QueenBee
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Re: Why sell with less than 500 on the clock?

Mon Feb 18, 2013 5:37 pm

I don't understand how the math would pan out. They could certainly lease the car to avoid the income tax return problem but how does taking a new car and converting it into a used car which sales tax will have to be paid when it gets sold allow the dealer to make more money? Maybe these sales were needed to meet a quota or allow them to get more of the back end manufacturer cash?

AFAIC the only way the federal rebate getting paid should be fraud is if it was paid twice on the car. It should just be paid at the time of purchase instead of a tax return credit since all someone has to do lease the car.

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TonyWilliams
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Re: Why sell with less than 500 on the clock?

Mon Feb 18, 2013 6:01 pm

QueenBee wrote:I don't understand how the math would pan out. They could certainly lease the car to avoid the income tax return problem but how does taking a new car and converting it into a used car which sales tax will have to be paid when it gets sold allow the dealer to make more money? Maybe these sales were needed to meet a quota or allow them to get more of the back end manufacturer cash?

AFAIC the only way the federal rebate getting paid should be fraud is if it was paid twice on the car. It should just be paid at the time of purchase instead of a tax return credit since all someone has to do lease the car.
I posted a link to the rules a few posts up. The fraud is buying the car to merely get the $7500 tax credit, and the reselling it. It's in the rules.

Some states don't have sales tax, so your above arguments wouldn't apply there. Also, some states (at least Washington, maybe others) don't charge a sales tax on EVs.

But, even a 10% sales tax on a $40,000 car is only $4000 in sales tax. I'd say that $7500 directly in a slimy car dealer's back pocket to then sell a "used" car with extremely low miles would be (and has been) very tempting.

Besides, if they will cheat on the fed tax, they will cheat on the sales tax... Maybe sell the car to themselves at $10,000? Then sell it used for $35k?

Caracalover
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Re: Why sell with less than 500 on the clock?

Mon Feb 18, 2013 6:58 pm

I was in a 2011 Leaf with only 500 miles on it the other day.

The owner did independent testing, and he knew virtually nothing about the car. I was at a drive and ride event with Plug in America when he showed up and started saying his car was broken, it would only go 30 miles on a full charge.

I walked him to his car to see what the heck he was talking about, especially after he told me it only had 500 miles on it.

He had it plugged in to a charging station, and I explained the bars, the GOM, etc. etc. He had all 12 capacity bars, he just didn't know how to read the gauge.

He was amazed that it would get better economy in city driving over highway. He says the car was charged up and then left to sit for all this time. He was taking it into Nissan the next day, or so he said.

He also wanted to rent a Tesla Model S for a day of testing, not sure if he got any takers, he was only offering $500, and the first guy he stated that number to said that was half the industry standard for a car like his. I walked away at that point, there were about 7 model S owners there that day so he may have gotten a taker.

Not sure these cars are in this category, but after the very odd encounter I had I thought I would share.

QueenBee
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Re: Why sell with less than 500 on the clock?

Mon Feb 18, 2013 7:00 pm

TonyWilliams wrote:
QueenBee wrote:I don't understand how the math would pan out. They could certainly lease the car to avoid the income tax return problem but how does taking a new car and converting it into a used car which sales tax will have to be paid when it gets sold allow the dealer to make more money? Maybe these sales were needed to meet a quota or allow them to get more of the back end manufacturer cash?

AFAIC the only way the federal rebate getting paid should be fraud is if it was paid twice on the car. It should just be paid at the time of purchase instead of a tax return credit since all someone has to do lease the car.
I posted a link to the rules a few posts up. The fraud is buying the car to merely get the $7500 tax credit, and the reselling it. It's in the rules.

Some states don't have sales tax, so your above arguments wouldn't apply there. Also, some states (at least Washington, maybe others) don't charge a sales tax on EVs.

But, even a 10% sales tax on a $40,000 car is only $4000 in sales tax. I'd say that $7500 directly in a slimy car dealer's back pocket to then sell a "used" car with extremely low miles would be (and has been) very tempting.

Besides, if they will cheat on the fed tax, they will cheat on the sales tax... Maybe sell the car to themselves at $10,000? Then sell it used for $35k?
No no, I'm not disagreeing that it isn't fraud, just saying that IMO the $7,500 should just be taken off the price instead of as a rebate and then there wouldn't be any way to defraud unless the $7,500 is paid twice on the same car, or on a car that never existed.

These two cars are in WA so sales tax applies but not in the way you are thinking. There is sales tax on USED EVs, just not new EVs.

Again, how does the $7500 go into the dealers pocket? They take a new car that would sell for say $35,344 before the federal refund, then pay licensing fees, possibly lease fees and convert it to a used car. They then try to sell the used car for $27,844 but unless they trick a buyer no one would do since the car would actually cost an extra $2645 after sales tax and could not be leased. Even if they are able to get the asking price they are out money VS just selling the car as new.

