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Tesla Model S Depositors: You Can't Sell Your Reservation, Legally

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2013 Tesla Model S

2013 Tesla Model S

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There's lots of interest in the award-winning Tesla Model S electric luxury sport sedan about now.

With production slowly ramping up, even the wealthiest electric-car fans have to wait as Tesla Motors [NSDQ:TSLA] works through its 14,000 reservations.

So, perhaps the impatient among them may turn to that source of all secondary sales, eBay.

Indeed, as of today, there are four Model S reservations offered for sale on eBay; last week, there were as many as eight.

There's just one problem.

Those reservations aren't transferable.

After a note from our reliable tipster Brian Henderson, we contacted Tesla to ask whether reservations could be transferred.

The answer: No.

"Reservations are not transferable," replied Tesla communications manager Shanna Hendriks, succinctly.

She pointed all reservation holders to Paragraph 6, "Deferral and Non-Transferability," of the Tesla Model S Reservation Agreement they had to sign to take their place in the Model S queue.

It says:

If you do not wish to enter into a Purchase Agreement at the time that you are contacted by Tesla, you have the option to relinquish your reservation sequence position and defer to a later position to be determined by us (only one deferral is permitted). If you do not communicate your decision to us within ten (10) days of notification under paragraph 4, you will automatically be granted such a deferral. This Agreement is not transferable or assignable to another party without the prior written approval of a Tesla authorized representative.

So does Tesla give that written approval? "I am unaware of any transfers happening," said Hendriks.

Reading some of the eBay ads, it appears that what's being offered is an almost simultaneous secondary sale.

That is, the reservation will order the car to the specifications of the secondary buyer, take delivery, and then resell it immediately.

2013 Tesla Model S reservations offered for sale on eBay, Dec 11, 2012

2013 Tesla Model S reservations offered for sale on eBay, Dec 11, 2012

Enlarge Photo

That's almost surely legal.

One caveat may be that some states won't consider a car to be sold as a "used car" until it has racked up some noticeable mileage, perhaps 7,500 miles.

So what these sellers are offering on eBay isn't actually the sale of a reservation.

They're selling a used car they don't actually own yet.

This isn't unheard of for desirable, limited-production cars on eBay.

We'd encourage the sellers to list what's being offered more accurately, though--because it's not their reservation that they're selling.

For the sake of both parties, we trust that anyone who enters into such an agreement has an iron-clad legal agreement ensuring that both sides clearly understand the terms of the deal.

We suggest it might be a good idea to specify all imaginable contingencies, in the event that something goes south.

Meanwhile, the 2012 Tesla Model S was named the Green Car Reports 2013 Best Car To Buy yesterday.

[hat tip: Brian Henderson]

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Comments (4)
  1. Transferring reservations is not ethical. This car if about getting future technology in our hands. Let's give first to those who has been waited longer!

    Assuming 2013 production rate of 20000 cars, if you place reservation deposit today and some of 14000 in front of you decide not to buy, you should get your car in 8 months or so. Not so long wait comparable to those who reserved in 2009-2010.
     
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  2. One seller (Tesla Model S Reservation #9,695) updated their posting this morning: "I called Tesla again this morning and they do in fact allow you to sell your reservation number. The way they do this is to allow you to have a co-buyer on the title. The initial title will have your name and my name and you can in fact apply for and receive the $7500 tax credit.
    The car will be 100% yours and 100% to your specification. It's just a matter of getting the legal t's crossed to ensure the confidence of all parties involved. I will have my attorney draft a simple agreement for the winning bidder."

    A bit risky for me, especially when there's still time to reserve at the lower prices...
     
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  3. @Konrad: Thanks for the additional info, which wasn't mentioned by Ms. Hendriks. If that is in fact the case, any potential buyers likely need to follow your advice and make sure all legal contingencies are adequately covered.
     
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  4. Although Tesla's approval must be sought, I don't see any compelling reason why Tesla would not approve if asked.
     
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