buying golf in SF Bay area without access to caif rebate

[billev]

I think a high % of buyers here in the SF Bay area can get the full 7500 credit from the Feds because

1) its a very high income /cost area, people who arent making enough in this to have 7500 federal tax liability here are prob not buying a new car at all
2) the car is often purchased as a second car or extra car, which also implies good income.

 

[billev]

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.

Looking at national Autotrader ads is misleading, because, as you point out, e golf wasnt sold nationally. Recent check of SF bay area craigslist revealed 4 private party sellers, with prices from 13k to 17k. Also, as I noted a number of dealers are listing 2015s at the 18K level, and private party is going to be lower. No doubt inventory of used e-golfs is slim, but so are buyers, as the deals on new ones are so sharp.

Funniest part of this whole debate is that joulesthief only paid 15.3K new for his 2015, yet was asking 18k firm for it in his now edited post. While he did get a number of rebates from VW, he more or less makes my point. The new ones are dirt cheap, so the used ones have to be cheaper.

 

[johnnylingo]

1) its a very high income /cost area, people who arent making enough in this to have 7500 federal tax liability here are prob not buying a new car at all
2) the car is often purchased as a second car or extra car, which also implies good income.

Agreed. I would add to this:

1) Higher than normal percentage of single people vs married
2) Lower than normal percentage with children/dependents
3) Lower than normal percentage of home owners, due to exorbitant costs of housing

These are the "big 3" deductions typically taken, so the tax liability of most Bay Area people is higher than you'd typically see.

 

[miimura]

I think a high % of buyers here in the SF Bay area can get the full 7500 credit from the Feds because

1) its a very high income /cost area, people who arent making enough in this to have 7500 federal tax liability here are prob not buying a new car at all
2) the car is often purchased as a second car or extra car, which also implies good income.

I am continuing to see more and more new e-Golf cars in Silicon Valley. In fact I just saw a new one this morning with the dealer placards in the license plate frame. I think most people are leasing. The deals are so good and the new model is coming, so there's not much reason to take on the resale value risk. The e-Golf was the first lease in my family. Previously I bought cars and kept them until the repair costs were approaching prohibitive levels. The 2001 Passat Wagon that our e-Golf replaced was running about $2,500/year in repair and maintenance cost. We kind of joke that the e-Golf is the "rental" and that we should drive it more since we're below the mileage allowance.

Anyway, my point is that the tax credit is not much of a consideration because most people are leasing and it's passed through in the lease.

 

[JoulesThief]

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.

Looking at national Autotrader ads is misleading, because, as you point out, e golf wasnt sold nationally. Recent check of SF bay area craigslist revealed 4 private party sellers, with prices from 13k to 17k. Also, as I noted a number of dealers are listing 2015s at the 18K level, and private party is going to be lower. No doubt inventory of used e-golfs is slim, but so are buyers, as the deals on new ones are so sharp.

Funniest part of this whole debate is that joulesthief only paid 15.3K new for his 2015, yet was asking 18k firm for it in his now edited post. While he did get a number of rebates from VW, he more or less makes my point. The new ones are dirt cheap, so the used ones have to be cheaper.

Yet you don't qualify for the 2500 rebate... you get to add that back in.... Very, very, very few folks managed to negotiate the price and the timing of buying an e-Golf that I did, let alone qualify for owner loyalty of $2000.

In other words, good luck with your purchase... I negotiated with all the pieces in place during the perfect storm, those conditions won't be happening again probably ever.

What I paid for it has no bearing on what it's worth to someone else. The reality is I paid sales tax on $25,200 to $25,300 too. That I qualified for things you don't qualify for is another condition you forget to account for.

My car is probably worth more to someone not living in the state of CA than you. You are not the right buyer for what I have for sale. I can easily afford to run it into the ground for 10 or 15 years until the wheels fall off of it, or maybe just replace the battery when it's time. Someone that lives in a state with no sales tax on used car is the right buyer for my car.

 

[billev]

Yet you don't qualify for the 2500 rebate... you get to add that back in.... Very, very, very few folks managed to negotiate the price and the timing of buying an e-Golf that I did, let alone qualify for owner loyalty of $2000.

