I have an Ioniq 5 reserved. I’ll be purchasing it when it arrives in 2 weeks. I haven’t asked the dealer about leasing it to get the $7,500 tax credit applied as a cap cost reduction. VW just started allowing this. A post on LeaseHackr suggested getting the VW lease and then refinancing at a better rate for immediate buyout.
Is this the kind of thing that Hyundai will start doing? Does Hyundai allow owners to buy out leases without a substantial penalty? The Hyundai chat is full of people talking about the recent Tesla price cut all of a sudden making the Ioniq5 much less attractive vs the Tesla.
This is a passthrough of the $7,500 tax credit. No contribution on the part of HMF, or any other leasing group. Opportunity for brokers?
President Manchin’s IRA killed the EV credit for the Ioniq 5 in mid August 2022, as well as for German VW ID 4s. There is a loophole that unlocks the tax credit if the vehicle is leased.
Blockquote In short, for a leased vehicle, the commercial tax credit can be taken by the lessor, regardless of whether the vehicle was assembled in the US. This means dealerships can get $7,500 in tax credits for each leased EV.
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This credit, then, could be passed on to the consumer in the form of reduced lease payments, as the dealership will effectively recognize an additional $7,500 in tax credit revenue from the lease of that vehicle.
I leased a Chevy Volt several years ago. At that time, I could only get half of the credit as a cap cost reduction. It was a take it or leave it proposition. Chevy took the other half.
There are plenty of other threads discussing Section 45. Aside from HMF, unless some credit unions announce some programs (@rvguy elbow elbow) Ally seems to be the only third party doing anything with leases and passing through the credit, but I haven’t seen any reports they are specifically on Hyundais. Maybe read-up and reach out.
If the Brokers had an angle, it would be advertised here in the Marketplace.
OK, I ran the rate checker lease/buy comparo, using HMF lease and finance rates for my agreed-upon price for 36 months.
For the January 2023 rates, it is $5,300 cheaper to buy instead of finance. If they passed through the whole $7500, the lease is cheaper to me than purchase by $3100. This all at no cost to Hyundai.
The Hyundai CEO said that he wants to move his lease rate from 5% of EV sales in 2022 to 30% in 2023. It will be hard to hit that target unless HMF changes the package substantially.
Buying out the lease questions:
I’m going to keep my EV for the long term. I can’t get the credit on a purchase, but I could get it as a cap cost reduction on a lease. I can get a 2.99% rate for purchase from my credit union. Targets are the VW ID4 and the Hyundai Ioniq 5. Hyundai started offering $2750 of lease cash in February 2023.
Should I care about the MF/RV if I am turning it into a purchase soon after I get the car?
Does it matter to the dealer for (clawback or other reasons) if I quickly turn it into a purchase?
Would my cost of the vehicle be Adjusted Capitalized Cost+Acquistion Fee+(Rent Charge for however many months I leased it before purchase)? I think this is the amount that I would finance with my credit union loan.
I was the person that asked Edmunds about the February Hyundai Motor Finance lease package for the Ioniq 5. It is 55% RV, $2750 lease cash, 0.00252MF or 6.05%. The dealer that I am working with does not have a lease relationship with any group other than Hyundai Motor Finance.
I think you are saying to take a markup to the MF in exchange for a lower adjusted cap cost. Good point.
I’ve been working hard on getting the transaction price to being just the MSRP without crazy fees and addons. They have agreed to that if I take the HMF financing. I felt like that was an achievement given the current environment. So now, should I reset my thinking and aim for a little lower adjusted cap cost if I switch to lease, take the lease cash, and they are willing to lower the cap cost further in exchange for marking up the MF. Do I have that right?
I’m willing to help the dealer by not refinancing for 3-4 months, if that is a thing for leases. I know it is a thing for purchases. Otherwise, lease on Monday, convert to purchase on Tuesday! I am irritated that HMF is not passing through the whole credit.
Its one those things that in a perfect world, you would do, but navigating that line can be a challenge. It can be difficult to convince a dealer you want them to mark up the rate.
is there any clause in the Lease document to prevent this ? I have purchase my lease before but after 1.5 years, I don’t recall any case we buy out the lease after few days. Would that mess up with the car registration ? should we wait to buy out after titled issue first?
