Tax credit

[wwhitney]

Also, if you have unused tax credit and non-IRA investments with unrealized capital gains, you can harvest the capital gains to use the tax credit. That way you reduce the future taxes you pay whenever you cash in your investments by increasing the investment basis.

Cheers, Wayne

 

[EVDRIVER]

Also, if you have unused tax credit and non-IRA investments with unrealized capital gains, you can harvest the capital gains to use the tax credit. That way you reduce the future taxes you pay whenever you cash in your investments by increasing the investment basis.

Cheers, Wayne

One could also drive their Leaf off a bridge and get a reduction off the death tax, I would cash in those capital gains first though

 

[evnow]

I was looking up something else and found this - a blast from the past.

ps : Apparently rightwing pundits are making the same point OP is making ...

http://green.autoblog.com/2010/08/10/rightwing-pundits-attack-the-volt-which-forces-fox-to-change-de/

 

[Desertstraw]

Autoblog Green has just posted the actual cost of leasing a Nissan Leaf. If my understanding of what is posted is correct, it seems to me that it makes no sense for anybody to buy a Leaf. As I understand it, the cost of leasing consists of three or four parts: 1) the difference behind the selling price and the residual price 2) interest on the balance after the down payment 3) an acquisition fee of $595 and possibly a disposition fee of 4) $395. All other charges are the same whether you lease or buy. It also seems that everybody who leases gets the benefit of the full $7,500 federal tax credit.

If this is correct, a person who pays the entire difference between cost of the vehicle and residual value at the start will have no interest payments. Therefore the whole additional cost of the lease will be $599 and maybe another $395. For a cost of less than $1000, one gets the benefit of the whole tax credit regardless of his tax liability and the opportunity to return the car and buy a better car, specifically with better batteries, at the end of the lease period.

There is also the difference between residual value and market value at the end of the lease period. This is a bet that can go either way. If the Nissan performs well and there are no better batteries available, then the market price of the car will be more than the residual price and you lose the difference. If better batteries are developed, say giving electric cars a range of 200 miles, then the market price will be lower than the residucal price and you gain the difference.

Is my understanding correct?

 

[DaveinOlyWA]

I am buying Probably despite the fact But i won't get a full tax credits.
I am doing so Because i believe In 3 years the Leafs market value will be much higher.

Of course this depends On the success of the technology. If it fails I will have a worthless p o s. If its successful I fully believe That demand would out strip supplies by a large margin causing delays of many months for someone who wants one.

Also tax incentives are Going to go away or be reduced.

That and the overridng fact.... i have literally waited all my life for this i'm simply sick and tired of waiting. Granted, This does not change The financial circumstances Of the lease versus purchase.

My actual decision Will really be based on What i can put down In my remaining payments. My down payment should be A minimum of 10,000 but could be significantly higher Because i'm selling 2 cars. Most valuable of the 2 Will probably be sold To my sister whom make payments.

Her reliability is not a factor and she is very open to the deal. She. Will be getting the car On a personal loan from me With no interest

She should pay me off in three years so i will need to finance the last 2 years.

 

[garygid]

Normally, a carefully-maintained car can be "as good as new" after 3 years.

However, with an EV, there is the issue of "diminished" battery capacity to consider.

 

[wwhitney]

If this is correct, a person who pays the entire difference between cost of the vehicle and residual value at the start will have no interest payments.

I'm not particularly knowledgeable about leases. But it seems to me that that you must still be paying the interest on the residual for the term of the lease, as part of this single lease payment.

There is also the difference between residual value and market value at the end of the lease period. This is a bet that can go either way.

My understanding is that with a lease you have a free option to buy the vehicle for the residual figure at the end of the term. So that bet always goes in your favor: if the market value exceeds the residual, you buy the vehicle at the residual; if the market value is less than the residual, you pass.

Cheers, Wayne

 

[Carlos]

Also, if you have unused tax credit and non-IRA investments with unrealized capital gains, you can harvest the capital gains to use the tax credit. That way you reduce the future taxes you pay whenever you cash in your investments by increasing the investment basis.

Cheers, Wayne

I'm not a tax expert nor am I offering tax advice but couldn't it be said that rather than utilizing unrealized cap gains one might consider an IRA conversion to a Roth IRA and capture the full tax credit assuming your tax liability exceeds $7,500?

Just a thought

 

[wwhitney]

I'm not a tax expert nor am I offering tax advice but couldn't it be said that rather than utilizing unrealized cap gains one might consider an IRA conversion to a Roth IRA and capture the full tax credit assuming your tax liability exceeds $7,500?

Sure, I think someone earlier in the thread suggested that. For 2010 you have the option to defer the tax liability from a conversion to 2011 and 2012 (50% in each year), so you'd obviously have to forego that deferral if you need the tax liability to utilize the tax credit.

