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Ridiculous Tesla Trade-In Policy [tesla will only take trade in on vehicle delivery]

sroy

Closed
Mar 13, 2021
542
225
New Jersey
No. You technically did not “purchase” the car with the $100. By placing a deposit, you pay for the strict performance under the contract of reserving, transporting, vehicle prep. NOT for the vehicle itself. Up until you sign the final contract and remit payment, the performance of the contract is solely for reservation related items (see: damages section of order agreement).
You said “this is not a binding contract” but it is. You are right that this is not the car buying per se but it still is a binding contract sorry for the miscommunication

EDIT also it is not a reservation. The order document is pretty clear about it ordering a car.
 

tony3505

Member
May 15, 2021
5
2
Knoxville, TN
What's with this policy. Makes zero sense to me
Ordered an M3. Decided to get the trade-in price - this was low but not horrible.
Thing is, the Tesla is 4 to 14 weeks away and the price is only good for 30 days! So I call the dealership and ask if I can drop the car off early and say that they don't do that. They only trade the car when you pick up your new car. What! Can anyone understand the Tesla perspective on this?
I was told that they are just trying to get gas cars off the road....and I should drive the car and just apply for a reevaluation when and if the new car does not show up before it expires,
I am starting to get this vibe from the whole Tesla experience. It is this. Change can happen at any point and you take what you get and you should be happy with that. Right? I'm all for innovative change but why can't I trade my car early so I get the guaranteed value and have some control over my finances?
I sold mine to Carvana. They gave me a check when the car was picked up.
Now i get to watch my delivery date move back and forth
 

GregoryK

Member
May 15, 2021
59
16
Canada
There is a big advantage to selling your car to the dealer you are buying from. I'm not sure about the US but in Canada we are taxed on pretty much everything.
When you sell your car to a private person they have to pay tax at 13% where I live. So the car costs quite a bit more than the price you are asking. Dealers and Wholesalers don't have to pay the tax they only pay it when they sell the car to an end user. So they "credit" you the tax amount off the new vehicle if you "trade it in". So if my vehicle's wholesale price is $40k then I'll get a credit of $45.2k towards a new car. If I sell the car to the wholesaler or dealer directly they just give me $40k. Frankly it is a bit of a scam in my eyes. It is one of the imperfections of our financial system.
 
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sidsub

Member
May 20, 2021
29
29
Smyrna, GA
Auto Trader offers an option Instant Cash Offer at a local dealership near you.


Check it out. But I do warn you... they appraise high then when you take the car in they get out the magnifying glasses and start pointing out every stone chip, leather wear, rust, scratch, tire degradation, etc and naturally the price they offer goes down. But if your car is in REALLY good shape then they might keep the price high. It's at least an option.

It turned out Tesla offered me more than this option. But I think every car is different.
When evaluating against a trade-in, do consider the sales tax implications though. Many states will give you a break on the sales tax (or the TAVT here in Georgia) when you trade-in your car, as you only pay tax on the difference between the price of the car you're buying and the trade-in value of the car you're selling. The difference could be a thousand or two and that could make trading in more attractive even if Tesla isn't offering the best trade-in value.
 
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GregoryK

Member
May 15, 2021
59
16
Canada
When evaluating against a trade-in, do consider the sales tax implications though. Many states will give you a break on the sales tax (or the TAVT here in Georgia) when you trade-in your car, as you only pay tax on the difference between the price of the car you're buying and the trade-in value of the car you're selling. The difference could be a thousand or two and that could make trading in more attractive even if Tesla isn't offering the best trade-in value.
Exactly right. My car is a BMW M2 with Low mileage. Tesla is offering almost a flat trade. I think the difference is $400. That's why it is different if you are trading in a 2012 Honda Civic. Any less value Tesla give you makes hardly any difference.
 
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MrSlippery

Member
May 26, 2021
40
23
Canada
Here's the thing. If I was offered $5k more than what Tesla are offering I would still be better off to take the Tesla offer because of the tax implications.
I think many people are not really understanding this, personally I found the offer from Telsa for my vehicle quite good. Certainly it was not top dollar but factoring in the tax implications it was a better option than me messing around selling it and possibly having a lapse in a vehicle.
 
