Anyone gotten a ridiculous buy offer for your used MME?

[RickMachE]

Provided you have owned the ROTH account for 5 years. You still pay taxes on the IRA to ROTH conversion if you IRA was funded with pre-tax dollars. There is also a 10% pre 59.5 years of age penalty to withdraw. Seems like a lot to go thru to make a couple thousand dollars. Not saying it cannot work, but depends on many of your personal factors. For most, it may not be as attractive as on the surface.

You're confusing several things.

Anyone can convert a traditional IRA to a Roth IRA. That conversion, the full amount, is taxable as income. That allows you to raise your income, generate tax, and thereby help use up a tax credit.

The owning for 5 years relates to withdrawals, not conversions.
The penalty for withdrawing isn't applicable, because you're not withdrawing.
For some, their tax bracket may make converting not make as much sense. But those people are likely to already have sufficient tax liability to use a $7,500 credit.
For those with lower income levels, and thereby a lower tax liability, let's suppose they can only use $2,500 of the $7,500 credit. Therefore, $5,000 is going to be totally wasted. Instead of wasting it, if I'm in the 15% tax bracket, I can convert $33,333.33 from a traditional IRA to a Roth IRA, and, at a 15% rate, generate tax owed of $5,000, and fully use the tax credit.

We were buying a Mach-E regardless (and may buy a Lightning). Our normal tax status would have us with a lower than $7,500 tax liability (or in the Lightning's case, possibly $12,500). Therefore, we need to generate taxable income, either via a capital gain or a conversion to Roth, to use up the credits.

The huge benefit is that since it's "free" income, i.e. we are using a tax credit that would otherwise be tossed away, we now have more Roth funds for retirement, or are able to free up more taxable money by getting rid of some large pending gains that would only get larger.

Sponsored

 

[JoeDimwit]

First legitimate offer over $110,000.97, and the Smurfmobile will be headed to a new home.

 

[Skepteach]

Or below MSRP depending on what trim you prefer. I paid $3K under MSRP and had it in days. Under MSRP/Over MSRP is basic rules of supply and demand.

I feel like I really lucked out too. I didn't order, just took advantage of one someone else ordered and decided not to get. The dealership didn't do any ADM, and since I went with Ford Options I got $1100 off the MSRP. I bought the car back in August. Seeing them now, I'm grateful I wasn't asked to pay $5k over sticker. If that had been the case, I'd still be driving my i3.

 

[J5hort]

You're confusing several things.

Anyone can convert a traditional IRA to a Roth IRA. That conversion, the full amount, is taxable as income. That allows you to raise your income, generate tax, and thereby help use up a tax credit.

The owning for 5 years relates to withdrawals, not conversions.
The penalty for withdrawing isn't applicable, because you're not withdrawing.
For some, their tax bracket may make converting not make as much sense. But those people are likely to already have sufficient tax liability to use a $7,500 credit.
For those with lower income levels, and thereby a lower tax liability, let's suppose they can only use $2,500 of the $7,500 credit. Therefore, $5,000 is going to be totally wasted. Instead of wasting it, if I'm in the 15% tax bracket, I can convert $33,333.33 from a traditional IRA to a Roth IRA, and, at a 15% rate, generate tax owed of $5,000, and fully use the tax credit.

We were buying a Mach-E regardless (and may buy a Lightning). Our normal tax status would have us with a lower than $7,500 tax liability (or in the Lightning's case, possibly $12,500). Therefore, we need to generate taxable income, either via a capital gain or a conversion to Roth, to use up the credits.

The huge benefit is that since it's "free" income, i.e. we are using a tax credit that would otherwise be tossed away, we now have more Roth funds for retirement, or are able to free up more taxable money by getting rid of some large pending gains that would only get larger.

I convert a rollover IRA (wife) and contribute (me) to a ROTH every year as I prepare for retirement. Was under the impression you wanted to use the proceeds from one sale, hold or pull from ROTH when you wanted to buy next car. For qualifying for the tax credit (or increasing your tax liability) may have some merit.

 

[RickMachE]

I convert a rollover IRA (wife) and contribute (me) to a ROTH every year as I prepare for retirement. Was under the impression you wanted to use the proceeds from one sale, hold or pull from ROTH when you wanted to buy next car. For qualifying for the tax credit (or increasing your tax liability) may have some merit.

Got it.

It's not a strategy that I'm seeking out. We already have about 80% of our retirement assets as Roth, don't really need to convert any more. However, because we want to buy EVs, and because they get tax credits, I'll be damned if I'm going to let a penny of them not get used. I suspect instead of conversions we'll potentially sell some taxable assets with big gains.

 

[J5hort]

I feel like I really lucked out too. I didn't order, just took advantage of one someone else ordered and decided not to get. The dealership didn't do any ADM, and since I went with Ford Options I got $1100 off the MSRP. I bought the car back in August. Seeing them now, I'm grateful I wasn't asked to pay $5k over sticker. If that had been the case, I'd still be driving my i3.

