First Take: Nissan keeps 85% of EV Tax Credit Via Lease

[Flyct]

THE FEDERAL TAX CREDITS FOR ALL NISSAN EVS ARE GONE AS OF 4/18/2023. THERE IS NO TAX CREDIT THAT NISSAN CAN PASS ON.

Not for commercial use.

And buying a car and leasing it to you is commercial use.

An interesting loophole, eh?

Very interesting loophole that I was not aware of. Thanks for educating me.

I just looked at the math leasing a “S” and buying it out after the lease. The residual is over $18,000. Add that to monthly payments, acquisition fee and buyback fee and you are up to around $34,000 for a $28,000 car before tax credits. That’s a windfall for Nissan.

 

[SageBrush]

That’s a windfall for Nissan.

That is one way to put it. :lol:

 

[LeftieBiker]

Yeah, windfalls are happy accidents. Nissan is shaking the trees.

 

[SageBrush]

Yeah, windfalls are happy accidents. Nissan is shaking the trees.

Closer to a shakedown

 

[WetEV]

Yeah, windfalls are happy accidents. Nissan is shaking the trees.

Closer to a shakedown

Non-option.

Please note that Electric Vehicle (EV) leases initiated 12/12/2022 or after are not eligible for purchase during the term of the contract or at maturity when the lease contract ends (this includes both direct Lessor and Dealer-initiated payoffs).

https://www.nissanfinance.com/nmachelp/s/article/Can-I-Purchase-My-Leased-Vehicle?language=en_US

Buy, no tax credit.

Lease and return the car, look at total payments.

Lease and buy the car? Can not do that. This is the case you are casting FUD on. It does not exist.

 

[SageBrush]

Lease and buy the car? Can not do that. This is the case you are casting FUD on. It does not exist.

No -- I was only pointing out that Nissan is keeping ~ 84% of the fed EV tax credit it gets from leasing an EV.

It is interesting that Nissan no longer lets people who lease EVs buy them. I expect that to change, unless Nissan thinks it is necessary to be compliant with the business EV credit rules. What are the other foreign made EV manufacturers doing ?

 

[LeftieBiker]

It is interesting that Nissan no longer lets people who lease EVs buy them. I expect that to change, unless Nissan thinks it is necessary to be compliant with the business EV credit rules.

I though that that was in the case of one lease "product" only. Has Nissan actually said that they will no longer have a Buy option when any new EV lease ends...?

 

[Flyct]

It is interesting that Nissan no longer lets people who lease EVs buy them. I expect that to change, unless Nissan thinks it is necessary to be compliant with the business EV credit rules.

I though that that was in the case of one lease "product" only. Has Nissan actually said that they will no longer have a Buy option when any new EV lease ends...?

Yes, Look at the link in previous posting. It states Nissan EV leases signed after 12/12/2022 cannot be purchased during the lease or after lease expires.

Tesla does the same, no buy option after lease is up.

 

[LeftieBiker]

Ouch. We have a dilemma that I'll be writing about later, but we do have two cars available to purchase at lease end.

 

[SageBrush]

It appears that NIssan has removed the lease-to-buy option, but to bring this thread back to its point -- Nissan will collect the full $7,500 fed EV tax credit on a leased EV, and for now is passing on about $1,200 of that amount to the consumer

 

[LeftieBiker]

That's actually fairly typical of post 2015 Nissan. They will raise the amount returned to the lessee as needed to keep sales alive.

 

[WetEV]

Lease and buy the car? Can not do that. This is the case you are casting FUD on. It does not exist.

No -- I was only pointing out that Nissan is keeping ~ 84% of the fed EV tax credit it gets from leasing an EV.

In the case that doesn't exist, Nissan is keeping 84% of the EV tax credit.

 

[SageBrush]

Lease and buy the car? Can not do that. This is the case you are casting FUD on. It does not exist.

No -- I was only pointing out that Nissan is keeping ~ 84% of the fed EV tax credit it gets from leasing an EV.

