Can't decide whether to lease or buy

Hey Hackers, I have a conundrum I can’t resolve…
I was recently pre-qualified for the Replace Your Ride incentive (7500 for plugin hybrid or electric, 5000 for regular high efficiency car). I am a low income resident.

At the moment I am considering a fully electric vehicle but can’t decide which one. At this moment if I had to decide, I would outright purchase a Hyundai Ioniq battery electric (price of $30k odd). I would get 7500 from RYR, 4500 from CVRP (state) 7500 from federal rebate and any other Hyundai incentives (college grad, uber driver, competitive owner and boostup).

The thing is that Ioniq battery electrics have had a recall and no one is selling them. All the other electric vehicles are pretty expensive (except for ford focus electric).

On the other hand, maybe I should lease? I could get the total lease paid for (with my incentives). But the thing about this is that I put down for a Tesla model 3 and my place is maybe 300,000th, so I would get it probably 2018 end or start of 2019. So I would want to have the lease for about a year and change and then switch to the model 3.

Maybe it would make sense to sell the model 3 when I get it? I dunno.

I have about 3 weeks to decide, else the RYR incentive will be invalid. Anybody got any thoughts on this?

I’d bail on the Model 3. At 300,00 on the list you’ll be lucky to see one by 2025, by then you can grab one on the secondary market.

I think you have answers to lot of ur questions :slight_smile: . Ioniq is too new and first in electric lineup from hyundai so get ready to be surprised. If you want something cheap and wouldnt mind 500$ a month out of your pocket , go for it.
you can always finance and trade it in if u have too many problems.

Regarding tesla 3 , it will be one in many electric cars in 2019 ish… since there are quite a few in lineups by late 2018 - 2019 , list below.
1 ) Jag I pace
2) Merc has a release in early 2020
3) Audi has Q8 full suv

If u lease hyundai now, u will most likely be locked in for 36 or so months … if u are looking for short term incentives or good hybrid which is reliable around 30K, something like honda accord hybrid touring or camry hybrid xle is totally worth it. Long drive is a big problem for electric cars , they are ok for short term commutes. But, in my opinion, we are atleast a year or 2 away from getting full benefits of electric cars since charging points are not free anymore for tesla , and you wont find one near your house or close in a long journey… so make a wise decision , take your time.

When given the choice between leasing or buying an electric car right now, I’d definitely lease. With the way that electric technology is advancing, I expect early cars to suffer high depreciation.

The complication in my dilemma is with all the incentives. The CVRP can only be claimed if I keep the car for a minimum of 30 months and also, they’re out of funds except for low income residents. Federal incentive will not be able to be applied for much longer given the current administration. Yeah, Ioniq is new but it is one of the cheaper EVs out there.

Go get a Volt or Bolt. With all of those incentives, you can buy one for $10k.

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Being low income, are you sure you would get the entire $7.5k federal rebate?

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You definitely would want to lease. Don’t know about the RYR incentive, but you will not get any of the $7500 of the Federal Tax Incentive if you buy as it is a tax deduction (lowers your tax liability, which low income people have very little of). There fore, you’d want to lease. That way, GM Financial will claim the rebate and forward it to you. I would lease a Chevy Bolt. There are already great deals to be had. You can probably get one for free or very close to it with those incentives. They already go for about $270/mo with nothing due at signing. Definitely check them out.

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Thanks for the info!
I’m just under the 300% Federal Poverty Level, so I still pay some taxes.

But doesn’t the federal incentive roll over if you don’t claim it all in one year?

As far as I know, any unclaimed portion cannot be rolled over to the next year.

Maybe I skipped over it, but I don’t see you mention how many miles you projecting to drive for the next 3 years. If you drive more than 15k a year or the total comes to over 45 k, I suspect you are better off buying rather than leasing. If Hyundai let’s you order and pay for the car using all current incentives and then wait (I know risky) for the vehicle delivery, it may be a way to go, given all the uncertainties. If it’s too much of the wait for you maybe you can buy a beater car for the time been and then unload it?

I probably will be doing between 10 and 12k miles per year… How does waiting for the delivery help me, I didn’t understand that part…

And you say to get a beater to get the RYR cash? The thing is I want to make use of the other incentives as well before they disappear.

I think @Falcon01 is on point. I would lease to make sure you are getting the full $7,500 federal. At “poverty” level, I doubt you are paying $7,500 in federal taxes. So go for the almost “free” car for 3 years.

Tesla will be a bad idea. You’ll probably get your turn to buy probably by end of 2019 if you are lucky.

Also, how does someone who qualifies for low income afford a 40-45k car beats me… :slight_smile:

correct me if I am wrong but the $7,500 from the federal government is a tax CREDIT not a tax deduction. Even if an individual owes zero taxes they are entitled to a $7,500 check from the government

https://www.irs.gov/instructions/i8936

"Line 23

If you cannot use part of the personal portion of the credit because of the tax liability limit, the unused credit is lost. The unused personal portion of the credit cannot be carried back or forward to other tax years."

Do not take this for wrong but buying a tesla 3 with your income is not the right thing to do. After all deductions you will not have much tax liability where the 7500 would come in handy. Leasing sounds like the best option.

How is the Tesla Model 3 even a consideration? If you qualify for low income then you most likely wouldn’t qualify for the $7500 tax credit as your liability would be below that. Also the tax credits will not last till 2019. Buying a depreciating asset more then your total annual income might leave yourself kicking self in future and I would strongly not recommend a car vs your future financial security. Stick with a leaf or free lease for now and continue working on getting your income up so you can responsibly enjoy nice cars without breaking the bank.

Ok you guys yes I’m low income. Should have mentioned though I’m a doctoral grad student (stipend) at a good school and expect to be able to afford the model 3 when I graduate which should be in about a year…

more details.
studying what?

Do a 24 month lease. Once that is done you should be ready to go for the model 3.