Selling used car for near break-even then buying back new

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FlaLove
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Selling used car for near break-even then buying back new

Post by FlaLove »

In March 2019, I bought a Tesla Model 3 SR+ for 38K+1.2K Destination and Documentation Fee+Florida Sales Tax (6%). I also received a $3.5K tax credit for it. It currently has 24K miles on it and is in "Very Good" condition. Originally I had financed the vehicle @ 1.7% through a credit union, but paid it off when savings rates dropped below 1.7% last year.

The last car I owned was bought used and I drove it for 13 years. I love this car and plan to do the same for this car and drive it until it dies.

According to Kelly Blue Book, the Private Party Range of my 2019 Tesla Model 3 SR+ is $36,932 - $41,359. These numbers really surprised me and I assume is due to the current state of the used car market.

I can buy a brand new 2021 Tesla Model 3 SR+ from Tesla.com for $40K+???+Florida Sales Tax currently with a 7-10 week delivery window.

If I were able to get say $39K for my used car and buy new again for 40K+???+Florida Sales Tax. Would it be worth it to extend the car's warranty, get a new battery, "reset" depreciation schedule so to speak, and maybe get an additional ~20 miles of range? Am I crazy to think there may be an opportunity here? I'm looking at it more as an opportunity to extend the warranty than anything. There's nothing in the 2021 model year that really draws me to it. It's nearly the same vehicle. Is it worth the hassle? Curious what your thoughts are.
Mike Scott
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Re: Selling used car for near break-even then buying back new

Post by Mike Scott »

If you can do it at break even, why not? You do need real life $ numbers in hand to make it work. Guesses won't work. You need to nail down the price on the new car and find someone to actually pay the required price on the used one.
Tingting1013
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Re: Selling used car for near break-even then buying back new

Post by Tingting1013 »

KBB value is irrelevant, get quotes from Carvana, Vroom, Shift, AutoNation. And then add 15% to those quotes if you still want to sell private party.

The answer is yes, you should absolutely do it.
Last edited by Tingting1013 on Wed Jun 23, 2021 10:04 am, edited 1 time in total.
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Stinky
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Re: Selling used car for near break-even then buying back new

Post by Stinky »

FlaLove wrote: Wed Jun 23, 2021 9:54 am
I can buy a brand new 2021 Tesla Model 3 SR+ from Tesla.com for $40K+???+Florida Sales Tax currently with a 7-10 week delivery window.
What is the “???” that you’re quoting?

Is it likely to be zero, $10k, or something else?

If it’s $0, I’d sell used and buy new. But the answer would be different if “???” is a large number.
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lolbatross
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Re: Selling used car for near break-even then buying back new

Post by lolbatross »

The used market is so shallow for teslas/EVs right now. I found one with 40k miles listed for more than would I could order new. Presumably you need to dig to find out what all the little differences are. For example the new model3 and y no longer have radar and rely only on cameras. The model Y just removed some seat adjustments in the passenger side. Also the self driving feature is a 10k add on. I assume your 2019 didn't include that.

The global chip shortage is impacting the entire market place - less new cars are able to be produced.

I think there is an opportunity here, but it may be short lived. If the incentives get reset I would expect demand to further increase and with it prices.

I would get a firm real offer from somewhere and then order a new one. You might be without a car for a few months so consider how you would handle that.
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FlaLove
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Re: Selling used car for near break-even then buying back new

Post by FlaLove »

Stinky wrote: Wed Jun 23, 2021 10:02 am
FlaLove wrote: Wed Jun 23, 2021 9:54 am
I can buy a brand new 2021 Tesla Model 3 SR+ from Tesla.com for $40K+???+Florida Sales Tax currently with a 7-10 week delivery window.
What is the “???” that you’re quoting?

Is it likely to be zero, $10k, or something else?

If it’s $0, I’d sell used and buy new. But the answer would be different if “???” is a large number.
The ??? would be another destination and documentation fee as I assume this would be added. Along with other minor fees associated with title/registration.

I agree, I should get more concrete numbers together.

I'm OK with being without a car for a month or so. I can work something out with my wife for this.

Thanks for the suggestion to get quotes from Carvana, Vroom, etc. Will Do this.
coldaudio
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Re: Selling used car for near break-even then buying back new

Post by coldaudio »

Just did something similar to this recently, sold my Tundra to Carmax for more than I originally paid for truck + tax + fees + registration. Shared a car with my wife for a month and a half and it was super easy (this was my biggest concern) until I just picked up another vehicle this week.

