Trade-in versus private sale

RunCycle

Active Member
Joined
Jan 21, 2018
Messages
194
Location
California
Tesla Owner
Model 3
Country
Country
#1
The 3 will be my first car purchase and my partner's first purchase at a dealership. What are the benefits from trading in your car versus selling to a private buyer? I can only think of convenience. Are there others?
 

Josh Pearlman

Active Member
Joined
Oct 4, 2017
Messages
46
Location
Mesa, AZ
Tesla Owner
Model 3
Country
Country
#2
Some states will offset your trade-in on the purchase price for tax purposes. Example:

Purchase Price - $60,000
Trade In - $10,000

Final total subject to sales tax - $50,000.

That is the only benefit that I can think of off the top of my head.
 

garsh

Dis Member
Moderator
TOO Supporting Member
Joined
Apr 4, 2016
Messages
11,242
Location
Pittsburgh PA
Tesla Owner
Model 3
Country
Country
#3
Yep, tax benefit & convenience.

Selling privately can potentially be a PITA. You could always try to sell it yourself, and if you find it to be too difficult, you could take it to someplace like a CarMax or CarSense as a backup plan.
 

ng0

Top-Contributor
Joined
Apr 11, 2017
Messages
996
Location
San Diego
Tesla Owner
Model 3
Country
Country
#5
The 3 will be my first car purchase and my partner's first purchase at a dealership. What are the benefits from trading in your car versus selling to a private buyer? I can only think of convenience. Are there others?
My experience in trade-ins is limited, but all I can say is the few times I have considered it, the dealership tried ripping me off big time. When we got our BMW, my wife had a Kia lease that had about a $16K buyout. I'd say the car was worth at least 14-15k on the private market. We asked the dealership to evaluate the Kia for a trade-in just to see what they would offer and they came back with $6k!!! I almost bailed on the whole purchase cause I was so in shock about their ridiculous offer.

Separately we had taken the Kia to Carmax and they offered $11k. Still outrageously low, but not nearly as bad as BMW. I'm sure every car and dealership will lead to a different experience, and some people swear on taking their cars to Carmax, but from what I can tell so far it makes sense to sell the car privately.
 

OrangeJulius

Active Member
Joined
Jan 19, 2018
Messages
188
Location
San Francisco, California
Tesla Owner
Model 3
Country
Country
#6
You are likely to get more money on a private sale than a trade. For example, years ago I sold a used Hyundai w/ 40k miles for about $6k. Trade-in offer was $400. Not a typo.
Yep.
Sell it yourself to a private party, and they're the end user; end of story.
Sell it (trade it in) to a dealer, and they want/need to turn around and sell it to someone else AT A PROFIT. That means they will always offer you less than they think they can sell it for.
 

SoFlaModel3

@Teslatunity
Moderator
TOO Supporting Member
Joined
Apr 15, 2017
Messages
9,818
Location
Florida
Tesla Owner
Model 3
Country
Country
#7
Important to note on the tax benefit (where applicable) -- if you still owe money on your car, it's only on the difference in value vs. pay off and not value alone.

In my case, I just traded in my car to Tesla.

Tesla offered $11,750.
CarMax offered $13,000.
Tesla matched.

KBB private sale estimate suggested that I could probably get ~$16,000 selling it. I didn't want to deal with meeting random people, the paperwork, delays, owning an extra car temporarily, insuring an extra car temporarily.

I opted for the convenience and ease of showing up to Tesla in one car and leaving with my Model 3.
 

ng0

Top-Contributor
Joined
Apr 11, 2017
Messages
996
Location
San Diego
Tesla Owner
Model 3
Country
Country
#8
Important to note on the tax benefit (where applicable) -- if you still owe money on your car, it's only on the difference in value vs. pay off and not value alone.

In my case, I just traded in my car to Tesla.

Tesla offered $11,750.
CarMax offered $13,000.
Tesla matched.

KBB private sale estimate suggested that I could probably get ~$16,000 selling it. I didn't want to deal with meeting random people, the paperwork, delays, owning an extra car temporarily, insuring an extra car temporarily.

I opted for the convenience and ease of showing up to Tesla in one car and leaving with my Model 3.
Good to know that Tesla is willing to match the CarMax offer. I guess that's something to consider if CarMax gives a reasonable quote.
 