Cheers, Wayne

 

[Desertstraw]

I appreciate the constructive criticism and want to thank wwhitney in particular. I think that his first point is well taken, since the residual owner has money tied up in this residue he is entitled to a return on his investment.

The second point can be argued two ways, buying it at the residual value would be cheaper than buying it on the open market as a used car. On the other hand, if you only intended to keep it for three years, you would make money by selling it at the market price if you bought it rather than returning it at the residual price if you leased it.

 

[wwhitney]

The second point can be argued two ways, buying it at the residual value would be cheaper than buying it on the open market as a used car. On the other hand, if you only intended to keep it for three years, you would make money by selling it at the market price if you bought it rather than returning it at the residual price if you leased it.

But in this situation you can still make the same money when the lease ends by buying at the residual price and then selling it on the market.

Wayne

 

[Desertstraw]

The second point can be argued two ways, buying it at the residual value would be cheaper than buying it on the open market as a used car. On the other hand, if you only intended to keep it for three years, you would make money by selling it at the market price if you bought it rather than returning it at the residual price if you leased it.

But in this situation you can still make the same money when the lease ends by buying at the residual price and then selling it on the market.

Wayne

Good point.

 

[smkettner]

Deleted

 

[LEAFer]

?spammer?

 

[greenleaf]

?spammer?

Probably. The spammer left behind a link from the signature.

 

[evnow]

?spammer?

Probably. The spammer left behind a link from the signature.

Yes. I've deleted the post based on IP.

 

[Coffee_Slurry]

I have never leased a car before, but this is the first time I'm considering it.

I'm worried that the Leaf could be a difficult car to sell between private parties. The potential buyer won't have the benefit of any tax credits, or a free charger installation.
Instead of just handing the keys over, they would either have to buy a new charger, or arrange to take and install mine. And they would have to do this quickly to keep the car running. I'm not really sure how this would pan out, or how many willing buyers there would be for used vehicles.

Even if it's just perceived/imagined, the diminished battery service after 3 years is more than an ICE. I can't predict how much.

If I can pre-negotiate a selling price for 3 years hence, that's worth paying a little more for the car now.

 

[Boomer23]

I'm worried that the Leaf could be a difficult car to sell between private parties.

Exactly my thinking. We're entering untrodden ground here. Your description of the scenario is on the money, IMHO, and this is one of the reasons why I'm leasing.

Consider also that we have no idea of how the Leaf will be viewed by the used car buying public three years from December. Just look at how Toyota went from the most respected brand to "unsafe" due to bad press that wasn't wholly deserved by all of their products (including the Prius).

I'm not saying that I expect any serious problems with the Leaf, but we have no control over the press and the reaction of a largely uneducated buying public. Look at the email comments from the general public to any newspaper article about EVs. At this early date, the reaction ranges from naive to skeptical to openly hostile. I know that these aren't the likely future buyers of used Leafs, but they are their friends and neighbors.

Of course, we all hope that the Leaf will be wildly successful, with waiting lists for months and used car buyers waiting with open arms.

 

[EVDRIVER]

I have never leased a car before, but this is the first time I'm considering it.

I'm worried that the Leaf could be a difficult car to sell between private parties. The potential buyer won't have the benefit of any tax credits, or a free charger installation.
Instead of just handing the keys over, they would either have to buy a new charger, or arrange to take and install mine. And they would have to do this quickly to keep the car running. I'm not really sure how this would pan out, or how many willing buyers there would be for used vehicles.

Even if it's just perceived/imagined, the diminished battery service after 3 years is more than an ICE. I can't predict how much.

If I can pre-negotiate a selling price for 3 years hence, that's worth paying a little more for the car now.

The charger is in the car. No wonder you have a ground loop

 

[planet4ever]

I have never leased a car before, but this is the first time I'm considering it.

I'm worried that the Leaf could be a difficult car to sell between private parties. The potential buyer won't have the benefit of any tax credits, or a free charger installation.
Instead of just handing the keys over, they would either have to buy a new charger, or arrange to take and install mine. And they would have to do this quickly to keep the car running. I'm not really sure how this would pan out, or how many willing buyers there would be for used vehicles.

Even if it's just perceived/imagined, the diminished battery service after 3 years is more than an ICE. I can't predict how much.

If I can pre-negotiate a selling price for 3 years hence, that's worth paying a little more for the car now.

The charger is in the car. No wonder you have a ground loop

We all know GroundLoop was just using sloppy terminology, and was talking about a charging station (a.k.a charging dock, a.k.a EVSE) rather than a charger. But I would still challenge the statement that "they would have to do this quickly to keep the car running." When you sell the car you will of course include the 120v charging cord that can be plugged in anywhere. Plugging that in for 12 hours a night will provide up to 60 miles range per day. That's over 20,000 miles per year!

That said, I too am planning to hedge my bets on the used car market by leasing.