Dealer cash is never taxed regardless of State, and that’s what’s being taxed in these “no fee” deal calculators. It’s interesting that you bring up states that don’t tax rebates, I’d be curious to know if the “no fee” deals are even offered in those states. If they are, then there would be no way to scoop that excess off the top.
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While we’re sharing and discussing templates, here’s mine. I agree with others that say to keep it short and sweet. You want to give as much detail as possible in a condensed little package.
Good morning, my name is X and I’m shopping on behalf of one of my employees, Y. She is ready to run credit, place a deposit and take delivery as soon as possible. Our offer on this model is below. If this works for your store, please let us know. Y is looking to close by this weekend. I can be reached at xxx.
Model Nissan Ariya
Stock Number
Address
Mileage 15,000
Term 24
MSRP 46,930.00
Selling Price (Agreed Upon Value) 38,482.60
Dealer Discount 8,447.40 18.00%
Money Factor 0.00193 4.63%
Doc Fee 699.00
Acquisition Fee 695.00
NY Taxes @8.625% 1,601.53
NY Tax on Tax due to Capitalization 138.13
Gov’t and DMV Fees (Estimated) 500.00
Gross Capitalized Cost 42,116.27
Total Rebates & Dealer Cash 14,250.00
Adjusted Capitalized Cost 27,866.27
Residual Value 22,995.70 49.00%
Depreciation & Amortized Amounts 4,870.57
Rent Charge 2,355.93
Total Cost of Monthly Payments 7,226.49
Monthly Payment @ 23 Months $301.10
Due at Signing (1st Payment Due) $301.10
Total Cost of Lease 7,226.49
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PA is such a state (all lease incentives are untaxed), and there are plenty of brokers who service PA (inc ones with no added broker fee). I haven’t personally utilized such a broker, but would be surprised if they were unwilling to apply the proper taxation.
It seems to me at least one broker is not offering (or at least trying to avoid) PA for their Northeast “no fee” deals. Curious isn’t it?
Look I’m all about the idea that I don’t care how much a broker makes if the deal is nuts. I’m cool with that. But I don’t like the obfuscation that takes place with “no fee” deals. Clearly games are being played and the actual fee being paid will vary significantly based on the tax rate of the State. A NY buyer is overpaying $1,200 on a deal like this. That’s a pretty hefty broker fee.
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Wow! Great deal - since everything is mixed together I am guessing you don’t have an idea on the true dealer discount from msrp for the demo loaner status before all dealer/customer incentives? I am seeing around 9% for non demo loaner so was trying to get a feel for what to offer if I find one. Thx!
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Wow! Great deal - since everything is mixed together I am guessing you don’t have an idea on the true dealer discount from msrp for the demo loaner status before all dealer/customer incentives? I am seeing around 9% for non demo loaner so was trying to get a feel for what to offer if I find one. Thx!
I think this will depend on how you define “discount”. Acura’s incentives can make this a little tricky because they’ve got substantial incentives that are customer-side and dealer-side. If you’re counting dealer-side incentives, that’s nearly 20% based on current incentives.
As for the “loaner”, if you look at the contract, the vehicle is marked as “used” so it didn’t have an MSRP. With that said, this model has a $66.5K and the adjusted was $34.7K = discount + incentives of $31.8K. Depending on location and what you qualify for, incentives are between $24-25.5K (customer and dealer). Assuming you’re not counting incentives towards discount, this would have been roughly a 10% discount before incentives for a vehicle with 5K miles. Adjust accordingly.
You mind sharing what you pay monthly for zdx insurance?
Some of the ZDX incentives are available as either dealer cash or customer facing, so depending on how the deal gets built, there can be some difference there.
I have seen several ZDX contracts, including my own, that weren’t done through a broker like you’re talking about that had some of the incentives selected and taxed in that way.
I priced it out, its about 2-2.5k/yr as a solo
It cost me $300 every 6 months to add my type s as a third vehicle.
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Totally understand, I’m not referring to Conquest, College, EV credit, etc etc. I am very curious to know if there is ever a legitimate reason for “end recipient dealer” lease cash to ever be taxed? It’s been my understanding and experience that when it’s the dealer’s cash without an explicit callout to be line itemed as an incentive (like the Prologue), the dealer should always treat the cash as a dealer discount that reduces the “agreed upon value”. Important for LHers to know when that’s happening to properly separate discount from cash (hello Mercedes).
As the $14,350 available on the ZDX is end recipient dealer cash, any dealer treating it as incentives/cash CCR rather than dealer discount is doing the customer a tremendous disservice in States that tax incentives.
Yes, i was caught off guard on my contract because some, but not all, of the dealer cash showed up as an itemized rebate.
Very interesting! I see 2 overlapping programs for the $5,500 that show one as customer receiving and one as dealer receiving. Was that the amount that was itemized?
That sounds about right
To me, it seems @jthacker48’s deal is an anomaly in which all the incentives were applied as a dealer discount and therefore not taxed. I suspect because it’s a demo – when the dealer first sold the car to themselves, they paid taxes on the incentives, and now they’re selling the demo at a heavily discounted price.
I went on SIGNED! and all ZDX contracts show taxed rebates, in the following amounts:
CA $11,200
CA $11,500
TX $18,800
NJ $19,450
NC $18,165
Are you implying that dealers are changing dealer cash into a taxed incentive, and somehow some of that collected tax money is being funneled to the broker? Seems risky because usually cash incentives are disclosed (at least with GM, there’s a Customer Incentive Acknowledgment Form that the lessee has to sign) and it seems that would also be a form of tax fraud.
I think that what he is suggesting is that one would be putting an untaxed incentive into the taxed incentive box for the purposes of slightly juicing up the monthly payment on a quote vs what it actually should be, creating a potential profit center on a kickback when the deal makes it to the dealership and it’s redone correctly. I would hope that no one is actually doing this, but I, again, think, that is what he is suggesting.
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This was my thought as well
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That is correct, and with zero proof of course, and only my understanding of how dealer received cash should be excluded from any taxation based on my experiences. I think the variation in itemized incentives we’re seeing in the ZDX is because program AP-Y46 has 2 ID numbers. 1 showing as customer received and one as dealer received. At least for that $5,500, could a clerical error cause a dealer to choose the wrong one? Certainly possible.
Although in the list of taxed incentives laid out above, not one shows $25,850. And that’s what these calculators are showing on no fee deals, so it did make me wonder.
I’ve yet to see one of these no fee contracts so can’t be sure. But as @IAC_Scott noted, I would have assumed it to be a quoting tactic in the calculator and then correctly resolved in the contract, with the buyer ultimately paying the same amount. Or it’s completely innocent and certain buyers are overpaying because no one’s calling out the incorrect taxation.
I had a “no fee” customer reach out to me about their deal and I wanted to do my best to uncover their true broker fee.
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The fact that dealer-facing rebate shows up as itemized on lease contract alone doesn’t mean the dealer incorrectly applied tax towards the lease calculation, though… right?
Not saying this happened in your case, but there are contracts I’ve signed where all incentives are itemized (and thus not baked into selling price), and I know they correctly untaxed them given the way the contract nets out / matches calculator correctly.