I vote for do it, even if it ends up costing ~$1k out of pocket, you're getting a vehicle 2 model years newer which will help with resale down the road.
Golf maniac
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Re: Selling used car for near break-even then buying back new

Post by Golf maniac »

Just curious, if I as a used car buyer can pay just a little bit more and get new why would I buy your used vehicle? Something just doesn’t make sense in this scenario.
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baxterbones
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Re: Selling used car for near break-even then buying back new

Post by baxterbones »

I just did this, albeit not exact same car. I couldn't believe it.

Sold a 2018 F150 XLT for 34.5K cash to Carmax.

I paid 28,500 out the door in early 2019 and it had 28K miles on it. I put on 12K miles over 15 months, and sold for 6K more than I bought it for. I watched in amazement as Carmax put it on their lot for 39,999. It sold within days.

After a few months, I bought a 2021 all-wheel drive Toyota Highlander XLE. Captain chairs, leather, push start, wireless charging. MSRP was about 45K, and I paid out the door 38K including registration,taxes etc. I simply got a true car quote, got instant spammed from 10 dealerships, selected the best offer and walked in and bought it.

What's even wilder - after I purchased it and was chatting with the sales rep, I asked why they have about 8-10 used Highlanders, with anywhere between 10K-50K miles on it on their lots for over $40K when I just bought mine for 38K? He said that's what people are paying. This toyota dealership is they type that sells used cars for their price - no haggling. I watched in amazement over next week or so and sure enough all those used Highlanders were purchased.

Wild times to be alive.
Tingting1013
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Re: Selling used car for near break-even then buying back new

Post by Tingting1013 »

Golf maniac wrote: Thu Jun 24, 2021 9:21 am Just curious, if I as a used car buyer can pay just a little bit more and get new why would I buy your used vehicle? Something just doesn’t make sense in this scenario.
Many people are conditioned to buy only used cars; they don’t check new car prices. I wouldn’t be surprised if many Bogleheads fit this description.
stoptothink
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Re: Selling used car for near break-even then buying back new

Post by stoptothink »

Tingting1013 wrote: Thu Jun 24, 2021 10:00 am
Golf maniac wrote: Thu Jun 24, 2021 9:21 am Just curious, if I as a used car buyer can pay just a little bit more and get new why would I buy your used vehicle? Something just doesn’t make sense in this scenario.
Many people are conditioned to buy only used cars; they don’t check new car prices. I wouldn’t be surprised if many Bogleheads fit this description.
Very true, just look at all the posts talking about buying "lightly used" cars as one of the principles of LBYM and wealth-building. If you are looking at lightly used cars from manufacturers with a decent reliability reputation (Toyota, Honda, Subaru...) it's been a long while since buying used was a better financial proposition than buying new. Shoot, I bought a VW jetta 5yrs ago and buying new was about the exact same price as a 2yr old one.
Big Dog
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Re: Selling used car for near break-even then buying back new

Post by Big Dog »

Tingting1013 wrote: Wed Jun 23, 2021 10:01 am KBB value is irrelevant, get quotes from Carvana, Vroom, Shift, AutoNation. And then add 15% to those quotes if you still want to sell private party.

The answer is yes, you should absolutely do it.
Concur.
Big Dog
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Re: Selling used car for near break-even then buying back new

Post by Big Dog »

Golf maniac wrote: Thu Jun 24, 2021 9:21 am Just curious, if I as a used car buyer can pay just a little bit more and get new why would I buy your used vehicle? Something just doesn’t make sense in this scenario.
A lot of people just don't want to wait. And used car are in demand right now.
OatmealAddict
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Re: Selling used car for near break-even then buying back new

Post by OatmealAddict »

Did something similar recently. Bought a new 4Runner last summer and traded it in on a new, top trim Subaru Outback. I ended up driving that 4Runner for free for nearly a year after all was said and done.

