buying golf in SF Bay area without access to caif rebate

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billev

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Joined
Mar 16, 2017
Messages
11
I want to buy a used e-golf vs buy new or lease, as I am ineligible for the calif rebate. If i buy new, or lease the rebate goes unclaimed for that VIN. Too painful to leave that money on the table.

So I am looking for a used one, as the calif market price for a used 2016 should be lower than for a new 2016 with rebate, as most buyers can get rebate.

My read is that a new 2016 SE w/quick charge lists for 31.5K, and TrueCar says the avg discount they get for a buyer is $6200, which means the selling price would be 25.3K, easily achieved. Guessing can go up to 1K lower if work really hard. Assuming most buyers pays enough tax for the federal tax credit and can also get the 2500 calif rebate ,the effective cost is 15.3k. If buyer already owns a VW, then take another 1k off. Appears that most people lease, and obviously those costs can be very very low as well.

Ergo, the market for used e Golfs should be very tough for seller. I'd like to get a 2016 SE with quick charge. If a new one is ~15K then a used should be around 13K, correct? Problem is sellers are asking 16-17K , why would anybody pay 2K more than they can get a new one for? I guess I see that with other cars too,but seems more common with used egolfs.

Anybody else faced the same situation, any ideas?
 
The reason the used selling price is higher than you expect is that you technically have to return a 30 month prorated portion of the $2,500 if you don't keep the car for the required 30 months. So, you should not expect to find one less than 2 years old that has that "discount" included.
 
miimura said:
The reason the used selling price is higher than you expect is that you technically have to return a 30 month prorated portion of the $2,500 if you don't keep the car for the required 30 months. So, you should not expect to find one less than 2 years old that has that "discount" included.

Interesting. Makes sense that have to keep car a certain period to keep rebate.

But, I dont think it matters. While seller has to give back the rebate to sell, it doesnt change that fact that when he goes to sell his car, his potential buyer is comparing with a brand new one that can be bought for 15K at the dealership. So why would any buyer essentially "pay back" the seller the rebate. Just buy a new one.

Its similar to situation where a seller lists any used car for the amount they owe on their loan. What the seller owes is irrelevant. Has no bearing on what the car is worth, which is determined by what alternatives are avail to the buyer. A brand new one at the dealer is certainly tough competition in the egolf case.

Now, I would agree that the need to return the rebate probably restricts the number of used cars on the market. But for ~80% of buyers (guessing egolf buyers have higher than average incomes, so maybe 20% higher than 300K), a new one is avail at ~15K. So someone looking to sell his used one for 16 is likely to be waiting a long time.
 
billev said:
I am ineligible for the calif rebate. If i buy new, or lease the rebate goes unclaimed for that VIN.

Something to be aware of is if you're over the income limit but for whatever reason anticipate a net income drop in the next year (or can leverage a traditional 401k), you can wait up to 18 months before submitting the paperwork. They will look at your most recent tax return on the date the rebate was submitted. Of course, the rebate pool may be exhausted or gone entirely by then...but just an FYI for anyone on the bubble.

I ended up in a similar scenario simply because the dealer was doing 2-year lease terms as the rebate was on hold and seemed unlikely to get replenished. Then of course they did so the next month and then dropped the income cap a month later. Not really happy with how the state's been doing this; if they're serious about encouraging EV adoption, funding should be steady and not come with strings attached, but enough of my rant...

billev said:
a new one is avail at ~15K. So someone looking to sell his used one for 16 is likely to be waiting a long time.

Yep. The residual price for my 2016 SE is $13.8k and it's only 16 months away from lease end. Even if bought it out today, I'd have to sell it for over $18k just to break even...and I'm quite certain the resale values for 2016s will drop even further in a few months when the 2018s have arrived.

Are you committed to buying? Taking over a lease might make a lot of sense. I will bet that there will be more available in the coming months as people like myself opt to get out of their leases early for something with more range.
 
Joulesthief, I am sure that you've take great care of the car. But 18K is above market for a private party sale.

Here's an ad from a local dealer for the same car.

https://www.cars.com/vehicledetail/detail/694942882/overview/

Same car, same miles, they are asking 17.5K, which means they likely will sell for 16-16.5k Plus I dont have to deal with going to DMV, dealing with making payment at a bank, etc. Generally dealer prices are 5-10% higher than private party for a reason.

A new 2016 SEL is avail for 20K for most buyers (not me admittedly).

