So if you over the $300k mark you can NOT receive the $7500 tax incentive if you buy. If you lease you can get it. I was told to then turn right around and buy out the lease.
How does early buyback work? I heard you must wait 3 months to try to buy it back (salesmen told me this…). I am in MD and I hear you do not have to pay tax again…
Also since you’re getting a $11500 incentive off the price to reduce your lease payment if you buy it back right away are you not paying market value so the price will be higher?
If you search, you’ll find no less than 1000 posts about buying out the lease of specific vehicles, and/or specific states (since sales tax handling differs).
Might want to rephrase this / ask again. Your buyout is reduced by the incentives, but the market value on EVs have dropped at auction d discounted by incentives, and price cuts, and reality that there is enough used supply to meet demand) so if you’re thinking about this just to flip, don’t.
Thanks for the info. I am not trying to flip it to sell it, I am trying to take advantage of the federal tax credit. I can not get the credit if you make over 300k jointly.
If I lease it the manufacture passes it on. So I was told you could buy it back ASAP. I just know I need to read all of the fine print. It’s hard to bypass $11,500.
On a lease there isn’t a $7,500 tax credit for the lessee.
The lessor gets the tax credit.
The lessor may or may not offer a corresponding incentive of $7,500, or some other amount.
Any amount that’s passed on by the lessor may come in the form of a line item incentive, an inflated RV, a below-market MF, etc., or some combination. There are lots of ways to subsidize the cost of a lease, which isn’t a recent development.
Note that the among the primary impacts of the $7,500 incentive to the lessor is MSRP inflation, so it’s arguable that you’re actually saving that much (if any) money no matter how it’s passed along.
That said, on a given vehicle it can tilt the purchase/lease decision in favor of leasing, whether or not you immediately buy out the lease.
Thanks for everyones input. My situation to be clear:
We are over the 300K cap so buying is an EV we would be passing up the $11500 incentive (Fed/State) I was pricing a gas 2024 Jeep Wrangler Willys loaded.
I was then told that if we lease the Jeep, Jeep was passing on the incentive to the customer. That is great however would prefer to pay the lease off ASAP but was concerned about the following:
Paying taxes twice. Once at the lease purchase and again at the buyout. I read that in MD I would not pay the tax twice. (Great)
Fees for termination of the lease? I assume that depends on the lease details. So I would need to read the fine print on early buyouts.
How the buyout payout is determine. Market value? The MSRP was $60K the Total Purchase Price is $44,979. Does the buy price start at the $44K amount and goes down each month?
Jeep buyout is pretty straightforward. Just lease it and buy it out before the first statement. That is what I and many others on here did when Jeeps were profitable flips. The salesman might have said 3 months because I think the dealer gets some profit from it if you keep the loan for a certain amount of time.
You want to lease it, and then basically immediately but it out. In MD, as long as the original lessee buys the car out you do not pay tax again. You usually don’t pay disposition if you buy the car out, but you need to read your contract. In my cases, leasing to get the credit and buying out does make sense, even after any extra fees.
Ok this is probably a dumb question but: To buyout early would I have to pay all of the 36month payments then whatever the buyout amount is? That can’t be right because that’s more than MSRP.
You just pay the buyout plus any additional fees stipulated in your contract. Generally, the buyout amount will be remaining payments plus residual value plus associated lease fees depending on the contract and any state taxes, depending on your state. Too many variables to give a precise answer and each situation is unique.
You can get a buyout price from the leasing company, just call whoever holds the lease and ask what the buyout for you would be.
It is VERY important which bank your lease is through here. There are multiple lessor options on Jeeps and they have very different implications as to how thos would go.
