[Alf89]

Originally Posted by IS350

Just to clarify, are you saying your BMW dealer allowed the $7,500 off the purchase price, in determining your potential X5 45e lease?

I don't think he is.

I was just told today by two dealers that "the bank" (i.e., BMW Financials Services) is getting the $7,500 when you lease an X45e, and there is NO passthrough of that in the form of a savings to the lessee. This is different from my last two i3 leases where that amount was passed through to me in the form of a savings off the MSRP.

I assume all BMW dealers are addressing this issue in the same way.

Bummer cuz that $7,500 would have made the X45e a no-brainer for me. I guess the car is too new at the moment. Perhaps BMW will change their position on this in the future.

[TXSchnee]

Originally Posted by IS350

Just to clarify, are you saying your BMW dealer allowed the $7,500 off the purchase price, in determining your potential X5 45e lease?

Yes, if I would have gone the lease route, both BMW and Porsche would have taken the tax credit amount ($7500 for BMW and $6712 for Porsche) off the agreed purchase amount for lease. The finance arms then claim the tax credit as a lease is not considered ownership for the leasee (for tax credit purposes).

[IS350]

Originally Posted by TXSchnee

Yes, if I would have gone the lease route, both BMW and Porsche would have taken the tax credit amount ($7500 for BMW and $6712 for Porsche) off the agreed purchase amount for lease. The finance arms then claim the tax credit as a lease is not considered ownership for the leasee (for tax credit purposes).

Mind sharing which BMW dealership will take the $7,500 off my 45e lease cost? Every dealership I've spoken to says if I lease it, I lose it.

It would seem like BMW Financial would prefer customers lease, so BMWFS gets to claim the credits, without passing them along to lease customers.

I'm trying to estimate my taxes to make sure I can utilize the tax credit, otherwise I'll lease, but I hate to leave that $7,500 on the table for BMWFS.

[IS350]

Originally Posted by Alf89

I don't think he is.

I was just told today by two dealers that "the bank" (i.e., BMW Financials Services) is getting the $7,500 when you lease an X45e, and there is NO passthrough of that in the form of a savings to the lessee. This is different from my last two i3 leases where that amount was passed through to me in the form of a savings off the MSRP.

I assume all BMW dealers are addressing this issue in the same way.

Bummer cuz that $7,500 would have made the X45e a no-brainer for me. I guess the car is too new at the moment. Perhaps BMW will change their position on this in the future.

It sounds like we need to find his dealership, if they offered it to him.

Are you planning to finance, if that's the only way you can get it? 60 months at .90 is solid.

[TXSchnee]

Originally Posted by IS350

Mind sharing which BMW dealership will take the $7,500 off my 45e lease cost? Every dealership I've spoken to says if I lease it, I lose it.

It would seem like BMW Financial would prefer customers lease, so BMWFS gets to claim the credits, without passing them along to lease customers.

I'm trying to estimate my taxes to make sure I can utilize the tax credit, otherwise I'll lease, but I hate to leave that $7,500 on the table for BMWFS.

I am in TX, and these were local dealerships. I did not want a lease, and both dealerships used the reduction of purchase price by tax credits to try to get me to lease instead of purchase. This was in July, so maybe BMW financial had a change of heart on it, but I am in no way lying, as it doesn't help me in any way to make up a story. As far as utilizing the credit if you purchase, you just need to owe more than the amount of the credit ($7500 for the 45e) to claim it. If you are looking at a vehicle that starts over $60k, I assume you owe more than $7500 in income taxes. Edit to add: this would have been my 4th vehicle from this dealership and sales associate in 5 years, and third under BMWFS, so maybe they offered as a loyalty benefit in my case.

[Alf89]

Originally Posted by TXSchnee

I am in TX, and these were local dealerships. I did not want a lease, and both dealerships used the reduction of purchase price by tax credits to try to get me to lease instead of purchase. This was in July, so maybe BMW financial had a change of heart on it, but I am in no way lying, as it doesn't help me in any way to make up a story. As far as utilizing the credit if you purchase, you just need to owe more than the amount of the credit ($7500 for the 45e) to claim it. If you are looking at a vehicle that starts over $60k, I assume you owe more than $7500 in income taxes. Edit to add: this would have been my 4th vehicle from this dealership and sales associate in 5 years, and third under BMWFS, so maybe they offered as a loyalty benefit in my case.

I don’t think your lying. I’m more inclined to think someone at your dealership misinformed you. If you spoke with someone about it in July, maybe they just assumed and didn’t have accurate info. Didn’t the X45e only come out recently?

I also had someone at another dealership tell me that I’d get the $7,500 if I leased. It’s not surprising that car salesmen don’t know what they’re talking about.

[Alf89]

Originally Posted by IS350

Are you planning to finance, if that's the only way you can get it? 60 months at .90 is solid.

I was only planning to lease the 45e. I don’t think I’ll be buying a hybrid or ev anytime soon.

