Purchasing Assistance Needed - New vs Used M3P

[SumOne]

I found a M3P in the exact spec I've been looking for at CarMax. It has the following items and it seems like a no brainer to buy it for these reasons:

• Less than 5,000 miles on it.
• Brand new all season tires. I called and verified they aren't the summer performance tires that come with the M3P.
  • So like $1,000 savings in tires here.
• Full self driving computer shown on software screen.
  • From what I've read, looks like this would most likely stay with the car. $10,000 savings.
• I'd get to subtract $39,000 off the taxable amount of the M3P from my trade in.
  • 65k - 39k = 26k * .08 (my tax rate) -> $2,000
  • vs buying brand new 65k * .08 -> $5,200
  • Potential savings of $3,200.

So it looks like I'm getting exactly what I wanted for cheaper than buying new, but then I got this estimate and the tax, title, & fees highlighted are crazy. Anyone got a breakdown of this?

I tried to do my homework to get to this $11,200 price and I came up short, big time.

• 60,000 * .08 = $4,800 in taxes.
• Title fee should only be $75.
• Registration should be $1,145.
  • 
• Total $6,020
• So $11,200 - $5,180 = $5,180 difference from what CarMax is stating. I know they gotta make a buck but wow.

So then I went back to Tesla and configured the car over there, and same problem.

So what gives? Would I be better off buying the car new from Tesla? How much did you all pay for these "taxes and fees"?

 

[jjrandorin]

"Full self driving computer" does not = FSD option on car. Just because the car has the FSD computer doesnt mean it has that option, so you need to examine that 10k you are talking about, there.

 

[SumOne]

"Full self driving computer" does not = FSD option on car. Just because the car has the FSD computer doesnt mean it has that option, so you need to examine that 10k you are talking about, there.

I plan to look for this when the car arrives at my local store. Even without this it's a potential savings of $4,200.

How much are the taxes and fee's on a new Tesla? Is the new or used option cheaper in the end?

 

[raptor5244]

You sell cars to Carmax, you don't buy cars from them.

1. As mentioned, FSD computer does not mean it actually has the $10k FSD feature, so you need to verify.
2. The cost of a new M3P (no FSD) depending on you build is $58,990-$60,990 depending your color option, plus tax and the $1200 destination and doc fee. You may have some fees for tag transfer, etc. but they are relatively small.
3. If you want FSD, just subscribe to it on a monthly basis so you can check it out and cancel at anytime if you feel it is not worth it. Don't sink $10k into this right now.
4. In your example above, you are only showing a sales tax savings on trade-in for the used car. Why is that? You can get the same sales tax savings on a new car as well.

Carmax is just jacking the price up to leave some room for negotiation. I bet they paid $53-54k for that car. If you love the car and want to drive one right now then so be it but I would not pay more than $54k-$55k for that car depending on the color and condition. You can order a new one and have it next month based on the delivery times on the Tesla website. The warranty clock starts fresh, odometer starts at less than 10 miles and you are the first one to fart in the seat. With used car pricing at an all time high, the best strategy is to use the high trade equity to buy new, not pay new car prices for used vehicles.

FWIW, a little more on the pricing history. I had a 2019 M3P Black, white interior, no FSD. Price new was $60,990 minus the $3,750 tax credit at the time, so $57,240. The car was mint, with 6,800 miles. About 10 months ago I shopped it around for some offers and the highest trade-in value offer was $42,500. That is pretty bad depreciation, way too low, so I decided not to sell. The used market then went nuts and I sold it Carmax for $48k about 4 months ago. I could probably get over $50k now if I waited a bit longer since the market keeps going up and Tesla keep raising the prices. My point is, once the tax credits kick in and supply chain issues improve these 3P cars do not command much of a premium in the used market. They just don't differentiate the car enough to justify the extra cost for the P.

 

[SumOne]

You sell cars to Carmax, you don't buy cars from them.

1. As mentioned, FSD computer does not mean it actually has the $10k FSD feature, so you need to verify.
2. The cost of a new M3P (no FSD) depending on you build is $58,990-$60,990 depending your color option, plus tax and the $1200 destination and doc fee. You may have some fees for tag transfer, etc. but they are relatively small.
3. If you want FSD, just subscribe to it on a monthly basis so you can check it out and cancel at anytime if you feel it is not worth it. Don't sink $10k into this right now.
4. In your example above, you are only showing a sales tax savings on trade-in for the used car. Why is that? You can get the same sales tax savings on a new car as well.

Carmax is just jacking the price up to leave some room for negotiation. I bet they paid $53-54k for that car. If you love the car and want to drive one right now then so be it but I would not pay more than $54k-$55k for that car depending on the color and condition. You can order a new one and have it next month based on the delivery times on the Tesla website. The warranty clock starts fresh, odometer starts at less than 10 miles and you are the first one to fart in the seat. With used car pricing at an all time high, the best strategy is to use the high trade equity to buy new, not pay new car prices for used vehicles.

