Nissan Leaf to be victim of heavy dealer price gouging?

[evnow]

It'll be interesting to see if Nissan will allow the dealers to mark up the money factor. Just like a home loan, dealers broker the loan to you from the financial institution, and are allowed to increase the money factor to make more money. In a loan, the max rate markup is 1-2%, and while I forget what the highest allowable markup is on a lease, it can change the payments drastically.

You may know whether I can do this - Can I prepay the whole depreciation upfront & not may any fiance changes for the lease - or atleast reduce that a lot ? The main reason would be sales tax - in WA sales tax exemption ends in 2010.

 

[BrendanDolan]

One pay leases usually have slightly lower money factors (or in the case of VW, lot lower), but they still have one, so no free pass there.

Since you're paying the total lease up front in Dec 2010, you should be able to sneak by sales tax all together. I'd consult a tax guy in your area though to make sure, but that seems reasonable.

 

[evnow]

One pay leases usually have slightly lower money factors (or in the case of VW, lot lower), but they still have one, so no free pass there.

I guess so - I still have to pay finance charges for the non-depreciation portion of Leaf.

Since you're paying the total lease up front in Dec 2010, you should be able to sneak by sales tax all together. I'd consult a tax guy in your area though to make sure, but that seems reasonable.

Normally does one pay sales/use tax on full lease payment or just the depreciation portion ?

 

[redLEAF]

One pay leases usually have slightly lower money factors (or in the case of VW, lot lower), but they still have one, so no free pass there.

I guess so - I still have to pay finance charges for the non-depreciation portion of Leaf.

Since you're paying the total lease up front in Dec 2010, you should be able to sneak by sales tax all together. I'd consult a tax guy in your area though to make sure, but that seems reasonable.

Normally does one pay sales/use tax on full lease payment or just the depreciation portion ?

The answer to the last question depends on your state motor vehicle tax laws; unfortunately here in IL you pay sales tax on the TOTAL purchase value not just the lease portion so in essence, if you buy the car at the end of the lease, you'll pay sales tax yet again, it stinks but no one has lobbyed enough to get it changed. I'm sure if you check your motor vehicle tax agency, it will spell it out.

 

[cinmar]

Invoice is probably around 31K, if you subtract the $7,500 Fed rebate you would have a cost of $23,500, and if still available in california after the $5k rebate you would have a net cost of around $18,500. What we really need to know is what the money factor is for the lease and residual value. I would think we can cut a deal on the Leaf just like any other car you buy or lease. We have to remember and the dealers have to know is we can change dealers and they will get Zero when it is time to talk price. I took the dealer cost of one of the other Nissans that was close to the retail of the Leaf to come up the the 31K.

Correction - it's not a Federal rebate, it's a non-refundable tax credit, i.e., you don't benefit till you file your taxes, and even then, you only benefit it you owe the Feds money. For example, if you owe $7,500 in taxes, then you zero out....but if you only owe $2,500 in taxes, you still zero out. That's because it's a "non-refundable" tax credit. If it was a refundable tax credit and you only owed $2,500 at tax time, you get $5,000 back, but this isn't the case. Makes me think we need to be changing up our W-4's to make sure we actually owe taxes this year.

On price gouging, I've e-mailed several dealers to ask whether they'll sell for MSRP. If none of them will, I'm walking. Same thing happened with my smart. Now they're selling for $2,500 under MSRP.

 

[Bicster]

Makes me think we need to be changing up our W-4's to make sure we actually owe taxes this year.

Changing your W-4 will do nothing to change how much tax you pay (only when you pay it), and by under-withholding, you could end up paying nasty penalties.

 

[cinmar]

Makes me think we need to be changing up our W-4's to make sure we actually owe taxes this year.

Changing your W-4 will do nothing to change how much tax you pay (only when you pay it), and by under-withholding, you could end up paying nasty penalties.

Thanks - I have my CPA looking into it.

 

[evnow]

Correction - it's not a Federal rebate, it's a non-refundable tax credit, i.e., you don't benefit till you file your taxes, and even then, you only benefit it you owe the Feds money. For example, if you owe $7,500 in taxes, then you zero out....but if you only owe $2,500 in taxes, you still zero out. That's because it's a "non-refundable" tax credit. If it was a refundable tax credit and you only owed $2,500 at tax time, you get $5,000 back, but this isn't the case.

