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Tesla trade-in

rtk86

Member
Mar 22, 2018
28
28
FL
I received a Tesla trade-in offer that was...well very low ($13K). They mentioned that they will match Carmax so I took my car in over the weekend and got an offer there which was $16K. However, in my prior experience, other auto buying groups are generally much higher than carmax (up to $1-2K more). Has anyone had any luck with having Tesla match other auto buyers?

In FL, we don't have to pay sales tax on the trade-in value, so $16K is really $17K if I sold it outside of a trade-in. So it'd be ideal if I could get them to match one of the other auto buying groups. Just curious other people's experiences. Thanks!
 

JohnSnowNW

Active Member
Feb 13, 2015
2,677
2,996
Minnesota
For me, CarMax was actually the highest offer I received. They have some sort of arrangement with CarMax which is why Tesla matches their evaluation. I was never offered an evaluation from Tesla, they just told me to go to CarMax, and simply filed the paperwork I was given.

I would be surprised if they match any other offer.
 
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When I bought my X, they offered $2K for a car I sold in 1 week for $8,500, and they offered $17K for a car I sold for $23K in a few weeks.

Tesla has to auction off all non-Tesla trade ins as they don't sell other brands of used cars, and they aren't willing to take any loss on the trade in since you commit to buying the car before you see a trade in value, so you inevitably have to get a lower offer from them so they can make up for all the transactional friction.
 
Yes, in probably every state, if you take the trade-in, then the value of the trade-in is deducted from the price of the vehicle, so your purchase price is lower, and thus the tax is. But if you sell your car privately, you probably have to pay the sales tax of the selling value of the car, plus you're paying sales tax on the full price of the Tesla too. So basically, you're double taxed.

If you can get $18k for your car privately, you're paying sales tax on $34k ($16k would be reduced from your sales tax on Tesla if you took the trade-in, otherwise you're paying that $16k PLUS the full value of your private party sale, which is $18k in this scenario). Florida state's car sales tax rate is 6%, with up to 1.5% based on local taxes. So ask yourself, what is 6% of $34k? It's $2040. Is it worth the hassle of doing a private party sale for $40 difference?
 
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Yes, in probably every state, if you take the trade-in, then the value of the trade-in is deducted from the price of the vehicle, so your purchase price is lower, and thus the tax is. But if you sell your car privately, you probably have to pay the sales tax of the selling value of the car, plus you're paying sales tax on the full price of the Tesla too. So basically, you're double taxed.

If you can get $18k for your car privately, you're paying sales tax on $34k ($16k would be reduced from your sales tax on Tesla if you took the trade-in, otherwise you're paying that $16k PLUS the full value of your private party sale, which is $18k in this scenario). Florida state's car sales tax rate is 6%, with up to 1.5% based on local taxes. So ask yourself, what is 6% of $34k? It's $2040. Is it worth the hassle of doing a private party sale for $40 difference?
unfortunately not in CA.
 

rtk86

Member
Mar 22, 2018
28
28
FL
Yes, in probably every state, if you take the trade-in, then the value of the trade-in is deducted from the price of the vehicle, so your purchase price is lower, and thus the tax is. But if you sell your car privately, you probably have to pay the sales tax of the selling value of the car, plus you're paying sales tax on the full price of the Tesla too. So basically, you're double taxed.

If you can get $18k for your car privately, you're paying sales tax on $34k ($16k would be reduced from your sales tax on Tesla if you took the trade-in, otherwise you're paying that $16k PLUS the full value of your private party sale, which is $18k in this scenario). Florida state's car sales tax rate is 6%, with up to 1.5% based on local taxes. So ask yourself, what is 6% of $34k? It's $2040. Is it worth the hassle of doing a private party sale for $40 difference?

You bring up a good point, I didn't realize I'd have to pay on the private party sale as well. That makes a ton of sense...now my potential 3K profit seems more like $1K and doesn't seem like much of the trouble.
 
You bring up a good point, I didn't realize I'd have to pay on the private party sale as well. That makes a ton of sense...now my potential 3K profit seems more like $1K and doesn't seem like much of the trouble.
Yeah, 3k above CarMax would net you [email protected]%, or [email protected]%. But you have the risk of not being able to make the sale, and finally having to switch to get CarMax or some other slightly better offer.

I know someone who bought a used car from a dealership, but decided to private party his car. He couldn't make the sale for what he wanted to, and finally got it sold like 6 months later for way under what he'd hoped. Probably still better than the dealer gave him, but in the meantime, he paid insurance for a car he was barely driving, and it kept a garage spot (so his new car was parked outside). It didn't help it was a convertible, and since he didn't sell it right away, the weather turned crappy, and no one was looking for a convertible when it's raining for 6 months straight. :)

IMO, not worth the risk, unless you're very sure of a decent sale.
 
The buyer pays the sales tax, not the seller. He won’t be double taxed.
You're right. He'll still pay sales tax on the Tesla side of things, but you're right that he won't be taxed on the sale of the vehicle. I was thinking that the person reporting the sale needed to treat it as income in some way, but probably not, since at registration time, the buyer would have to show he paid the tax, or would end up paying it then.

So yeah, if he didn't take the $16k off the price of the Tesla, he'd pay 6-7.5% on 16k, or 960-1200. If he can get $2k more at private party, then he'll make around $1k or less depending on local tax rate.
 

rtk86

Member
Mar 22, 2018
28
28
FL
You're right. He'll still pay sales tax on the Tesla side of things, but you're right that he won't be taxed on the sale of the vehicle. I was thinking that the person reporting the sale needed to treat it as income in some way, but probably not, since at registration time, the buyer would have to show he paid the tax, or would end up paying it then.

So yeah, if he didn't take the $16k off the price of the Tesla, he'd pay 6-7.5% on 16k, or 960-1200. If he can get $2k more at private party, then he'll make around $1k or less depending on local tax rate.

My situation is that the Tesla offer is now $16K, which will save me ~$1K in sales tax. So it'd be the equivalent of selling my car to a private party for $17K. I think if I sold to a private party, I could get $19.5K. so basically I think I could get $3.5K more private party but it'd be more like getting $2.5K but I'll also have to pay for a temp tag, keep the car insured, and spend time selling it.

So it sounds like I wouldn't have to pay the sales tax on the selling side of things and the buyer would? If that's the case, I just need to decide if $2.5K is worth the trouble.
 
My situation is that the Tesla offer is now $16K, which will save me ~$1K in sales tax. So it'd be the equivalent of selling my car to a private party for $17K. I think if I sold to a private party, I could get $19.5K. so basically I think I could get $3.5K more private party but it'd be more like getting $2.5K but I'll also have to pay for a temp tag, keep the car insured, and spend time selling it.

So it sounds like I wouldn't have to pay the sales tax on the selling side of things and the buyer would? If that's the case, I just need to decide if $2.5K is worth the trouble.
Yeah, I think @crouch was correct, you only pay the additional tax on the Tesla, not on selling your car to someone else. Would you need to have the car separately temp tagged? Wouldn't you just get a new plate for your Tesla, and keep the existing plate on your current car? Shouldn't need to get it temp tagged... But yes, it will need to remain insured. Perhaps you could call your insurance company and explain that you're only keeping it until you sell it, so it will only be driver for test-drive purposes. Not sure if they'd do anything to reduce that rate.
 

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