Cap Cost Reduction (CCR) Question

Ask the Hackrs
1

Hello, I’m in California and have a question regarding how incentives and rebates are treated relative to a cap cost reduction. For example, a Jeep that I am looking at will include a $3,500 rebate from the manufacturer–i.e. $2,500 for a lease bonus and $1,000 for a conquest rebate–so the dealer is applying that amount as a cap cost reduction and taxing the $3,500 accordingly.

Is the dealer doing it correctly, or should the $3,500 be reduced from the actual selling price instead?

2

Dealer cash would come out of selling price but customer incentives (lease cash, conquest cash, etc) would be applied as CCR and thus taxable. In your case, it seems they are doing it correctly.

3

Thanks for confirming!