Mach-E Forum | Ford Mustang Mach-E Forum and News banner

1 - 18 of 18 Posts

·
Registered
Joined
·
16 Posts
Discussion Starter #1
How does the fed tax credit work with a lease?
Is it applied to the car to reduce monthly payments or is my only alternative to claim it on my yearly taxes?
 

·
Registered
Joined
·
393 Posts
Ford hasn't announced a leasing option yet. But if you do lease, generally the bank takes their $7500 and gives it back to you via reduced payments, reduced initial payment, or both.

With a traditional purchase, loan, or Ford Options plan, you earn the non-refundable, federal tax credit which reduces your tax liability for the fiscal year in which you first titled the car.
 

·
Registered
2016 Nissan Leaf, 2021 Mustang Mach-E First Edition reserved
Joined
·
1,128 Posts
Ford hasn't announced a leasing option yet. But if you do lease, generally the bank takes their $7500 and gives it back to you via reduced payments, reduced initial payment, or both.

With a traditional purchase, loan, or Ford Options plan, you earn the non-refundable, federal tax credit which reduces your tax liability for the fiscal year in which you first titled the car.
To clarify what @macchiaz-o is saying, the only "lease" Ford has announced so far is the Ford Options which is basically financing with options for a large balloon payment buyout or a buyback. That allows folks in most states to have a lease-like experience and still take advantage of the $7500 tax credit. There are multiple Ford Options threads elsewhere here on the Mach E Club. You can get more details than you want there.
 

·
Registered
Reserved First Edition Rapid Red Metallic
Joined
·
871 Posts
I will try to summarize:

The Ford Option Plan:

This is nothing more than a deferred payment plan. Think of it as a finance plan for either 36 or 48 months with a balloon at the end. Unlike a normal finance plan, at the time of making the 36 or 48 payment, the balloon, you can either return the car or pay the balloon and keep the car. As this is nothing more than a finance plan, title has been transferred to you. Keep in mind that like any purchase of an auto, there is state tax due. This will be on the MSRP of the MME.

As the owner of the car, in the year that you title the car, you are entitled to a Federal Tax Credit of up to $7,500. It is not a rebate but a credit against the Federal taxes due in the year of titling the car. To get the full credit you must owe at least $7,500 in taxes.

To get the credit you file form 8936

See: https://www.irs.gov/pub/irs-pdf/f8936.pdf

Ordinary lease:

In an ordinary lease the title remains in the lessor, Ford Financial. As Ford Financial is the title holder, Ford Financial, not you as the lessee, is entitled to the Federal Tax Credit.

What all other manufacturer are doing is, in the lease as a cap cost reduction, aka "deposit, they are putting in $7,500. This substantially reduces your monthly payments.

Keep in mind that in almost all states, sales tax is on the total of 36 or 48 months payments (not the MSRP as in the Ford Option Plan) plus tax on any cap cost reduction. The $7,500 cap cost reduction is subject to state sales tax.

The tax savings of leasing vs. the Ford Option Plan can be as much as $3,500.

Not only are the monthly lease payments under a lease substantially lower than the Ford Option Plan, but in addition there is a substantial savings on state tax.

Hope this helps.

.
 

·
Registered
Joined
·
16 Posts
Discussion Starter #6
Since my preference is to lease, if the Ford Option Plan is the only option, then that might be a deal killer for me because of budgetary concerns.
 

·
Registered
Reserved First Edition Rapid Red Metallic
Joined
·
871 Posts
Since my preference is to lease, if the Ford Option Plan is the only option, then that might be a deal killer for me because of budgetary concerns.
Those of us who will only lease, and I am one of them, the Ford Option Plan is a non-starter.

Normally the residual on a 3 year lease, 10,000 miles per year, is between 58% and 60% -especially on a brand new model.

Presently the balloon on the Ford Option Plan, aka "residual" is at 44%. That low residual is why the Ford Option Plan is not a lease but a deferred payment plan.

That balloon payment makes the monthly payments $200 to $300 more than a lease with a residual of 58% to 60%.

