2023 IRA EV/PHEV Lease Credit "pass-through"

I wouldn’t mess with Ally.

It’s usually as simple as lease the car, and then once your account is set up, buy it out. In some states, the buy out has to go through a dealer. In others, you can buy direct from Hyundai financial.

There’s nothing straw purchase about it since you, the lessee, is the buyer. Remember, on a lease, you do not get a tax credit. You simply get an incentive from the bank.

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Have you read this very thread?

Yes you can lease to claim the credit, it’s discussed many ways here, and in other threads.

There are other brand specific threads (not Genesis/Hyundai) with examples too if you search.

Once you do that, let us know what specific questions you have about doing this in your situation (besides what Matt already answered).

I would just remind you that even if you drive your cars into the ground, it may still make financial sense to lease instead of buying with cash.

If you buy a $50k car with cash right now you are forgoing 5% annual return on that cash because that’s what CDs and HYSAs are paying in interest.

There are leases that have money factors (rent charge) in the 3-4% range.

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Minor correction:

The tax credit is claimed by the leasing company. They may choose to reduce the capital cost by all, some, or none of the amount of the credit. The customer does not claim the credit.

If the leasing company chooses to reduce the capital cost of the lease by $7,500, then the customer benefits because the amount that they have to pay to buy out the lease is reduced by $7,500. Leasing companies have alway received the tax credit. They will continue to do so. These companies are unaffected by the restrictions that President Manchin introduced in August 2022 when he signed the IRA. This didn’t matter to non-commercial buyers before the IRA changes.

That is why almost everyone who wants to buy an EV should lease, get the lowered cap cost, and then buyout the lease, either with cash or with a decent refinance package. Exception is those buyers whose income and vehicle comply with the Manchin restrictions. Buying out the lease makes irrelevant any games that may be played with the terms of the lease–inflating the money factor, messing with the residual value, etc.

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Hopefully, we keep waiting for a good 6 months :rofl:

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Timely article from the Post about how messed up this situation is. Quote from the top:

On Friday, the Biden administration is expected to release guidance that will sharply limit the number of vehicles eligible for the $7,500 tax credit

https://www.washingtonpost.com/climate-environment/2023/03/29/electric-vehicles-tax-credits-consumers/

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Sorry if this is previously discussed but does anybody know whether Audi (VW Finance) has an early prepayment penalty of any kind? And whether the disposition fee must be paid on buyout? Thanks

I just got a VW ID4 yesterday and had the same question. There is no penalty and disposition fee for buyout from VW finance/credit. I had happened to read that same message in one of the other forums on LH as well. The message has been consistent between the forums and a few of the knowledgeable VW dealers (although some VW sales people will and do say :poop: stuff) , no prepayment penalty and disposition fee for buyouts.

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I’m sure smarter people have answered this question but I can’t find it:

My VW dealer is advertising the $7,500 lease discount on the '22 and '23 ID4s. I had thought only the '22’s we’re eligible since the '23s can receive the IRS tax rebate. Was I wrong? If so, is the lease rebate for a '23 a separate thing and could I then still get the IRS rebate? That seems unlikely, but I wanted to ask for input.

You do not qualify for a tax credit on a lease.

The bank gets a different $7500 tax credit that does not have the same restrictions as the customer tax credit that applies to purchases. They then choose if they want to pass on an equivalent amount incentive. VW chooses to.

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I just saw an article referencing April 18 as an important date for changes in legislation. I didn’t read any of the details of course, lol

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So basically 2.5 more weeks of waiting.

Is it a Coincidence it’s right after Tax Day?

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RIP EV lease hacks, you were fun while you lasted

That’s when the proposed regulations go into effect. There’s a public comment period running through June on the proposed regulations, when the real regulations go in effect.

Of course, if you purchase between April and June, you’re subject to the proposed regulations, even if they don’t make it into the real regulations.

Somehow, they managed to further complicate this shit show.

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This only impacts purchases, correct? The $7500 for commercial use doesn’t have battery/minerals requirements. So lease hacks can continue. :sunglasses:

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Yes, this should only effect purchases

So maybe…You think they’ll add stronger rebates to leases since many people will be deterred from buying an EV?

Hard to say. It’s possible RVs will increase a bit since the net cost to get something new will increase.

FFS……got a Mach e coming in April/May.