Derik

Top-Contributor
TOO Supporting Member
Joined
Jul 26, 2017
Messages
467
Location
Wildomar, California
Tesla Owner
Model 3
Country
Country
#10
I've gone the carmax way twice. Once with my wife's old prius. The dealer we were buying her new prius from offered us $500 for it. Carmax offered $2,500. I'm sure I could have sold it for like $4000 if I wanted to take the time etc to sell it privately.
The second time I've used Carmax was selling my mom's escape. It was throwing a CEL and felt like it was only running on 3/4 cylinders. KBB for the car was like $3,000 in fair condition at the time. If I wanted to sell it privately it would have been difficult and I'm sure all i'd have gotten was low ball offers. Carmax offed $2,500 for the car the way it was.

If you're going to sell privately you can always go get a quote from CarMax, so at least you've got something to play with. It all matters on how much your time is worth in the end.
 

GDN

Moderator
Moderator
TOO Supporting Member
Joined
Oct 30, 2017
Messages
3,585
Location
Far North Dallas, TX
Tesla Owner
Model 3
Country
Country
#11
This has been noted before, at least for TX, but this is how I decide if it is best to sell or trade and how much I have to sell the car for based on it's trade in value.

In Texas, the value of the trade reduces the total sale amount, thus you pay less tax when trading. So assuming the M3 is $57.5K and trade is $13K, the 6.25% on the full sales amount w/o trade is $3594. If I trade and value is $13K then taxes are only $2781. So if I sell the current car outright I need to sell it for $813 more than they would give me on trade to come out ahead and make it worth it to sell it myself.

So as another month or two passes I'll have Carmax make an offer since it seems Tesla will match that value, hoping it is close to $13K - I know that if I think I can get more out of it selling it outright - I have to get $813 more out of it than they'll give me trade to come out ahead.

There is one more thing and I have to track him down, there is car dealer over on the edge of Addison, he has bought 3 of my pervious cars from me and they get treated like a trade. He has worked out with most dealers around (and I'll have to see if he works with Tesla or if Tesla works with him) to take his draft just like a trade. He will make his appraisal and give you a bank draft for his value good for 7 days. When you go to purchase the new car - you hand them this draft, which is essentially his purchase of your car from the dealer after you trade it in.

Since Tesla doesn't want to deal with trades and they just wholesale them they should love this idea. They don't have to mess with getting rid of the trade in, it's a guaranteed sale to this used dealer, but yet you get to benefit from the trade in value.

I've got to go find his contact information, I hope he is still in business.
 

smak

Well-Known Member
Joined
Apr 1, 2017
Messages
218
Location
North Hollywood
Country
Country
#12
I think the time from invite to delivery is the perfect time period to try to sell privately. If you have the time.

If you find no takers at a higher price by the time tour car is ready, then just sell to Tesla or CarMax.
 

SoFlaModel3

@Teslatunity
Moderator
TOO Supporting Member
Joined
Apr 15, 2017
Messages
9,818
Location
Florida
Tesla Owner
Model 3
Country
Country
#14
I think the time from invite to delivery is the perfect time period to try to sell privately. If you have the time.

If you find no takers at a higher price by the time tour car is ready, then just sell to Tesla or CarMax.
Unless your car comes in 1 week and you’re on a work trip when it arrives ;)
 

smak

Well-Known Member
Joined
Apr 1, 2017
Messages
218
Location
North Hollywood
Country
Country
#15
If you have Tesla match your carmax quote, is that all you need? You don't have to go through everything you would have to do if you were trading in without the carmax quote?

like sending Tesla all those pictures of your car...
 

SoFlaModel3

@Teslatunity
Moderator
TOO Supporting Member
Joined
Apr 15, 2017
Messages
9,818
Location
Florida
Tesla Owner
Model 3
Country
Country
#16
If you have Tesla match your carmax quote, is that all you need? You don't have to go through everything you would have to do if you were trading in without the carmax quote?

like sending Tesla all those pictures of your car...
Have Tesla quote you first — who knows it could be higher. To that end proceed with the pictures.

After that get the CarMax quote either way. Assuming CarMax is higher than provide a copy of the quote and Tesla will match it!