverable money, bad investment.
     

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