BTW: In WA the trick of saying you sold the car for a fraction of the cost, or actually selling the car for a fraction of the cost to say a family member doesn't work. The licensing department has a value for the car that if you don't meet you have to go through hoops to prove that it's not actually worth.

cwerdna
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Location: SF Bay Area, CA

Re: Why sell with less than 500 on the clock?

Mon Feb 18, 2013 11:27 pm

Caracalover wrote:I was in a 2011 Leaf with only 500 miles on it the other day.

The owner did independent testing, and he knew virtually nothing about the car. I was at a drive and ride event with Plug in America when he showed up and started saying his car was broken, it would only go 30 miles on a full charge.

I walked him to his car to see what the heck he was talking about, especially after he told me it only had 500 miles on it.

He had it plugged in to a charging station, and I explained the bars, the GOM, etc. etc. He had all 12 capacity bars, he just didn't know how to read the gauge.

He was amazed that it would get better economy in city driving over highway. He says the car was charged up and then left to sit for all this time. He was taking it into Nissan the next day, or so he said.

He also wanted to rent a Tesla Model S for a day of testing, not sure if he got any takers, he was only offering $500, and the first guy he stated that number to said that was half the industry standard for a car like his. I walked away at that point, there were about 7 model S owners there that day so he may have gotten a taker.

Not sure these cars are in this category, but after the very odd encounter I had I thought I would share.
That is very strange. I wonder if he bought it new or used and got taken in anyway by a dealer who claimed the tax credit. This is exactly why there to be a standard questionnaire (that hopefully a Leaf owner can own) for poor range complainers. See http://www.mynissanleaf.com/viewtopic.p ... 91&start=0" onclick="window.open(this.href);return false;. I've seen a few (newbie) Leafers posting here before who didn't understand the GOM and have posted rather odd questions due to the lack of understanding.

Re: the price for renting a rare car. I found http://www.bwrentacar.com/cars.html" onclick="window.open(this.href);return false;, for example. I have no idea if those are good/bad prices or if that place is reputable. There used to be a place in the Seattle area (Bellevue) that rented exotics/not the typical rental car, but it looks like they don't anymore.

DaveinOlyWA
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Re: Why sell with less than 500 on the clock?

Sun Mar 03, 2013 10:08 am

they still exist. they are on living social all the time. dont remember the details but i think it was like $75 for 3 hours as a 50% off voucher

thought about it but never investigated because they dont list Tesla, only Ferrrari Lamborghini,s and such...iow, boring stuff
2011 SL; 44,598 mi, 87% SOH. 2013 S; 44,840 mi, 91% SOH. 2016 S30; 29,413 mi, 99% SOH. 2018 S; 25,185 mi, SOH 92.23%. 2019 S Plus; 19,653 mi, 93.47% SOH
My Blog; http://daveinolywa.blogspot.com" onclick="window.open(this.href);return false;

smkettner
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Location: Orange County, CA

Re: Why sell with less than 500 on the clock?

Sun Mar 03, 2013 10:37 am

Maybe the dealer grabbed the $7,500 tax credit and then marked it down $7,500 extra. What is the harm in that?
Might be more marketable considering it is two model years old and compares more to the price point in the used vehicle market.
Might also appeal to a person that could not get the full tax credit but prefers to buy.

caffeinekid
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Location: Wilmington, Louisiana

Re: Why sell with less than 500 on the clock?

Sat Mar 09, 2013 7:43 pm

[quote="smkettner"]Maybe the dealer grabbed the $7,500 tax credit and then marked it down $7,500 extra. What is the harm in that?
Might be more marketable considering it is two model years old and compares more to the price point in the used vehicle market.
Might also appeal to a person that could not get the full tax credit but prefers to buy.[/quote]
Because the cars are now technically used AND a model year out, yet they are priced essentially as "new" minus the $7500 rebate. Both factors solicit more depreciation than is reflected in the asking price. Maybe not "harm," but not fully ethical either.

caffeinekid
Posts: 206
Joined: Thu Dec 02, 2010 11:57 am
Delivery Date: 06 Mar 2011
Location: Wilmington, Louisiana

Re: Why sell with less than 500 on the clock?

Sat Mar 09, 2013 7:47 pm

[quote="smkettner"]Maybe the dealer grabbed the $7,500 tax credit and then marked it down $7,500 extra. What is the harm in that?
Might be more marketable considering it is two model years old and compares more to the price point in the used vehicle market.
Might also appeal to a person that could not get the full tax credit but prefers to buy.[/quote]
Because the cars are used AND a model year out, yet the asking price is new minus the $7500 rebate. Both factors solicit a higher depreciation than what the vehicles are listed at. Not necessarily "harm," but not exactly ethical either.

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