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GregoryK

Member
May 15, 2021
59
16
Canada
I think many people are not really understanding this, personally I found the offer from Telsa for my vehicle quite good. Certainly it was not top dollar but factoring in the tax implications it was a better option than me messing around selling it and possibly having a lapse in a vehicle.
If I sold the car privately or to another dealer or wholesaler I would get the price they offered. Say $55k. Tesla are offering me $50k but that comes off the price of the Tesla before taxes. Say the Model 3 is $60k well here in Ontario with a sales tax of 13% the total cost would be $60k + $7.8k = $67.8k
If I show up with $55k from the other dealer or a private sale my cost of purchase would be $12.8k
If I trade in my vehicle the price would be $60k (price before tax) - $50k (trade in price) = $10k + 13% taxes = $11.3k (Total cost of purchase)
I hope this is now clear.
 
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MrSlippery

Member
May 26, 2021
40
23
Canada
If I sold the car privately or to another dealer or wholesaler I would get the price they offered. Say $55k. Tesla are offering me $50k but that comes off the price of the Tesla before taxes. Say the Model 3 is $60k well here in Ontario with a sales tax of 13% the total cost would be $60k + $7.8k = $67.8k
If I show up with $55k from the other dealer or a private sale my cost of purchase would be $12.8k
If I trade in my vehicle the price would be $60k (price before tax) - $50k (trade in price) = $10k + 13% taxes = $11.3k (Total cost of purchase)
I hope this is now clear.
Yes absolutely, I understood what you meant perfectly (I am also in Ontario). I get some places in the US this may not be as important but for many people it does and is very important to understand. that just because you can sell the car privately for $2000 more does not mean you actually will have $2000 more in your pocket.
 

Rito

Member
May 2, 2021
57
46
Gatineau
Yes absolutely, I understood what you meant perfectly (I am also in Ontario). I get some places in the US this may not be as important but for many people it does and is very important to understand. that just because you can sell the car privately for $2000 more does not mean you actually will have $2000 more in your pocket.
If I sold the car privately or to another dealer or wholesaler I would get the price they offered. Say $55k. Tesla are offering me $50k but that comes off the price of the Tesla before taxes. Say the Model 3 is $60k well here in Ontario with a sales tax of 13% the total cost would be $60k + $7.8k = $67.8k
If I show up with $55k from the other dealer or a private sale my cost of purchase would be $12.8k
If I trade in my vehicle the price would be $60k (price before tax) - $50k (trade in price) = $10k + 13% taxes = $11.3k (Total cost of purchase)
I hope this is now clear.
Yeah a lot of people don't realize this. Simply take the trade in off you are given, multiply by 1.xx (your sales tax rate). If you can sell privately for anything higher than this its 👌(which i was able to, by a lot).
 

MrSlippery

Member
May 26, 2021
40
23
Canada
Yeah a lot of people don't realize this. Simply take the trade in off you are given, multiply by 1.xx (your sales tax rate). If you can sell privately for anything higher than this its 👌(which i was able to, by a lot).

Exactly, in my case I was surprised at the reasonable number Tesla offered. It made selling privately not only more work for me but almost no additional value in the end.
I still need to place my order mind you
 

CapitalTM3

Member
Apr 6, 2021
93
99
USA
This is where I’d need to chime in with *verify your local laws in your tax locality*
For instance here in Virginia—there is zero tax benefit of a trade in.

we also get hosed on any and all referral incentives. Stupid VA laws….
 

kelseymarie38

Member
May 25, 2021
52
85
Nebraska
I don't know if they operate in Canada, but check out CarMax or something similar that will buy your vehicle. I got a offer for $5,200 over what Tesla offered from CarMax, went and sold it to them that day. Then I just emailed in to Tesla asking them to modify my financing to no longer be trading in a vehicle.
Exactly what I did! Tesla offered me 22k for my vehicle, got a quote from CarMax for 26k.. ended up selling it that day. They also told me (CarMax) are bidding higher on cars because of the whole issue with no one having used cars to sell.
 

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