Should I trade in my 2019 SR+ for the 2021?

[Mattopotamus]

He ends up with a car that’s 2 years newer!!!

New tires, new warranty, 0 miles, new specs, no battery degradation, perfect condition. For $4500. That’s a bargain. People pay more for full PPF. Just get a new car !!

That is the case with any new car. Wait a few more years, and he will have equity and instead of paying $4500 out of pocket, he can use that equity as a down payment and have the same results for $0 extra. I guess he may be in that situation now, which changes the equation.

 

[Oofie810]

That was my thought process. Most people who own the SR+ are not too concerned with range, so the addition of 13 miles and even winter range increase is of no concern. Again, that is just my thought process. If OP was worried about range, he would be looking at the LR.

Got it, makes sense to me as well.

 

[F14Scott]

I think it makes perfect sense. You also have a newer car that will last longer. A warranty reset. Fresh tires etc.

In MA I would lose the trade in tax credit if I didn’t trade into the same dealer as where the new car is coming from. In other words I’d have to trade into Tesla for that tax savings. Other states might vary on those rules.

But hell yeah. For $4500, I’d do it.

And I’ve done exactly what you are doing with Jeep’s before. When you get a really good trade offer it can be worthwhile. But I did go up in trim. I purchased 3 Jeep’s in 3 years. But the trades were insanely good. Friends and family thought I was nuts. But if you run the numbers it can be fine. Loan or no loan.

One way I run the numbers is this.

Amortize what it cost to own the car for the life time of the car. I use 10 years as it’s almost worthless by then.

Say it cost $38,000 for 10 years. What did it cost per month to own?

$316/mo ($38,000 /120 mo)

Now take that $4500 and divide it by $319.

Comes out to 14 months.

If you owned your 2019 longer than that you’d be ahead by paying $4500 for a “reset”.

Your paying $4500 for the usage you already got out of your car you have now. As long as the cost per month is close to what you are ALREADY paying to keep what you have, why not?

Yes. When I totaled my wife's TM3, our payout was so high that we ended up making money when we bought a new one, e.g. the difference between a new one and the totaled cash was less than the sum of our monthly payments until then. We got a brand new car, reset the mileage clock, and ended up paying less per month (better interest rate) than before the wreck.

 

[mswlogo]

That is the case with any new car. Wait a few more years, and he will have equity and instead of paying $4500 out of pocket, he can use that equity as a down payment and have the same results for $0 extra. I guess he may be in that situation now, which changes the equation.

You could make the same argument that he keeps it for 10 years.

I say if it's around what he is ALREADY PAYING by keeping it (by amortizing it to figure that out). It makes absolutely no difference.

Now, if the cost was like $10,000.00 then it doesn't make financial sense. But at $4500.00 I think it's a no brainer.

"Wait a few more years" as you say will now come 2 years later. It's all the same

If he could upgrade for a $100 would it be worth it? Of course it would.
If he could upgrade for a $1000 would it be worth it? Of course it would.

What is the magic number that you would give to say it's worth it? TO HIM, not you.

I think $4500 would be a bargain. If that is the true cost and he can get the full tax credit on the new car.

People pay more per year on 1 year of leasing than that.

He better grab that deal quick. Because the dealer may not have adjusted their figures for new prices yet.

 

[imola.zhp]

Since your state allows you to use the credit of selling the car to someone else, GO FOR IT. I wish Tennessee would do that.

 

[KaptKamp]

I think you have to trade it in to tesla to get the tax break

I'm thinking the same thing as the OP but I have a 2020 from Dec 19' with 11k miles on it. However, in NJ electric cars have no sales tax and they now have a $5,000 state tax credit that I didn't the first time (because it wasn't a thing until Jan 20'). For fun I requested a trade in a month ago from Tesla and I got quoted $31k, but I didn't realize Carvana or CarMax might quote so much higher. Would I have to trade in to Tesla to get the credit if I never got the state credit before?

