If I'm not mistaken, the $7500 credit doesn't reduce the price of the vehicle. It's a non-refundable tax credit, which means you only get $7500 if you have at least $7500 in tax liabilities. It's kind of a scam if you ask me.
Buy or Lease?
As most of you already know the Alfa Tonale when leased qualifies for a $7500
reduction off the MSRP price. This will reduce either lease payments or the final
buyout price. Also saves on sales tax paid.
Unfortunately if you buy instead of leasing
no clean EV tax savings of $7500 off your income tax can be had. This was confirmed by my dealer when I ordered my Tonale.
it’s called the commercial Clean EV tax credit which is passed along to the customer who leases the vehicle.
What are you doing Buying or leasing?
reduction off the MSRP price. This will reduce either lease payments or the final
buyout price. Also saves on sales tax paid.
Unfortunately if you buy instead of leasing
no clean EV tax savings of $7500 off your income tax can be had. This was confirmed by my dealer when I ordered my Tonale.
it’s called the commercial Clean EV tax credit which is passed along to the customer who leases the vehicle.
What are you doing Buying or leasing?
1 - 20 of 28 Posts
No that is not correct. The $7500 tax credit used to lower your federal tax is not available for EV cars that have final assembly outside the US starting 2023 due to the Inflation Reduction Act which just took effect this year. The tax incentive I am referencing is only available to leasing companies like Ally leasing as a $7500 cost reduction when they buy EV vehicles even when built overseas. This loophole allows the Leasing company to pass this substantial savings to the
person who leases the Tonale from them.
I hope this helps. Ask your dealer about it as most dealers I checked with at first we’re not aware of it but when they checked it out found it to be true.
person who leases the Tonale from them.
I hope this helps. Ask your dealer about it as most dealers I checked with at first we’re not aware of it but when they checked it out found it to be true.
One correction: The $7,500 is fully taxable, like any down payment. You will reduce your monthly payments, but not your sales tax.As most of you already know the Alfa Tonale when leased qualifies for a $7500
reduction off the MSRP price. This will reduce either lease payments or the final
buyout price. Also saves on sales tax paid.
Unfortunately if you buy instead of leasing
no clean EV tax savings of $7500 off your income tax can be had. This was confirmed by my dealer when I ordered my Tonale.
it’s called the commercial Clean EV tax credit which is passed along to the customer who leases the vehicle.
What are you doing Buying or leasing?
Sales tax is less for leases than financing, but that is unrelated to the credit.
That is incorrect. This has nothing to do with tax credits for yourself.If I'm not mistaken, the $7500 credit doesn't reduce the price of the vehicle. It's a non-refundable tax credit, which means you only get $7500 if you have at least $7500 in tax liabilities. It's kind of a scam if you ask me.
This is a tax credit received by Ally, and they give it to you as down payment on the Tonale. It reduces your payments.
Also, if you bought, say a Tesla, you get the $7,500 as a refund in April as long as you had a Federal liability for the entire year of at least $7,500. Or if less, you get less. Just about every working person paid at least $7,500 in Fed taxes. It does not mean you OWE money. If your refund was $5,000 and you bought a Tesla, your refund would be $12,500.
I have owned 3 Teslas and leased a PHEV with the down payment stuff.
The sales tax on a lease is based on the cost basis of the car so it would be less with this write off applied.
Down payments do not reduce the sales tax. They are taxed. If you put $50,000 down, the state would not receive less sales tax.The sales tax on a lease is based on the cost basis of the car so it would be less with this write off applied.
Found this Motor Trend article referencing the
The EV tax credit only with cars leased.
“When combined with Alfa Romeo's $1,595 destination charge, the entry level Tonale Sprint comes in at $44,590, the mid-range Ti is priced at $46,590, and the top-level Veloce comes out to $49,090. What none of those prices take into account is the EV tax credits that were amended last year. According to Stellantis, the Alfa Romeo Tonale is eligible to take advantage of a $7,500 tax credit, but only as a lease. A Stellantis representative states, "Similar to the practice already in place, we are expecting our close lending partners to pass along a Capitalized Cost Reduction benefit on a lease of qualifying EVs for the amount of the Commercial Clean Vehicle Tax Credit. The leasing benefit will provide an effective and immediate access to the Credits to continue our growth in sales of electric vehicles." Due to the Tonale's final assembly taking place in Milan, Italy, it does not qualify for the Federal EV Tax Credit for the purchase of a new EV, Fuel Cell Vehicle (FCV), or PHEV.”
The EV tax credit only with cars leased.
