How a dealer could "sell" Leaf with $7,500 tax credit to all

An enterprising dealer could "sell" anyone a Leaf with almost the full tax credit regardless of his income tax with a little cooperation from Nissan. Here is how it would work and I welcome objections.

We start with the buyer B who has a RAQ date from Nissan. Instead of what Nissan now does, it sells the Leaf to the dealer who pays wholesale and gets the $7,500 federal credit. The dealer then leases the car to B who pays the full lease cost up front and loans the dealer the residual amount. The dealer now has received the full price of the car minus the $7,500 from B. As far as the money flow iis concerned there is no different between this transaction and a straight sale. When the lease period ends, the car is sold to B for the residual which has already been paid.

As far as I can tell this meets all the requirements of the law. Of course the lease contract must be written in a way that protects both parties, e.g. not allowing B to change his mind about buying at the end of the lease period.

For goodness sake DS. How many more times are you going to flog this already dead horse?

Let us know how that works out for you.

mwalsh said:

For goodness sake DS. How many more times are you going to flog this already dead horse?

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Until I can buy the car for the same price as you.

Desertstraw said:

An enterprising dealer could "sell" anyone a Leaf with almost the full tax credit regardless of his income tax with a little cooperation from Nissan. Here is how it would work and I welcome objections.

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See "another way to buy" thread. This is basically what they are talking about.

Moving.

Desertstraw said:

Until I can buy the car for the same price as you.

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You CAN buy at the same price as everyone else. It is your tax situation that may well be different.
I would focus on your tax situation.

if an ignore feature were available.... I would use it.... :mrgreen:

This thread really belongs under this thread you already started here:

http://www.mynissanleaf.com/viewtopic.php?f=4&t=1331

Or under the tax credit thread. I would one more time ask that people refrain from adding points to threads they have already started to start another thread. If everyone does this we will have hundreds of threads soon and it will be impossible to follow anything of interest. Please keep conversations somewhat focussed.

Thank you.

EVDRIVER said:

This thread really belongs under this thread you already started here:

http://www.mynissanleaf.com/viewtopic.php?f=4&t=1331

Or under the tax credit thread. I would one more time ask that people refrain from adding points to threads they have already started to start another thread. If everyone does this we will have hundreds of threads soon and it will be impossible to follow anything of interest. Please keep conversations somewhat focussed.

Thank you.

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What is different here is that it takes Nissan out of the picture. Since normally Nissan Motor Acceptance Corporation holds the lease and therefore presumably owns the car, getting them to accept payment of the residual is doubtful since they work by standard formulas and probably want the interest (or whatever you want to call it) on the residual . When I spoke with NMAC customer service people, they did not even know what a one-pay lease was. Moreover using a one payment lease and paying the residual might be interpretated as a sale by IRS. I tried to present the first idea to the Leaf Customer Service Department and was brushed off.

The new idea involves only the dealer since he would own the car during the lease period and the residual would be a loan to him not a payment. It would be a way for one dealer to sell more cars and not involve the whole Nissan network. The criticism that I wanted was on the question of whether IRS might also regard this as a sale and therefore only allow the credit under the sale law not the full $7,500. The other hitch might be that Nissan might refuse to deliver the car if the lease is held by the dealer rather than Nissan.

Although some of the posters here regard the whole problem that I am addressing as unimportant, probably because they are getting the full $7,500, getting the full $7,500 makes the difference of owning or not owning a Leaf for many people. A standard lease saves some money over buying for some people but nowhere near $7,500. The purpose of a stimulus is to enable people to buy who otherwise wouldn't buy. As the law was written it mostly gives money to people who would buy anyhow. Most people would regard the law as unfair and it is probably not what the people in Congress thought that they were voting for. A way to get the full $7,500 helps Nissan and dealers to sell more cars and makes the car available to people who cannot afford it.

I would also point out that as things stand now the car will cost some people $32,780 and others as low as ($32,780-$7,500-$5,000 {California incentive} - $1,000 {discount by some dealers} = $19,280. What is the real value of the car on the market? How much will insurers insure it for? Some people could buy a Leaf and a Corolla for the price that others will pay just for the Leaf. And isn't there an incentive for someone who has no interest in electric cars to buy at $19,280 and resell it at a profit? Where else in the marketplace is there such a discrepancy in the price of an item?

Finally if the cost of the Leaf is not a matter of major interest to people who visit a Leaf site, what is? Many of us would buy Teslas if we could afford them It is something important enough for the government to spend a large amount of money. "The devil is in the details" and the details are what I have been addressing.

You are entitled to you thoughts and I'm not disagreeing at all and you have valid points, I'm saying this may belong under the leasing section, tax credit area etc, that's all. As a side point, it makes no difference what you pay for the car in terms of insurance, they insure based on the value of the vehicle at MSRP and blue book, you can pay $1, it makes no difference.

I don't know how to sell car online Leaf with $7,500. It's difficult for me to do it. Hmmm..

The $7,500 is not a rebate, and it's not a discount. It's a tax credit.

It is intentional that the tax credit goes to taxpayers who would be paying at least that much Federal tax.