I am very happy with my current TM3 but am only interested because it might be a dollar for dollar switch for a new car reset.

 

[mswlogo]

I'm thinking the same thing as the OP but I have a 2020 from Dec 19' with 11k miles on it. However, in NJ electric cars have no sales tax and they now have a $5,000 state tax credit that I didn't the first time (because it wasn't a thing until Jan 20'). For fun I requested a trade in a month ago from Tesla and I got quoted $31k, but I didn't realize Carvana or CarMax might quote so much higher. Would I have to trade in to Tesla to get the credit if I never got the state credit before?

I am very happy with my current TM3 but am only interested because it might be a dollar for dollar switch for a new car reset.

Keep in mind that offer from Tesla is probably gonna be lower. But with the $5000 incentive and no tax it would be hard to go wrong.

 

[Higgles]

Thanks everyone for the thoughtful information! It might just come down to the car color. The wife really doesn’t like the white and the extra $1000 to change he paint might just shift the formula to the no column. The quote is still good until the weekend so hopefully I can convince her.

 

[Higgles]

I think it makes perfect sense. You also have a newer car that will last longer. A warranty reset. Fresh tires etc.

In MA I would lose the trade in tax credit if I didn’t trade into the same dealer as where the new car is coming from. In other words I’d have to trade into Tesla for that tax savings. Other states might vary on those rules.

But hell yeah. For $4500, I’d do it.

And I’ve done exactly what you are doing with Jeep’s before. When you get a really good trade offer it can be worthwhile. But I did go up in trim. I purchased 3 Jeep’s in 3 years. But the trades were insanely good. Friends and family thought I was nuts. But if you run the numbers it can be fine. Loan or no loan.

One way I run the numbers is this.

Amortize what it cost to own the car for the life time of the car. I use 10 years as it’s almost worthless by then.

Say it cost $38,000 for 10 years. What did it cost per month to own?

$316/mo ($38,000 /120 mo)

Now take that $4500 and divide it by $319.

Comes out to 14 months.

If you owned your 2019 longer than that you’d be ahead by paying $4500 for a “reset”.

Your paying $4500 for the usage you already got out of your car you have now. As long as the cost per month is close to what you are ALREADY paying to keep what you have, why not?

Really nice post. Good idea to amortize over 10 years. We had the car for about 17 months so the math checks out. I think I am convinced I just have to get the wife on board.

 

[Rushore]

I'm thinking the same thing as the OP but I have a 2020 from Dec 19' with 11k miles on it. However, in NJ electric cars have no sales tax and they now have a $5,000 state tax credit that I didn't the first time (because it wasn't a thing until Jan 20'). For fun I requested a trade in a month ago from Tesla and I got quoted $31k, but I didn't realize Carvana or CarMax might quote so much higher. Would I have to trade in to Tesla to get the credit if I never got the state credit before?

I am very happy with my current TM3 but am only interested because it might be a dollar for dollar switch for a new car reset.

I actually traded in my Dec 2020 M3 SR plus with 13k miles in Sep. I paid 40k after the Fed rebate with no sales tax here in NJ. Autotrader gave me $36k. NJ now has a $5k rebate. I was holding on for the 2021 refresh but I was worried that the NJ rebate may end due to budget cuts, so I picked up a new 2020 SR plus last week for $35k after the rebate. With the 2.5% current interest rate, saving on my monthly payment as well.

 

[Mattopotamus]

I actually traded in my Dec 2020 M3 SR plus with 13k miles in Sep. I paid 40k after the Fed rebate with no sales tax here in NJ. Autotrader gave me $36k. NJ now has a $5k rebate. I was holding on for the 2021 refresh but I was worried that the NJ rebate may end due to budget cuts, so I picked up a new 2020 SR plus last week for $35k after the rebate. With the 2.5% current interest rate, saving on my monthly payment as well.

For those states with no sales tax, is it because it is built into the ad valorem, or just just flat out have no sales tax on the car?

