In Scottsdale, AZ. I am looking at a few XC60/XC90 T8 units. The dealer is claiming when you lease a 2020 model that the federal credit is applied to the lease but with the 2021 model you need to apply for the federal credit separately. I cannot find anything saying this is the case. I am hoping to use the current A-Plan incentive and federal tax credit to offset the negative equity in my current vehicle. Looking to trade in the current vehicle specifically because our familiy needs a larger vehicle for some recent life changes.
Listen to the data. You’re 6k upside down, your new lease has terrible dealer discount (if any after incentives), probably not base MF. No MSDs and you’re putting a down payment?
Finance is probably already looking at their next Winnebago…
In the quote, it’s a $69k XC90 T8 and there is 6k in negative equity so that would make the vehicle $75k. I see where you are coming from though.
I am still a bit confused about the federal tax credit. On the 2020 model, the dealer buy sheet shows a subtraction of $5,419 from the MSRP - A-Plan - rebates (loyalty and such). Do you mean on the 2020 they are passing down the federal credit to me but on the 2021 they are choosing to keep it for themselves?
Yes man, dealer is choosing to give you the tax credit on 2020 and choosing not to pass on the credit in 2021. Could likely be that dealer wants to move the 2020 metal out.
Have you checked what your vehicle is worth from other sources, so you can maximise the trade in value? I’d start with that and then like others have said try and keep the negative equity separate and pay it off without tax and interest. That $6k is adding $180pm on to the cost of any vehicle you lease so it should be a last resort.
Check on the Edmunds forums what the incentives are for the various trims and see where you’re getting most value. I think it’s the T5 or T6 Momentum trim. Going for the older model year is almost always going to be cheaper due to more incentives and it’s been on the lot for longer.
You’ve got $6000 negative equity which is equivalent to $166/month. So that $1076 payment is really more like $910. But that’s with $2000 down, so now you’re up to $965/month on a $68k/car with only 10k/year allowed.
I can promise you if you do this you will dearly regret it.
The $40k car you owe $46k on has already represented a dubious previous decision and you’re about to make another one. See if you can trade it in elsewhere to get $46k on it. Then still don’t get this car. Volvo T8s lease like @*#(. I know they are fast but you can get a T5 or T6 XC60 for hundreds/month less.
Also I’m quite sure the title holder (volvo) gets the $7500. That needs to come into the equation now. You don’t file for it.
The 40K was clearly the highest trade-in offer we have seen. The next highest was 37K. But that 40K is dubious at best since they are keeping the federal EV credit so the value is technically 5.5K less, making that trade value only 34.5K
The dealer doesn’t get to choose if they apply the credit or not. The bank does. You need to find out if the incentive is available on the 21s or not.
Is this correct? Can’t a dealer just decide to not pass on the rebate? Obviously the bank first has to allow dealership to pass the rebate on for dealership to have a choice. But if the bank does allow it, cant the dealership then decide to hold it back? It is hard to know because Edmunds doesn’t have numbers up yet for 2021 XC90s.
I think its even worse. He would probably be paying interest and tax on anything that gets rolled in. So likely more like 183 a month.
I hear you, but if you can avoid “eating” that $6k in negative equity I would just keep driving the XC40. Do you have another car? Does it meet your growing family’s needs?
At the end of the day, you have to figure out what makes financial sense.