In the case that doesn't exist, Nissan is keeping 84% of the EV tax credit.

And in the case that does exist -- leasing the vehicle -- Nissan is keeping 84% of the Fed EV tax credit

 

[WetEV]

No -- I was only pointing out that Nissan is keeping ~ 84% of the fed EV tax credit it gets from leasing an EV.

In the case that doesn't exist, Nissan is keeping 84% of the EV tax credit.

And in the case that does exist -- leasing the vehicle -- Nissan is keeping 84% of the Fed EV tax credit

How so? A lease without a purchase at the end is just a rental.

 

[SageBrush]

In the case that doesn't exist, Nissan is keeping 84% of the EV tax credit.

And in the case that does exist -- leasing the vehicle -- Nissan is keeping 84% of the Fed EV tax credit

How so? A lease without a purchase at the end is just a rental.

Nissan makes a LEAF and sets an MSRP (that dealerships may charge more or less)
A lease in the usual circumstances starts from the MSRP, and then interest and depreciation is folded into the lease cost
In the case of an EV, Nissan is paid $7,500 if it leases the car. You might think that then the lease cost will be (MSRP - 7500) and then interest and depreciation is folded into the lease cost.

But no. For now, Nissan is folding interest and depreciation into (MSRP - 1200)

I'll leave any further questions on this topic from you to Lefty. He is a lot more understanding of trolls. You must miss hydrogen guy -- the two of you had a thing going.

 

[Flyct]

For the handful of leases I’ve negotiated I always ask for the 4 numbers that are used to calculate the lease. That way you can see where they are overcharging. Of course in today’s market I’m sure there is little room for negotiation.

1- MSRP
2- Capitalized cost
3- Residual
4- Money factor.

Throw these into a lease calculator and the monthly cost should spit out.

Any customer down payment is a capitalized cost reduction. If Nissan is getting a $7,500 credit then the capitalized cost should also be reduced by $7,500. If not then they are taking advantage.

I wonder if a 3rd party leasing company would be able to qualify for the tax credit?

Of the 66 new cars I’ve bought I’ve only leased one time myself, a Acura RL. I negotiated reducing the CAP cost and a higher residual. At the end of the lease the car was worth far less than the residual so Acura lost out. I offered to buy iAcura $2k less the residual and they rejected the offer. They put the car on auction. When I searched the car on Mannheim I saw they sold for $4,000 less than residual.

I negotiated a few Honda and Toyota leases for family members using a 3rd party leasing company. They were more amenable to negotiations.

 

[LeftieBiker]

For the handful of leases I’ve negotiated I always ask for the 4 numbers that are used to calculate the lease

With no buyout or residual, the only really important number will be the monthly payment, unless they keep more than one length for the leases. I'm guessing it will be either only 3 years, or a choice between 2 and 3 years.

 

[Flyct]

For the handful of leases I’ve negotiated I always ask for the 4 numbers that are used to calculate the lease

With no buyout or residual, the only really important number will be the monthly payment, unless they keep more than one length for the leases. I'm guessing it will be either only 3 years, or a choice between 2 and 3 years.

True. But I wonder what the early termination provision is on a new Nissan Leaf lease with no purchase at end of lease option?

I would be very reluctant to sign a lease that doesn’t allow terminating it and having to pay all future lease payments. Stuff happens in life that may require getting out of a lease early.

My daughter got divorced and had 18 months left on a Lexus lease that she couldn’t afford on a teachers salary. I took her to our local Lexus dealer, they appraised the car and she was able to give the car back to the dealer with a $125 check from her to get out of it. The dealer put it on their lot as a CPO vehicle and had it sold in a week. Everyone was happy.

 

[SageBrush]

If Nissan is getting a $7,500 credit then the capitalized cost should also be reduced by $7,500. If not then they are taking advantage.

Exactly

 

[WetEV]

If Nissan is getting a $7,500 credit then the capitalized cost should also be reduced by $7,500. If not then they are taking advantage.

Exactly

The capitalized cost of a car doesn't matter when you can't buy the car at the residual.