[IS350]

Originally Posted by TXSchnee

I am in TX, and these were local dealerships. I did not want a lease, and both dealerships used the reduction of purchase price by tax credits to try to get me to lease instead of purchase. This was in July, so maybe BMW financial had a change of heart on it, but I am in no way lying, as it doesn't help me in any way to make up a story. As far as utilizing the credit if you purchase, you just need to owe more than the amount of the credit ($7500 for the 45e) to claim it. If you are looking at a vehicle that starts over $60k, I assume you owe more than $7500 in income taxes. Edit to add: this would have been my 4th vehicle from this dealership and sales associate in 5 years, and third under BMWFS, so maybe they offered as a loyalty benefit in my case.

Thanks, if you're close with any of those dealerships, enough to ask if that $7,500 can still come off a lease, I'd love to know what they say now.

As for the credit if I finance, after adding in my my losses, I usually get a refund check, so I'm not sure I could find a way to utilize it, unless I converted some IRA $ to Roth, perhaps, may need to find a good CPA, would need to do it by next month, and have to decide whether to lease or buy shortly. Car is in production.

[IS350]

Originally Posted by Alf89

I was only planning to lease the 45e. I don’t think I’ll be buying a hybrid or ev anytime soon.

I understand, for fear of depreciation? If I buy, I'll still likely sell in 3 years, but if I can utilize the tax credit, I hope to come out ahead on a buy vs. lease.

[TXSchnee]

Originally Posted by Alf89

I don’t think your lying. I’m more inclined to think someone at your dealership misinformed you. If you spoke with someone about it in July, maybe they just assumed and didn’t have accurate info. Didn’t the X45e only come out recently?

I also had someone at another dealership tell me that I’d get the $7,500 if I leased. It’s not surprising that car salesmen don’t know what they’re talking about.

I am not saying I could claim the $7500 in tax credits if I leased. I was being questioned on pass through savings of the $7500. The July comment was when I picked up my Cayenne, the 45e came in a month later and I was told the same thing, if I leased, the purchase price of the vehicle would be lowered by the tax credit amount, this would, in effect, act like an extra down payment and reduce the monthly payment amount. Others on here have not been given that info, and told the tax credit savings does not pass through from BMWFS to the customer.

[TXSchnee]

Originally Posted by IS350

Thanks, if you're close with any of those dealerships, enough to ask if that $7,500 can still come off a lease, I'd love to know what they say now.

As for the credit if I finance, after adding in my my losses, I usually get a refund check, so I'm not sure I could find a way to utilize it, unless I converted some IRA $ to Roth, perhaps, may need to find a good CPA, would need to do it by next month, and have to decide whether to lease or buy shortly. Car is in production.

I usually get a refund check as well, but even with a $4000 refund last year, I still paid $36,000 in income tax to federal. The tax credit reduces the income tax paid, doesn't matter if you already get a refund, so basically, if income was the same this year, and I still paid in $36,000 the credit would make it so I only should have paid $29,288 and my refund would rise accordingly. (I am using the $6712 credit available on my Cayenne for this example).

[rlou]

I recently put in an order for a 2021 45e in 10/2020. Prior to placing the order, I checked with several dealerships in WA, OR and CA specifically to determine if the $7500 credit would be applied to a lease as a capital cost reduction, and all told me that the tax credit would NOT be available on a lease. So, I will end up purchasing it...

[IS350]

Originally Posted by TXSchnee

I usually get a refund check as well, but even with a $4000 refund last year, I still paid $36,000 in income tax to federal. The tax credit reduces the income tax paid, doesn't matter if you already get a refund, so basically, if income was the same this year, and I still paid in $36,000 the credit would make it so I only should have paid $29,288 and my refund would rise accordingly. (I am using the $6712 credit available on my Cayenne for this example).

Thanks. Are you saying you still wrote them a check for your tax bill, or your net was positive after you did your taxes, and they sent you a check?

I will add a marriage and child deduction this year, so I'm not sure that'll leave enough tax owed to utilize the $7,500. I'm hoping to get a TurboTax in early December to see what I'd need to do to capture the credit.

All that said, if this car tanks 50% in 3 years of financing, I would have likely been better off leasing. It's a gamble, oh well.

[Alf89]

Originally Posted by TXSchnee

I am not saying I could claim the $7500 in tax credits if I leased.

Yes, I understood that to mean that the $7,500 would reduce your purchase price.

[TXSchnee]

Originally Posted by IS350

Thanks. Are you saying you still wrote them a check for your tax bill, or your net was positive after you did your taxes, and they sent you a check?

I will add a marriage and child deduction this year, so I'm not sure that'll leave enough tax owed to utilize the $7,500. I'm hoping to get a TurboTax in early December to see what I'd need to do to capture the credit.

All that said, if this car tanks 50% in 3 years of financing, I would have likely been better off leasing. It's a gamble, oh well.

