[bro1999]

Thanks to nik.taylor for posting the screen grab.

This message seemed to go out to ALL Chevy dealers, so leasing doesn't seem to be region restricted, like the Spark EV and '16 Volt...they apply for all regions.

Bolt LT: 36 month lease
Residual: 58% (likely for 15k miles, 10k mile lease should be 3% higher, or 61%)
Money factor: .0005
CCR/Lease cash: $0

Premier trim has 1% lower residuals, otherwise the same.

I HAVE To think there is some CARB state-only incremental CCR available....just a matter of how much. FWIW, the Volt's incremental CCR is $2,250 in CARB states currently.

For fun, here are the lease numbers for a barebones base $37.5k LT for someone in a non-CARB state sold @ MSRP (let's assume 6% tax, tax only the monthly, and another ~$1,200 in fees on top....doc/lease acquisition/registration):
36 months/10k miles
Price: $37,495
Residual: 61%
MF: .0005 /1.2%
$0 down
Monthly payment: $507

 

[Bacardi]

There's just no way there won't be lease incentives, expect the national deal to be $299-$369/mo and $1499-$2999 down...

I also wouldn't be surprised if they offer an unlimited mile option like they did for the Spark...

 

[bro1999]

There's just no way there won't be lease incentives, expect the national deal to be $299-$369/mo and $1499-$2999 down...

I also wouldn't be surprised if they offer an unlimited mile option like they did for the Spark...

Looks like there will be no incentives in the non-CARB states, at least initially. Non-CARB'ers who placed orders need not bother with leasing.

Now how much "bonus" lease cash are CARB staters being offered...feel free to chime in, Rick @ Keyes.

 

[phil0909]

So, are these numbers good? Pardon my ignorance - it's been over 18 years since I leased my current car.

.0005 is a 1.2% APR, so that seems good. I'm assuming the residual of 57-58% includes the $7,500 federal tax credit, so the residual percentage would be comparable to ~48% on a car not eligible for tax credit (I deduct $7,500 from both numerator and denominator - sale price and residual value. Net percentage varies slightly by trim level and options). 48% net residual seems not great, but reasonable for an EV?

Why will GM want to provide lease incentives? Do they like leasing better than selling/financing? I'm not disagreeing, just not understanding why they would wish to make less profit on a lease than on a sale.

 

[bro1999]

So, are these numbers good? Pardon my ignorance - it's been over 18 years since I leased my current car.

.0005 is a 1.2% APR, so that seems good. I'm assuming the residual of 57-58% includes the $7,500 federal tax credit, so the residual percentage would be comparable to ~48% on a car not eligible for tax credit (I deduct $7,500 from both numerator and denominator - sale price and residual value. Net percentage varies slightly by trim level and options). 48% net residual seems not great, but reasonable for an EV?

Why will GM want to provide lease incentives? Do they like leasing better than selling/financing? I'm not disagreeing, just not understanding why they would wish to make less profit on a lease than on a sale.

Traditionally, leasing companies almost always pass at least a portion of the $7,500 tax credit to customers. Even the '16 Volt had about $4,600 lease cash on the hood at initial launch.

Aside from lease cash, the numbers look good for the Bolt.

 

[phil0909]

Traditionally, leasing companies almost always pass at least a portion of the $7,500 tax credit to customers. Even the '16 Volt had about $4,600 lease cash on the hood at initial launch.

Thanks, bro. My understanding is that the entire tax credit is passed along, either in the purchase price or in the residual value. Any leasing company that keeps a portion of the credit would be grossly uncompetitive - why would anyone lease from a company that steals thousands of dollars of tax credits from the customer? Seems unlikely in any kind of reasonably free market.

Also, the federal tax credit applies in all states, not just CARB states. So the tax credit would not explain why the manufacturer would offer lease incentives only in CARB states.

What am I missing? Thanks,

 

[bro1999]

For fun, I plugged in a 51% residual (same as the Volt), and to get to the same monthly payment as a $0 incentive, 61% residual lease, it would require $4,000 in lease cash.

