Was wondering at what valuation it starts to make sense to trade in a current owned vehicle versus selling it to Carmax/Carvava/Vroom/etc.
For example, I got an online offer of $33,600 from Carmax. The new car I am about to finance (not lease) is at 2.49% for 6 year term. Given how cheap money is at that low rate, at what evaluation does it start make sense to trade-in instead of sell to Carmax?
Also how should taxes play a role in my decision. I am in Florida.
What does the finance rate on a new loan have to do with trading vs selling a car outright.
Carmax value > trade value + tax savings = sell to Carmax
Trade value + tax savings > Carmax value = trade vehicle in
Solution 
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I think the rate plays a role because money is cheap right now. Its the same reason why I am not putting any money down on the vehicle I am purchasing (just the taxes).
I can take those $33,600 from Carmax and plug into my investment portfolio versus simply lowering the loan amount by trading it in.
yes of course invest, because stocks never go down. Wonder why banks don’t think of that, why loan at 2.49% when they could just invest?
You’re able to receive a check from the dealership (for your trade) just as you would from CarMax.
You’re also asking questions that none of us on here have the full details to. Sure, it is 2.49% interest. Is that on financing $10,000? $100,000?
Oh. Didn’t know that was an option. Financing roughly 60k
Glad to see you have such a relevant and busy life to have the time to post your sarcastic smarta** response adding nothing productive to this discussion.
Most people don’t, because #1 dealers LOVE to further complicate a deal by mixing in a trade. Classic game of watch this hand, while I do something else with my other hand.
So do you think it would be safe to let them tell me what they value my trade in at and then just ask that they give me that amount in a check?
The price of the new vehicle is already set in stone because its Tesla and they don’t negotiate. At the same time I don’t know what their practices are in terms of trade-ins. I guess I’ll find out soon.
In the order process I said I was not trading in any vehicle but when they saw that I am transferring tags they reached out to me to see if I would consider doing a trade-in.
What is Tesla offering you?
When I got my Tesla, CarMax offered $4k over Telsla’s trade value… so it was an easy decision to make.
Just got the offer right now. Without even knowing Carmax offer Tesla offered me exactly $1000 less than Carmax.
You’d probably come out a good bit ahead giving the trade the tesla then after the sales tax savings.
Of course, be sure to get offers from more than just carvana/carmax. Sometimes there’s an outlier that’s a lot better than the rest.
OP owns the trade-in correct? What tax savings/liability is there?
I thought when you sold to a dealer, there is no sales tax?
In many states (including Florida), if you trade in a vehicle own on the purchase of a new vehicle, you only pay sales tax on the delta between the value of the two vehicles. Trading it in would lower the amount of sales tax that would need to be paid on the tesla.
This is my understanding as well. So for example if the trade in offer is 30k and the car I am buying is 60k, I will only pay taxes on the difference. So about 6% on 30k.
Where else have you valued the trade, beyond Tesla and Carmax?
Vroom, Algo, givemethevin, carvana.
All below Carmax offer.
Tomorrow going to swing by an autonation Honda dealer to see what they offer.
Part of that is due to laws actually
Someone needs to build an app that, you put in your vin number & mileage and you get offers for your car so you don’t have to go to each site individually…