Yes, no way I was paying 5K over, I paid 3K under...so a difference of 8K!
I'll feel better when my tax refund comes in and state EV refund check arrives. Love the Ford Option. Hoping I can sell provately in 3 years and make more than what I owe for remaining 4th year and baloon payment. Be interesting to see what the EV landscape looks like then...or a 2024 MME

Congrats Skepteach, looks real nice in red.

 

[Mach1E]

Got it.

It's not a strategy that I'm seeking out. We already have about 80% of our retirement assets as Roth, don't really need to convert any more. However, because we want to buy EVs, and because they get tax credits, I'll be damned if I'm going to let a penny of them not get used. I suspect instead of conversions we'll potentially sell some taxable assets with big gains.

Better in general to Roth convert (regular income tax rates and dollar for dollar and forever tax free) than sell capital gains assets (cap gains rates and only the gains taxable, but no tax free growth advantage).

Since the credit is a dollar amount and not a deduction, a dollar is a dollar in tax savings, but it will take a TON of capital gain asset selling to generate $7500 in tax burden vs Roth conversion.

For example in a 22% bracket, converting about $34k to Roth will do it.

If cap gains, you need a $50,000 gain to do the same. This may mean selling a couple hundred k to show a $50k gain.

Plus if you are older and keep the cap gain assets, someone could inherit them instead and pay zero taxes with a stepped up cost basis.

Of course everyone’s situation is different

 

[Canchino77]

I received a 57k offer from givemethevin (carbonized gray, prem, AWD, ext range). I am a little leary as I have never heard of them. Anyone used them before?

 

[Frankie]

47,700 from Tesla.

49,000 from Vroom.

For a GTPE

 

[Mach1E]

47,700 from Tesla.

49,000 from Vroom.

For a GTPE

They don’t know what it is.

Even my insurance company had to override the VIN to update my coverage.

What’s interesting is that my paperwork from the sale showed it as a “Mach E Premium.”

 

[Mach-Tony]

I received a 57k offer from givemethevin (carbonized gray, prem, AWD, ext range). I am a little leary as I have never heard of them. Anyone used them before?

Yeah, I sold them a focus ST a while ago and it was easy. It's a lot easier when the car is paid off. They just showed up with a check and test drove it once and took it with them.

 

[Skepteach]

Interesting. So for comparison's sake, Carvana and Vroom were both at $50k for my car, but givemethevin just came back with a range of $52-54k. That's a pretty substantial difference. It's been a week since those first offers but surely the car market isn't mimicking Bitcoin quite that closely....?

 

[Bobobobob]

I haven’t looked at offers as I have no interest in selling my IB extended range…well, unless the offer is ridiculously good! ?

What really floored me is the used car market.

Previous vehicle was a 2019 Honda Accord Hybrid. MSRP was $34,499 and I bought new for $31,499 back in the fall of 2019.
When I ordered my Mach E in March, trade in value Was $26,500 at Carvana and Vroom. I kept checking each month and watched the price slowly climb. By the time I sold it to Carvana in September, I was given $31,199 for a 2 year old car with 11,500 miles. I was checking Carvana and two weeks after my trade in they have it listed as pending sale at $33,990!

Kind of wish I had a GT on order!! Well played to those who do!

 

[connoisseurr]

I’ll share some info on how crazy the used market is now…

We owned a 2019 Ford Edge ST and a 2018 Focus RS. Edge was as lease and the RS is owned outright.

The buyout on the edge was $26000. Vroom and Carvana offered $38,600 / $38,100 respectively. The catch was I had to purchase the Edge from my originating dealership to not pay sales tax. Vroom, Carvana and Carmax won’t buy Ford leases (and probably not Ford Options either, just an FYI). Bought the car and my originating dealership offered to buy the car on the spot for $38,300, semi splitting the difference of my 3rd party offers. Fine with me because I didn’t have to wait for the title to arrive and potentially lose value.

The RS we purchased privately (we are second owners) for around $32000 back in 2019. Carvanas offer was garbage but again, Vroom and Carmax are in the mid $39000 range. It’s crazy.

The dumping of both vehicles is almost enough to cover the cost of the Mach E.

Edge is gone, and the RS may go too, if I can find something cheap to drive for the next year while we wait for a MY21 Mach E and an EV truck. We also have a MY22 Mach E scheduled for production so should Ford have made other unannounced changes or refinements, we can take advantage of that and sell the MY21 Mach E when it arrives. And from the looks of the offers you all are receiving, it would be well worth it.

 

[Deleted member 4669]

Just got a Vroom offer of 53,700 for my Premium AWD which is about $500 more than i paid including tax, title and reg. Hope it keeps holding its value as I bought this as an interim vehicle as I wait for my 2 Door Bronco to be built. Still no build date so will be keeping the Mach-e around for a few more months it seems.

Sponsored