Ioniq 5 Leasing as a backdoor into the EV tax credit

Ask the Hackrs Buy/Finance
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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.

Article about the lease unlocking of the tax credit

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.

Blockquote
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.

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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.

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I heard the proper nickname is Maserati Manchin.

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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.

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And when they do, I’ll be there…lol

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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.

  1. Should I care about the MF/RV if I am turning it into a purchase soon after I get the car?
  2. Does it matter to the dealer for (clawback or other reasons) if I quickly turn it into a purchase?
  3. 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.
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Is this Hyundai Financial and is this specific to EVs/PHEVs?

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Yes they are

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According to Edmunds they started offering $2750 off leases of the I5
Note : Not confirmed by the forum yet.

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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.

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Ideally, you would push the dealer for a larger discount in exchange for a marked up mf.

There usually is a minimim hold period before a dealer gets some sort of charge back on mark ups, etc.

Adjusted cap cost will include your acq fee. There often is some amount of buyout fee however.

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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.

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Curious what payment they are offering you if you could share… As well as the trim / options…

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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.

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This was originally a 800m + 2000 lease so this would make it a 725 + 2000

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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?

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I havent seen any that have early penalties. Some dont allow buyouts at all (tesla for example).

Its always easier to do once registration has gone through though

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Someone on Reddit said they started offering $7500 rebate on Ioniq 5

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That’s what this picture says

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Special Lease

Effective February 18, 2023 - February 28, 2023

EXTREMELY LIMITED INVENTORY AVAILABLE. MODEL SHOWN PRICED HIGHER. Excludes taxes, title and license. Lease a 2023 IONIQ 5 SE Automatic Transmission RWD(50412REZ) for $539 per month for 39 months with $3,999 due at lease signing (lease offer shown includes application of $7,500 EV Lease Bonus). Excludes registration, tax, title and license. Closed end lease for 2023 IONIQ 5 SE Automatic Transmission RWD(50412REZ) available from 2/18/2023 and 2/28/2023, to well-qualified lessees approved by Hyundai Motor Finance. Not all lessees will qualify. Higher lease rates apply for lessees with lower credit ratings. Offer shown based on $3,999 due at lease signing (includes $539 first payment and $3,460 capitalized cost reduction). No security deposit required. MSRP $46,835 (includes destination, excludes tax, license, title, registration, documentation fees, options, insurance and the like). Includes application of $7,500 EV Lease Bonus resulting in a net capitalized cost of $36,525. Net capitalized cost includes $650 acquisition fee. Dealer contribution may vary and could affect actual lease payment. Total monthly payments $21,021. Option to purchase at lease end $22,949. Lessee is responsible for third-party fees. Third-party fees vary by state or locality. Lessee is also responsible for insurance, maintenance, repairs, $.20 per mile over 10,000 miles/year, excess wear, and a $400 disposition fee. Disposition fee of $400 applies in all states except in CO, IN, IA, KS, ME, OK, SC, WI, WV, and WY, where disposition fee is subject to state law limitations. CO, IA, KS, ME, OK, WV, and WY: The amount of 2 times the base monthly lease payment or $400, whichever is less. IN and SC: The amount of 3 times the base monthly lease payment or $400, whichever is less. WI: The amount of the base monthly lease payment or $400, whichever is less. Must take new retail delivery on vehicle from dealer stock by 2/28/2023. Special Retail Balloon offer also available in the states of AL, AR, LA, MS, NM, OK, TN, TX.

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