Then throw in the sales tax on the MSRP with the Ford Option Plan which is about $3,000 more than on a lease together with the additionally monthly on the Ford Option Plan and you are looking at close to $10,000 more on the Ford Option Plan vs. a was a lease on the MME.

.
 

·
Registered
Joined
·
19 Posts
Those of us who will only lease, and I am one of them, the Ford Option Plan is a non-starter.

Normally the residual on a 3 year lease, 10,000 miles per year, is between 58% and 60% -especially on a brand new model.

Presently the balloon on the Ford Option Plan, aka "residual" is at 44%. That low residual is why the Ford Option Plan is not a lease but a deferred payment plan.

That balloon payment makes the monthly payments $200 to $300 more than a lease with a residual of 58% to 60%.

Then throw in the sales tax on the MSRP with the Ford Option Plan which is about $3,000 more than on a lease together with the additionally monthly on the Ford Option Plan and you are looking at close to $10,000 more on the Ford Option Plan vs. a was a lease on the MME.

.
I really wish Ford would release something on this - We are less then 2 months away at this point from the first customer facing vehicles and no news yet? Have there been any new EV's to date that didn't offer a lease option?
 

·
Registered
Reserved First Edition Rapid Red Metallic
Joined
·
871 Posts
I really wish Ford would release something on this - We are less then 2 months away at this point from the first customer facing vehicles and no news yet? Have there been any new EV's to date that didn't offer a lease option?
You are correct. Every manufacturer from Tesla to Audi to VW that manufactures EV offer financing and lease options.

Without a lease option I am not interested in the First Edition.

As they are in such "hot" demand, I am sure my dealer will be happy to take my First Edition into his inventory for sale - or maybe not?

.
 

·
Registered
Joined
·
19 Posts
You are correct. Every manufacturer from Tesla to Audi to VW that manufactures EV offer financing and lease options.

Without a lease option I am not interested in the First Edition.

As they are in such "hot" demand, I am sure my dealer will be happy to take my First Edition into his inventory for sale - or maybe not?

.
What thread/twitter/forum do we all have to message at once to get the point across? The EV world is not ready for financing as technology and batteries are to young...Leasing is the best option to keep the flow of Mach e's especially for consumers 3 years from now that want to try an EV and a nice price.
 

·
Registered
Joined
·
393 Posts
What thread/twitter/forum do we all have to message at once to get the point across? The EV world is not ready for financing as technology and batteries are to young...Leasing is the best option to keep the flow of Mach e's especially for consumers 3 years from now that want to try an EV and a nice price.
Ford muckymucks do follow this forum. So you are getting your point across. There's one person here who's posted his views on leasing probably hundreds of times. I'm sure Ford has seen the desire.

I'm definitely not interested in leasing, so I'm happy to have other options. :)

On your separate point, three years from now there will be used EVs at a nice price, just like there already are today.
 

·
Super Moderator
Joined
·
1,436 Posts
What thread/twitter/forum do we all have to message at once to get the point across? The EV world is not ready for financing as technology and batteries are to young...Leasing is the best option to keep the flow of Mach e's especially for consumers 3 years from now that want to try an EV and a nice price.

We have a thread on financing. Be warned, a lot of theoretical number-crunching:

 

·
Registered
Joined
·
621 Posts
If you actually look at the finance calculator on ford.com or the x-plan details, they have put incentives ONLY on the options program; in my area the amount of the incentives is $2500. On the X-plan chart you have to click on the model name to see the details where it explicitly states that the incentives only apply to the options plan.
 

·
Registered
Reserved First Edition Rapid Red Metallic
Joined
·
871 Posts
If you actually look at the finance calculator on ford.com or the x-plan details, they have put incentives ONLY on the options program; in my area the amount of the incentives is $2500. On the X-plan chart you have to click on the model name to see the details where it explicitly states that the incentives only apply to the options plan.
Interesting:

When I went to "Local Incentives and Offers"

See: https://shop.ford.com/showroom/?fmccmp=search-kba&linktype=incentives#/

and then clicked on "2021 Mustang MachE"

The following came up:

"A custom errorhandler for 404 responses"

No incentives or special offers came up

But when you go to the calculator the $2,500 incentive came up with the caveat that delivery "must be taken from stock by 1/1/2021."