My wife also has a 2020 4Runner and I noticed that it's now worth right about what we paid for it nearly 18 months ago. We won't be selling that one though since she's in love with it.
theplayer11
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Re: Selling used car for near break-even then buying back new

Post by theplayer11 »

yup, do it. Carvana just quoted me $20,552 on my 2016 Nisan Frontier that I bought new for $21k even. Will sell and by a new Tacoma for $26,200. No brainer
Coachrhino11
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Re: Selling used car for near break-even then buying back new

Post by Coachrhino11 »

theplayer11 wrote: Thu Jun 24, 2021 12:25 pm yup, do it. Carvana just quoted me $20,552 on my 2016 Nisan Frontier that I bought new for $21k even. Will sell and by a new Tacoma for $26,200. No brainer
What kind of new Tacoma are you buying for 26k?? Stripped down 4 banger? Most new Tacoma's are much higher. By the way, the Tacoma is still living off it's past. Transmission issues at least on the auto and it drives horrible, zero get up even on the 6 cylinder.

But you are correct regarding Carvana. I had a great experience using Carvana last summer. No one on the "Jeep forum" believed me. I got what I paid for the new Wrangler after having buyers remorse and it was having battery issues, leaving me stranded on main road brand new. It was the ESS, not main battery. Overpriced garbage for new Jeeps.

One thing for certain, the Jeep and Tacoma hold value big time!
stoptothink
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Re: Selling used car for near break-even then buying back new

Post by stoptothink »

theplayer11 wrote: Thu Jun 24, 2021 12:25 pm yup, do it. Carvana just quoted me $20,552 on my 2016 Nisan Frontier that I bought new for $21k even. Will sell and by a new Tacoma for $26,200. No brainer
Out of curiosity I just checked. We have a 2017 VW jetta, bought brand new end of 2016 for <$14k OTD (TTL, everything). Good condition with 55k, Carvana estimate: $12,547. Now I'm kind of tempted.
Afty
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Re: Selling used car for near break-even then buying back new

Post by Afty »

Golf maniac wrote: Thu Jun 24, 2021 9:21 am Just curious, if I as a used car buyer can pay just a little bit more and get new why would I buy your used vehicle? Something just doesn’t make sense in this scenario.
OP quotes a 7-10 week wait for a new Tesla. Some people either can't or don't want to wait.
techiegirl
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Re: Selling used car for near break-even then buying back new

Post by techiegirl »

My daughter sold her 2019 Model 3 to Carmax for $45k. She bought it in March or April 2019 for $41k - 42k (after taxes, fees, fee and state rebate).
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Re: Selling used car for near break-even then buying back new

Post by FrugalProfessor »

baxterbones wrote: Thu Jun 24, 2021 9:40 am I just did this, albeit not exact same car. I couldn't believe it.

Sold a 2018 F150 XLT for 34.5K cash to Carmax.

I paid 28,500 out the door in early 2019 and it had 28K miles on it. I put on 12K miles over 15 months, and sold for 6K more than I bought it for. I watched in amazement as Carmax put it on their lot for 39,999. It sold within days.

After a few months, I bought a 2021 all-wheel drive Toyota Highlander XLE. Captain chairs, leather, push start, wireless charging. MSRP was about 45K, and I paid out the door 38K including registration,taxes etc. I simply got a true car quote, got instant spammed from 10 dealerships, selected the best offer and walked in and bought it.

What's even wilder - after I purchased it and was chatting with the sales rep, I asked why they have about 8-10 used Highlanders, with anywhere between 10K-50K miles on it on their lots for over $40K when I just bought mine for 38K? He said that's what people are paying. This toyota dealership is they type that sells used cars for their price - no haggling. I watched in amazement over next week or so and sure enough all those used Highlanders were purchased.

Wild times to be alive.
It seems to me that the only way this makes any sense (in the short run) is the crazy shortage of used cars.

Post current insanity (chip shortage, stimulus money, etc), is this replicable going forward? If so, how? Tell me what car to buy.

From other threads, it seems that the only potential arbitrage going forward is utilizing the $7.5k federal tax credit for EV/PHEV vehicles, then selling a year or two later. If true, any recommendations on models for this particular arbitrage?

The underlying mechanism which seems to be driving the above is the fact that most people don't have $7.5k of tax liability to offset with the tax credit....
I blog here: https://www.frugalprofessor.com/
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ResearchMed
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Re: Selling used car for near break-even then buying back new

Post by ResearchMed »

Because of this thread, I played along, and on Saturday, submitted the info to Carvana.

DH and I later discussed this and may actually be interested.
Vroom and Carmax each offered a few thousand dollars less.

The Carvana "offer" expires on Saturday (good for one week).
IF we re-submit same information about the same car, say, tomorrow, does anyone know if we'll get dinged somehow for not accepting the first time?

