then use the EV credit as a CCR; otherwise, residualize it. The above assumes the CCR tax is capitalized and that the monthly payment streams are taxed. The difference between capitalizing and not capitalizing the CCR tax is negligible. So, either pay the tax at lease inception or capitalize it. Either way, it will have a negligible impact on your decision.
NOTE: The expression above, if true, tells us by how much the residualized contractual payment exceeds the CCR contractual payment. In the example below, it is 33.65.
Lol again, I wasnât sure what to expect from you, but this is more maths than I was envisioning. We gotta figure out how to get the LH software to embed a working spreadsheet hahah
Iâm curious if thereâs an inflection point where if the MF gets low enough or the tax rate gets low enough⌠that youâd be worse off with CCR Rebate vs Residual Rebate.
After picking up my brains from the floor since they EXPLODED
Your 3rd column is wrong as Residualized doesnât work that way, they Alter the RV and the MF at the same time so your âsimpleâ plan of adding $7500 to the RV doesnât work.
Absolutely! Check out the spreadsheet below. The payments are nearly equal with an MF = .00108. Try using MF = .00001 and itâs much better to residualize the EV credit. So, for this scenario, MF = .00108 is the breakeven. Anything below it favors residualizing the EV credit. Anything greater, favors using it as a CCR assuming the other variables (e.g., sales tax rate) remain the same.
I guess GM Financial has found a way to get people the lower monthly lease payment, and also remove their incentive to rapidly buy out the lease. I wonder if the other EV financing companies will follow suit.
I also wonder if their way of using the $7,500 to subvent the residual will make it harder to sell or securitize the lease. Since now the residual is grossly inflated. Most Blazer EV customers will get the $7,500 rebate as a tax deduction, so the real value in the secondary market will be much less than the subvented residual on the lease.
I think the captives self-insure their residuals. However, the banks usually purchase residual insurance through residual insurance carriers. I doubt the banks, or their residual insurers would allow a residualized EV credit.
Good question. I donât know how their accounting works.
Rather than eating the $7500 as cap cost reductions immediately to customers. GM can raise MF some(Blazer LT model money MF is .00251) and collect the $7500 business tax credits for their financials.
The 2LT lease advertised on Chevy website at $469/month w/ enhanced residual. Normally would be $431/month, had the $7500 been a cap cost reduction.
Seems like this has been sufficiently answered, so to summarizeâŚ
Yes, it only applies to purchase, though many manufacturers pass it through on a lease. You can refer to this link for additional information, but be sure to confirm w/dealer before purchase.
If you intend to purchase and find that you do not qualify for the $7,500 credit due to the income limit, simply try being poorer.
Sorry. You were wondering about the inflection point. Itâs not an inflection point. An inflection point is where the concavity of a graph of a function changes. I think you meant the break-even point. In the interest of brevity, I skipped several steps in solving for F and the sales tax rate, lamda. See my original post.
Ok so latest list of Electric things that donât get the $7,500 coming back through on a lease.
BMW 330e
BMW X5e
BMW 530e
Ford Escape PHEV FWD
Fisker Ocean (I donât think itâs leasable now)
Chevrolet Silverado EV truck doesnât seem to have the pass through yet
Subaru Outlander PHEV gets $6200 not $7500
Toyota Prius Prime
Toyota Rav4 Prime
Mercedes Benz C63s E Performance
(Iâm leaving the Blazer EV off because a $7,500 residual enhancement is still a âpassthroughâ of some value related to the IRA money.)
as followsâŚ