2023 Toyota Prius - WOW!

[Hersbird]

The lease deal doesn't always work. On the Pacifica hybrid the lease companies never passed on the $7500 they got. It was speculated because it would make leasing a non-PHEV version so much more expensive Chrysler wouldn't be able to make lease sales on the others. I don't know, the Jeep PHEV was a killer deal and did get the $7500 pass thru. So why the Jeep and not the Pacifica. All I know is I couldn't get a $7500 discount trying to lease the Pacifica I bought, so I just financed it and got the credit myself later. Nobody on leasehacker got the discount either. So it's really up to them if they want to pocket the credit or pass it on.

[JSH]

Originally Posted by Hersbird

The lease deal doesn't always work. On the Pacifica hybrid the lease companies never passed on the $7500 they got. It was speculated because it would make leasing a non-PHEV version so much more expensive Chrysler wouldn't be able to make lease sales on the others. I don't know, the Jeep PHEV was a killer deal and did get the $7500 pass thru. So why the Jeep and not the Pacifica. All I know is I couldn't get a $7500 discount trying to lease the Pacifica I bought, so I just financed it and got the credit myself later. Nobody on leasehacker got the discount either. So it's really up to them if they want to pocket the credit or pass it on.

No - the leasing company doesn't always pass the full credit through into the lease deal. It is up to the buyer to do a bit of due diligence and make sure the bank isn't trying to rip them off. If the bank won't pass the credit through - walk away.

It would have been nice if the IRA had specifically written into law that the full credit has to be passed through to the buyer for a leased vehicle. They did for buyers that purchase the car but transfer the credit to the dealer to get a point of sale rebate.

I suspect EVs will become a bit easy to find as supply chains improve. I've noticed several car dealerships that have full lots again. Saturday I drove by a Hyundai dealership and they had about 10 Ioniq 5s lined up out front. (Looking at their website they claim to have 99 but most of those are likely allocations not actual vehicles)

[Isaac Zachary]

How does "passing the full credit" to the buyer apply when prices are negotiable? From what I understand, car dealerships don't have to sell new cars at MSRP prices. They can sell them for less or sell them for more. It would seem to me that in theory a dealership could sell a car for $7,500 more than MSRP and still apply the "full credit" towards the price.

I don't know how that would work with leases, but I would imagine it's the same. ??? Or is a lease a fixed price from the manufacturer? Do people negotiate to get cheaper leases? Can dealerships gouge customers when there's a shortage of leaseable vehicles?

[JSH]

Originally Posted by Isaac Zachary

How does "passing the full credit" to the buyer apply when prices are negotiable? From what I understand, car dealerships don't have to sell new cars at MSRP prices. They can sell them for less or sell them for more. It would seem to me that in theory a dealership could sell a car for $7,500 more than MSRP and still apply the "full credit" towards the price.

I don't know how that would work with leases, but I would imagine it's the same. ??? Or is a lease a fixed price from the manufacturer? Do people negotiate to get cheaper leases? Can dealerships gouge customers when there's a shortage of leaseable vehicles?

You have to look at the math. Yes, a dealer could mark up a car $7500 and then subtract $7500 for the credit. Then the buyer should walk away because the dealer is trying to rip him off. As with all car purchases - buyer beware - check the documents before you sign. Leases can be fixed from the manufacturer if they are doing the financing and advertising a special or they can be completely negotiated just like a purchase. I've done 2 leases in my life:

In the case of my 2016 Spark EV it was a hard deal advertised by GM - no negotiation. The advertised lease price was good for only specific VINs. I saw no reason to argue with a lease payment of $100 a month.

The math worked out like this: $26,000 MSRP - $7500 tax credit - $7500 GM cash = $11,000. The agreed upon value of the car at the end of the lease = $7,100. So $11,000 - $7100 = $3900. That $3900 was split into 39 monthly payments. That is the math that got me to a $100 a month lease with zero down. (It wasn't quite zero down as I had to pay $115 for a title fee and $173 for registration)

With my 2003 VW Jetta Wagon it was a normal negotiation. We negotiated the purchase price of the vehicle and the value of my trade. Then I compared their finance options to what I had from my credit union. Then they said - we can lower your payment if you lease. I checked the math and found they weren't trying to screw me and the monthly payment was about $100 less for the lease vs a 5 year loan so I took the lease even though a knew I would have to buy the car because I would be way over the miles. 2 years into the lease we used a subsidized Stafford student loan* to buy out the lease contract and Uncle Sam paid the interest on the loan until my wife graduated from university.

* I paid my wife's tuition out of pocket and used the student loans that were available to her to refinance my student loans, then the car, then my motorcycle (which was my primary transportation. We took every subsidized loan she qualified for until all of our "consumer" debt was consolidated and subsidized. When she graduated we paid of the loan in about 3 years.