We didn't really think we were interested in this, but then we started thinking about it a bit more, plus reading more here...
We wouldn't get close to the same "deal" some are reporting here, but they are offering more than I would have expected.
The car is in truly pristine condition for it's age, low mileage, zero cosmetic issues inside (never any pets, children, or smoking). So having a dealer look at it as a trade might (??) even be better, as there's no way to communicate the actual condition online. We had it serviced 2-3 weeks ago, and had nice, new Pirelli tires put on. :oops: "Way back then", we had no idea we'd even be considering selling it!

So is there any downside to letting that 7 day offer expire, assuming the car's condition and mileage haven't changed? (Mileage may have changed by less than 100 miles.)

RM
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Tingting1013
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Re: Selling used car for near break-even then buying back new

Post by Tingting1013 »

ResearchMed wrote: Thu Jun 24, 2021 2:27 pm Because of this thread, I played along, and on Saturday, submitted the info to Carvana.

DH and I later discussed this and may actually be interested.
Vroom and Carmax each offered a few thousand dollars less.

The Carvana "offer" expires on Saturday (good for one week).
IF we re-submit same information about the same car, say, tomorrow, does anyone know if we'll get dinged somehow for not accepting the first time?

We didn't really think we were interested in this, but then we started thinking about it a bit more, plus reading more here...
We wouldn't get close to the same "deal" some are reporting here, but they are offering more than I would have expected.
The car is in truly pristine condition for it's age, low mileage, zero cosmetic issues inside (never any pets, children, or smoking). So having a dealer look at it as a trade might (??) even be better, as there's no way to communicate the actual condition online. We had it serviced 2-3 weeks ago, and had nice, new Pirelli tires put on. :oops: "Way back then", we had no idea we'd even be considering selling it!

So is there any downside to letting that 7 day offer expire, assuming the car's condition and mileage haven't changed? (Mileage may have changed by less than 100 miles.)

RM
There is always a risk the offer will go down. Also possible the offer will go up. Have you checked AutoNation?

What I have also seen work is putting it on Craigslist with no intention of selling it private party. Many dealers scour CL for used cars in good condition and will make unsolicited bids that may rival what you already have.
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ResearchMed
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Re: Selling used car for near break-even then buying back new

Post by ResearchMed »

Tingting1013 wrote: Thu Jun 24, 2021 2:30 pm
ResearchMed wrote: Thu Jun 24, 2021 2:27 pm Because of this thread, I played along, and on Saturday, submitted the info to Carvana.

DH and I later discussed this and may actually be interested.
Vroom and Carmax each offered a few thousand dollars less.

The Carvana "offer" expires on Saturday (good for one week).
IF we re-submit same information about the same car, say, tomorrow, does anyone know if we'll get dinged somehow for not accepting the first time?

We didn't really think we were interested in this, but then we started thinking about it a bit more, plus reading more here...
We wouldn't get close to the same "deal" some are reporting here, but they are offering more than I would have expected.
The car is in truly pristine condition for it's age, low mileage, zero cosmetic issues inside (never any pets, children, or smoking). So having a dealer look at it as a trade might (??) even be better, as there's no way to communicate the actual condition online. We had it serviced 2-3 weeks ago, and had nice, new Pirelli tires put on. :oops: "Way back then", we had no idea we'd even be considering selling it!

So is there any downside to letting that 7 day offer expire, assuming the car's condition and mileage haven't changed? (Mileage may have changed by less than 100 miles.)

RM
There is always a risk the offer will go down. Also possible the offer will go up. Have you checked AutoNation?

What I have also seen work is putting it on Craigslist with no intention of selling it private party. Many dealers scour CL for used cars in good condition and will make unsolicited bids that may rival what you already have.
Thanks. We'll look into AutoNation and think about Craigslist.
We hadn't considered trying private party, even though years ago I had a very successful experience selling privately. But that was then, and this is now, etc. :annoyed

I suppose we could look at other cars tomorrow to get an idea about whether a trade might be better in this case.
We do have a second car, so there is no urgency to find the replacement, but that other car is a 2004 Volvo XC90... and although it, too, is almost pristine (and *especially* given its age) and very low mileage, it doesn't have a few of the more recent safety features that we would much prefer (!) to have if driving on highways, etc.

Thanks!