 

[KaptKamp]

For those states with no sales tax, is it because it is built into the ad valorem, or just just flat out have no sales tax on the car?

Not sure about the technical terms you used, but when I went to pick up the car from the store one of the documents I had to sign was to agree to exempting sales tax. I remember this specifically because the sales advisor said something along the lines of, "Sign this for the sales tax exemption. Or you don't have to if you are feeling generous to the government."

 

[Rushore]

For those states with no sales tax, is it because it is built into the ad valorem, or just just flat out have no sales tax on the car?

NJ has no sales tax on EVs
With $5,000 rebate and tax exemption, New Jersey poised to become electric vehicle leader

 

[solar3]

I too am contemplating on trading my 2018 to a 2021. Will cost around $8500 after the $5k rebate in NJ. My car will need tire by next Spring, and I was going to install the power trunk which combined will be around $1500. So by trading, I "save" another $1500 lol. I will have to stay with the white color though, otherwise the trade will be too close to my mental $10k limit.

 

[Mattopotamus]

I too am contemplating on trading my 2018 to a 2021. Will cost around $8500 after the $5k rebate in NJ. My car will need tire by next Spring, and I was going to install the power trunk which combined will be around $1500. So by trading, I "save" another $1500 lol. I will have to stay with the white color though, otherwise the trade will be too close to my mental $10k limit.

You are willing to pay ~20% of the car price for those upgrades?!

 

[solar3]

You are willing to pay ~20% of the car price for those upgrades?!

How often can one trade up to a 3 newer model year car for under $10k? My car is approaching 40k miles.

Don't forget, the $8500 gets me a fresh new car and warranty, in addition to the new 350 miles range, heat pump, HW3.0 computer (I have 2.5), power trunk, etc.

 

[Mattopotamus]

How often can one trade up to a 3 newer model year car for under $10k? My car is approaching 40k miles.

Don't forget, the $8500 gets me a fresh new car and warranty, in addition to the new 350 miles range, heat pump, HW3.0 computer (I have 2.5), power trunk, etc.

The HW3 is huge, I also made the assumption you were talking about a SR+ (based on the thread), but now see you are talking about the LR based on the range, so it is a totally different price I had in my head.

 

[imola.zhp]

If your in NJ, this seems like a no-brainer, win-win.

 

[Jstylez]

i just wanted to add. 2021 versions also come with a center console charging station, a USB drive for sentry mode. and the location where u plug in that usb drive is now located in the glove compartment where its password locked to make it harder for potential thieves to steal the drive to not leave any evidence behind vs the old way where they could just lift up the center console and take the usb drive... i had a 2019 SR+ (full auto) and traded it in for a 2020 LR (brought the holiday special enhanced auto) now im thinking about trading it in again for a 2021 LR. only thing thats kinda holding me back is the fact i’ll lose my enhanced auto pilot, nothing too big it’s just summon mode and the ability to move the car forward and backwards without buying the full auto drive which i really dont need but the summon function i actually use from time to time especially when its raining in the parklot i use to park my vehicle.

 

[Mattopotamus]

i just wanted to add. 2021 versions also come with a center console charging station, a USB drive for sentry mode. and the location where u plug in that usb drive is now located in the glove compartment where its password locked to make it harder for potential thieves to steal the drive to not leave any evidence behind vs the old way where they could just lift up the center console and take the usb drive... i had a 2019 SR+ (full auto) and traded it in for a 2020 LR (brought the holiday special enhanced auto) now im thinking about trading it in again for a 2021 LR. only thing thats kinda holding me back is the fact i’ll lose my enhanced auto pilot, nothing too big it’s just summon mode and the ability to move the car forward and backwards without buying the full auto drive which i really dont need but the summon function i actually use from time to time especially when its raining in the parklot i use to park my vehicle.

You are forgetting one of the biggest features of EAP, navigate on auto pilot. You will lose that too. I think that is the sole reason many people jumped on the $4K deal they had a few months ago.