Tesla no longer accepts CarMax appraisals for trade-ins!

[dweeks]

I'm a current owner of a early 2016 90D (link in the for sale section) and am buying an inventory 100D.

I wanted to look at trading in in case I can't get a good private sale price.

My Tesla Owner Advisor told me that Tesla would honor a CarMax appraisal, so I got one today. Then, when I talked to the Tesla Delivery Specialist after finishing with CarMax, she said in no uncertain terms that Tesla does NOT honor CarMax appraisals.

I was very surprised. I called the OA, and he looked into it. An hour later, he called me back to apologize and say that he was wrong. What he said was that, while Tesla may have accepted CarMax appraisals in the past, they stopped as CarMax was appraising too high, and Tesla was losing money on the trade-in deal when they could not sell the car with the desired markup. Of course, CarMax was perfectly willing to write me a check for 66K on the spot today, so they must have been confident in the accuracy of their appraisal.

What experiences have others here had with CarMax appraisals and Tesla trade-ins?

 

[boaterva]

Well, mine was a case of sorta, maybe. They didn't actually take it, but I faxed them the CM appraisal, and they 'put it out for bid with their team of buyers'. It was sold/accepted within 30 minutes. (So, thus, I had an offer, which turned into a formal trade-in for the same amount from Tesla.)

So, I don't know if that is the same process, where the external (?) buyers use the CM appraisal as a guideline if you have a popular model? (Mine was an older BMW 3-series.)

Perhaps in the past they just used the CM paperwork and didn't actually do the external processing to see if anyone wanted that car for that price? Beats me. I could have done the same as you, of course, but it's a lot easier to drive up and give the car to Tesla!

 

[jelloslug]

The answer seems simple: just sell it to Carmax.

 

[Max*]

The answer seems simple: just sell it to Carmax.

I don't know about AZ, but some states reduce the taxes owed when you trade in a car upon purchasing a new car. If the trade-in delta is low, $66k could offset a substantial tax burden.

 

[singal3]

Tesla won't match CarMax on Tesla vehicles. There are significant tax savings in some states when the vehicle is traded in as opposed to selling to CarMax.

 

[boaterva]

I don't know about AZ, but some states reduce the taxes owed when you trade in a car upon purchasing a new car. If the trade-in delta is low, $66k could offset a substantial tax burden.

Right, Virginia doesn't. But, yeah, if yours does, excellent point to do so.

I think it depends on your car and the price. Mine was only $9500, and in excellent shape, so it went quickly.

 

[dweeks]

I don't know about AZ, but some states reduce the taxes owed when you trade in a car upon purchasing a new car. If the trade-in delta is low, $66k could offset a substantial tax burden.

But a straight sale to CarMax is not like a trade to Tesla, so the sales tax advantage is not there. What I had expected was thhat Tesla would give me 66K (CarMax valuation) for my trade and then I pay sales tax on the difference.

 

[Max*]

But a straight sale to CarMax is not like a trade to Tesla, so the sales tax advantage is not there. What I had expected was thhat Tesla would give me 66K (CarMax valuation) for my trade and then I pay sales tax on the difference.

Huh? I was responding to @jelloslug who said to just trade it in. My point (which is what you're repeating back to me) is that it's not always a clear cut case, depending on what Tesla offers.

If CarMax is $66k, and Tesla is $65k, you'd likely save more than the $1k in tax savings, assuming AZ does that. So taking the CarMax deal isn't worth it. Whereas if Tesla's offer is $50k, then yes, by all means, take the CarMax deal and run.

 

[ecarfan]

while Tesla may have accepted CarMax appraisals in the past, they stopped as CarMax was appraising too high,

Interesting. Four months ago when I was preparing to trade in my S for a new X, I took my S to CarMax for an appraisal, knowing that many people had posted on TMC about how Tesla would match that appraisal and it was usually higher than what Tesla would offer.

In my case, it was the opposite. The CarMax appraisal was surprisingly low, in my opinion. I did not mention it to Tesla, and Tesla gave me about $6K more than what CarMax offered.

But times have changed. Maybe then Tesla was more motivated to pay top dollar for trade ins. Or maybe Tesla was very motivated to sell me the “inventory” car that I was planning on purchasing. (It exactly matched my desired specs, by the way).

 

[dweeks]

Huh? I was responding to @jelloslug who said to just trade it in. My point (which is what you're repeating back to me) is that it's not always a clear cut case, depending on what Tesla offers.

If CarMax is $66k, and Tesla is $65k, you'd likely save more than the $1k in tax savings, assuming AZ does that. So taking the CarMax deal isn't worth it. Whereas if Tesla's offer is $50k, then yes, by all means, take the CarMax deal and run.

