Hi, I am new to leasing. I am looking for a 2024 Subaru Solterra Limited, 36 months/12,000 miles/63146.
I was told by one local dealer that I need to pay tax upfront on the $7500 EV tax credit. How much this is true? I couldn’t find any article regarding paying tax upfront on cap cost reduction for EV credit.
“in MO you are required to pay what is called a cap cost reduction tax for the tax credit. It may differ in other states, but all Subaru dealers in MO have to abide by that as well.”
I am also interested in what money factor, residual value, and credits should I be looking for this vehicle.
As I said I am new to leasing. I am not sure about this $7500 wording about tax credit or incentive. I shopped at other dealers (Subaru, Nissan, Hyundai) and they didn’t mention about paying this tax at signing. That’s the cause of confusing.
Most dealers don’t know how taxes work, you find that out when you hit the finance office.
But Taxes are not something a dealership can ‘make up’, it’s regulated.
Dealerships do their best to comply with the requirements set by their state franchise tax boards.
I don’t think dealers are trying to “rip people off” when they attempt to collect taxes to satisfy statutory requirements. There are a bunch of accountants involved that deliberate over what is a reduction of the sales price, what is a dealer contribution to help pay for the product (rebate), what is is customer funds to help pay for a product at the time of sale, and what portion of the funds owed by the customer are financed.
A dealership can take the most conservative (safe) perspective and represent the $7,500 pass-through as customer cash. Feel free to try and challenge their interpretation of tax code with their accountants during our sales negotiation. I don’t think you’ll get very far, but you can still try.
Were they incentives itemized or rolled into the discount?
There’s always a difference here between a direct to consumer rebate and a direct to dealer rebate with how it gets captured on a contract and how it gets taxed as a result in states that tax incentives.
All 5 had it under Rebates and Incentives and 4 of them had Sales tax as N/A or $0
I just noticed that the 5th one has $17500 in Down payment, so maybe that’s why there is sales tax.
That doesnt say theres no sales tax, that just says the sales tax was paid from the due at signing rather than capitalized. Youd need to look at the contract as a whole to see if there is tax being paid.
I got conflicting quotes from the local Toyota dealer. I was told no sales tax and Toyota charges 1.5% of total cap cost.
3yr/36k miles/$0 down payment (bZ4X Limited)
MSRP: $52,474
Selling price: $50,478
Money factor : 0.00001 ( I bet he entered just for fun as it depends upon credit report)
Residual factor: 42% ( $22,039) → This is way lower than what Subaru dealer offered (63%)
Rebate: $11,500 (there is no mention of EV incentive)
Total Add Caps : $2,071.85 (What’s this?)
Adjusted Cap Cost: $41,049.85
Base monthly : $528.71
I didn’t argue much and told him I would come back later.
Different vehicles will have different residuals. You should know what they are for the vehicles before you ever consider talking numbers with a dealer. Going in blind is doing yourself a huge disservice.
At the same time you gather the rv for the vehicles youre looking at, you would also get the incentives, which surely show that $11500 is inclusive of the ev incentive.
I am aiming for $350 (incl taxes) per month. But this offer was way higher than what I read from other folks for the same car. As someone said, there are some incentives/rebates not applied to MO state.