“When combined with Alfa Romeo's $1,595 destination charge, the entry level Tonale Sprint comes in at $44,590, the mid-range Ti is priced at $46,590, and the top-level Veloce comes out to $49,090. What none of those prices take into account is the EV tax credits that were amended last year. According to Stellantis, the Alfa Romeo Tonale is eligible to take advantage of a $7,500 tax credit, but only as a lease. A Stellantis representative states, "Similar to the practice already in place, we are expecting our close lending partners to pass along a Capitalized Cost Reduction benefit on a lease of qualifying EVs for the amount of the Commercial Clean Vehicle Tax Credit. The leasing benefit will provide an effective and immediate access to the Credits to continue our growth in sales of electric vehicles." Due to the Tonale's final assembly taking place in Milan, Italy, it does not qualify for the Federal EV Tax Credit for the purchase of a new EV, Fuel Cell Vehicle (FCV), or PHEV.”
Even if you want to buy the vehicle. Just lease it first and then buy at the end or in the middle. Should be still better than buloaner. We need to wait though to be sure. Lease companies are not required to pass all of that incetive to customer. So far chrysler capital passes the full amount to customers so fingers crosssed.
The only downside would be for folks who wants like 5 years of loan.
The only downside would be for folks who wants like 5 years of loan.
This is really state dependant. Some states taxes the full value of the car for lease while Some only tax the lease payments.Down payments do not reduce the sales tax. They are taxed. If you put $50,000 down, the state would not receive less sales tax.
As long as the residual value of car is at or above the buyout price lease to buy makes sense with the EV incentive you can get. My dealer will get me that EV price reduction.Even if you want to buy the vehicle. Just lease it first and then buy at the end or in the middle. Should be still better than buloaner. We need to wait though to be sure. Lease companies are not required to pass all of that incetive to customer. So far chrysler capital passes the full amount to customers so fingers crosssed.
The only downside would be for folks who wants like 5 years of loan.
That impacts the buy or no buy decision at the end of the lease.As long as the residual value of car is at or above the buyout price lease to buy makes sense with the EV incentive you can get. My dealer will get me that EV price reduction.
Leasing vs buying from the beginning is not related to that. Even if the value of the car ends up being lower than the buyout price at the end of the lease you will still be better off than buying from the beginning since you get the $7500 discount.
Our taxes are not paid on the full value of the car, they are based on the depreciation (what you are paying for the lease). Car is $X today, and worth $Y in 24 months, so the difference is the lease cost (plus interest, etc). That value cannot be lowered by a down payment. The down payment is merely paying for part of the depreciation upfront. So the sales tax with $0 down or $50k down is the same. That's my thinking.This is really state dependant. Some states taxes the full value of the car for lease while Some only tax the lease payments.
So is it better with a 24 month lease and 6% interest rate to put down more than 20% or lesser down payment if you want to buy out the Tonale?Our taxes are not paid on the full value of the car, they are based on the depreciation (what you are paying for the lease). Car is $X today, and worth $Y in 24 months, so the difference is the lease cost (plus interest, etc). That value cannot be lowered by a down payment. The down payment is merely paying for part of the depreciation upfront. So the sales tax with $0 down or $50k down is the same. That's my thinking.
I didn't quite understand the question.So is it better with a 24 month lease and 6% interest rate to put down more than 20% or lesser down payment if you want to buy out the Tonale?
1. Buy it at 6% rate with 20% down (how many years of financing?)
2. Lease for 24 months and buy it at the end of 24 months (do you finance at that time or will you just pay the full amount? that amount would probably be 30-35k or so)
Are these the options you are comparing?
You should put down as little money as possible. Any down payment (not counting taxes/DMV upfront) will be completely lost if you total the car. So, if that's shortly after you get the car, it's a big hit to your wallet.So is it better with a 24 month lease and 6% interest rate to put down more than 20% or lesser down payment if you want to buy out the Tonale?
I would say $5k or less. $0 is ideal, but of course your monthly payments are high.
If you intend to buy-out the car, you should just finance it from day 1. Leasing usually means paying higher interest rates than financing (Money Factor used to be 4%+ when financing was 0-2.9%), and then you have to finance a used car. Used car rates are higher than new cars. Plus, in a normal world, the buy-out is typically HIGHER than the resale value of the car.
I think $7500 discount would offset the increased rates. Also on lease you are passing the resale value risk to the bank. If the car depreciates a lot then you can just return it, if you already purchased you are taking that depreciation.You should put down as little money as possible. Any down payment (not counting taxes/DMV upfront) will be completely lost if you total the car. So, if that's shortly after you get the car, it's a big hit to your wallet.
I would say $5k or less. $0 is ideal, but of course your monthly payments are high.
If you intend to buy-out the car, you should just finance it from day 1. Leasing usually means paying higher interest rates than financing (Money Factor used to be 4%+ when financing was 0-2.9%), and then you have to finance a used car. Used car rates are higher than new cars. Plus, in a normal world, the buy-out is typically HIGHER than the resale value of the car.
