Tesla Referral Program

[HankLloydRight]

@Younis, you do know that Tesla will be issuing you a 1099 for the amount of the discount they give you on the "free roadster", right?

Not only that, but @Younis is going to have to wait until at least 2020, if not longer (i.e. "Tesla Time") to cash in those referrals, buy the Roadster, find a buyer, then re-sell it, and then pay the income taxes on it. Also, let's do some math:

27 referrals is a 44% discount or $110,000, you'd still have to come up with $140,000 cash just to buy the car. At a 40% combined tax rate (Federal+State), you'd owe $44,000 in taxes. Your after-tax total cost would be $184,000. And after you sell it (assuming you can sell it for the full $250k price), your net income is just $66,000.

A better idea seems to be take a portion of that $140,000 cash you'll need in two years and just buy the car you want today.

Besides, the people with a lot of referrals spend a significant amount of their own time to produce Youtube videos, news, blog, fan or informational websites with useful content, or (a clear rule violation) taking out advertisements or Google Ad Word ads.

These outlets provide real value to new Tesla buyers which is why they attract the referrals, as they should. I don't think anyone is going to use your referral code out of the kindness of their hearts so you can get a free car. There's no free lunch (or referrals), really. If you really want 27 referrals, start creating good Youtube content, or build out a news, blogging, fan, or informational website or do something else that gives to the community, if you expect to get something back out from it.

 

[HankLloydRight]

I just hope that Tesla can in some way legally bind people who receive the discount on their roadster and prevent them from reselling them.

First of all, it's too late for Tesla to add legally binding rules to the free Roadster award. Second, why?

Tesla should be able to prevent this in some way, just as they are preventing the selling of M3 reservation spots.

Which they are not doing. Anyone can transfer their M3 reservation to anyone else. And they won't be able to do for the Roadster, either. Besides, there are extremely simple ways to get around any kind of restriction like that -- just create a partnership, LLC, or trust to buy and own the car with both the buyer and seller as partners/owners/trustees, etc. After the two-year waiting period, dissolve the entity and the buyer gets to keep the car. If I'm the winner of a Tesla Roadster, Tesla can't deny me to register and title it in a business entity that I own. It would take any competent lawyer one hour or less to draw up the agreement.

The intent of the roadster referral program is not to profit from it but to enjoy the rewards of the hard work it took referring all your friends to buy a Tesla in the first place.

Why is it up to Tesla to dictate to me how to enjoy the awards I've received? I don't remember Tesla publishing the 'intent' of the Roadster award, do you?

And nobody is 'profiting' from selling a Roadster from the referral program, in fact, everyone is losing a ton of money due to taxes. Since anyone and everyone can reserve their own 'Founders Edition' Roadster today, there won't be a market premium for those cars (like the Ford GT) when Tesla starts making them, and referral winners want to sell them. So there's no profit to be made at all. For me, I'd love to keep the Roadster, but it's much to flashy for me**, and I don't want that kind of attention, so I fully intend to sell it. That's how I will enjoy the rewards of the hard work it took generating all those referrals.

** This town is the mecca of flashy million dollar cars, but every one of those owners is a mega-wealthy d-bag. I do not want to be associated with that lot. A day doesn't go by I don't see Ferraris, Maseratis, Bentleys, Aston Martins, and the occasional Mclaren drive by. It's also a densely populated area with crowded highways, potholes, and lots of cops running laser. There's really nowhere around here to enjoy a car with such capabilities as the Roadster.

 

[Amit519]

@HankLloydRight, what bothered me was @Younis was reaching out to ask buyers to use his referral code so that the buyers can help him get his free roadster and he can then go ahead and resell it and profit from their use of his code. Like you said, it takes a lot of hard work to get referrals, lots of test drives, lots of YouTube content creation, news, blogs, etc, etc. People aren't just going to use his code because HE was 27 referrals away from his free car. Right now there are a ton of owners with their first referral $500 credit still available that buyers would rather use than use his code. Right?

 

[bonnie]

Our Model S got totaled in a bad accident and with the new referral program starting in May, I thought I would ask the community if they would like to use our code in the hopes of getting 27 referrals. That's half way to a free roadster 2.0. I hope to buy the roadster, sell it and user the proceeds to buy a replacement car. I have 8 referrals already, so 19 more. Any help would be greatly appreciated. I can offer guidance on ordering, charging, taking delivery, incentives, taxes, body, protection and so on. PM me if interested.

Doesn't your insurance cover replacing your totaled Model S?

 

[MelaniainLA]

Doesn't your insurance cover replacing your totaled Model S?

BINGO!!!!!! Smells like a fish. Talks like a fish...

 

[Amit519]

I for one am looking forward to owning and enjoying driving one of the most amazing "hardcore smackdown to gas-powered cars."
I placed a deposit on the base roadster the very next morning after the big reveal. I too would love more referrals to make a dent in the purchase price when 2020 comes. But like Hanklloydwright said, it takes hard work getting the referrals.

