When a lender originates a lease on a PHEV or EV that qualifies for the tax credit, they receive that tax credit the following year when they file their taxes. If the lender passes some or all of that through as a cap reduction at origination, they are essentially giving the lessee an interest-free loan on that money. And in today’s rate environment, that is a lot of interest income to eat.
Chrysler Capital on the 4XEs has been passing all of it through and has decided to continue that same strategy. Ally has elected to pass some amount on for several models but I am not sure what gas equivalent they are using to base the math on:
$5,644 on 22 Ford Escape PHEV
$5,255 on 22/23 Kia Niro PHEV
$7500 on 23 Kia Sorento PHEV
$6,179 on 22/23 Mitsubishi Outlander PHEV
$4,480 on 22 Toyota Prius Prime
$6,689 on 22/23 Toyota RAV4 Prime
US Bank, on the 4XEs chose to bump their RVs by $7,500 to have a similar effect on payment but resulted in higher interest portions of the payment. So far they haven’t elected to do that this year.
Ultimately the payment determines which lender gets the deal and each lender can pull either level to try and beat the other lenders on payment and originate the volume.