I went to a NorCal Chevy dealer to look at leasing a 2024 Equinox lease. They said that the $7,500 works differently with a lease than the individual tax credit for a purchase. First, there’s no income limits and nothing to file with the government to get it. Second, they said that the $7,500 reduced the monthly lease payment by boosting the residual price by $7,500. I forget the exact number, but they showed the residual value on a $43K MSRP car being low 30’s, say $33K. The sales rep said if I purchased the car at lease end, the price I’d pay would be $33K minus $7,500, round it to $25K. Is that how it works or just how chevy does it or the sales people don’t know what they’re talking ? FYI, for a 24 mo/10K lease, its was something under 400/mo (exact amount depended on DAS payment) or a one-pay of about $7200…
This is untrue.
On a lease, the owner of the vehicle (GM Financial in this case) gets a tax credit, not you. They can then choose to apply it towards the lease, or not, in whatever way they want.
GM increases the residual value rather than giving a cap cost reduction, so the residual value you see has this factored in.
The dealer is not involved in the process at all. They do nothing. The residual value from GM financial is what the residual value is. It’s what you can buy it out at the end. There is no $7500 reduction at the end.
When you lease, Chevy got the full $7500 tax credit, they pass it to you, thus you don’t need to deal with the income limit etc.
Please do you research, you can get equinox lease much cheaper than what they quoted you for. All you need is probably just 30-60 minutes reading what people got here for that car.
It is true that Chevy uses the lease credit to increase the residual value. How much they increase it by is really unknown, since the residual value is an educated guess to begin with. TGh eonly thing you know is that you will not want to buy out the lease at the end due to the inflated residual.
“GM increases the residual value rather than giving a cap cost reduction, so the residual value you see has this factored in.”
Thanks for the reply. This sort of sounds like what the sale rep said, but if that’s how it works, then I end up paying more sales tax this way instead of reducing the purchase price.
You actually pay less sales tax in CA with a rv increase (unless you buy at the end) since cap cost reductions are taxed upfront.
I’m doing my research. This was just a scouting mission to see how dealers approach lease negotiations. First impression is the sales people don’t really understand how leases work or they try to take advantage of my ignorance on leases. This would be my first.
This is absolutely true in many cases.
It’s also irrelevant, since there’s really no need to ever discuss leases in detailed with the sales people.
Put together a target deal, make an offer, and send it over for them to take to the finance manager. The only response you need from the salesman is “yes” or “no”. There’s no good reason to ever ask them for numbers or for a quote.
Thanks. That sounds like what the sales rep said. The part about the 7500 coming off the residual if I purchased it at the end of lease didn’t make sense if the residual value they showed me is boosted by the 7500.
You can do better by clicking on Marketplace
And using the tax credit to inflate the RV vs showing it as a line item rebate saves you a lot on sales tax.
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