Question around pricing

[astrorob]

I thought the way I read the new law was if you ordered the car in 22 and it gets delivered in 23 you fall under the old rebate.

i don't think so? the rules say that the car has to be placed into service in calendar year 2022 to qualify for the old tax credit. that much is pretty clear.

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[astrorob]

Only if you had a signed binding purchase agreement. If you ordered and did not get a purchase agreement (which most of do not), then you’re not grandfathered on the Federal money. ??

i don't even think that matters. the language about the binding contract only refers to what specific qualifications of the tax credit apply.

Transition Rule for Vehicles Purchased before August 16, 2022
If you entered into a written binding contract to purchase a new qualifying electric vehicle before August 16, 2022, but do not take possession of the vehicle until on or after August 16, 2022 (for example, because the vehicle has not been delivered), you may claim the EV credit based on the rules that were in effect before August 16, 2022. The final assembly requirement does not apply before August 16, 2022.

Vehicles Purchased and Delivered between August 16, 2022 and December 31, 2022
If you purchase and take possession of a qualifying electric vehicle after August 16, 2022 and before January 1, 2023, aside from the final assembly requirement, the rules in effect before the enactment of the Inflation Reduction Act for the EV credit apply (including those involving the manufacturing caps on vehicles sold). If you entered into a written binding contract to purchase a new qualifying vehicle before August 16, 2022, see the rule above.

the belief is that the MME satisfies the new final assembly requirement as it is made in north america. the battery source rules do not apply to the old tax credit. so if you are claiming in 2022 you should be able to take the full $7500. if you have to claim in 2023, it's possible that you can only take $3750 since no one knows if the battery in the MME meets the requirements. also of course the 2023 tax credit is means tested, and the 2022 credit is not.

 

[Duckwrangler]

Has anyone run into an issue of being told your credit just won't qualify for the 2.49% rate from the spring, even if you technically are rate locked? I can see a dealer pulling that. And it would be harder to argue with.
The financing calculator on Ford's website auto populates at 7.5% - is that their standard offer now?

 

[perfectstorm]

So I actually picked up my mach e today. They called me after I posted. I got 1k rebate for ordering from the dealer and another 1k for for options even though I thought it was only $500. I didn't have to ask for the 2.49%. When I went to meet the financing guy 2.49 was already on the contract. Couldn't be happier how it turned out. Was ready to put up a fight for the 2.49

 

[RedOctobrrr]

So I actually picked up my mach e today. They called me after I posted. I got 1k rebate for ordering from the dealer and another 1k for for options even though I thought it was only $500. I didn't have to ask for the 2.49%. When I went to meet the financing guy 2.49 was already on the contract. Couldn't be happier how it turned out. Was ready to put up a fight for the 2.49

This was for a 2022 model year?

I went back and forth with the dealer for 2 days and was unable to get 2.49% on a 2023, only 4.49% from August rates. He assured me 2.49% would only apply to the 2022's.

 

[4sallypat]

Has anyone run into an issue of being told your credit just won't qualify for the 2.49% rate from the spring, even if you technically are rate locked? I can see a dealer pulling that. And it would be harder to argue with.
The financing calculator on Ford's website auto populates at 7.5% - is that their standard offer now?

Yes, if your credit is not tier 1 or 2, FMCC will raise the rates.

2.49% Options rate assumes you have top tier credit.

Standard rate starts at 4.99% for 36 months and goes up - again that varies with your credit.

I was offered 6.99% for 84 months in July by FMCC, but had my own financing in my pocket: 3.49% 84 months.

My wife's incoming MME will be Ford Options - my wife has top tier credit so she will qualify...

 

[MisterSofa]

It is still a 22 was built on 11/3. I was told delivery date 12/8-12/15. So how do I get confirmation on what the apr was back in march? Been difficult getting answers out of my dealer like the current location of the car. My Zip Code is 19344

I ordered my vehicle in January and it was delivered in November. I did the options plan at 2.49 and received a $1750 options rebate, plus a $2k NE regional rebate on the sticker. I’m in Valley Forge.

 

[perfectstorm]

I ordered my vehicle in January and it was delivered in November. I did the options plan at 2.49 and received a $1750 options rebate, plus a $2k NE regional rebate on the sticker. I’m in Valley Forge.

I really wish I would have ordered the premium> That put the 2k regional rebate only on premiums. Still happy after the tax credit ill be under 38k. When I was at the dealership they had a Ford Escape with a sticker of 45k

 

[sim1]

i don't even think that matters. the language about the binding contract only refers to what specific qualifications of the tax credit apply.



the belief is that the MME satisfies the new final assembly requirement as it is made in north america. the battery source rules do not apply to the old tax credit. so if you are claiming in 2022 you should be able to take the full $7500. if you have to claim in 2023, it's possible that you can only take $3750 since no one knows if the battery in the MME meets the requirements. also of course the 2023 tax credit is means tested, and the 2022 credit is not.

