What exactly is a lease credit? How does this factor into a payment?
Is this simply additional off a sale price?
Example:
Sale price- 30,000
Lease credit- 3000
Cap cost- 27000
Thank you
It’s an incentive or rebate.
Basically, yes. Depending on your state, it could be taxable.
Lease credit / lease cash is a non-cash credit applied to the sale. In most states it will be taxable just like any true cash cap cost reduction if it is disclosed as such.
If it is dealer cash it would normally be removed from the top line sale price, and thus not taxable as it is realized as a reduction in selling price.
Most programs are consumer-facing though and must be disclosed/taxed.