In other words, good luck with your purchase... I negotiated with all the pieces in place during the perfect storm, those conditions won't be happening again probably ever.

What I paid for it has no bearing on what it's worth to someone else. The reality is I paid sales tax on $25,200 to $25,300 too. That I qualified for things you don't qualify for is another condition you forget to account for.

My car is probably worth more to someone not living in the state of CA than you. You are not the right buyer for what I have for sale. I can easily afford to run it into the ground for 10 or 15 years until the wheels fall off of it, or maybe just replace the battery when it's time. Someone that lives in a state with no sales tax on used car is the right buyer for my car.

I totally agree that what you paid for it has no bearing on what it's worth. but the following two factors do

1) the price for new ones
2) the price dealers are asking for used ones

Regarding 1) In another post, someone noted he was offered a 2016 SEL for 28K, or 18K after govt incentive. That's for a new car, with better features than the 2015. well worth the 900 delta in sales tax.

2) more directly, dealers are advertising *asking* 18K for your exact car, means they will go lower.

You are going to be waiting a long time to sell your car at 18K firm here in Calif.

 

[JoulesThief]

Yet you don't qualify for the 2500 rebate... you get to add that back in.... Very, very, very few folks managed to negotiate the price and the timing of buying an e-Golf that I did, let alone qualify for owner loyalty of $2000.

In other words, good luck with your purchase... I negotiated with all the pieces in place during the perfect storm, those conditions won't be happening again probably ever.

What I paid for it has no bearing on what it's worth to someone else. The reality is I paid sales tax on $25,200 to $25,300 too. That I qualified for things you don't qualify for is another condition you forget to account for.

My car is probably worth more to someone not living in the state of CA than you. You are not the right buyer for what I have for sale. I can easily afford to run it into the ground for 10 or 15 years until the wheels fall off of it, or maybe just replace the battery when it's time. Someone that lives in a state with no sales tax on used car is the right buyer for my car.

I totally agree that what you paid for it has no bearing on what it's worth. but the following two factors do

1) the price for new ones
2) the price dealers are asking for used ones

Regarding 1) In another post, someone noted he was offered a 2016 SEL for 28K, or 18K after govt incentive. That's for a new car, with better features than the 2015. well worth the 900 delta in sales tax.

2) more directly, dealers are advertising *asking* 18K for your exact car, means they will go lower.

You are going to be waiting a long time to sell your car at 18K firm here in Calif.

Come on back when you have an e-golf titled in your name, with no lien. Good luck in your purchasing endeavors.

 

[bizzle]

I think a high % of buyers here in the SF Bay area can get the full 7500 credit from the Feds because

1) its a very high income /cost area, people who arent making enough in this to have 7500 federal tax liability here are prob not buying a new car at all
2) the car is often purchased as a second car or extra car, which also implies good income.

This isn't how markets work and it's frankly surprising that you, or anyone else, would completely miss this reality.

Regardless of what Bay Area purchasers do or don't qualify for, they are going to look at overall market values before assigning a used value to their vehicle. That is, even if it's true that most Bay Area purchasers would qualify for the $7,500 dollar tax credit that has no bearing on the rest of the market since it's not true that all Californians qualify for the credit. A seller would be foolish to offer their vehicle below average market value unless that person had some other extraneous circumstances forcing the sale. In that case, the seller would have a buffer to reduce the asking price without losing out of pocket. If, however, you saw market conditions where eGolfs in the Bay Area were selling for $7,500 dollars less than the rest of the state you would a solid argument. You don't see that because used value is dictated by market conditions more than what someone paid for any given commodity. Sometimes people lose money because of the discrepancy between what they paid and what the market says the commodity is worth and sometimes people gain money.

In any case, you continue to make this assumption that simply because someone else has qualified for incentives that you should have them passed through to you on the used market. You're welcome to continue making that argument, but the bottom line is that if you think you qualify for a new car for less or equal cost than a used one, what is the point of starting this thread? The amount of time you spent here would have been better served finding a deal like JoulesThief did.

 

[johnnylingo]

used value is dictated by market conditions more than what someone paid for any given commodity.