The delivery "taken from stock" has not changed. The only thing that has changed is the date. If you remember the original date was by the end of October, then November now it is end of December.

Can anyone find out if this incentive will apply to the MME or limited for "cars taken from stock" as all MME are by reservations and none will be "taken from stock."

.
 

·
Registered
Joined
·
621 Posts
If you go to the azx plan website (fordpartner.com) and select the mach-e, it is currently showing the options plan discount as being available until 1/4. As you said they've been updating the incentives every month, but the last update at the end of oct took away the incentive for traditional financing, but left the options plan discount. I think that since the options program was revived for the mustang and that the specific mach-e link takes you to that, they will probably keep the incentive for a little while. I am guessing that is how they are making the options plan more palatable - since it gets the $2500 and financing doesn't.


2989
 

·
Registered
Reserved First Edition Rapid Red Metallic
Joined
·
871 Posts
If you go to the azx plan website (fordpartner.com) and select the mach-e, it is currently showing the options plan discount as being available until 1/4. As you said they've been updating the incentives every month, but the last update at the end of oct took away the incentive for traditional financing, but left the options plan discount. I think that since the options program was revived for the mustang and that the specific mach-e link takes you to that, they will probably keep the incentive for a little while. I am guessing that is how they are making the options plan more palatable - since it gets the $2500 and financing doesn't.


View attachment 2989
Note the part that says:

"Take new retail delivery from dealer stock by 01/03/2021": Again dealer stock.

"fordpartner.com" : Are you sure this is the correct link?

I am unable to get anything from this link.

Just for kicks I googled Ford plan #13770 - the basis for the $2,500 incentive.

Here is a link: https://www.macheclub.com/site/thre...ts-apr-deals-and-promotional-lease-rates.958/

Clearly this is not up to date, nor do I think the $2,500 rebate is up to date.

Within the next 30 days we will know:

  • Will Ford be offering a lease on the MME
  • Will there be any incentives
  • What the financing terms will be
  • Will there be a further reduction in the price of the First Edition, so that the differential between a LR AWD Premium and the First Edition goes back to $1,600 or remains $3,600
  • The range and performance of the MME
  • Will there be further across the board price reductions
.

.
 

·
Registered
Joined
·
621 Posts
Note the part that says:

"Take new retail delivery from dealer stock by 01/03/2021": Again dealer stock.

"fordpartner.com" : Are you sure this is the correct link?

I am unable to get anything from this link.

Just for kicks I googled Ford plan #13770 - the basis for the $2,500 incentive.

Here is a link: https://www.macheclub.com/site/thre...ts-apr-deals-and-promotional-lease-rates.958/

Clearly this is not up to date, nor do I think the $2,500 rebate is up to date.

Within the next 30 days we will know:

  • Will Ford be offering a lease on the MME
  • Will there be any incentives
  • What the financing terms will be
  • Will there be a further reduction in the price of the First Edition, so that the differential between a LR AWD Premium and the First Edition goes back to $1,600 or remains $3,600
  • The range and performance of the MME
  • Will there be further across the board price reductions
.

.
Yes, I know it says the "in stock" comment, but that makes no sense since there won't be dealer stock for 3-6 months.

Here's the exact login URL: AXZ Plan - Login
 

·
Registered
Reserved First Edition Rapid Red Metallic
Joined
·
871 Posts
Yes, I know it says the "in stock" comment, but that makes no sense since there won't be dealer stock for 3-6 months.

Here's the exact login URL: AXZ Plan - Login
Thanks.

Under incentives2: Here is incentive 2:

"2 Purchase incentives do not include Ford Credit Bonus Cash. Ford Credit Bonus cash requires Ford Credit financing or lease contract. Not all buyers will qualify. See dealer for residency restrictions, qualifications and complete details. To view details on incentives for a specific trim, click on the appropriate trim level."

To date there is no lease contract.

Again, I think we have to wait as per my post #16.

.
 
1 - 18 of 18 Posts
Top