Leasing the MME and the federal tax credit?

[astrorob]

I know some companies just keep the federal tax rebate for themselves when you lease a car from them. some discount the financed amount by the tax credit.

anyone know what ford does here? if my 2023ME is delivered in december then i'll still qualify for the old EV credit. i wouldn't qualify for the new one, so i'm considering buying the MME if it arrives in december, if ford doesn't pass on the tax credit to the buyer. if it arrives in 2023 i guess i'd just lease the car.

thanks

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[macchiaz-o]

For most Mach-E buyers that can fully benefit from the tax credit, Ford Options is a better choice than a lease.

https://www.ford.com/finance/finance-options/ford-options/

It's a retail contract with a balloon payment and a built in turn in or trade in option which, if you elect to use it, allows you to forgo the final payment. Since it's a retail loan, you are the purchaser and you can claim the tax credit on your individual tax return.

If you lease through Ford Credit, you will get some value of the federal tax credit provided to you in the lease pricing, but it won't be the full $7,500, mostly because it's based on Ford Credit's federal taxes instead of yours.

 

[astrorob]

thanks for that, i didn't know about ford options (first ford car...)

i will check it out.

 

[joes723]

https://www.ford.com/finance/finance-options/ford-options/


Standard Purchase

Vehicle Type	New or Certified Pre-Owned
Terms	Up to 84 Months
Disposal Fee	N/A
Acquisition Fee	N/A
Mileage Options	Unlimited
Contract-End Options	N/A
Vehicle Ownership	Customer
Electric Vehicle Tax Credit	Customer

Ford Options

Vehicle Type	Exclusive for the Mustang Mach-E®and F-150®Lightning™
Terms	36- and 48-Month Terms
Disposal Fee	$475 - waived with renewal
Acquisition Fee	$0
Mileage Options	Customizable
Contract-End Options	· Renew by trading in or sell privately · Retain the vehicle (purchase) - Pay off the balance - Refinance the final balloon payment · Return the vehicle and transfer ownership to Ford Credit
Vehicle Ownership	Customer
Electric Vehicle Tax Credit	Customer

Red Carpet Lease

Vehicle Type	New
Terms	24-to 48-Month Terms
Disposal Fee	$395 - waived with renewal
Acquisition Fee	$645
Mileage Options	Customizable
Contract-End Options	· Return and renew into a new vehicle · Purchase the vehicle, if applicable · Return the vehicle
Vehicle Ownership	Ford Credit
Electric Vehicle Tax Credit	Ford Credit

Only if you go with traditional financing or ford options are you able to qualify for the federal tax credit

 

[generaltso]

Contract-End Options	· Return and renew into a new vehicle · Purchase the vehicle, if applicable · Return the vehicle

I believe Ford is not allowing lease buyouts for EVs anymore. So if you lease the car, you have to turn it in at the end.

 

[hybrid2bev]

I believe Ford is not allowing lease buyouts for EVs anymore. So if you lease the car, you have to turn it in at the end.

Or lease it again for another term and then turn it in after that.

 

[astrorob]

I believe Ford is not allowing lease buyouts for EVs anymore. So if you lease the car, you have to turn it in at the end.

interesting, that's what tesla is doing (perhaps has always done) with model 3 and model y leases.

i had to extend mine to cover the gap between the tesla lease and the delivery of the MME, but right now things look like that might not have been necessary. fortunately you can terminate the extension any time.

 

[ChuckA]

I believe Ford is not allowing lease buyouts for EVs anymore. So if you lease the car, you have to turn it in at the end.

Effective 06/15/22.

 

[MachEnation]

Definitely explore ford options instead. I was just recently looking to lease a plug-in Lincoln corsair and was disappointed to see that Ford was not offering to rebate a piece of the tax credit to the customer. Obviously, this could be negotiated with the dealer, but in prior years it was already put in as a rebate from the manufacturer.

 

[astrorob]

Definitely explore ford options instead. I was just recently looking to lease a plug-in Lincoln corsair and was disappointed to see that Ford was not offering to rebate a piece of the tax credit to the customer. Obviously, this could be negotiated with the dealer, but in prior years it was already put in as a rebate from the manufacturer.

do we happen to know how this works in practice?

when i bought a 2011 leaf, i just took the tax credit when filing my return. (interestingly i got a letter from the IRS asking for more info and proof of purchase; when i talked to the guy on the phone he said people were claiming ford F-150s and other ICEs and so needed the VIN and proof of purchase.)

but because this is a lease, seems like ford will receive the credit, which means that if the customer gets the credit, the amount needs to be knocked off the financed amount at the time of lease, which means fighting with the dealer.

