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Hi,

I am not a financial professional so I was wondering about how the current availability of tax credits might impact the lease vs. buy decision. Specifically, the fact that these tax credits might not be available when the lease expires. I know that traditionally the lease/buy decision is based on the length of time you expect to keep the car and the number of miles per year that you expect to drive. But does this calculation need to be extended to consider the fact that tax rebates may not be available in the future.
 

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Keep in mind the only way to lease an MME is through a third party leasing firm. Ford is instead offering Ford Options, which is a loan structured to work similarly to a lease. (Or you can pay cash or do a traditional style loan through Ford or some other lender.)

At any rate, the federal tax credit is based on when the car is first registered. Length of ownership doesn't matter.

So if you take ownership at the end of 2020, then you are credited up to $7,500 towards your 2020 tax liability. If you take ownership in 2021, then up to $7,500 is credited towards your 2021 tax liability.

It's a "non-refundable" credit, so thus up to $7,500 instead of being exactly $7,500. If your tax liability minus other credits that you qualify for is less than $7,500, then the credit you'll receive will be less.
 

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Lots of incentives on other BEVs are tilting the lease vs buy one way or the other:


EV deals: Leaf, i3, I-Pace incentives boost buying, but leasing remains better for most
Stephen Edelstein
STEPHEN EDELSTEIN AUGUST 19, 2020

The advantages between leasing versus buying electric cars are currently blurred by some especially strong sales incentives.

The Nissan Leaf is currently eligible for 0% APR financing for 72 months, plus a $500 financing bonus. Nissan is also offering a $4,000 rebate in August, which is $1,000 more than last month, and the most seen to date, according to our partner site CarsDirect. The best deal for buying a new Leaf in August 2019 was 0% APR for 36 months, with a $1,000 bonus, the website noted.

Similarly, the BMW i3 is currently eligible for 0% APR financing for 60 months, compared to 3.75% in August 2019.

The Jaguar I-Pace currently offers a choice of 0% APR financing for 72 months or a $5,000 unadvertised credit, according to CarsDirect. A year ago, the best offer was 2.9% APR financing for 60 months with no credit. The difference in financing offers equates to a monthly payment $283 lower than in August 2019.

2020 BMW i3
2020 BMW i3

Jaguar has been fairly aggressive with incentives for the I-Pace, using discounts to target Tesla owners. Some extensive changes to the I-Pace are also on the way for the 2021 model year, but the revamped version isn't here yet.

On the leasing side, the Chevrolet Bolt EV is a good deal. General Motors no longer qualifies for the full federal EV tax credit, but nationally its finance arm is currently offering $7,250 in savings on Bolt EV leases.

Regional deals can be even better. In San Francisco, the base LT trim level is available to lease at $199 a month for 36 months, with $1,599 down, when coming from another lease. That works out to an effective monthly cost of $243, or $7 less than a Honda Fit EX despite the Bolt EV's $18,000-higher base price, according to CarsDirect.

Leasing are often subsidized and can help soften the steep depreciation with some creative math. Non-Tesla electric cars generally lose value faster than comparable internal-combustion models, although they seem to have adjusted upward slightly over the past couple of years.
 

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Keep in mind the only way to lease an MME is through a third party leasing firm. Ford is instead offering Ford Options, which is a loan structured to work similarly to a lease. (Or you can pay cash or do a traditional style loan through Ford or some other lender.)


I do not believe that is accurate:

Many companies including Jaguar, BMW and Audi lease their EV through their financial arm. In the lease the financial arm of the manufacturer passes the $7,500 Federal Tax credit back to the lessee in the form a a cap cost reduction (deposit).

Between now and when the first MachE are delivered, I believe Ford will come out with a similar lease program, with reasonable residuals (58% to 60%, 3 years, 10,000 miles per year) and MF. The Ford Option Plan, as you correctly state, is nothing more than a deferred purchase plan.



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