I don't understand why Desertstraw believes this tax credit should apply to people who aren't paying (much) taxes.

GroundLoop said:

It is intentional that the tax credit goes to taxpayers who would be paying at least that much Federal tax.

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What is the intention of providing more credit to taxpayers with higher tax liabilities? Why is the full credit passed to Nissan regardless of the buyer's tax liability? Seems to me the main thing the current system does is makes those of us with insufficient tax liability decide whether to let NMAC make (in interest) the portion of the tax credit we can't take because of insufficient tax liability.

I will end up paying more either way. The difference is that Uncle Sam loses more (all $7500) if I lease, while NMAC makes more (the interest on the lease and fees).

Possibly a better way would be to allow excess from the $7500 tax credit to carry over if the taxpayer doesn't have enough liability in a single year.

tps said:

I will end up paying more either way. The difference is that Uncle Sam loses more (all $7500) if I lease, while NMAC makes more (the interest on the lease and fees).

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If NMAC makes more money then NMAC pays more taxes to Uncle Sam. Whether NMAC gets the credit or you get the credit, Uncle Sam never loses money on the deal. The worst that can happen (from the US perspective) is that whoever gets the credit ends up with a tax liability of zero. NMAC undoubtedly has some very smart accountants, but I'm quite confident that they are going to end up paying much more in US taxes than they get in credits. If you lease, you will increase the amount of money Uncle Sam gets from NMAC.

tps said:

GroundLoop said:

It is intentional that the tax credit goes to taxpayers who would be paying at least that much Federal tax.

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What is the intention of providing more credit to taxpayers with higher tax liabilities?

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I have no idea why it was drafted as a tax credit -- that's a question for your legislature.

It just seems odd that most of this thread is "I don't pay more than $7,500 in fed tax, so how can I get the fed gov't to just write me a check instead?"

GroundLoop said:

tps said:

GroundLoop said:

It is intentional that the tax credit goes to taxpayers who would be paying at least that much Federal tax.

Click to expand...

What is the intention of providing more credit to taxpayers with higher tax liabilities?

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I have no idea why it was drafted as a tax credit -- that's a question for your legislature.

It just seems odd that most of this thread is "I don't owe $7,500 in fed tax, so how can I get the fed gov't to just write me a check instead?"

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It's a "funded" refund. If you pay only $100 you get $100. Pay nothing and get nothing, you fund the credit not others, seems fine to me and I don't want non-tax payers to get a tax credit of they don't pay. I'm not entitled to a tax refund if I don't pay my taxes, otherwise it's a govt rebate not a tax credit. If I owed taxes last year and failed to pay do I deserve a Leaf tax rebate this year? NO! That's a govt hand out.

EVDRIVER said:

It's a "funded" refund. If you pay only $100 you get $100. Pay nothing and get nothing, you fund the credit not others, seems fine to me and I don't want non-tax payers to get a tax credit of they don't pay. I'm not entitled to a tax refund if I don't pay my taxes, otherwise it's a govt rebate not a tax credit. If I owed taxes last year and failed to pay do I deserve a Leaf tax rebate this year? NO! That's a govt hand out.

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You've pointed this out before, and I pointed out before that they could "fund" the entire $7500 for most of us who will have a single year tax liability shortfall by simply allowing us to roll the excess credit onto next year's tax liability. I expect the LEAF to retain some value for a few years; why must the federal government apply the entire credit against a single year?

You seem to be missing the point; it's not that I have a problem with not getting a credit for tax I don't pay, as I'll pay the $7500 sooner or later. I have a problem with them not giving me the rest of the credit against my liability next year. That, IMHO, would be more fair.

tps said:

EVDRIVER said:

It's a "funded" refund. If you pay only $100 you get $100. Pay nothing and get nothing, you fund the credit not others, seems fine to me and I don't want non-tax payers to get a tax credit of they don't pay. I'm not entitled to a tax refund if I don't pay my taxes, otherwise it's a govt rebate not a tax credit. If I owed taxes last year and failed to pay do I deserve a Leaf tax rebate this year? NO! That's a govt hand out.

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You've pointed this out before, and I pointed out before that they could "fund" the entire $7500 for most of us who will have a single year tax liability shortfall by simply allowing us to roll the excess credit onto next year's tax liability. I expect the LEAF to retain some value for a few years; why must the federal government apply the entire credit against a single year?

You seem to be missing the point; it's not that I have a problem with not getting a credit for tax I don't pay, as I'll pay the $7500 sooner or later. I have a problem with them not giving me the rest of the credit against my liability next year. That, IMHO, would be more fair.

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I agree on the rollover.

If you read the general media reports, you would know that only rich, tree hugging yuppies and celebrities are buying the leaf, so no problem about taking the full tax credit! :lol:

Apparently no one considered that the Leaf might be a perfect car for retired people who just putter around town, and have great flexibility in their driving habits. If the range indicator is low, no problem, just head home and do the rest of the errands tomorrow.

A rollover would be great, but with the current fiscal climate, just keeping the status quo will be hard enough.