Leasing the i3

[Shrink13]

My Volt lease is ending in 4 months and I am seriously interested in leasing a fully loaded (no rapid charger) Tera with range extender. A SF bay area dealer is quoting me a MSRP of $55,350, a drive off of $1,643, and a monthly (36 months) of $672.19 (including tax). I am hoping that the state rebate of $2,500 will still be available in January.

From others' experience, how do those numbers seem? Are there any current test drive programs out there that might provide a further discount?

Thank you

 

[HomelessDude]

Even if that quote is based on 10,000 miles per year it's an excellent rate.

 

[Surge]

California gives a rebate of $2500 on an i3?
What are the federal rebates?

The Ontario rebate of $8500 is looking quite generous, in comparison!

 

[WoodlandHills]

Federal rebate is $7500 for purchase and $4875 for lease.

 

[i3Pooshd]

Great deal!

 

[Alexander99]

Not a bad deal, but not that good either....

Based on your values the dealer is taking just $2,000 off the MSRP and passing along the $1,000 incentive on the REX. If you went with the BEV the incentive is $2,000. Double check that they aren't marking up he MF (money factor) on your lease.

Check out Stevens creek, they have 40 i3s in stock. They were $4,500 off MSRP.

 

[Shrink13]

Much thanks Alexander99. I will check out other dealers. Good suggestion and good numbers to know. I did not think it was a great deal, but it was the first set of figures that I had gotten. The monthly seemed high.

 

[apudiyap]

I'm in the SF Bay Area. My i3 BEV Teraworld finally came after a long wait. Everything except the 20" wheels. MSRP $50,900.

Negotiated down to $600 over invoice minus BMW innovation credit of $2,000. For an effective price of $1,400 *below* invoice of $45,570. It was tough negotiation but its a sport for me

Went with 36/10K lease. 53% and 0.00125. So no markups there. Applied $4,875 of the federal credit towards cap reduction. Drive off was $1,300. Includes bank fee + doc fee + DMV fee + sales tax on the cap reduction + first month payment. So my numbers work up to $497 + tax = $540/month. This is my fourth lease and I can work out my own numbers. This sounded like a cool deal. I get $2,500 back from California as well

I considered the Owner's Choice and the 24/10K lease as well.

Did not like the owner's choice because there's no option to return the car and walk away. You are just financing a portion of it now, but you own the car and are responsible for the whole amount. The 'residual' price in this case is the money you will still owe them after the term's end. You can buy out the car at that time by paying that amount. But if you don't want it, they will only buy it from you at the then market rate. You are still fully susceptible to the vagaries of used electric car market. Yes, you get the full $7,500 federal tax credit (instead of the $4,875), but after adjusting for the sales tax difference, its not much ($225). I think the option to walk away is worth more. EDIT: i3atl pointed out that this is not the case. You do have the option of walking away. See below.

The 24/10K looked attractive. With a residual of 63%, that is the same as the '7% residual bump' 'secret special deal' people were raving about in Aug/Sept. But upon closer look, the monthly payment (with just the $4,875 cap reduction) was working out to be the exact same number (with the same 0.00125 money factor) for both the 24/10K and 36/10K leases. Note that if you are paying an additional cap reduction out of your pocket, the numbers will artificially tilt towards the 24/10K since that amount is being used up in 24 months instead of 36 months. So that will lower the monthly payment on the 24 more than it would on the 36. But the deal breaker for me was that the 24 is not eligible for the $2,500 from California. So I decided to go route 36. You pay for half of the 3rd year and California pays the other half (well, more than one third anyway).

Good luck, guys!

 

[i3atl]

Did not like the owner's choice because there's no option to return the car and walk away. You are just financing a portion of it now, but you own the car and are responsible for the whole amount. The 'residual' price in this case is the money you will still owe them after the term's end. You can buy out the car at that time by paying that amount. But if you don't want it, they will only buy it from you at the then market rate. You are still fully susceptible to the vagaries of used electric car market. Yes, you get the full $7,500 federal tax credit (instead of the $4,875), but after adjusting for the sales tax difference, its not much ($225). I think the option to walk away is worth more.

That is not how OC has been explained or perceived by the community. How did you come to this conclusion?