I agree on that point.

 

[AnxietyRanger]

Tesla won't match CarMax on Tesla vehicles. There are significant tax savings in some states when the vehicle is traded in as opposed to selling to CarMax.

It is not just the U.S., though, where Tesla simply has rather poor trade-in values. Their CPO process is such that it clearly loses value in the process, for whatever reason, that is a cost passed on the trade-in seller...

 

[bob_p]

When our S 100D arrived in March - we had a choice of trading in our Jaguar or our "classic" S P85.

At that time, Tesla indicated they would take the CarMax quote for the Jaguar - but not for a Tesla.

If/when Tesla starts producing customer Model 3's, we'll likely trade-in our S P85 for the Model 3.

At least in Texas, sales tax is excluded for the trade-in amount - which is a pretty significant savings for sales tax around 8%...

If we want to take advantage of the reduced sales tax, unless Tesla has changed their policy, we'll have to accept whatever price they assign to our trade-in, and if we find another option at a higher price, we'll only take that path if the increased price covers the increased sales tax on the new car.

 

[TexasEV]

At least in Texas, sales tax is excluded for the trade-in amount - which is a pretty significant savings for sales tax around 8%...

Actually in Texas the auto sales tax is just the state tax of 6.25%. Local sales taxes don’t apply to autos.

Excluding the trade in is another gift from the legislature in Texas and some other states to the auto dealer cartel. It allows them to obtain used cars at less than market price, by incentivizing buyers to trade in rather than sell to a buyer such as CarMax. The state loses sales tax revenue under this rule which serves no public policy purpose.

 

[NewTMSMan]

Vroom was actually recommended by my OA for me recently, but no mention of matching the values, just as an option to trading the car in. In NJ there is no sales tax on electric cars so trade or sell didn't matter, but to make it easy I traded both cars and they actually gave me slightly more than Vroom for both my 2011 Porsche Panamera 4S and my 2016 Corvette Z06.

 

[easyredbeach]

Tesla offered me 13,250 for my 2010 Lexus RX 350 and the local Lexus dealer offered, to my surprise, only 12,500. I was pretty sure that CarMax's appraisal would fall between the two, so When they came in with a 15k offer I was quite pleased. I called my delivery specialist, and he told me that he thought Tesla would match that price. He called me ten minutes later to confirm the offer. Today I received my 75D MS and Tesla took the Lexus and applied the15k CM appraisal to my final payment.

 

[dweeks]

Vroom was actually recommended by my OA for me recently, but no mention of matching the values, just as an option to trading the car in. In NJ there is no sales tax on electric cars so trade or sell didn't matter, but to make it easy I traded both cars and they actually gave me slightly more than Vroom for both my 2011 Porsche Panamera 4S and my 2016 Corvette Z06.

Vroom offered me 64K.
CarMax offered me 66K.

 

[ReturnZero]

The vehicle I’m trading in is a lease that I’m about halfway through. Does the sales tax credit still apply in this case?

 

[AnxietyRanger]

Tesla offered me 13,250 for my 2010 Lexus RX 350 and the local Lexus dealer offered, to my surprise, only 12,500. I was pretty sure that CarMax's appraisal would fall between the two, so When they came in with a 15k offer I was quite pleased. I called my delivery specialist, and he told me that he thought Tesla would match that price. He called me ten minutes later to confirm the offer. Today I received my 75D MS and Tesla took the Lexus and applied the15k CM appraisal to my final payment.

Tesla's valuations are perfectly fine for non-Teslas according to most reports.

It is Teslas that they value poorly, because of their rigid CPO process or some other reason.

 

[Rockster]

When our S 100D arrived in March - we had a choice of trading in our Jaguar or our "classic" S P85.

At that time, Tesla indicated they would take the CarMax quote for the Jaguar - but not for a Tesla.

If/when Tesla starts producing customer Model 3's, we'll likely trade-in our S P85 for the Model 3.

At least in Texas, sales tax is excluded for the trade-in amount - which is a pretty significant savings for sales tax around 8%...

If we want to take advantage of the reduced sales tax, unless Tesla has changed their policy, we'll have to accept whatever price they assign to our trade-in, and if we find another option at a higher price, we'll only take that path if the increased price covers the increased sales tax on the new car.

I'm pretty sure you only pay the state base rate of 6.25% here in Texas when you're paying tax on a car.

 

[MP3Mike]

The vehicle I’m trading in is a lease that I’m about halfway through. Does the sales tax credit still apply in this case?

Probably not the same way as with a lease the sales tax is baked into the lease payment, so you haven't paid the full sales tax. So you might get credit for what you have paid for, but it probably differs from state to state.