This is just a guess though still we need to see the programs. (if there is 0% APR for buying, I highly doubt ofc it may be a good option.) Currently APR on Stelvio is 7.26% while lease interest rate on Stelvio is much lower.
yeah down payment on lease should be as minimum as possible. I would even say 1k or less (I always do $0). The only exception is one pay leases that lowers your interest rate. That can be considered if you have the cash.
Yea, without knowing the money factor, residual and financing interest rates, this is a hard discussion to have.I think $7500 discount would offset the increased rates. Also on lease you are passing the resale value risk to the bank. If the car depreciates a lot then you can just return it, if you already purchased you are taking that depreciation.
This is just a guess though still we need to see the programs. (if there is 0% APR for buying, I highly doubt ofc it may be a good option.) Currently APR on Stelvio is 7.26% while lease interest rate on Stelvio is much lower.
yeah down payment on lease should be as minimum as possible. I would even say 1k or less (I always do $0). The only exception is one pay leases that lowers your interest rate. That can be considered if you have the cash.
PHEV/BEV, other than Tesla, tend to have 52% residual in 36 months, which is low. Tesla is in the 60s. So, leasing these cars isn't great. However, I agree there are benefits, I lease most of the time. I would think the resale value will be pretty low in 3 years since Alfa BEVs might be available, or at least other BEVs in lower price ranges. PHEVs are like Blu-Ray, just a transition medium. So their future value is low.
Current rates are crazy. I get why, but wow. I plan to refinance one of my cars in a few years (assuming the world goes back to normal haha).
I know rates are crazy. I got my Stelvio lease with less than 1% lease (0.8%). Last year I got a Wrangler lease with 2% and was thinking it is high. Now 4-5% looks normal for leases.Yea, without knowing the money factor, residual and financing interest rates, this is a hard discussion to have.
PHEV/BEV, other than Tesla, tend to have 52% residual in 36 months, which is low. Tesla is in the 60s. So, leasing these cars isn't great. However, I agree there are benefits, I lease most of the time. I would think the resale value will be pretty low in 3 years since Alfa BEVs might be available, or at least other BEVs in lower price ranges. PHEVs are like Blu-Ray, just a transition medium. So their future value is low.
Current rates are crazy. I get why, but wow. I plan to refinance one of my cars in a few years (assuming the world goes back to normal haha).
Normally FCA subsidizes the rates a lot for leases but probably they wont for Tonale because it would already have the $7500 incentive on it.
Just to clarify I am not saying leasing this car will be great compared to other BEVs or brands. I am just guessing it will be better than buying Tonale.
It is just luck at some point. Residuals on Stelvio was pretty bad, there were tons of incentives on it when leased it. It was 60% for 27 months. I was able buy pay tax on the purchase price and sell it for 7k profit on 17th month.
I wish Alfa was using Chrysler Capital like Jeeps. They are more flexible. With Ally you have to buy the car you cant sell it to third parties.
Receiving the benefits of the $7,500 credit (down payment) is ideal...granted that could always be legislated away by the time Tonale arrives in the US.I know rates are crazy. I got my Stelvio lease with less than 1% lease (0.8%). Last year I got a Wrangler lease with 2% and was thinking it is high. Now 4-5% looks normal for leases.
Normally FCA subsidizes the rates a lot for leases but probably they wont for Tonale because it would already have the $7500 incentive on it.
Just to clarify I am not saying leasing this car will be great compared to other BEVs or brands. I am just guessing it will be better than buying Tonale.
But I think we all need to see the numbers and figure it out. The low residual means leasing is expensive for these cars, and financing could be equal in price. Depends on the numbers. I prefer to lease when it makes sense.
It would be informative for those of us planning to lease if we share the lease deals that are offered to us for 3 year leases. Any mo ey down, interest rate and residual value after 3 years.
In this Autoweek UK article I read it says the. 3 year depreciation will be 52-55%. This means higher monthly lease payments for us who lease. Here it is
“
Depreciation
Analysts predict that the Alfa Romeo Tonale will retain between 52 and 55 per cent of its value after three years and 36,000 miles come trade-in time. In comparison, both the BMW X1 and Volvo XC40 should hold onto as much as 64 per cent of their original value after the same three-year period, although that depends a lot on the specification chosen.”
Does this depreciation figure seem right to you?
In this Autoweek UK article I read it says the. 3 year depreciation will be 52-55%. This means higher monthly lease payments for us who lease. Here it is
“
Depreciation
Analysts predict that the Alfa Romeo Tonale will retain between 52 and 55 per cent of its value after three years and 36,000 miles come trade-in time. In comparison, both the BMW X1 and Volvo XC40 should hold onto as much as 64 per cent of their original value after the same three-year period, although that depends a lot on the specification chosen.”
Does this depreciation figure seem right to you?
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