 

[charlie755]

Right now there are a ton of owners with their first referral $500 credit still available that buyers would rather use than use his code. Right?

Don't know why any current buyer wouldn't use a code that has the $500 credit still attached, unless they are uninformed. Now that my own $500 credit referral has been used, I rec anyone I talk to use a code with it still available. I'd offer a signature HPWC, but have no idea when it will actually be available.

 

[HankLloydRight]

People aren't just going to use his code because HE was 27 referrals away from his free car. Right now there are a ton of owners with their first referral $500 credit still available that buyers would rather use than use his code. Right?

Yes, exactly.

 

[HankLloydRight]

Doesn't your insurance cover replacing your totaled Model S?

BINGO!!!!!! Smells like a fish. Talks like a fish...

It was an MS60, the insurance co offered him $18k (if what he says is true).

Totaled 2014 Model S60

 

[bonnie]

It was an MS60, the insurance co offered him $18k.

Totaled 2014 Model S60

Ahhh - so we're talking about helping him upgrade without him putting out any additional money.

I'd like help upgrading to a new Roadster, too. I'm guessing all of us would like that. Just sayin'.

 

[MP3Mike]

It was an MS60, the insurance co offered him $18k (if what he says is true).

Totaled 2014 Model S60

No, the insurance company offered to sell the totaled car back to him for $18k, which he then wanted to sell to someone for $20k. He never said how much they paid him for the total loss.

 

[HankLloydRight]

But it's probably in the same range, no? $15k-$25k for a totalled 2014 MS60 sounds about right.

 

[bonnie]

But it's probably in the same range, no? $15k-$25k for a totalled 2014 MS60 sounds about right.

Hank, you need more caffeine this morning.

If I total my $100k vehicle, it may only be worth $10k due to damage. But my insurance will pay what that $100K vehicle was worth before the accident. Not the $10K it's worth after I totaled it.

Edit: After I total it, I'm due reimbursement for what the vehicle was worth before the accident. At that point, my insurance company owns the totaled vehicle. And I may choose to buy the totaled vehicle that they bought from them for $10k, but that's separate from what I receive for a replacement vehicle. That's just the insurance company selling an asset they acquired.

 

[HankLloydRight]

That's if you have replacement value insurance. Not everyone does.

Everyone knows the amounts that insurance companies offer (at least initially) are well, well, below market value for totalled cars. "Replacement" value for a totalled 2014 MS60 in 2017 can't be more than $25k.

I personally have an 'agreed value' insurance policy that pays me the agreed value, regardless of market value or condition of the car.

 

[bonnie]

That's if you have replacement value insurance. Not everyone does.

Everyone knows the amounts that insurance companies offer (at least initially) are well, well, below market value for totalled cars. "Replacement" value for a totalled 2014 MS60 in 2017 can't be more than $25k.

I personally have an 'agreed value' insurance policy that pays me the agreed value, regardless of market value or condition of the car.

Even if it's only value of what it was worth at the time of the accident (which I believe I said), the buyback offer for a totaled vehicle has nothing to do with what insurance pays to you after an accident. It's either replacement value (which I opted for) or it's for what the vehicle is worth before it was totaled.

The value of the totaled vehicle is dependent on if it's smushed flat as a pancake (prob only what the metal is worth) or if it sustained heavy damage, but there are plenty of parts that could still be resold on the used market. So the offer to buy back could be $10 or it could be $18k. But that has nothing to do with what the insurance company pays to you for the accident. Separate transaction.

Edit: As far as determining what a vehicle is worth at the time of the accident, if you don't have a policy that will replace with a new vehicle, then (in my experience) the insurance company will look at what similar vehicles are selling for on the market. I've had that happen, I've negotiated by showing higher values for that vehicle, and settled amicably

 

[HankLloydRight]

That's fine, but what I'm saying is, in this case, it's close to/about the same amount.

 

[MP3Mike]

But it's probably in the same range, no? $15k-$25k for a totalled 2014 MS60 sounds about right.

Sorry to keep the OT going but: If they think the salvage value of it is $18k, then they likely paid him much more, otherwise they wouldn't have totaled it.

 

[HankLloydRight]

Sorry to keep the OT going but: If they think the salvage value of it is $18k, then they likely paid him much more, otherwise they wouldn't have totaled it.

Ok, if that's the case, it just makes his 'plea' for referrals that much worse.

 

[Younis]

Wow, sorry if I upset people with my post. All of this is null and void anyway, Bonnie explained that the referrals for the roadster don't carry over into May, so scratch that plan. If you guys have questions about the accident let me know, but if you are not clear about what your policy covered, reach out to your insurance company.

 

[edlin303]

Since Younis no longer needs them, I’ll step in. I need your help getting 55 referrals starting May 1. Once I do, I will wreck my Model X so that I will then need a roadster to replace it. Who’s with me?