I've heard it otherways too - i.e. you get that $7.5K no matter how much tax you pay.

Anyway, the new EV bill is going to make it a rebate - if the bill passes.

 

[cinmar]

Correction - it's not a Federal rebate, it's a non-refundable tax credit, i.e., you don't benefit till you file your taxes, and even then, you only benefit it you owe the Feds money. For example, if you owe $7,500 in taxes, then you zero out....but if you only owe $2,500 in taxes, you still zero out. That's because it's a "non-refundable" tax credit. If it was a refundable tax credit and you only owed $2,500 at tax time, you get $5,000 back, but this isn't the case.

I've heard it otherways too - i.e. you get that $7.5K no matter how much tax you pay.

Anyway, the new EV bill is going to make it a rebate - if the bill passes.

Ghosh, I hope so! I have a new baby and am doing other energy efficient upgrades, such as solar, so I don't know if I would even benefit from the tax credit because it's non-refundable and I have so many other credits this year.

 

[BrendanDolan]

One pay leases usually have slightly lower money factors (or in the case of VW, lot lower), but they still have one, so no free pass there.

I guess so - I still have to pay finance charges for the non-depreciation portion of Leaf.

Since you're paying the total lease up front in Dec 2010, you should be able to sneak by sales tax all together. I'd consult a tax guy in your area though to make sure, but that seems reasonable.

Normally does one pay sales/use tax on full lease payment or just the depreciation portion ?

As I understand it in CA, it's on the full amount, but I've been out of sales for a few years, so the ins and outs might have changed (or are different between CA and WA).

 

[planet4ever]

As for lease money factor and residual value, those are two of only three variables (the third being disposition fee) I wasn't able to find in that fine print I referred to above. But fitting money factor and residual value into the values they did give, my best prediction would be residual = 53% and money factor (as of April 2010) is .003646 (i.e. APR = 8.75%). My personal guess is that the money factor (and hence the monthly lease) will have gone up a bit by the first of 2011.

Who is "they" ?

"They" is Nissan. Go to www.nissanusa.com/leaf-electric-car/
Click "Price" on the left, "packages & features" in the middle.
Now look closely at the bottom of the big whitish box, where it says "Disclaimer". See that scroll bar on the right?

 

[planet4ever]

Correction - it's not a Federal rebate, it's a non-refundable tax credit, i.e., you don't benefit till you file your taxes, and even then, you only benefit it you owe the Feds money. For example, if you owe $7,500 in taxes, then you zero out....but if you only owe $2,500 in taxes, you still zero out. That's because it's a "non-refundable" tax credit. If it was a refundable tax credit and you only owed $2,500 at tax time, you get $5,000 back, but this isn't the case.

I've heard it otherways too - i.e. you get that $7.5K no matter how much tax you pay.

Oh, it's definitely "non-refundable", but that doesn't mean what you think it might mean. It means your total federal income tax liability for the year you buy the Leaf can't go negative. You can get money back (after you file your taxes the next year) that you had already paid in withholding or estimated payments.

Anyway, the new EV bill is going to make it a rebate - if the bill passes.

I wouldn't pin my hopes on that, if I were you.

(1) It's only a bill; it may not become a law.
(2) It would be a supplement to the $7500, not a replacement for it. The supplement would be a rebate but the $7500 would remain a non-refundable credit.
(3) Most people would not be eligible. It would apply to only a very limited number (probably 5 to 15) of metropolitan areas; which ones will depend on what kind of horse trading goes on in Congress. Put bluntly, this is a pork barrel bill. Who gets the pork depends on whose vote is needed for other legislation.

 

[evnow]

"They" is Nissan. Go to http://www.nissanusa.com/leaf-electric-car/
Click "Price" on the left, "packages & features" in the middle.
Now look closely at the bottom of the big whitish box, where it says "Disclaimer". See that scroll bar on the right?

Got it. I somehow thought, you got the money factor from someone. Here is my best gues ...