Trade in worth it?

[Jehorton]

I’m finally in my 8 step process. I have my 22 model Y that I’ll be either trading in or private selling. Private sale price higher side has the vehicle going for roughly $60k. Trade in value on KBB has anywhere from $53k - $58k. Rivian offered me $51k today for my trade in. How much does this save me in taxes and is it worth it?

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[VSG]

It will reduce the cost of of your R1T so you only pay taxes on the remainder. So you save $51k times (your tax rate) which in my state would save you about $5300. That brings the value of your trade-in up to the middle of your KBB value. Plus there's the convenience of a no-hassle trade-in that will be quick and easy. Sure you might get more in a private sale, but that could take a lot of time and energy.

I didn't end up trading in my car because Rivian only offered me about 1/4 the KBB value. Clearly they didn't want my older car. But if they had offered anywhere near the KBB I would have taken it.

 

[Monkey]

Taxes in regards to trade-ins differs from one state to another. OP looks to be in Florida so I can't comment on how it works there. But many states don't allow the trade-in to alter the recorded purchase price and tax the actual purchase price of the vehicle. A trade-in is just payment toward that amount, so no tax savings. That is unfortunately how it works where I'm at... OTOH, my tax rate is only 4%.

Rivian seems to handle trade-ins just like Tesla, as in they don't really want to be in the used car business and will usually low-ball you. They offer a price where they know they can broker the car to someone else. Unless it works for significant tax savings, I would sell it elsewhere, either a private party sale or direct to CarMax or other. Used car values are dropping fast lately. Many companies like Vroom, CarMax, Carvana, etc.. picked up significant inventory during the pandemic shortage and much of it high-dollar inventory they paid too much for. The fire-sale is just beginning and will only continue to expand as new car availability improves and consumer purchasing slows with the economy and higher interest rates. Teslas are still seeing significant demand, but a Model Y now is worth $10K less than it was just 2 or 3 months ago.

 

[Hodog16]

Some states don’t allow tax savings on trade ins but Florida does at least when I lived there years ago. I think sales tax on cars is around 6-7% depending on county, so you’d be looking at about $3,000-3,500 savings giving you about $54k or so in value.

A big thing also you need to think about is if you sell it to a dealer or private party how quickly the money will get to you. If you still have a lien it can take up to a month or longer to get a check as the loan has to be paid off and the title released and sent to the dealer or buyer. If the car is paid off and you have the title in hand, then it’s much quicker. I think Carvana etc cut you a check immediately but I don’t know the details.

 

[Revelation]

I used carbuyerusa.com when I sold my Model 3. It was a pretty easy and painless process. I had the money wired for the vehicle three days before they even came and picked it up.

If you want to know more, just let me know.

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