Tesla Trade-in: Your Guide to Trading Your EV
When you first bought that new Model S or another Tesla model, it probably felt like the one. However, as cars age, we can quickly fall out of love, and trading it in for a new Tesla or another vehicle from a different automaker can help rekindle your passion for your vehicle.
Plus, a Tesla trade-in is a win for everyone. You get a new vehicle, and the dealership receives a quality used car it can offer another customer.
So, how does a Tesla trade-in work? We’ll cover the ins and outs of trading in your old Tesla for something new, including the upsides and downsides of a Tesla trade-in.
Tesla Trade-in Timeline
When you’re looking to trade in a Tesla vehicle, whether it’s the cheapest model — the Tesla Model 3 — or one of the pricier models, including the Model Y, Model S, or Model X, there is a specific timeline you’ll follow. This will help you get the most money for your Tesla trade-in and streamline the process when you’re at the dealership.
Figure Out Your Tesla Trade-in Value
Like any pre-owned vehicle, used Tesla models depreciate over time, based on the mileage on the odometer. So, before trading in your Tesla, get an idea of what you can get for it on trade.
Sites like Kelley Blue Book (KBB) and the National Automobile Dealers Association (NADA) Guide offer guidance on how much you can expect for your Tesla trade-in. Enter your vehicle’s information into these sites and check the trade-in value to determine how much your car is worth.
Beware not to confuse this valuation with its retail value or private party value, as retail value is what dealers sell cars for and private party value is what you can sell it to someone for on the open market. These values will both be higher than what you will get on trade.
When you enter your car’s information, make sure you’re entering its features and condition accurately — these can dramatically impact the trade-in value. For example, if your vehicle is a Long Range model and has Autopilot full self-driving capabilities, these features can increase the value of your trade-in.
Once you get an estimate from KBB or the NADA Guide, you’ll have a rough idea of your Tesla trade-in value and can use this to your advantage in the negotiation process. You can also use this number to determine whether a trade-in will pay off your loan balance. If not, you may have to roll the unpaid portion into the new car loan, leaving you with a higher payment or interest rate.
Clean and Service Your Tesla
Before you take your electric vehicle (EV) to a dealership for an official appraisal, prepare to put your best foot forward. Clean your Tesla trade-in inside and out, and take care of any service and maintenance needs.
With full maintenance and service records and a spotless body and cabin, your Tesla trade-in will be ready to make a great first impression. This may not get you more than the KBB or NADA value for your Tesla trade-in, but it will help you get closer to the top of the trade-in value range.
Get It Officially Appraised
When trading in a used Tesla, the dealership is going to want to verify the vehicle’s condition before making a formal trade-in offer. Bring the vehicle to the dealership or dealerships where you’re considering trading it in, and get an appraisal.
If the appraisal seems low and the dealership won’t agree to improve it, head to a second and maybe even a third dealership for more appraisals. Once you figure out which dealership will offer you the best trade-in price, return to that dealership to make a deal.
Agree to the Deal and Complete Your Tesla Trade-in
When you’re satisfied with your trade-in offer, you can negotiate the new car deal and complete the paperwork. However, when completing the paperwork, ensure the dealership includes the full trade-in value on the contract. A dealership could easily lower the trade-in amount on the contract, hoping you won’t notice, or enter the number incorrectly on accident.
At this point, the dealership will take possession of your Tesla model and transfer over possession of your new car. Other than the sale paperwork, there should be no additional paperwork to fill out.
The dealership will cut a check to your finance company for any balance on your car loan. Then any remaining cash from the trade-in offer will reduce the new vehicle‘s MSRP.
Pay Off Any Remaining Loan Balance
When performing a trade-in, the dealership where you’re trading your vehicle will attempt to pay off your car loan before you incur more interest charges.
In some cases, though, slow mailing systems or slow dealership processes lead to delays that result in interest accruing on your account. This can leave you with a small value left on your car loan. You’ll need to pay it off to release the title and have it marked as “paid in full” on your credit report.
Benefits of Trading in Your Tesla
There are some significant benefits to trading in your Tesla. Here are the top ones for most car owners:
Lower Monthly Payments
Your Tesla trade-in will help reduce the new vehicle‘s MSRP, which will reduce your overall monthly payment.
Reduced Down Payment
Your Tesla trade-in value applies directly to the MSRP of the new car you’re buying, meaning it reduces your down payment. With the Tesla trade-in value going toward your down payment, you may also pay the MSRP down far enough to get a lower interest rate.
Reduced Sales Tax
In some states, when you trade in a vehicle, it reduces the vehicle’s taxable amount, which can lower your sales tax burden.
For example, imagine you’re trading a Tesla Model S for a $52,000 BMW, Audi, or Mercedes. The dealership offers you $45,000 for your electric car, which has a $35,000 loan balance. In this case, you’d apply $10,000 to the $52,000 BMW MSRP, leaving you with a $42,000 taxable sale price.
At 7% sales tax, that can save you $700 in taxes.
No Stressful Private Sales
When you sell a vehicle privately, you need to list the vehicle, deal with viewers, and handle all the paperwork. With a Tesla trade-in, you simply give the vehicle to the dealership, and it hands over your new car — no personal project required.
The Downsides of Trading in Your Tesla
There are a few downsides to trading in your Tesla, too. Here’s what owners need to look out for.
Less Cash in Your Pocket
Selling your Tesla car to a private buyer will almost always result in you getting more money than when you trade it in.
Dealership Shell Games
Some dealerships play games with pricing when you’re car buying, hoping you won’t notice. They may try to lower the interest rate but increase the car’s price or raise the interest rate but stretch out the payment to make it seem more affordable. Offering a Tesla trade-in to these dealerships just gives them one more variable to play with in an attempt to trick you.
Start Your Car Shopping With Compare.com
Are you looking to use that Tesla trade-in toward a new electric car? Use the Compare.com used electric car comparison tool to help you find the best EV for you. While you’re here, check out our full guide to EVs to learn more about how they work and why they can save you money.
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