I would probably pay no more than 16K for a private party 2015 SEL premium.
 
billev said:
Ergo, the market for used e Golfs should be very tough for seller. I'd like to get a 2016 SE with quick charge. If a new one is ~15K then a used should be around 13K, correct? Problem is sellers are asking 16-17K , why would anybody pay 2K more than they can get a new one for? I guess I see that with other cars too,but seems more common with used egolfs.

Rarity is the reason. VW hasn't sold very many of these, only since model year 2015, and only in 11 states. A quick check of Autotrader shows just THREE cars for sale by private party (via Autotrader) in the entire country, the cheapest one being $16.5k; the rest are being sold by VW dealers.

OTOH a similar search on Autotrader shows no less than 50 Leafs for sale by private party, for as little as $7800 with a NEW traction battery. I've heard of ones with severely degraded batteries go for as little as $5k.
 
I'm skeptical that the $6K discounts claimed by TrueCar are off the top. First of all, other than the dieselgate era VW dealerships were unwilling to deal on pricing on their eGolfs. Their perspective was that we are already getting $10K off and a "great deal" at that. That may change a bit toward end of year sales recently but for the year my wife and I tracked pricing before finalizing a deal even holiday sales and end of month/quarter sales were only about $500-$1K off.

Assuming the TrueCar estimates can materialize in reality, and that's a big if from someone who has taken in TrueCar print-offs to various dealerships for a few different makes of cars, they very likely are taking into account the loyalty/conquest discounts and/or rebates etc. (and dealerships advertise their pricing with rebates included, which exacerbates this problem while doing market research).

Finally, you don't seem to be calculating TT&L on a brand new car purchase, which is going to be based on the full sticker price in California. That's around $4K, whether you're looking at $31K ($35K) or $25K ($29K). If you're financing, it takes more capital to borrow $30K than $15K and the interest may actually be around $2K over the life of the loan anyway. My wife and I are well above the median income brackets in this country and I'm not sure how close we'd come to netting the full $7,500 tax credit. My suspicion without seeing my taxes this year yet is that you have be earning well above six figures to realize the full credit (since it's not a rebate) or be in some special circumstances where you aren't taking a lot of other write-offs and that saving a few thousand dollars slogging through craigslist/private party sales would not be worth the effort or aggravation.

The bottom line, however, is that if you feel people are pricing their used vehicles too high and that you can buy a new one for less you should go do that and you'll either realize you got a great deal or figure out that the price you thought going into the process isn't what you're paying coming out the other end.
 
bizzle said:
my wife and I tracked pricing before finalizing a deal even holiday sales and end of month/quarter sales were only about $500-$1K off.

It's all timing. Hayward was doing 20% off MSRP back in July and Sunnyvale wasn't far behind. I've always felt late summer/early fall was the best time to get a car. The new models come in and the dealers get under pressure to move inventory.

bizzle said:
the full $7,500 tax credit. My suspicion without seeing my taxes this year yet is that you have be earning well above six figures to realize the full credit (since it's not a rebate)

Not true. Someone making $50k/year pays $1855 + 15% so that's a federal tax liability of over $9k. Of course realistically they're going to have deductions, but point is a gross income of say $65k+ should realize the full credit amount.
 
johnnylingo said:
bizzle said:
my wife and I tracked pricing before finalizing a deal even holiday sales and end of month/quarter sales were only about $500-$1K off.

It's all timing. Hayward was doing 20% off MSRP back in July and Sunnyvale wasn't far behind. I've always felt late summer/early fall was the best time to get a car. The new models come in and the dealers get under pressure to move inventory.

bizzle said:
the full $7,500 tax credit. My suspicion without seeing my taxes this year yet is that you have be earning well above six figures to realize the full credit (since it's not a rebate)

Not true. Someone making $50k/year pays $1855 + 15% so that's a federal tax liability of over $9k. Of course realistically they're going to have deductions, but point is a gross income of say $65k+ should realize the full credit amount.

It's over 6 figures if you have qualified dividends as a good portion of your income, and capital gains as the other portion, being retired and trying to qualify for the 7500 federal tax credit.

I knew when I bought my 2015 SEL that I would probably never see the deal I did again from VW of America. I can afford to run it until it needs a new battery. before buying another electric car. Lately, my range has been showing 123 to 124 miles on the guess o meter on a full recharge. Same route, same driving style, temps in the high 70's to low 80's. Full charge, then drive immediately. New, it showed 129 miles. I usually try to drive 70 to 110 miles on a recharge, leaving 45 to 9 or 10 miles of charge on the battery.
 
JoulesThief said:
being retired and trying to qualify for the 7500 federal tax credit.