OTOH a 36 month loan with 10k down seems to have about $7k in interest, so the credit would cover the interest on the loan, and since it is the original EV credit, it should be as "simple" as claiming it on my tax return. but then i'd have to deal with selling a car with a somewhat degraded battery at some point in the future. the leaf was incredibly difficult to sell. i don't expect a more modern EV to have battery degradation as bad as the leaf, but who knows.

 

[4sallypat]

......
but because this is a lease, seems like ford will receive the credit, which means that if the customer gets the credit, the amount needs to be knocked off the financed amount at the time of lease, which means fighting with the dealer.

OTOH a 36 month loan with 10k down seems to have about $7k in interest, so the credit would cover the interest on the loan, and since it is the original EV credit, it should be as "simple" as claiming it on my tax return. but then i'd have to deal with selling a car with a somewhat degraded battery at some point in the future. the leaf was incredibly difficult to sell. i don't expect a more modern EV to have battery degradation as bad as the leaf, but who knows.

Ford RCL will not let you get any money back from them on the MME because they don't need to share it with consumers.

Dealer will not kick in any money because they do not get any of the tax credit from Ford Finance arm that owns your vehicle.

Ford RCL will not let you buy out at the end of the lease.

If you MUST lease, look into a 3rd party lease: Ally or US Bank - they usually offer a partial credit kicked back to you.

I would NEVER lease in this current time - I am looking at Ford Options when my MME arrives.
Ford Options offers a lower rate plus $2,000 incentive. And I get to decide what to do at balloon maturity...

 

[astrorob]

I would NEVER lease in this current time - I am looking at Ford Options when my MME arrives.
Ford Options offers a lower rate plus $2,000 incentive. And I get to decide what to do at balloon maturity...

sorry, when i said "this is a lease" i meant ford options is a lease. perhaps technically it is not, but functionally it is very similar.

so assuming i'm using ford options, do i still have to fight with the dealer about this? or maybe it just appears on the term sheet "automatically" since ford's webpage clearly says the customer gets the tax credit.

i'm just trying to get mentally prepared for the dealer BS. this is why i leased a tesla 3 years ago. almost everything happened online, no sitting in the finance manager's office for 5 hours while they try to upsell you. i walked into the delivery center, wrote a check, a tesla engineer showed me how to use the car, and i drove away.

 

[4sallypat]

sorry, when i said "this is a lease" i meant ford options is a lease. perhaps technically it is not, but functionally it is very similar.

so assuming i'm using ford options, do i still have to fight with the dealer about this? or maybe it just appears on the term sheet "automatically" since ford's webpage clearly says the customer gets the tax credit.

i'm just trying to get mentally prepared for the dealer BS. this is why i leased a tesla 3 years ago. almost everything happened online, no sitting in the finance manager's office for 5 hours while they try to upsell you. i walked into the delivery center, wrote a check, a tesla engineer showed me how to use the car, and i drove away.

Ford Options is a finance with balloon and lease type of payments.

Ford Options you keep the tax credit.

Ford Options has a set incentive which you need to find out from your dealer: order date vs delivery date.

The dealer should show you on their SMART VINcent system - which one is more favorable (if any difference) between the 2 different dates.

Not really much to haggle with Ford Options - it's pretty much set in stone, except for your credit tier, score and finance rate.

 

[astrorob]

Ford Options you keep the tax credit.

right, this i understand. i'm really asking about the details.

does "keep the tax credit" mean i just claim it on my 2022 return? or will it appear as a discount on the terms sheet?

i won't be eligible for the "new" EV credit but i should be eligible for the old one. i understand the new tax credit is supposed to be a point-of-sale thing, but the old one needs to be claimed on your tax return, assuming it is the customer that receives the credit directly.

Not really much to haggle with Ford Options - it's pretty much set in stone, except for your credit tier, score and finance rate.

that's good. my credit tier/score is probably the highest, so it's really just about the MF/APR.

 

[4sallypat]

right, this i understand. i'm really asking about the details.

does "keep the tax credit" mean i just claim it on my 2022 return? or will it appear as a discount on the terms sheet?

i won't be eligible for the "new" EV credit but i should be eligible for the old one. i understand the new tax credit is supposed to be a point-of-sale thing, but the old one needs to be claimed on your tax return, assuming it is the customer that receives the credit directly.



that's good. my credit tier/score is probably the highest, so it's really just about the MF/APR.

Yes, you get to claim the $7500 (assuming you had tax liability) before end of 2022 when your MME is delivered.

There is no discount on the sales contract for $7500 - that POS does not work until 2024 under the new tax law.

So if you get delivery before the end of 2022, you qualify to get the full tax credit which you request in 2023 on your taxes.

If you get delivery in 2023, you may get half or full credit depending on how it's interpreted by the IRS under the new tax law.

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