Sell my 2018 Clarity or not?

[Geor99]

I've had no problems with my 2018 Clarity. It has almost 57,000 miles on it. However, last Friday 1/13/2023, Tesla reduced the price of the Model Y by $13,000. That put some trims under the $55,000 MSRP cap needed to qualify for the $7,500 EV tax credit. After consulting with my wife, I ordered a blue Model Y long range. We test drove a Model Y yesterday. Tesla offered and I accepted $18,500 for my Clarity as a trade-in. (Used car prices are dropping significantly.) We are scheduled to pickup our new Tesla this Saturday, 1/21/2023.

I really liked my Clarity during the nearly 5 years that I have owned it. It is comfortable and quiet. It is quirky though and it is a sedan.

Would you mind sharing what your all-in cost of the Tesla Model Y was for you? My 5 year Clarity loan at close to zero will be paid off soon. I am looking forward to not having to shell out the $600 per month, but on the other hand I would really like a Tesla; so I am curious as to your price

 

[David Towle]

Would you mind sharing what your all-in cost of the Tesla Model Y was for you? My 5 year Clarity loan at close to zero will be paid off soon. I am looking forward to not having to shell out the $600 per month, but on the other hand I would really like a Tesla; so I am curious as to your price

I just picked up mine Friday. All in cost for a Y was 59k with Florida sales tax. It would be 1k less without the trailer hitch. But I'm keeping my Clarity, the Tesla is for my wife. FYI all regular performance model Ys are now long range.

 

[Geor99]

I just picked up mine Friday. All in cost for a Y was 59k with Florida sales tax. It would be 1k less without the trailer hitch. But I'm keeping my Clarity, the Tesla is for my wife. FYI all regular performance model Ys are now long range.

And do you get $7500 from the Feds as well? After 4 years, I also just lost my Ca HOV lane privledge earlier this month, which is another check mark on the buy a Tesla ledger I believe that it is 7500 from the Feds and 2 grand from STate of Ca on new Telsas, but I am not positive about this.

 

[David Towle]

yes I will get $7500. Remember you have to pay minimum $7500 in fed income tax to get the full rebate.

 

[DaleL]

Would you mind sharing what your all-in cost of the Tesla Model Y was for you?

Description Total in USD
Model Y Long Range Dual Motor All-Wheel Drive $52,990
Deep Blue Metallic Paint $1,000
19’’ Gemini Wheels Included, All Black Premium Interior Included, Five Seat Interior Included, Autopilot Included
Subtotal $53,990
Destination Fee $1,390
Order Fee $250
Total $55,630

Registration, Document fee $416.85
Sales tax: This will depend on the state and amount of trade. In my case, $2,278.13

I expect to get back the $7,500 EV tax credit next year. $55,630 - 7,500 = $48,130

 

[Landshark]

yes I will get $7500. Remember you have to pay minimum $7500 in fed income tax to get the full rebate.

I expect to get back the $7,500 EV tax credit next year. $55,630 - 7,500 = $48,130

It is a Tax Credit as opposed to a Tax Rebate. If the credit creates an overpayment on a tax return, a refund, in some amount, will be issued.

Some dealers are handling the Credit on their end, at least on Leased vehicles. I believe the new legislation allows dealers to handle the Credit on sales as well.

The dealer applied the Credit and took $7500 off the price of our leased Jeep 4xe. To my knowledge, there were no measures taken to verify that we were below the income cap, or had a $7500 tax burden.

 

[David Towle]

It is a Tax Credit as opposed to a Tax Rebate. If the credit creates an overpayment on a tax return, a refund, in some amount, will be issued.

What I have read is the opposite. This is from the IRS:
The credit is nonrefundable, so you can't get back more on the credit than you owe in taxes. You can't apply any excess credit to future tax years.
This comes from this page:
https://www.irs.gov/credits-deductions/credits-for-new-clean-vehicles-purchased-in-2023-or-after

 

[Landshark]

What I have read is the opposite. This is from the IRS:
The credit is nonrefundable, so you can't get back more on the credit than you owe in taxes. You can't apply any excess credit to future tax years.
This comes from this page:
https://www.irs.gov/credits-deductions/credits-for-new-clean-vehicles-purchased-in-2023-or-after

The IRS guidance that you’ve linked is not the opposite of what I stated previously.

It isn’t necessary to “owe” $7500 in taxes. It also isn’t necessary to “pay $7500 minimum in fed income tax to get the full rebate” as you mentioned in an earlier post. It isn’t a Rebate. It is only necessary to have a tax burden of $7500 or more to realize the full tax credit. The difference between the taxes owed and tax burden is frequently a cause of confusion.

As you’ve stated, the credit is non-refundable, so you won’t get the $7500 back as you are expecting.

To elaborate on my statement about a possible, overpayment and tax refund, I believe the following to be accurate. If a person had income that produced a federal income tax burden of $7500 and their employer had withheld $7500 in federal income taxes throughout the course of the year, the $7500 EV tax credit would satisfy the tax burden and the $7500 that was withheld would become an overpayment which would be refunded to the taxpayer. The refund would be the taxes that were withheld. If the tax credit did not satisfy the tax burden in this situation, then the credit would be useless.