[Isaac Zachary]

Originally Posted by JSH

You have to look at the math. Yes, a dealer could mark up a car $7500 and then subtract $7500 for the credit. Then the buyer should walk away because the dealer is trying to rip him off. As with all car purchases - buyer beware - check the documents before you sign. Leases can be fixed from the manufacturer if they are doing the financing and advertising a special or they can be completely negotiated just like a purchase. I've done 2 leases in my life:

In the case of my 2016 Spark EV it was a hard deal advertised by GM - no negotiation. The advertised lease price was good for only specific VINs. I saw no reason to argue with a lease payment of $100 a month.

The math worked out like this: $26,000 MSRP - $7500 tax credit - $7500 GM cash = $11,000. The agreed upon value of the car at the end of the lease = $7,100. So $11,000 - $7100 = $3900. That $3900 was split into 39 monthly payments. That is the math that got me to a $100 a month lease with zero down. (It wasn't quite zero down as I had to pay $115 for a title fee and $173 for registration)

With my 2003 VW Jetta Wagon it was a normal negotiation. We negotiated the purchase price of the vehicle and the value of my trade. Then I compared their finance options to what I had from my credit union. Then they said - we can lower your payment if you lease. I checked the math and found they weren't trying to screw me and the monthly payment was about $100 less for the lease vs a 5 year loan so I took the lease even though a knew I would have to buy the car because I would be way over the miles. 2 years into the lease we used a subsidized Stafford student loan* to buy out the lease contract and Uncle Sam paid the interest on the loan until my wife graduated from university.

* I paid my wife's tuition out of pocket and used the student loans that were available to her to refinance my student loans, then the car, then my motorcycle (which was my primary transportation. We took every subsidized loan she qualified for until all of our "consumer" debt was consolidated and subsidized. When she graduated we paid of the loan in about 3 years.

Ok, so (which means "or cheese" in Spanish), if I sell the Avalon and get $5,000 left over after paying it off (I owe less than $2,000) and then take that and search for a lease on a new Bolt, which not only gets the $7,500 federal tax credit it'll get a $1,500 state tax credit (would be $2,000 if it were a purchase and not a lease) then a base 2023 Chevy Bolt would be $26,500-7,500-1,500 = $17,500. So then we figure this will be worth something at the end of 3 or whatever years... (???) But if it's worth say half that, $8,000ish, then we divide that other $10,000 in the following years, I'd pay around $300 per month, or something like that??? Then owe the other $8,000 at the end of the lease???

[JSH]

Originally Posted by Isaac Zachary

Ok, so (which means "or cheese" in Spanish), if I sell the Avalon and get $5,000 left over after paying it off (I owe less than $2,000) and then take that and search for a lease on a new Bolt, which not only gets the $7,500 federal tax credit it'll get a $1,500 state tax credit (would be $2,000 if it were a purchase and not a lease) then a base 2023 Chevy Bolt would be $26,500-7,500-1,500 = $17,500. So then we figure this will be worth something at the end of 3 or whatever years... (???) But if it's worth say half that, $8,000ish, then we divide that other $10,000 in the following years, I'd pay around $300 per month, or something like that??? Then owe the other $8,000 at the end of the lease???

Pretty much. A lease is basically a balloon loan. You make payments on part of the value of the vehicle and then have a lump sum payment due at the end. That is what reduces the monthly payment.

The difference between a balloon loan and a lease is that with a lease you have the option to just return the car and own nothing. (Well beside a lease return fee, excess mileage fees ($0.25 a mile for a Bolt), and the cost to repair any damage)

[redpoint5]

The credit is corrupt ignorant BS, which is what I've been saying forever. Those in favor of it are either corrupt or ignorant.

[JSH]

Originally Posted by redpoint5

The credit is corrupt ignorant BS, which is what I've been saying forever. Those in favor of it are either corrupt or ignorant.

I'm assuming you are saying credit reports are corrupt? How so? It seems pretty simple to me. The better your track record of paying on time - the higher your score = better terms you get and the more likely a lender will extend a loan.


How do you propose we manage risk better when deciding whether or not to let people borrow large amounts of money?

[redpoint5]

Originally Posted by JSH

I'm assuming you are saying credit reports are corrupt? How so? It seems pretty simple to me. The better your track record of paying on time - the higher your score = better terms you get and the more likely a lender will extend a loan.


How do you propose we manage risk better when deciding whether or not to let people borrow large amounts of money?

Subsidies for wealthy folks buying new EVs, of course.

[freebeard]

I'm assuming you are saying credit reports are corrupt? How so?

Aiding and abetting usury?