Net positive. Money taken from pay withholding was higher than need be after doing taxes. We ended up being eligible for the $2000/per child tax credit for 2019, had always made too much previously, but new tax laws allow up to $500,000/year income now. As long as you owe at least $7500 in federal income taxes, you can claim the full credit, anything lower and it adjusts amount appropriately (example, you owe $6000, that is the most you can use out of the $7500 credit). It also doesn't carry over, so you cannot use some for 2020 taxes and the rest for 2021. It really is up to you on the lease, it may well take a depreciation hit, but constant lease payments get old after awhile.

[IS350]

Originally Posted by TXSchnee

Net positive. Money taken from pay withholding was higher than need be after doing taxes. We ended up being eligible for the $2000/per child tax credit for 2019, had always made too much previously, but new tax laws allow up to $500,000/year income now. As long as you owe at least $7500 in federal income taxes, you can claim the full credit, anything lower and it adjusts amount appropriately (example, you owe $6000, that is the most you can use out of the $7500 credit). It also doesn't carry over, so you cannot use some for 2020 taxes and the rest for 2021. It really is up to you on the lease, it may well take a depreciation hit, but constant lease payments get old after awhile.

I appreciate that. I am likely making it more complex than needed, but hope TurboTax will give me a better idea of my tax bill early next month when the new software is out, before I decide to buy or lease. It should just be AGI, minus $24k married credit, minus $2k per child. I claim 10 exemptions on my W-4 at work, so hopefully the withholdings will be able to eat up that $7,500 credit.

True on continued lease payments getting old, but, the constant warranty and free maintenance every 3 years is nice.

[IS350]

Originally Posted by seniorcitizen

I don't put too many miles on my cars.
I have a convertible for spring/summer/fall. It is 2007 Audi A4 Cab with only 44000 miles.
We don't take a lot of long road trips.
So primary use of the car is when whole family wants to go somewhere and my daily work commute during winter.
MN Winters can be cold and long.

I wanted to buy a car which provided better mileage because it is good for environment. Took a long look at Tesla Model Y and X. Could not stomach all the quality issues they are having. I wasn't following BMW closely so I was pleasantly surprised to find X5 45e. I have owned BMW's before so it was a no brainer to get a plugin hybrid.

I will place my order with in next week and share pictures etc when the car arrives.

Still leaning towards leasing.

Thank you all of your comments.

Still think you'll lease?
I'm tempted by the .90 at 60 months to finance and that tax credit. Still, if the value tanks in 3 years, the lease seems smarter.

[jc.bmw]

If you’re going to close the year owning more than $7500 in _unpaid_ taxes, I’d seriously consider buying instead of leasing. Folks are getting 0.9% APR and $3500 rebate from BMW financial services.

This is the second generation of the X5 hybrid and it’s really a good purchase. It drives so well in electric that I see little risk in 3 years. There are other factors like recalls that can create a bad name for the model but hopefully that was a one time thing.

I took the risk, and financed the full amount given the 0.9% APR and the current positive prospects of the stock market with the 2021 “back to normal” stance.

[IS350]

Originally Posted by jc.bmw

If you're going to close the year owning more than $7500 in _unpaid_ taxes, I'd seriously consider buying instead of leasing. Folks are getting 0.9% APR and $3500 rebate from BMW financial services.

This is the second generation of the X5 hybrid and it's really a good purchase. It drives so well in electric that I see little risk in 3 years. There are other factors like recalls that can create a bad name for the model but hopefully that was a one time thing.

I took the risk, and financed the full amount given the 0.9% APR and the current positive prospects of the stock market with the 2021 "back to normal" stance.

Congrats, well done! i thought it was a $2,500 rebate, no? I guess an extra $1,000 for loyalty?

I think a buy is a smart move, given the rates, lease would be $300 less/month than the finance, freeing up more cash for the market, and giving the option to turn it back in if values tank, but, the tax credit essentially lowers the finance payment equivalent around $150.

I'm still conflicted. You or anyone else look at BMW Select or Owner's Choice finance options, which still would allow the tax credit?

[Penguino]

The 45e is a PLUS not a MINUS in my opinion. Regardless how outdated the tech might seem in 5-7 years, it'll still be a better purchase than a comparable same-year 45 X5.

If you are concerned about technology depreciation, sell it at year 3 and repurchase another one.

[Penguino]

Originally Posted by IS350

Congrats, well done! i thought it was a $2,500 rebate, no? I guess an extra $1,000 for loyalty?

I think a buy is a smart move, given the rates, lease would be $300 less/month than the finance, freeing up more cash for the market, and giving the option to turn it back in if values tank, but, the tax credit essentially lowers the finance payment equivalent around $150.

I'm still conflicted. You or anyone else look at BMW Select or Owner's Choice finance options, which still would allow the tax credit?

PenFed has a similar program as well. It's normally what I use.

[IS350]

Originally Posted by Penguino

The 45e is a PLUS not a MINUS in my opinion. Regardless how outdated the tech might seem in 5-7 years, it'll still be a better purchase than a comparable same-year 45 X5.

If you are concerned about technology depreciation, sell it at year 3 and repurchase another one.

Thought about that, just wonder if selling at year 3 may see values in the $30k range vs. lease residual of about $45k on an $82k MSRP vehicle.