Edit: I just checked the wording on the OC contract, and you are not correct. The purchase price is established on the contract, and the only items that will affect it are the disposition fee and excess wear and/or excess mileage - just like a lease.

 

[apudiyap]

That is not how OC has been explained or perceived by the community. How did you come to this conclusion?

Thats what I have been told by the dealer. Thanks for the clarification. In any case, $225 wouldn't have swayed me. Considering you get the tax credit sometime next year.

 

[i3atl]

That is not how OC has been explained or perceived by the community. How did you come to this conclusion?

Thats what I have been told by the dealer. That the 'purchase price' was the price for me to buy the car. And not for them to take it back. That they would follow regular trade-in procedure to take it back at the then market rate. Thanks for clarification.

Based on what I and others have experienced, it seems that many dealers still don't understand the new financing options. It's unfortunate that people are making decisions based on some of the misinformation they're giving out. Thankfully it doesn't sound like it would've saved you much anyway, but some states (like GA) base the sales tax on the purchase price of the car (vs the total of the lease payments, as in CA), so in those cases OC typically provides a significantly better value than leasing.

 

[apudiyap]

It's unfortunate that people are making decisions based on some of the misinformation they're giving out.

I totally agree with you on that. And I admit I didn't do my due diligence researching the Owner's Choice. I don't usually take any information from the dealer/salesman. I have loved my leases before and the sales tax difference was always at the bottom of my mind. So in retrospect, looks like I never took OC seriously. Yes, the difference is not much in my case. Probably not worth the hassle and the wait filing for federal tax credit. But yes, it could be different for other people. Thanks.

 

[wraithnot]

Since we already leased our i3 BEV, we don't need to lease another one. But I thought I would pass along this offer we recently received from one of the dealerships my wife contacted in late September. A pre-paid lease is a bit risky because if the car is totaled then the insurance pays the leasing company and you end up with nothing. But given that, this still looks like a pretty good deal:

------------------------------------------------------------------------------------------------------------------------------------------------------------
Now through October 31st you can make just one payment of $9,111 on the all-new, all-electric BMW i3, and you are done with lease payments for 2 years. And because the BMW i3 is all electric - you will also have no maintenance and no gas expense for 2 years!

(* 24 months pre-paid lease, 10,000 miles per year, one car at this price - stock #142129, valid until October 31st)

Please call me at your earliest convenience to get pre-approved.



Regards,

Mico Silver
Internet Sales Manager
BMW of San Francisco
1675 Howard St, San Francisco, CA 94103
Direct 415-551-4247 | Fax 415-544-5348 | Cell 415-335-6535

www.bmwsf.com

 

[dlass0123]

Great deal: what about the home charger?? what about body damage credit?? what about NO AM radio?? did CA send you a check for $2500 yet?? no federal money on the lease?
what is the cost of charging at home?

I'm in the SF Bay Area. My i3 BEV Teraworld finally came after a long wait. Everything except the 20" wheels. MSRP $50,900.

Negotiated down to $600 over invoice minus BMW innovation credit of $2,000. For an effective price of $1,400 *below* invoice of $45,570. It was tough negotiation but its a sport for me

Went with 36/10K lease. 53% and 0.00125. So no markups there. Applied $4,875 of the federal credit towards cap reduction. Drive off was $1,300. Includes bank fee + doc fee + DMV fee + sales tax on the cap reduction + first month payment. So my numbers work up to $497 + tax = $540/month. This is my fourth lease and I can work out my own numbers. This sounded like a cool deal. I get $2,500 back from California as well

I considered the Owner's Choice and the 24/10K lease as well.

Did not like the owner's choice because there's no option to return the car and walk away. You are just financing a portion of it now, but you own the car and are responsible for the whole amount. The 'residual' price in this case is the money you will still owe them after the term's end. You can buy out the car at that time by paying that amount. But if you don't want it, they will only buy it from you at the then market rate. You are still fully susceptible to the vagaries of used electric car market. Yes, you get the full $7,500 federal tax credit (instead of the $4,875), but after adjusting for the sales tax difference, its not much ($225). I think the option to walk away is worth more. EDIT: i3atl pointed out that this is not the case. You do have the option of walking away. See below.

