I find myself in the fortunate situation where I qualify for every Colorado tax incentive for an EV. It totals $24,000 of incentives.
I’m keen to use every incentive available, including the Federal tax credit, but I’m not interested in buying (I’m going down the route of choosing something where the federal tax credit gets passed on to me as lease cash).
I’m finding that in quite a few cases, the total amount payable over the course of the lease is less than the total of the incentives! This is more pronounced the lower in MSRP one goes.
In this (slightly bizarre) scenario, can the unused portion of the incentives be put towards paying some/all of the Sales Tax or “interest” charges upfront?
Or must these incentives only go towards reducing the capitalized cost?
[in Colorado these incentives are all considered Taxed Incentives, so this question also pertains to another bizarre scenario where unused incentive could help cover the tax liability created by using incentives!]
All upfronts can be capitalized and the rebate goes towards cap cost.
Just remember the best deals don’t necessarily use a ton of rebates. Some banks subsidize the RV and/or MF instead of a taxable rebate (for example a $20,000 rebate in a 10% tax area costs the consumer an extra $2,000. A smaller rebate coupled with RV/MF subsidies costs the consumer a fraction of that).
Thank you! That makes total sense. A few times the Calculator has started spitting out negative numbers due to the large rebates, and I think it has exposed my lack of understanding about the underlying mathematics of leasing - I thought I understood things… until I didn’t!