Well yeah, a retiree wouldn't hit $7500 in fed taxes unless they have high investment income. Generally speaking, someone in that situation would be better leasing or buying used. But everyone's financial situation is unique.
 
I've also heard of people moving Traditional IRA funds over to Roth to order to get that $7500 taxation. I don't recommend it unless you really know what you're doing.
 
johnnylingo said:
Not true. Someone making $50k/year pays $1855 + 15% so that's a federal tax liability of over $9k. Of course realistically they're going to have deductions, but point is a gross income of say $65k+ should realize the full credit amount.
Not much sense in having a discussion with someone who writes, "realistically they're going to have deductions" but then completely ignores those deductions to make an unrealistic argumentative point :\
 
bizzle said:
johnnylingo said:
Not true. Someone making $50k/year pays $1855 + 15% so that's a federal tax liability of over $9k. Of course realistically they're going to have deductions, but point is a gross income of say $65k+ should realize the full credit amount.
Not much sense in having a discussion with someone who writes, "realistically they're going to have deductions" but then completely ignores those deductions to make an unrealistic argumentative point :\

Everybody's situation is different. That's why we hire experts and professionals to do things we aren't skilled at, like CPA's to do your taxes.

Some people here are fanatics, and want everyone else to be driving an electric car too, for whatever altruistic reason or agenda they have of their own.

Once the tax credits and subsidies are gone, we will see how Electric cars stand, on their own true merits. I won't personally be looking forward to solar farms all over California, myself, to power all these cars. Waiting to see how it will affect the electrical utility infrastructure, and it being a government regulated and controlled resource. I see that as problematic, compared to oil companies, providing gas and diesel at free market prices. Can't put solar panels on the townhouse roof where I live, but given a choice, I would love to be off the grid.
 
JT, California law is on your side against your HOA if they're claiming rules don't allow solar panels. I went through this with my HOA. The larger issue is roof space, however, since we barely cut even given the limited roof space and the fact the utility co. tried to bump us out of NEM 1.

And yes, everyone's tax situation is different, which is why I stated, "without seeing my taxes" meaning if I were making a blind guess and not actually going through the tax tables. In context, it's a silly rebuttal to point out that someone just ran raw income through a tax table and came up with an appropriate tax liability without acknowledging deductions because even if it's true that some hypothetical person earning $65K could realize the full tax credit, it doesn't necessarily follow that someone else earning $85K would.

I suppose I could have worded the sentence better but the point I was making was to be careful with the assumption that everyone selling an eGolf on the used market should be reducing their asking price by $7500 since everyone who wants to buy one will automatically qualify for the federal tax credit.
 
bizzle said:
Not much sense in having a discussion with someone who writes, "realistically they're going to have deductions" but then completely ignores those deductions to make an unrealistic argumentative point :\

The average American pays $9k a year in Taxes

Sure, everyone's tax situation is unique, just like it says in the fine print at the end of the H&R Block commercial. Point is, one does not need a 6 figure income to get a $7500 liability
 
RonDawg said:
I've also heard of people moving Traditional IRA funds over to Roth to order to get that $7500 taxation. I don't recommend it unless you really know what you're doing.

Moving would entail a tax hit and perhaps some fees, but simply changing your contributions to Roth in the year you buy the car wouldn't be a bad idea at all. Much better to set aside money for a tax-free retirement (which is smart regardless) than forfeit money from Uncle Sam.

Roth 401ks are an even better option since they go up to $18k/year vs. the IRA's only $5500.
 
johnnylingo said:
Point is, one does not need a 6 figure income to get a $7500 liability
No one said. Try reading and comprehending the point being made that you are attempting to refute, bud.

The funny part is that the link you provided actually supports my point better than yours.

Only 4 out of 5 people earning under $75K had income tax liability whereas 98.8% of $75-200K incomes had income tax liability.
$25-50K: $1,871 in taxes
$50-100K: $6,251 in tax liability.
Over 100K: $17K in tax liability.


The average tax return shows adjusted gross income of $65,751, and the average taxable return has AGI of $94,284.
 
bizzle said:
Try reading and comprehending the point being made that you are attempting to refute, bud.

In fairness, you weren't very clear on who your statement applied to. "You" in the English language can refer to both a single person or a general group of people. I was simply trying to clear up a statement that I considered inaccurate, not pick a fight. For my part I should have noted that my numbers referred to single filers with no dependents. A married person with kids and a jumbo mortgage would come in a different numbers. As would a retiree or a student. We can all agree tax liabilities depend on a variety of factors.

However, please don't get snippy. It's really uncalled for and has no place here.
 
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