NorCal e-Golf SEL Lease, should I do it?

[adamhoolhorst]

I think you need a minimum 30 mo lease for CA $2500 rebate.

Yeah just looked this up. Glad you let me know about this! Thanks for the help.

 

[miimura]

I got an offer last night that I am thinking of jumping on for a 2015 SEL:
24 mo lease
$2999 down, about $4,500 out the door with all other charges
$79/mo +tax
15,500 residual

Eligible for the $2,500 CA rebate as well. Anything I'm missing here!?!

I have two pieces of advice.
1. You need 30 months in order to qualify for the CA state rebate.
2. Don't put more than the rebate amount down in cash at the start of the lease.

Ask for the top line number "Dealer Selling Price". These days that number should be at or below $30,000 for a 2015 SEL.

 

[RonDawg]

Also, what is the yearly mileage allowance? A lot of cheap leases including the ones mentioned here have low mileage allowances. Great if you don't drive much, can get costly if you do.

 

[schmove]

I had a dealership tell me that: You pay tax on the rebate money as well as the cap cost plus your 625 for aquistion plus registration and doc fee.

Do you really pay tax on the $7500 rebate?!

 

[garypen]

I had a dealership tell me that: You pay tax on the rebate money as well as the cap cost plus your 625 for aquistion plus registration and doc fee.

Do you really pay tax on the $7500 rebate?!

The $7500 is not a rebate. It's a federal tax credit. If you were to buy the car, you would get a $7500 tax credit when you filed your 2015 taxes.
When leasing, VW applies the credit, which they get as the owner of the car, to your cap cost reduction, the entirety of which is taxable.

 

[miimura]

Do you really pay tax on the $7500 rebate?!

Yes, think of it this way - you are putting $7,500 more cash into the deal, but VW is giving it right back to you. You still have to pay the sales tax on the price of the car. The way the leases are taxed, you pay sales tax on everything except the residual and some of the small service fees. Everything that is paid up-front is taxed up front (including the applied tax credit) and the monthly payment is taxed at the normal tax rate each month.

 

[miimura]

I just noticed that the 2016's have hit the dealer lots and dealers that still have a significant number of 2015's are making pretty good deals. It looks like Capitol VW is selling 2015 SELs for $28,835. Unless there are some advertising shenanigans like including the $2,500 state rebate or something, that's a pretty compelling price. I would guess that VW will not put any incentives on the 2016's until the 2015's are really all gone.

 

[RonDawg]

I had a dealership tell me that: You pay tax on the rebate money as well as the cap cost plus your 625 for aquistion plus registration and doc fee.

Do you really pay tax on the $7500 rebate?!

In California, you end up paying your local sales tax, based on the car's registration address, on the difference between the Capital Cost and the Residual. Rather than making you pay for the entire tax up front like with a car purchase, you pay tax only on the Capitalized Cost Reduction (the "down payment) up front, and additional tax for each mothly payment. AFAIK you're not supposed to pay tax on the acquisition and doc fees. Registration already has the tax figured in.

Because you are paying tax throughout the term of the lease, note that if your local sales tax goes up or down, that will affect your payment, as does moving to a different location with a different sales tax rate.

 

[schmove]

Awesome, thanks everyone for the explanation.

Local dealer quoted me:

2015 e-Golf SEL Premium
Lease: 36 months / 10k miles per year
Due at Signing: $2,500 (includes DMV fees, title, license, registration, and your first payment) And you get $2,500 CA rebate in 4-6 weeks.
Monthly Payment: $246+tax

I think they still have 12 SELs in stock.

 

[stevestrange]

Awesome, thanks everyone for the explanation.

Local dealer quoted me:

2015 e-Golf SEL Premium
Lease: 36 months / 10k miles per year
Due at Signing: $2,500 (includes DMV fees, title, license, registration, and your first payment) And you get $2,500 CA rebate in 4-6 weeks.
Monthly Payment: $246+tax

I think they still have 12 SELs in stock.

Hmmm -- that looks no better than the 2016 SEL lease deal I saw at Sunnyvale VW just a couple days ago on their webpage, which was something like $3800 down and $199/mo. Now that it is October, all the special lease deals seem to have disappeared from the web pages of local dealerships.