He's not saying that. Rather, he's arguing market factors for new cars can effect used car values and vice-versa. I agree.

Forget about rebates for a second and consider interest rates. They've been at record lows for the last two years and have been a large factor in the 2015/2016 sales records. Personally, I can say I had been leaning towards buying a used EV until the APRs went below 1% and at that point it was a no-brainer to go new. The Ford dealer was willing to knock $3k off their original asking price for a low-mileage Focus Electric, but the potential hassle of owning a used car (even with factory warranty) just wasn't worth it.

But anyway, the true test will be in a few years when the federal tax credit pools for Tesla and GM start to dry up and the California rebate perhaps disappears forever. Values for used EVs should rise slightly at that point, not because people paid more for them but because the cost of getting a new one has risen.

 

[billev]

used value is dictated by market conditions more than what someone paid for any given commodity.

He's not saying that. Rather, he's arguing market factors for new cars can effect used car values and vice-versa. I agree.

Exactly.

The reason I site the prices others are paying now for new and used eGolfs is because that sets the market now. What joules thief paid back in 2015 has nothing to do with the value of his car. I never suggest it does, other than as an indicator of how cheaply these cars are aquired new. The alternatives available to buyers TODAY set the price.

Imagine Joe Blow wants an eGOLF. He has a variety of choices- buy new from dealer, buy used from dealer, lease from dealer, buy used from private party. The prices offered in the various settings all interact. Right now, leases are DIRT cheap. New from dealer has heavy discounting and tax incentives. And Used from dealer shows offerings at or below Joules Thief's prices.

There are hundreds of Joe Blows, and most of them are rational, and most of them are able to get the 7500 rebate (by leasing ) and the 2500 rebate. SOme Joe Blows even can get the loyalty and the college grad rebate.

For Joules and Bizzle - heres the point All of this discounting and rebating on new cards downward pressure on the prices of used eGolfs. In this market (non-collector cars) a new one is worth more than a used one.

Or dont follow my argument, just do a search on cars.com and see what dealers are ASKING for 2015 SELs, some of them VW certified. The data is right there. Private Party used has lower prices than dealer used, for a variety of reasons. Financing, convenience among them.

 

[bizzle]

used value is dictated by market conditions more than what someone paid for any given commodity.

He's not saying that.

No, that's exactly what he's arguing.

His second sentence of the first post of this entire thread claims, "the calif market price for a used 2016 should be lower than for a new 2016 with rebate, as most buyers can get rebate."

He continues to cite JT's out of pocket expenses from two years ago, which are completely irrelevant to a discussion about new or used pricing today.

He also cites a new eGolf for $28K (before TT&L, FYI) and then concludes that the market price for the car is $18K because the person who was thinking about it qualified for rebates and incentives even though he does not. The market price for that car is $28K, not $18K, which is the point that continues to be lost in both of your positions. The only way you can argue the market price for that car is $18K is by also arguing that any discounts/incentives/bargaining that is realized by the original purchaser should be passed through to second owners. If you argue that you aren't saying that, but your points depend on it, you are arguing it whether or not you realize that's what you are doing.

 

[johnnylingo]

bizzle, meet billev.

billev, meet bizzle.

You're both making the same argument and I agree with you both.

Goodnight.

 

[bizzle]

No, we are not making the same argument.

He is looking at pricing for new models and including incentives that he does not qualify for to derive the market price. That is, he thinks the ticket price for a 2016 SEL is $18K and, subsequently, used models should be less than that price. Then he looks at the used market and wonders why people like JT are listing their used vehicles around that same $18K. The answer, as I and JT tried to explain, is that he is incorrectly assuming a pass-through in regards to those savings (that he has already stated in this thread he does not qualify for).

His frustration stems from not being able to qualify for those incentives and for not seeing a reduced price on the used market reflexive of others realizing those incentives.

Even though he says he's not thinking that way, he inadvertently loops back to the same argument because his entire position is built on the premise that a car's market value is X-incentives. With vehicle purchases, more than any other commodity, someone else's out the door price does not become *your* out the door price--even from the same dealer with an identical car.

The entire conversation is hinging around this faulty premise that new and used cars' market values are inclusive of any/all incentives and discounts that buyers avail themselves of when they purchase or lease the vehicle.