The 24/10K looked attractive. With a residual of 63%, that is the same as the '7% residual bump' 'secret special deal' people were raving about in Aug/Sept. But upon closer look, the monthly payment (with just the $4,875 cap reduction) was working out to be the exact same number (with the same 0.00125 money factor) for both the 24/10K and 36/10K leases. Note that if you are paying an additional cap reduction out of your pocket, the numbers will artificially tilt towards the 24/10K since that amount is being used up in 24 months instead of 36 months. So that will lower the monthly payment on the 24 more than it would on the 36. But the deal breaker for me was that the 24 is not eligible for the $2,500 from California. So I decided to go route 36. You pay for half of the 3rd year and California pays the other half (well, more than one third anyway).

Good luck, guys!

 

[B5Eagle]

I lease a Leaf and a Volt and the dealers applied the full $7500 tax credit toward reducing the purchase price that was used to base the lease numbers. I just leased an i3 but the dealer only applied $4875 to the price reduction. Does anyone know what happened to the remaining $2625 credit? Can I apply for that amount as a tax credit?

 

[tiburonh]

I lease a Leaf and a Volt and the dealers applied the full $7500 tax credit toward reducing the purchase price that was used to base the lease numbers. I just leased an i3 but the dealer only applied $4875 to the price reduction. Does anyone know what happened to the remaining $2625 credit? Can I apply for that amount as a tax credit?

No, sadly, if you lease the i3 you only get to "use" $4,875 of the Federal credit -- and that gets applied directly by BMW to your lease rather than coming to you as a credit on your federal tax returns. BMW says that they only get $4,875 credit themselves from the Feds when someone leases through them -- that only individuals can get the full $7,500 (and then only when they buy, not lease).

When others have asked "but why do Chevy and others give the full $7,500 credit to people who lease", BMW's response has been "that's a marketing decision by those companies", that those companies are actually also only getting $4,875 themselves but then throwing in the other $2,625 as a corporate funded subsidy.

Depending on what state you live in, you may of course also be able to get a tax credit or a cash rebate from your state. Rules vary from state to state on this.

 

[i3Alan]

BMW says that they only get $4,875 credit themselves from the Feds when someone leases through them -- that only individuals can get the full $7,500 (and then only when they buy, not lease).

My understanding is that the lease company does get the full $7500, but that appears as income to them on which taxes are paid. BMW figures their costs of the $7500 tax credit per lease is about $2625, and they give the customer what is left. There is nothing in the US tax code regarding this tax credit that makes it less for a corporation or a lease deal. That is, BMW does get the full $7500 tax credit for the lease, but their cost of getting that credit and passing it on to their customer is supposedly $2625.

 

[dlass0123]

someone wrote
Federal rebate is $7500 for purchase and $4875 for lease.

we were told in CA NO federal rebate unless purchased: NO credit at all NOT $4875???
Please let us know for sure

 

[tiburonh]

someone wrote
Federal rebate is $7500 for purchase and $4875 for lease.

we were told in CA NO federal rebate unless purchased: NO credit at all NOT $4875???
Please let us know for sure

First of all, the federal program is a tax credit, not a rebate.

You can only get the tax credit if you purchase. (Note that going with BMW's Owner's Choice program qualifies as a purchase.) You don't receive this credit at the time of purchase - instead, you take it when you file your taxes for the year in which you purchased the car. The amount of the tax credit you get then is limited by the amount of federal taxes you owe in the year you buy the car. And "owe" doesn't mean how much you have you have to pay on top of withholding or any prepayments you have made -- it simply means how much your 1040 shows is due from you in total during the year you bought the car. Anyway, from the total you owe according to your 1040, you can take a credit against that up to a total of $7,500.

If you lease, you personally get NO federal tax credit. However, BMW does then get a federal tax credit, which they say is $4,875, not $7,500. So BMW is "transferring" that credit to people who lease by reducing the capitalized cost of the car (on which the lease rate is based) by $4,875.

I hope this helps. As alway, you should talk with your own tax professional to get professional advice. The IRS form for this credit is 8834; info about it is on this part of the IRS web site: www.irs.gov/form8834.

Meanwhile, in CA, you can get a $2,500 rebate from the state for both leases and purchases of an i3, provide you keep the car for at least 36 months. Full details about this are here: https://energycenter.org/clean-vehicle-rebate-project

 

[dlass0123]

fantastic tax explanation buying vs. leasing