Lease deals in the northeast

[blownb310]

I've been comparing lease rates from northeastern dealers. Let's use this thread to document them.

A guy in Buffalo, NY said this: "I was quoted $575/mo with $575 down for 12k miles, loaded Premier. I didn't pull the trigger. GM is keeping 5k or the 7.5k rebate. Nissan gives you all of it."

In central NJ: "On MSRP of $39,690, I was quoted a 3 year 10,000 mile/year lease at $341 with $5000 down, which I thought was ridiculous."

 

[nealauto]

Lease Deal on All Bolts in Stock
E.G.
2017 Bolt LT
Orange Burst
Driver Confidence Package
Comfort and Convenience Package
MSRP 38940
Includes NYS Resident Instant Rebate of 2000.00
Lease for 289.00 per month for 36 months with 1st , Taxes and Bank Fee out of pocket plus applicable DMV fees...
No Prep Fee's ....No Admin Fee's....No B.S. Fee's
StatenIsland chevy.com
Neal Diamond at your service

 

[nealauto]

5000.00 down plus all the applicable and customary fee's is way way too much....I am always available for questions...718-351-4200

 

[DucRider]

I've been comparing lease rates from northeastern dealers. Let's use this thread to document them.

A guy in Buffalo, NY said this: "I was quoted $575/mo with $575 down for 12k miles, loaded Premier. I didn't pull the trigger. GM is keeping 5k or the 7.5k rebate. Nissan gives you all of it."

In central NJ: "On MSRP of $39,690, I was quoted a 3 year 10,000 mile/year lease at $341 with $5000 down, which I thought was ridiculous."

The $7500 is a Federal Tax Credit and is NOT A REBATE. It is only available to the leasing company, not the lessee. It is NOT transferable or assignable, so they cannot give you ANY of it to use against your federal income tax obligation.

The GM Financial leasing offer does use the $7500 to provide:
a) a Capitalized Cost Reduction (CCR)
b) lower depreciation (or rent) by assigning a high residual
c) a below market Money Factor (Interest Rate) on the lease

All of these result in a lower monthly payment.

Other leasing companies will have different programs. Some will show a $7,500 CCR, but will have greater depreciation and higher interest resulting in a monthly payment that is likely to be equal to or higher than the manufacturer subsidized program. You are not obligated to lease thru GM Financial, and are free to shop for financing. Most dealers will have alternative financing options, but you can also check with local Credit Unions, your personal bank, etc.

 

[nealauto]

Please keep in mind the the how the words "500.00 Down" means a Down payment in addition to the 1st , Taxes and Bank Fee .....The correct way to tell a salesperson their commitment to a car is "Total Money Out Of Pocket": and then there will never be any confusion whatsoever

 

[LeftieBiker]

The $7500 is a Federal Tax Credit and is NOT A REBATE. It is only available to the leasing company, not the lessee. It is NOT transferable or assignable, so they cannot give you ANY of it to use against your federal income tax obligation.

Come on now, let's not play the semantics game. Nissan takes the $7500 and then takes all of it off the MSRP for the lessee. GM takes only $2500 off the MSRP and then, instead of just keeping the other $5k, they add insult to injury and add it to the residual. So "perpetual lessees" save a few hundred in tax, while anyone who might want to buy the car gets screwed twice instead of just once.

 

[Schnort]

You keep saying this. And you keep being wrong.

 

[michael]

Please keep in mind the the how the words "500.00 Down" means a Down payment in addition to the 1st , Taxes and Bank Fee .....The correct way to tell a salesperson their commitment to a car is "Total Money Out Of Pocket": and then there will never be any confusion whatsoever

Yes. And zero down similarly does not mean zero out of pocket.

I always use the words "zero driveaway". I expect to make exactly 35 payments of the agreed-upon price

 

[DucRider]

The $7500 is a Federal Tax Credit and is NOT A REBATE. It is only available to the leasing company, not the lessee. It is NOT transferable or assignable, so they cannot give you ANY of it to use against your federal income tax obligation.

Come on now, let's not play the semantics game. Nissan takes the $7500 and then takes all of it off the MSRP for the lessee. GM takes only $2500 off the MSRP and then, instead of just keeping the other $5k, they add insult to injury and add it to the residual. So "perpetual lessees" save a few hundred in tax, while anyone who might want to buy the car gets screwed twice instead of just once.

You are trying to use leasing as means to finance a purchase to essentially sidestep the Tax Credit rules (you don't qualify for the full amount IIRC).
In a lease, you enter into a contract to pay $xxx for the amount of car value you use up. That amount remains the same whether the MSRP is reduced, the residual is raised, or a combination of both. No financial institution is obligated to write a lease on your terms. Why don't you picket and rant at YOUR bank because they won't offer you a lease on the terms you desire? Or have you even asked?

