Ensuring that a leasing company applies the electric vehicle (EV) tax credit to your lease requires some negotiation and due diligence on your part. Here are steps you can follow:
Understanding the Tax Credit for Leased Vehicles
- Tax Credit Ownership: When you lease a vehicle, the tax credit typically belongs to the leasing company (dealer), not you. This means they have the option to apply the credit, but they are not obligated to do so.
- No Direct Claim: You will not claim the EV tax credit on your taxes. Instead, any savings from the credit will be passed to you by the leasing company through reduced lease payments.
Negotiating the Tax Credit
- Review Your Lease Agreement: Make sure the lease agreement includes the application of the EV tax credit to your lease payments. Check for specific language or clauses about using the tax credit to lower your monthly payments.
- Ask the Dealer: If it’s not specified in your agreement, ask the dealer to confirm whether they will pass the credit to you. Emphasize the importance of this credit in your leasing decision.
- Ensure Transparency: Request a clear explanation of how the credit will be applied. This could be through lower monthly payments or omitted payments. Ensure you understand the exact terms.
- Monitor Your Payments: After the lease begins, verify that your payments reflect the promised savings from the tax credit. If you find discrepancies, contact the leasing company promptly to resolve the issue.
- Consider Another Dealer: If one dealer is unwilling to pass the credit to you, consider leasing from a different company that is more willing to apply the tax credit to your lease.
Legal and Regulatory Considerations
- IRA Exemptions: The Inflation Reduction Act (IRA) allows leased vehicles to qualify for the full tax credit without certain restrictions like the “Buy American” rule or income caps. However, this exemption is primarily intended for commercial fleets and may not apply universally.
By being proactive and negotiating clearly with the leasing company, you can increase the likelihood that they will apply the tax credit to your lease.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-can-i-ensure-the-leasing-company-applies-the-tax-credit-to-my-lease/
