Leasing discussion ("what % of people lease")

[winterescape]

Michael,

I'm no expert on leasing, but doesn't raising the residual by applying the $7500 tax credit lower the cost of the lease?

Maybe I'm missing something, but all I know is I'm leasing. $40k MSRP car for $250 a month, that doesn't seem possible unless that $7500 is being used to lower the lease cost.

I agree. I never follow the logic of all these lease VS purchase posts. In my opinion, no one is "taking" my $7,500, or double charging me $5,000.

I agreed to pay GM $250/ month to drive a brand new $40,000 Bolt for three years. After 36 months I get to pick the best new EV on the market, with all the latest technology, or pick up a good used Bolt at fair market value, whichever works best for me. As previously stated by others, all that matters to me in the end is the total out of pocket $$ over the 3 year lease and the fact that I got to enjoy a great new EV for 36 months.

 

[LeftieBiker]

I agree. I never follow the logic of all these lease VS purchase posts. In my opinion, no one is "taking" my $7,500, or double charging me $5,000.

I try to make it very clear that GM is hurting those who want to lease and then buy an EV (as in they don't have enough taxable income to buy it instead of leasing), rather than those who just want a new car to lease every few years. Maybe I'll put that in all caps next time.

 

[DucRider]

I agree. I never follow the logic of all these lease VS purchase posts. In my opinion, no one is "taking" my $7,500, or double charging me $5,000.

I try to make it very clear that GM is hurting those who want to lease and then buy an EV (as in they don't have enough taxable income to buy it instead of leasing), rather than those who just want a new car to lease every few years. Maybe I'll put that in all caps next time.

GM is not "hurting" anyone.
GM Financial is offering a lease package that will be more attractive to some than to others. Feel free to shop for a lease with any lending institution. Many will offer the full $7,500 as a CCR. The deals I have seen tend to put the residual at ~35%, so be prepared for significantly higher payments than the program subsidized by GM.

A lease is not and never has been designed as the best way to finance and purchase a vehicle.

Your major problem seems to be with the fact that Federal incentive is in the form of a Tax Credit (that does not rollover) instead of an actual rebate. Stop harping on GM and get after your elected representatives that can work to make the full incentive available to lower income purchasers.

Another option is a pre-owned Bolt with a price that reflects the fact that the Fed incentive is not available on used vehicles.

GM is offering a product you apparently want. GM Financial is not. Vote with your wallet and get the Bolt, but not the GM Financial lease.

 

[LeftieBiker]

A lease is not and never has been designed as the best way to finance and purchase a vehicle.

Your major problem seems to be with the fact that Federal incentive is in the form of a Tax Credit (that does not rollover) instead of an actual rebate. Stop harping on GM and get after your elected representatives that can work to make the full incentive available to lower income purchasers.

Regardless of how leases were "designed" it has worked out that they are the only way for most people to use the Federal tax credit when buying an EV. Rather than treating this as a trivial concern affecting few people, you might stop telling us to 'write our congressman' (a virtual admonishment to give up, in this society) you might instead accept it as a serious flaw for many people in how some leases are structured. When asked about Nissan's terrible 30kwh battery packs, my response isn't "Go buy another brand." I acknowledge the problem and try to figure out how to address it. You do suggest using another leasing entity, but since they have no incentive to actually do a lot better than GM, it isn't a good option, from what I've seen.

 

[DucRider]

A lease is not and never has been designed as the best way to finance and purchase a vehicle.

Your major problem seems to be with the fact that Federal incentive is in the form of a Tax Credit (that does not rollover) instead of an actual rebate. Stop harping on GM and get after your elected representatives that can work to make the full incentive available to lower income purchasers.

Regardless of how leases were "designed" it has worked out that they are the only way for most people to use the Federal tax credit when buying an EV. Rather than treating this as a trivial concern affecting few people, you might stop telling us to 'write our congressman' (a virtual admonishment to give up, in this society) you might instead accept it as a serious flaw for many people in how some leases are structured. When asked about Nissan's terrible 30kwh battery packs, my response isn't "Go buy another brand." I acknowledge the problem and try to figure out how to address it. You do suggest using another leasing entity, but since they have no incentive to actually do a lot better than GM, it isn't a good option, from what I've seen.

I AM asking you ta address the problem - the fact that the EV incentive is structured in such a way that it requires a relatively high income level to take advantage of it. Leasing can be a a "work around" for some, but will usually result in them paying more for the vehicle in the long run. Some have also converted traditional IRA's to Roth IRA's to generate a tax liability in the year they purchase an EV in order to take advantage of the full credit amount.

Nissan designed the 30kWh pack and is indeed who needs to address any issues.

GM did not design the Tax Credit and is not who can make changes to it.

Right or wrong, GM Financial has designed their lease program in a way that saves everyone that leases a Bolt in CA (and probably other States as well) hundreds of dollars in State sales tax. GM Financial is not looking out for your best interests, they are looking out for theirs. They are a for profit company, not your mother. They are not a regulated monopoly, they have competition.

If GM Financial is offering a product you don't want, look elsewhere. If you want the Tax Credit structured so you can use it to purchase - complain to the people that can change it. Pretty simple really.

If you didn't keep mentioning retirement, I would guess from your sense of entitlement that you were part of a much younger generation. The Tax Credit belongs to the leasing company, not to you. They are not stealing it from you, ripping you off or anything similar. It is theirs to do with as they please, whether that be passing it along, applying it to their bottom line, or anything in between. Their decision, not yours. You don't have any right to the credit if you lease a vehicle.

 

[LeftieBiker]

Leasing can be a a "work around" for some, but will usually result in them paying more for the vehicle in the long run.

If you define "more" as anything from "less" to "slightly more but much less than buying an EV without being able to use the tax credit," then sure. We leased a Prius II in 2010 and it would have cost us no more to buy it off lease than it would have to buy it new off the lot. Likewise the Prius PHEV that my housemate leased for 3 years and then bought last year. If I had bought my Leaf last February it would have cost far less to lease and then buy.

You'll just keep making excuses for GMAC, so I guess we're done. At least your mindset is clear to others, now. As for my "sense of entitlement" I guess I'm just one of those $25k per year income snobs who feels that tax breaks shouldn't be only for the affluent.

 

[DucRider]

[ I guess I'm just one of those $25k per year income snobs who feels that tax breaks shouldn't be only for the affluent.

Exactly why you should be criticizing the way the tax credit is structured, and not blaming someone else for not passing on their tax credit in the exact way and form that you want.