I personally think GM Financial is making a mistake, but not for any of the reasons you do. They are going to be in a similar situation as Nissan with lots of EV's being turned back with a book value much higher than true market value. They'll likely have to do the same as Nissan and wholesale them off (at a loss), and/or offer them to lessees at a discount from the agreed upon residual. They do have an advantage in that the $7500 Tax Credit on the Bolt will not be available in 3 years - even the sunset phase will be done. That may or may not boost the value of used Bolts.

If you cannot afford to buy a $40K car, don't buy it. It's not GMs fault. If you want the Tax law changed to make it a rebate instead of a tax credit, you need to address Congress, not leasing companies. Getting mad at a leasing company for refusing to help you circumvent the restrictions of the current Tax Laws? They are not ripping you (or anyone) off. The terms are clear. You choose to sign. Or not.

 

[LeftieBiker]

Same old same old. When Nissan/NMAC is looking like a White Knight, then GMAC is doing something very wrong. Namely, they are taking a relatively small, short-lived profit that will earn them the ire of early lessees, as soon as sales fall off enough for the lease terms to improve. Had GM been smart, they would have just passed on $5k of the Federal credit to lessees, pocketed $2500, and left the residual alone. That would have equaled "no anger down the road."

 

[tedkidd]

The $7500 is a Federal Tax Credit and is NOT A REBATE. It is only available to the leasing company, not the lessee. It is NOT transferable or assignable, so they cannot give you ANY of it to use against your federal income tax obligation.

Come on now, let's not play the semantics game. Nissan takes the $7500 and then takes all of it off the MSRP for the lessee. GM takes only $2500 off the MSRP and then, instead of just keeping the other $5k, they add insult to injury and add it to the residual. So "perpetual lessees" save a few hundred in tax, while anyone who might want to buy the car gets screwed twice instead of just once.

You are trying to use leasing as means to finance a purchase to essentially sidestep the Tax Credit rules (you don't qualify for the full amount IIRC).
In a lease, you enter into a contract to pay $xxx for the amount of car value you use up. That amount remains the same whether the MSRP is reduced, the residual is raised, or a combination of both. No financial institution is obligated to write a lease on your terms. Why don't you picket and rant at YOUR bank because they won't offer you a lease on the terms you desire? Or have you even asked?

I personally think GM Financial is making a mistake, but not for any of the reasons you do. They are going to be in a similar situation as Nissan with lots of EV's being turned back with a book value much higher than true market value. They'll likely have to do the same as Nissan and wholesale them off (at a loss), and/or offer them to lessees at a discount from the agreed upon residual. They do have an advantage in that the $7500 Tax Credit on the Bolt will not be available in 3 years - even the sunset phase will be done. That may or may not boost the value of used Bolts.

If you cannot afford to buy a $40K car, don't buy it. It's not GMs fault. If you want the Tax law changed to make it a rebate instead of a tax credit, you need to address Congress, not leasing companies. Getting mad at a leasing company for refusing to help you circumvent the restrictions of the current Tax Laws? They are not ripping you (or anyone) off. The terms are clear. You choose to sign. Or not.

Yes, once the tax credit goes away it is likely to bump residual of all these cars by some amount.

But Gary, if you are trying to make an argument of fairness in your bold assertion of telling others what they should and should not buy, the part you almost express but may not fully grasp is that the tax credit is tremendously regressive. It is not a $40,000 car someone is buying, it's the cost of ownership and in this case the $7500 is actually a direct ADD to the cost for people who can't use the credit.

For those who don't qualify for the tax credit, their cost of ownership is driven UP by the $7500 credit that wealthier people receive because the car IMMEDIATELY depreciates by some amount, as any car does, PLUS the $7500 that many will get back.

These "tax credits" for EV's and Solar are not really reimbursement for societal benefits or everyone would be able to get them. Nah, they're really freebees for the wealthy.

 

[LeftieBiker]

These "tax credits" for EV's and Solar are not really reimbursement for societal benefits or everyone would be able to get them. Nah, they're really freebees for the wealthy.

The one exception to this is leasing an EV from a company that gives most or all of the benefit of the tax credit to the lessee. This is exactly why I keep arguing for leasing as a path to purchase, because with the tax credit structured this way it is the only way to for most of us to get the full tax credit applied to a purchase.