 

[JoulesThief]

No, we are not making the same argument.

The entire conversation is hinging around this faulty premise that new and used cars' market values are inclusive of any/all incentives and discounts that buyers avail themselves of when they purchase or lease the vehicle.

That's correct. Ask anyone that bought a car with an employee discount if they pass that savings on to the next consumer when they sell it. The answer is "hell no". However.... if you come from the "entitled" generation, you might incorrectly think so, that it is due you. The market sets the sales price of anything, if not artificially tampered with or manipulated by the government or its incentives. No one is AZ is getting a CA $2500 rebate. What they do get is no sales tax on used cars, as does NV.

Like stock, or any asset, the object in preserving capital is to buy low and sell high, relative to going market prices. If you have any doubt, ask Warren Buffet how it's done.

Bizzle is very well versed in finance and economics. I haven't heard such arguments as his since some other students I was in class with at a University were forced to think at this level, arguing with a professor.

 

[forbin404]

Why should seller pass on to the new used car buyer all the discounts that they got?
When selling a car you sell to make money.

If you want that, go look at a used Fiat 500e, those are going for $4k out of Manheim and hence about $6k. But the car should be selling for about $15k.

It's all about market, if the market can bear it, people sell at that price. If it can't, then the price goes down.

 

[billev]

I can see that inductive reasoning isnt working, so lets just look at data that supports my assertion that Joules' "18K firm" + travel costs + hassle of arranging isnt a realistic price to a buyer in Calif

https://www.cars.com/for-sale/searchresults.action/?mdId=56107&mkId=20089&page=1&perPage=50&rd=100&searchSource=GN_REFINEMENT&sf1Dir=DESC&sf1Nm=price&stkTypId=28881&trId=26401&yrId=56007&zc=94002

Here's 5 2015 SELs in the Bay Area from dealers available to me RIGHT NOW, no supposition, no debate.

Avg ASKING 17.9K, average Miles 12K. 3 of the 5 have a VW CPO tag on them.

On a 18K ASKING price used car at a dealer, one can pretty easily get to 16.5K or so. They are probably paying 13K for them at auction.

So here's the choice:

16.5K for the car, from a dealer, several with CPO warranty. OR 18K for the same car, from some dude on the internet who wants you to buy him a plane ticket home.

To come full circle, that is way I said would pay no more than 16K for a private party car 2015 SEL like the one offered to everyone on this board by Joules.

As why this price what it is, that's a rehash that I'll spare the board.

 

[JoulesThief]

I can see that inductive reasoning isnt working, so lets just look at data that supports my assertion that Joules' "18K firm" + travel costs + hassle of arranging isnt a realistic price to a buyer in Calif

https://www.cars.com/for-sale/searchresults.action/?mdId=56107&mkId=20089&page=1&perPage=50&rd=100&searchSource=GN_REFINEMENT&sf1Dir=DESC&sf1Nm=price&stkTypId=28881&trId=26401&yrId=56007&zc=94002

Here's 5 2015 SELs in the Bay Area from dealers available to me RIGHT NOW, no supposition, no debate.

Avg ASKING 17.9K, average Miles 12K. 3 of the 5 have a VW CPO tag on them.

On a 18K ASKING price used car at a dealer, one can pretty easily get to 16.5K or so. They are probably paying 13K for them at auction.

So here's the choice:

16.5K for the car, from a dealer, several with CPO warranty. OR 18K for the same car, from some dude on the internet who wants you to buy him a plane ticket home.

To come full circle, that is way I said would pay no more than 16K for a private party car 2015 SEL like the one offered to everyone on this board by Joules.

As why this price what it is, that's a rehash that I'll spare the board.

Go buy your e-Golf then, for whatever you want to pay.

 

[forbin404]

Wow, you must be good to talk a dealer down from $18k to 16.5k.

 

[johnnylingo]

if you come from the "entitled" generation

 

[billev]

Because I have a pathetic need to show people why I am right . . .


Heres a 2015 SEL premium for 15.5K with 10K miles.

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


Here's a certified one for 16.9K

https://www.cars.com/vehicledetail/detail/697494745/overview/