"Leasing" a 2016 e-Golf from a non-CARB state?

Ask the Hackrs
1

Hi all!

So if you’ve been following my posts, you’ve been seeing me try to lease an electric car for dirt-cheap. In particular, due to large markdowns and bloated dealership inventory in Maryland, I’ve been looking at the e-Golf. Unfortunately I live in a non-CARB state (Virginia), and for reasons unknown, they are providing ridiculous leasing terms. For example:

Dealership 1: 36mo/7.5k lease - $499/mo with 0 down but ~$3200 due at signing for fees (SEL with price at $32499).
Dealership 2: 36mo/12k lease - $678/mo with 0 down or $608/mo with taxes/tags/fees up front (SE with Fast Charge, selling price unknown)

Obviously these numbers are psychotic. However, I did verify that if I were to come and pay cash (or use 3rd party financing) their Internet pricing would be honored, and these numbers seem more reasonable (16.5-17.5k for SE with DC Fast Charge and 21.5-22.5k for SEL).

So – the sales price seems reasonable, but the lease numbers through VW are insane! (for non-CARB people) I decided to look at third-party leasing. In particular, I looked at my local credit union’s Auto Flex program. It seems many credit unions offer this nationwide.

Basically it works just like a lease: you pick a term and mileage and then at the end of the term you pay the residual or give them the car. However, the big difference is they let you title the car in your name, so in that sense it’s more like a balloon loan. Now, because it’s not the manufacturer, the residuals are usually worse, however, because we’re talking about an EV, I was interested in what my actual lease cost would be out of pocket considering now I can claim any EV-related tax credits that VW was refusing to offer.

Now here are numbers I was running using data from the credit union. (They didn’t have residual information for the SE with DC Fast Charge, just the SE, so the SE residual might be lower than what they actually offer).

SE residuals at 12k/yr
36 mo: $5975
48 mo: $4988
60 mo: $4175

SEL residuals at 12k/yr
36 mo: $6388
48 mo: $5300
60 mo: $4438

So assuming a $17k cash sale price of an SE with DCFC if I finance through my credit union, I’m looking at something like this:

Buy for approx $17k with a $337/mo payment (~$11k financed). Then claim the $7500 EV credit at tax time and apply it toward the loan when I get it. Then I really only am paying $3500 + interest (the actual cost of the “lease” w/o tax). To me this works out to around the $100/mo numbers the California people get. This assumes I return the car at the end of 36 mo. The other alternative is to monitor resale values, sell the car early, and profit. Note that these numbers don’t include tax (4.15% in VA) and fees.

Does this scheme make sense at all? Can someone recheck my math and look for an even better deal? I was eyeing this versus a normal finance deal since I have at least some downside protection if the values completely tank as battery capacities increase.

2

My first question - are you sure that the cash price already doesn’t include the fed tax credit?
Technically it shouldn’t but it’s auto business - anything is possible.

3

I verified this twice with one of the dealers posting an Internet sales price of $17,676 for SE w DCFC. Basically he said that’s the cash price + tax/tags + roughly $500 in dealer fees. I even made him go verify and call me back. I now am trying to get him to either match a competitor with the same car advertised for $16,599, or maybe even get him to go lower.

It seems the e-Golfs haven’t moved at all in Maryland. I even found a VW dealer in Waldorf, MD who actually had 3 brand-new 2015s that were just sitting around and had exorbitant prices posted online (listing around $26k?) higher than everyone else.

4

Interesting. That’s a lot of discount on the car.
With that kind of discount and fed rebate on top is like buying the new car for $11k. Doesn’t happen often.

Logically you math sounds reasonable.

Few more questions:
Where does the residual comes from? Credit union give the $ or %? If percent then from what?
How is the process of the “return” of the lease car works with CU? Just in case you may get hit with some ridiculous bill at the end.

5

For 17.5 k, yes you should buy. Then by claiming 7.5k in federal tax credit, you would lower your cost to 10k. 10k for a new car is great :slight_smile:

6

Where does the residual comes from? Credit union give the $ or %? If percent then from what?
How is the process of the “return” of the lease car works with CU? Just in case you may get hit with some ridiculous bill at the end.

I asked the credit union for the end of term residual value in dollars (to make my calculations easier). I’m just going to guess it’s a percentage off the MSRP. In terms of lease return, it seems like any other lease – prob a 3rd party company comes to inspect the car near the lease end and either tells you to fix it, or you begin to setup alternative financing for the residual. If you Google “credit union auto flex,” there are a lot of credit unions offering this.

I think my plan is to monitor my amount owed and compare it to KBB/CarMax values. If I hit a point of profit (which is definitely possible after receiving the 7.5k), and there are better EVs out there or even better deals, then I’ll just bail early and pay it out.

7

For 17.5 k, yes you should buy. Then by claiming 7.5k in federal tax credit, you would lower your cost to 10k. 10k for a new car is great :slight_smile:

Plus it’s electric so the maintenance costs are miniscule. I looked at the VW e-Golf forums and the annual / 10k service for the first three years consists of checking washer fluid and wiper blades, checking brake pad levels, doing factory software updates, and visually inspecting everything. That’s it. I think that ran $20-30 total?

8

I’m wondering why no one else has done anything like it in the CARB state and applied CARB state rebate in addition to this price

9

I’m wondering why no one else has done anything like it in the CARB state and applied CARB state rebate in addition to this price

Probably because it does require a higher monthly payment up front and you have to wait to get your $7500 back. Plus it takes extra legwork to deal with third-party financing, and quite frankly I’ve never done an Auto Flex type of loan before – only traditional loans and leases.

I really don’t understand why Maryland people don’t do this. That state gives you an extra $3000 on top of the $7500. That gives you a practically free car!

10

I’m going to try to get a dealer in SoCal to match that price. Highly doubt it.

11

If you need dealer websites / inventory / postings for comparison check out the following dealers:

King VW - Gaithersburg, MD
Ourisman VW - Bethesda, MD (not their Rockville location!)
DARCARS VW - Silver Spring, MD

Between the 3 of them there’s around 10-15 2016’s in inventory.

12

May just be worth calling them. Buying it over the phone and having them ship it to me. All my dealers say that includes the $7500 federal but I tell them it doesn’t and they don’t believe me.

13

I meant buying the car outright. If you can get $18k for that e-Golf plus $7,5k fed tax state plus upto $3k in CARB state you are left with $8k price on the brand new car.
Sounds crazy…

14

Hayward VW has the deal around $16700 but they show the breakdown including the $7500 tax credit. I would check again with the dealer.