This is exactly what I was looking for. Thank you.

1. FSD will verify in person when the car arrives.
2. Perfect, I just found the same on a reddit post around the same amount. Not bad.
3. Was not planning on getting FSD at all, but if someone else already paid the entry fee I feel like buying used suddenly makes sense. In a couple years when this system is fully fleshed out it could turn into a huge selling point with a private party.
4. I've always thought that here in Colorado its the cost of the car minus the trade in value, and you pay taxes on the remainder. If you buy new you get taxed on the full amount.... I could be totally wrong. Now I've gotta do some more research.

 

[raptor5244]

This is exactly what I was looking for. Thank you.

1. FSD will verify in person when the car arrives.
2. Perfect, I just found the same on a reddit post around the same amount. Not bad.
3. Was not planning on getting FSD at all, but if someone else already paid the entry fee I feel like buying used suddenly makes sense. In a couple years when this system is fully fleshed out it could turn into a huge selling point with a private party.
4. I've always thought that here in Colorado its the cost of the car minus the trade in value, and you pay taxes on the remainder. If you buy new you get taxed on the full amount.... I could be totally wrong. Now I've gotta do some more research.

New or used, shouldn't matter. Go for the brand new car, with no miles for the same or less money than Carmax. Carmax is pricing that car for the person that doesn't want to wait a month or so. Also, research the upcoming tax credits, which could save you a ton of money on a new one.

EV tax credits: Manchin a no on Build Back Better bill, putting $12,500 incentive in doubt

The House passed Biden's Build Back Better bill in November, but it remains untouched in the Senate.

www.cnet.com

 

[SumOne]

Good thing the transfer I initiated is free as well as no obligation, cause I ain't going through with it now. Cancelled it.

If I'm reading the screenshot above right, I think I was right about being taxed on the full amount of the car since I'd still be selling my used car to CarMax. I'd be buying the Tesla without a trade. Not a huge problem.

I've been trying to keep track of the "Build Back Better" bill and so far it looks like the M3P won't make the cut because its just too expensive. I'm hoping the gov website here updates to reflect the bill if it passes - Federal Tax Credits for Electric and Plug-in Hybrid Cars

Bearded Tesla Guy did a breakdown on the bill as it stands:

 

[raptor5244]

Good thing the transfer I initiated is free as well as no obligation, cause I ain't going through with it now. Cancelled it.

If I'm reading the screenshot above right, I think I was right about being taxed on the full amount of the car since I'd still be selling my used car to CarMax. I'd be buying the Tesla without a trade. Not a huge problem.

I've been trying to keep track of the "Build Back Better" bill and so far it looks like the M3P won't make the cut because its just too expensive. I'm hoping the gov website here updates to reflect the bill if it passes - Federal Tax Credits for Electric and Plug-in Hybrid Cars

Bearded Tesla Guy did a breakdown on the bill as it stands:

You should only be taxed on the difference after the trade-in value is factored in on used or new cars. Based on what I read above Colorado is no different from most states.

I think this is still the list of states with no sales tax credit on trade-ins all the rest allow you to only tax the difference between the new and the used.

California
District of Columbia
Hawaii
Kentucky
Michigan
Montana
Virginia

The federal tax credit limit on sedans vs. SUVs is dumb. For example, a M3P doesn't qualify but a MYP does? Dumb.

 

[Gauss Guzzler]

Yeah, the trade-in tax exemption is only available if you trade in to the same dealership that you’re buying from. It is not intended to benefit the consumer in any way. It’s just a devious way of hiding the absurd subsidies your corrupt state is handing out to the car industry.

By requiring you to trade-in at the same dealership they ensure that the dealer will overcharge for your new car and/or underpay for the trade-in to such an extent that it *almost* makes sense to sell your old car elsewhere and just pay the extra tax. And thus they end up keeping most of the money that would otherwise have been paid in tax or retained by you.

 

[SumOne]

Yeah, the trade-in tax exemption is only available if you trade in to the same dealership that you’re buying from. It is not intended to benefit the consumer in any way. It’s just a devious way of hiding the absurd subsidies your corrupt state is handing out to the car industry.

By requiring you to trade-in at the same dealership they ensure that the dealer will overcharge for your new car and/or underpay for the trade-in to such an extent that it *almost* makes sense to sell your old car elsewhere and just pay the extra tax. And thus they end up keeping most of the money that would otherwise have been paid in tax or retained by you.

Exactly what I ended up doing. Sold my vehicle to CarMax and earned a hefty profit. I've read that CarMax/Carvana/Vroom all of these mega dealers are willing to pay these absurd prices in order to snuff out the competition... and it seems to be working because I've sold them two vehicles in the past few years.

Before I started down this M3P route, I was looking at a M340i at a dealership. I was going to save around 3k in taxes by trading my vehicle for it.... but in the end the profit I made at CarMax exceeds the tax savings by thousands of dollars, and I still get a new car.