 

[Lithium]

How do we see in the GM lease that we get say $5000 in rebate and $2500 in residual inflation? I was at the dealer yesterday and he said $3500 from Fed credit and $2000 from NYS. So how can I see this rebate/credit in effect on a lease? With my Ford Focus EV it was obvious that they reduced the cap cost by $7500 and residual was what it was. Kia Soul EV has $17,700 in rebate on 2016 now and there clearly, $1700 NYS , $7500 fed and rest is old model clearance money.

 

[DucRider]

The one exception to this is leasing an EV from a company that gives most or all of the benefit of the tax credit to the lessee. This is exactly why I keep arguing for leasing as a path to purchase, because with the tax credit structured this way it is the only way to for most of us to get the full tax credit applied to a purchase.

No way. "Most of us" that purchase the car will have $7500 in tax liability.

A small percentage will not and will try and utilize leasing as a means to purchase since they do not qualify for the incentive as it is written into the tax code by Congress.

Most buyers of ANY $40K car have more than $7500 in tax liability and can use the entire credit.
For 2017, AGI to generate $7500 in tax liability is:
Single: ~$53K
Married filing jointly: ~$56K

And yet again, a lessee that gets a lower payment gets the full benefit of the tax credit in the form of lower payments.
A purchaser trying to use leasing as a means to finance the car may not.
If you don't like GM Financials lease program but want to lease the Bolt, use another lender.

 

[DucRider]

How do we see in the GM lease that we get say $5000 in rebate and $2500 in residual inflation? I was at the dealer yesterday and he said $3500 from Fed credit and $2000 from NYS. So how can I see this rebate/credit in effect on a lease? With my Ford Focus EV it was obvious that they reduced the cap cost by $7500 and residual was what it was. Kia Soul EV has $17,700 in rebate on 2016 now and there clearly, $1700 NYS , $7500 fed and rest is old model clearance money.

The lease residual on a Bolt is about 60% (varies a little with trim and miles/yr).
The FFE residual is ~40%
The Soul EV is ~39%
Pretty easy to see the Bolt residual is artificially high (the FFE and Soul EV are still very likely to be worth less than their residual at lease end - even with the much lower %)

Your payment is based on the amount of the car value you "use up".

Whether they reduce the capitalized cost or increase the residual, both result in a lower payment.
Round numbers, simple example:
$40K MSRP
1) $5000 CCR (Tax credits) = $35K capitalized cost. 60% residual (from MSRP) = $24K
You'll pay for the $11K (35K-24K) that you "used up" (plus interest)
2) $10K CCR = $30K capitalized cost. 48% residual = $19K
You'll pay for the same $11K that you "used"

 

[SeanNelson]

...because with the tax credit structured this way it is the only way to for most of us to get the full tax credit applied to a purchase.

No way. "Most of us" that purchase the car will have $7500 in tax liability.

You guys are members of different groups and so "us" means something different to each of you. It's pointless to argue over its meaning.

 

[LeftieBiker]

It's true that without buyer data we can't argue what "most" people in the Bolt buying/leasing group look like economically. However, going by the Leaf, which is a $35k car, there are an awful lot of people without that tax liability. BTW, the income numbers Ducrider posted are essentially meaningless. Our household made about $100k before I retired, and I didn't pay $7500 in Federal taxes even then. I think it was about $3500. Now that I am retired we still bring in over $70k, and guess what? My Federal tax liability is about $1.5k. My housemate pays enough in Federal taxes to buy a Bolt, and I have both enough savings and enough income to easily finance a Bolt, but since I can't use household income, that's no help.

Ducrider, you can make your fonts as large as you want, but it won't strengthen your argument. EV buying and leasing is, because of the Federal tax credit, a different animal than ICE vehicle leasing and buying. Believe it or not, but I've been helping prospective Leaf buyers lease cars for several years now, and while Bolt buyers/lessees might be slightly different as a group, there is no reason to believe that the groups GM appears to be targeting (young professionals and older Liberals, who are often retired) are significantly more able to use the tax credit themselves than are Leaf buyers and lessees.

 

[GetOffYourGas]

Most buyers of ANY $40K car have more than $7500 in tax liability and can use the entire credit.
For 2017, AGI to generate $7500 in tax liability is:
Single: ~$53K
Married filing jointly: ~$56K

Two errors in this assertion:
1) The Bolt is advertised as a $30k car, not a $40k car. Which it is, but only if you qualify for the tax incentives. And $30k cars attract a lot of customers with lower income than $40k cars. Moreover, the TCO of the Bolt is more in line with a $20k car due to the low maintenance and the inexpensive fuel.
2) The AGI is specifically after deductions. Many people who earn 6-figure household incomes also have many deductions - child credits, mortgage interest, student loan interest, etc. Those add up quickly and can easily bring the AGI down to these numbers.

Ok, so that second one is not so much an "error" as it is misleading.