When negotiating with a dealership to get the federal tax credit applied to your electric vehicle (EV) lease, there are several key points and strategies to keep in mind:
Understand the Tax Credit on Leases
- Unlike purchases, where you can claim the federal tax credit on your tax return, leases work differently because the dealer technically owns the vehicle. The tax credit is usually passed through by the dealer to you as a lease incentive or discount embedded in the lease price.
- The dealer is not required to pass this credit on to you. Whether the tax credit is included in the lease deal depends on the dealer’s willingness to pass along this incentive.
How to Negotiate the Tax Credit Applied to Your Lease
- Ask explicitly for the tax credit to be included in your lease price. Check your lease contract carefully for this inclusion; if it’s not there, request it from the dealer.
- Shop around different dealers. Many dealerships pass the tax credit savings to customers in the form of reduced lease payments or upfront incentives, but some inflate the MSRP or add fees that diminish the benefit.
- Negotiate the vehicle’s gross capitalized cost (the negotiated selling price of the car). This cost directly influences your monthly payments and final buyout price. Bringing the gross capitalized cost down can effectively capture the tax credit benefit.
- Be cautious of dealer markups. Some dealers increase the vehicle’s MSRP or add fees, which can negate the value of the tax credit. Use sources like Kelley Blue Book and Edmunds to understand the fair value of the vehicle before negotiating.
Additional Tips for Negotiating a Lease with Tax Credit
- If the dealer refuses to include the tax credit in the lease pricing, consider walking away or looking for another dealership that will pass along this credit.
- Remember that the tax credit benefit on a lease usually appears immediately as a price reduction or upfront incentive; you do not have to wait until tax season to see the savings.
- Leases are negotiable. You can negotiate not just the tax credit inclusion but also lease factors like mileage allowance, money factor (interest rate), and buyout price, which affect overall lease cost.
Summary
To get the tax credit applied to your EV lease, explicitly negotiate with the dealer to have the credit reflected in your lease contract as a lower capitalized cost or upfront discount. Shop around for dealers who pass the credit along rather than mark up prices, and verify the lease terms carefully. Dealers may or may not include the tax credit, so being informed and persistent is crucial.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-do-i-negotiate-with-the-dealership-to-get-the-tax-credit-applied-to-my-lease/