So a 10% higher residual is equivalent to about $4k lease cash on a 36 month lease. Interesting. Makes me wonder if GM is inflating the Bolt's residual.

 

[nik.taylor]

One dealer told me those numbers are correct but they received an updated sheet with $2500 CCR.

 

[bro1999]

One dealer told me those numbers are correct but they received an updated sheet with $2500 CCR.

I wonder if that's BASE CCR or CARB state-only CCR?

 

[nik.taylor]

I wonder if that's BASE CCR or CARB state-only CCR?

They didn't mention that unfortunately.

 

[DonC]

The residual is very high -- bro1999 is estimating $4000 -- and there is $2500 in CCR. So $6500. I expect the CCR to go higher after initial demand is met, but only in CARB states with the ZEV mandate (subset of CARB). GM has a lot of flexibility in the leases. The Bolt EV qualifies for $14000 in ZEV credits plus the $7500 tax credit. That's $21,500 in credits for a $40,000 car. Quite a bit.

 

[DonC]

Also, the federal tax credit applies in all states, not just CARB states. So the tax credit would not explain why the manufacturer would offer lease incentives only in CARB states.

What am I missing? Thanks,

You're missing the $14000 in ZEV credits. FYI the tax credit is apportioned over the life of the car, and hence split between the lease depreciation and the residual. Note the ZEV credits are only available in CARB states with the ZEV mandate (sorry Washington).

 

[bro1999]

The residual is very high -- bro1999 is estimating $4000 -- and there is $2500 in CCR. So $6500. I expect the CCR to go higher after initial demand is met, but only in CARB states with the ZEV mandate (subset of CARB). GM has a lot of flexibility in the leases. The Bolt EV qualifies for $14000 in ZEV credits plus the $7500 tax credit. That's $21,500 in credits for a $40,000 car. Quite a bit.

I argue that CARB-staters should be passed on the full $7.5k fed tax credit on a Bolt lease.

I believe a Volt is only worth 1.5 ZEV credits currently (and ~1 starting in 2018 as it currently stands).

 

[phil0909]

You're missing the $14000 in ZEV credits. FYI the tax credit is apportioned over the life of the car, and hence split between the lease depreciation and the residual. Note the ZEV credits are only available in CARB states with the ZEV mandate (sorry Washington).

But ZEV credits apply to sales just as well as leases. I'm still not getting why it makes sense for GM to offer an incentive for leases, over and above any discount or incentive offered for straight sales.

 

[Bacardi]

entire tax credit is passed along, either in the purchase price or in the residual value

This does seem to be a sticking point for EVs, they're better off to structure the lease to include a $7500 incentive and mark up other things...So many factors to leasing, incentives are just one part...GMF historically waives the first payment and has very low money factors...Perhaps marketing wise it would be better to advertise $7500 off...

One dealer told me those numbers are correct but they received an updated sheet with $2500 CCR.

That makes more sense...I really can't believe there wouldn't be any incentives...The Mirai dropped from $499/mo to $350ish/mo, the Clarity just came out to $369/mo and Prime will be a huge competitor...

If there was a bet I could make in Vegas, I'd bet we can expect more CCR updates...

 

[DonC]

I argue that CARB-staters should be passed on the full $7.5k fed tax credit on a Bolt lease.

I believe a Volt is only worth 1.5 ZEV credits currently (and ~1 starting in 2018 as it currently stands).

If you bought a Bolt EV you'd get a $7500 tax credit which would be for the life of the car. Given you lose about 50% of a car's value over the first three years, if you lease then, logically, you'd get half the credit, or $3750, over the first three years. I think that's about what we're seeing on the leases, which seems fair to me. Otherwise you make leasing more attractive than purchasing. Alternatively just take it off the MSRP before you calculate the residual. That would work as well. Nissan did it this way on the Leaf leases initially. Not sure about now.

