Where does the $7500 incentive go?

Ask the Hackrs Buy/Finance
1

I’m located in Michigan and looking to lease a Lyriq. I was looking for a basic tech deal with 15k/24 0 down and keep getting quoted close to $800 a month. I’ve asked about where the $7500 was and they keep claiming it was already included so I’m trying to understand where the $7500 incentive goes with a lease. I’ve used the rate findr to determine what the residual would be, but every quote I’m receiving has the same residual and they are claiming the $7500 is already included.

Is there a way to verify this with their paperwork?

Thanks

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2

Every dealer will quote with the rebate included, wouldn’t make sense to not use it on a lease quote

You dont have to verify with paperwork, if they gave you a lousy quote then move on. Its a fantasy to think that the dealer is going to add the $7500 last minute and drop the payment drastically from a previous quote

Residual is a set percentage set by the bank every month and every dealer will use the same number

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3

Cadillac uses their ev credit to boost the rv. There is no $7500 incentive on the Lyriq.

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4

The residual is designed so that you’re getting the benefit of the $7500

This is why the residuals on those cars are so high and they’re able to be leased for such a good price

GM originally tried to claim the residual about 56% and then they would have the dealer add $7500 to the residual and call it a residual enhancement

This made people like you happy because then they could see exactly where they were getting the benefit of that money.

I guess the practice was found to be misleading, and as such GM simply does not disclose the 7500 it simply gives you the benefit of it as part of the residual

An example would be without the lender receiving receiving $7500 the residual would be at say 56%
With them knowing they get that they raised the residual

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5

Cadillac is no longer giving the $7500 towards the Lyriq?

6

Thank you for that detailed explanation. Makes much more sense.

7

They do, on finance. And as RV bump on leases.

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8

One benefit of the residual bump in lieu of an equivalent cash incentive is that you save on upfront taxes on incentives. With some vehicles having ~$10K in rebates and incentives, that could be ~$1,000 extra in drive-offs depending on your tax rate.

The downside of course is that if you exercise your lease-end purchase option, the price you’ll pay is inflated. Never buy out your lease in this scenario. Lease another one instead.

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Or allocate a portion of the 7500 to CCR and use the balance to pay lease inception fees so that DAS = 0 or DAS = 1st pay. Only that portion of the 7500 used as the CCR is taxable (at least in Ohio). You’ll have a much better chance of having equity in the vehicle at lease end.

10

Fortunately, there are other incentives available on lyriq leases that can serve that purpose.

11

He was talking about scenario where there is no $7,500 rebate, hence there is nothing to allocate anywhere

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12

Lowering the MF and/or increasing the RV is a much more tax efficient use of the rebate.

Unfortunately too many customers don’t understand that and clamor to see a line item that says “$7,500” even if it costs them more.

13

Not in VA. I want to see as many rebates as possible.