Is there a thread in the forum where people have exhausted this topic?
I agree that the language about the binding contract refers to what specific qualifications of the tax credit apply. But that means everything.
If qualifying for a written binding contract, then it doesn't matter if you take delivery on Dec. 31, 2022, or 2023, 2024, or beyond. It doesn't matter if you exceed the income cap, have final assembly in China, etc. All that matters is what mattered on August 15, 2022 (e.g., whether the manufacturer had hit the 200,000 unit cap, etc.).

(l) TRANSITION RULE.—Solely for purposes of the application of section 30D of the Internal Revenue Code of 1986, in the case of a taxpayer that—

(1) after December 31, 2021, and before the date of enactment of this Act, purchased, or entered into a written binding contract to purchase, a new qualified plug-in electric drive motor vehicle (as defined in section 30D(d)(1) of the Internal Revenue Code of 1986, as in effect on the day before the date of enactment of this Act), and ​

(2) placed such vehicle in service on or after the date of enactment of this Act, ​

such taxpayer may elect (at such time, and in such form and manner, as the Secretary of the Treasury, or the Secretary’s delegate, may prescribe) to treat such vehicle as having been placed in service on the day before the date of enactment of this Act.

 

[astrorob]

i think the bottom line though is that almost no one will qualify as having a "written binding contract" per the IRS's own language:

What Is a Written Binding Contract?
In general, a written contract is binding if it is enforceable under State law and does not limit damages to a specified amount (for example, by use of a liquidated damages provision or the forfeiture of a deposit). While the enforceability of a contract under State law is a facts-and-circumstances determination to be made under relevant State law, if a customer has made a significant non-refundable deposit or down payment, it is an indication of a binding contract. For tax purposes in general, a contract provision that limits damages to an amount equal to at least 5 percent of the total contract price is not treated as limiting damages to a specified amount. For example, if a customer has made a non-refundable deposit or down payment of 5 percent of the total contract price, it is an indication of a binding contract. A contract is binding even if subject to a condition, as long as the condition is not within the control of either party. A contract will continue to be binding if the parties make insubstantial changes in its terms and conditions.

anyone that ordered online and put down a $500 deposit would fail to meet this standard, because $500 is < 5% of the total contract price, and the $500 is refundable.

i think it would have been an unusual deal, but if you did go in and put $5000 down in some sort of unrefundable fashion (by contract with the dealer) then i guess you'd qualify.

 

[sim1]

The IRS FAQ you quoted is an IF A, THEN B statement. Here, A is "a significant non-refundable deposit or down payment" and B is a written binding contract. The absence of a significant non-refundable deposit or down payment does not disqualify a written binding contract. In other words, it in no way says IF NOT A, THEN NOT B.
But I understand that everywhere one looks, all that is found is stuff that discourages people from considering whether they qualify for the transition rule.

 

[Ngkgb]

This was for a 2022 model year?

I went back and forth with the dealer for 2 days and was unable to get 2.49% on a 2023, only 4.49% from August rates. He assured me 2.49% would only apply to the 2022's.

Exactly what my dealer told me. SoCal here.

 

[smcnair]

Wow, so the cash incentive varies from state to state ?
Had no idea - thought it was nationwide...

Sorry to hijack this thread:
So I am in So Calif and I keep hearing $2000 using Ford Options.
What happens to my rate since it was ordered in April and keeping the same order number, forced into a '23 with a $6K PCO ?

Varies by county. I got $1000. My son got $500. One county over. Ordered and delivered same day.

 

[astrorob]

The IRS FAQ you quoted is an IF A, THEN B statement. Here, A is "a significant non-refundable deposit or down payment" and B is a written binding contract. The absence of a significant non-refundable deposit or down payment does not disqualify a written binding contract. In other words, it in no way says IF NOT A, THEN NOT B.
But I understand that everywhere one looks, all that is found is stuff that discourages people from considering whether they qualify for the transition rule.

yes i understand that. all i'm trying to say is that the $500 deposit does not constitute evidence of a binding contract as far as the IRS is concerned, since it is refundable.

it's going to be the rare, super-informed customer that went to a dealer and entered into a binding contract to purchase a MME, deposit or not. going online, submitting an order and paying $500 is not a binding contract per the IRS, so that alone can't satisfy any exemption of the placed-in-service rule.

 

[sim1]

yes i understand that. all i'm trying to say is that the $500 deposit does not constitute evidence of a binding contract as far as the IRS is concerned, since it is refundable.

it's going to be the rare, super-informed customer that went to a dealer and entered into a binding contract to purchase a MME, deposit or not. going online, submitting an order and paying $500 is not a binding contract per the IRS, so that alone can't satisfy any exemption of the placed-in-service rule.

I don't think the IRS has said anything of the sort. And I'm not trying to be difficult; I'm just trying to be precise, based on my understanding.
Per the IRS, if submitting an order and paying $500 constitutes a binding contract under your State law, my understanding is, then yes, the IRS suggests that would qualify for the pre-IRA credit.

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