Yeah, the rules change after calendar 2017. I think that starting in 2018 the ZEV credits for the Volt and other TZEVs use a formula ((.01 X electric range on UDDS) + .03 + .02 for going more than 10 miles on USO6). There's a hard cap of 1.1 ZEV credits so it can't be more than that. For a ZEV like the Bolt EV it's ((.01 X range on UDDS) + .5). More reason to sell now!

 

[DonC]

But ZEV credits apply to sales just as well as leases. I'm still not getting why it makes sense for GM to offer an incentive for leases, over and above any discount or incentive offered for straight sales.

I don't think it does. I think the deal is just structured in a different way. IOW if the market price of a Bolt EV is $X, and you get $2000 in lease cash, whether you buy or lease you'd be able to get a purchase price of X-$2000. It would just show up differently in a lease or sale document. In one it might be called "lease cash" and in the other "rebate". Note that in both cases there is a sale -- to you or to your lessor. It's just to a different buyer. From the dealer perspective it's all the same.

 

[phil0909]

I don't think it does. I think the deal is just structured in a different way. IOW if the market price of a Bolt EV is $X, and you get $2000 in lease cash, whether you buy or lease you'd be able to get a purchase price of X-$2000. It would just show up differently in a lease or sale document. In one it might be called "lease cash" and in the other "rebate". Note that in both cases there is a sale -- to you or to your lessor. It's just to a different buyer. From the dealer perspective it's all the same.

Thanks Don, this sounds right to me.

 

[phil0909]

If you bought a Bolt EV you'd get a $7500 tax credit which would be for the life of the car. Given you lose about 50% of a car's value over the first three years, if you lease then, logically, you'd get half the credit, or $3750, over the first three years.

I don't think this is right. The tax credit accrues in full, immediately upon the first sale of the vehicle. After the first day of ownership, there is no more tax credit being earned or amortized. If the leasing company does not credit the full $7,500 to the initial leaseholder, then they are pocketing money they should not really be keeping. I'm not saying it doesn't happen, I just don't want it happening to me!

The straightforward way to do this is:
1. The leasing company receives the full $7500 credit upon buying the car, incurring a net cost of $29,995 to buy the base Bolt
2. The lessee (e.g., me) pays for a lease based on the actual net cost $29,995, rather than $37,495.
3. The lease's residual value is a lot less than 58% (or 61% or whatever) of $37,495, because no further tax credit is available. At the end of a 3-year lease, the Bolt is probably worth roughly $15k - half of the $30k net price paid up front. That's what the leasing company can sell for, and what they should show as residual value.
Based on the numbers niktaylor found, it appears GM is not doing this the straightforward way...

 

[Bacardi]

I don't think this is right. The tax credit accrues in full, immediately upon the first sale of the vehicle. After the first day of ownership, there is no more tax credit being earned or amortized. If the leasing company does not credit the full $7,500 to the initial leaseholder, then they are pocketing money they should not really be keeping. I'm not saying it doesn't happen, I just don't want it happening to me!

The straightforward way to do this is:
1. The leasing company receives the full $7500 credit upon buying the car, incurring a net cost of $29,995 to buy the base Bolt
2. The lessee (e.g., me) pays for a lease based on the actual net cost $29,995, rather than $37,495.
3. The lease's residual value is a lot less than 58% (or 61% or whatever) of $37,495, because no further tax credit is available. At the end of a 3-year lease, the Bolt is probably worth roughly $15k - half of the $30k net price paid up front. That's what the leasing company can sell for, and what they should show as residual value.
Based on the numbers niktaylor found, it appears GM is not doing this the straightforward way...

I understand your mindset but there isn't a right or wrong way, there are so many ways to make leasing attractive, GM simply doesn't match their incentives to the tax credit...Even minor things, such as credit tiers, GM only requires a 620 credit score to for the top tier, even minor things like a "single pay lease" discount is another discount that needs to be taken into consideration...At the end of the day very few understand the leasing numbers and dealers love that...This is why ultimately GM will advertise "lease today, only $XX9/mo and $XXX9 due at signing!", no mentioning of the incentives...