RM
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theplayer11
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Re: Selling used car for near break-even then buying back new

Post by theplayer11 »

Coachrhino11 wrote: Thu Jun 24, 2021 12:32 pm
theplayer11 wrote: Thu Jun 24, 2021 12:25 pm yup, do it. Carvana just quoted me $20,552 on my 2016 Nisan Frontier that I bought new for $21k even. Will sell and by a new Tacoma for $26,200. No brainer
What kind of new Tacoma are you buying for 26k?? Stripped down 4 banger? Most new Tacoma's are much higher. By the way, the Tacoma is still living off it's past. Transmission issues at least on the auto and it drives horrible, zero get up even on the 6 cylinder.

But you are correct regarding Carvana. I had a great experience using Carvana last summer. No one on the "Jeep forum" believed me. I got what I paid for the new Wrangler after having buyers remorse and it was having battery issues, leaving me stranded on main road brand new. It was the ESS, not main battery. Overpriced garbage for new Jeeps.

One thing for certain, the Jeep and Tacoma hold value big time!
yup, bare bones with no back seats. I use it to haul stuff around my nursery and dump runs. Don't put many miles on it. I basically need it for the bed, put about 3,500 miles on it a year.
Edit: and no sales tax because it will have a farm plate
Coachrhino11
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Re: Selling used car for near break-even then buying back new

Post by Coachrhino11 »

ResearchMed wrote: Thu Jun 24, 2021 2:27 pm Because of this thread, I played along, and on Saturday, submitted the info to Carvana.

DH and I later discussed this and may actually be interested.
Vroom and Carmax each offered a few thousand dollars less.

The Carvana "offer" expires on Saturday (good for one week).
IF we re-submit same information about the same car, say, tomorrow, does anyone know if we'll get dinged somehow for not accepting the first time?

We didn't really think we were interested in this, but then we started thinking about it a bit more, plus reading more here...
We wouldn't get close to the same "deal" some are reporting here, but they are offering more than I would have expected.
The car is in truly pristine condition for it's age, low mileage, zero cosmetic issues inside (never any pets, children, or smoking). So having a dealer look at it as a trade might (??) even be better, as there's no way to communicate the actual condition online. We had it serviced 2-3 weeks ago, and had nice, new Pirelli tires put on. :oops: "Way back then", we had no idea we'd even be considering selling it!

So is there any downside to letting that 7 day offer expire, assuming the car's condition and mileage haven't changed? (Mileage may have changed by less than 100 miles.)

RM
So last summer when I sold my Jeep this happened to me. I had the 7 day offer and waited and procrastinated because I had changed my mind a couple times. Resubmitted it a day later and got $400 more. I took it and ran. I was not about to risk again. But yes, it could go down or up. Depends on many factors, supply and demand for that vehicle being #1.
theplayer11
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Re: Selling used car for near break-even then buying back new

Post by theplayer11 »

Coachrhino11 wrote: Thu Jun 24, 2021 10:46 pm
ResearchMed wrote: Thu Jun 24, 2021 2:27 pm Because of this thread, I played along, and on Saturday, submitted the info to Carvana.

DH and I later discussed this and may actually be interested.
Vroom and Carmax each offered a few thousand dollars less.

The Carvana "offer" expires on Saturday (good for one week).
IF we re-submit same information about the same car, say, tomorrow, does anyone know if we'll get dinged somehow for not accepting the first time?

We didn't really think we were interested in this, but then we started thinking about it a bit more, plus reading more here...
We wouldn't get close to the same "deal" some are reporting here, but they are offering more than I would have expected.
The car is in truly pristine condition for it's age, low mileage, zero cosmetic issues inside (never any pets, children, or smoking). So having a dealer look at it as a trade might (??) even be better, as there's no way to communicate the actual condition online. We had it serviced 2-3 weeks ago, and had nice, new Pirelli tires put on. :oops: "Way back then", we had no idea we'd even be considering selling it!

So is there any downside to letting that 7 day offer expire, assuming the car's condition and mileage haven't changed? (Mileage may have changed by less than 100 miles.)

RM
So last summer when I sold my Jeep this happened to me. I had the 7 day offer and waited and procrastinated because I had changed my mind a couple times. Resubmitted it a day later and got $400 more. I took it and ran. I was not about to risk again. But yes, it could go down or up. Depends on many factors, supply and demand for that vehicle being #1.
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