Leasing an F-150 Lightning

[BennyTheBeaver]

I had started this discussion in a thread about Battery Packs and didn't want to keep hijacking that thread. Here is more, recent, information about Leasing and Tax Credits.

According to these articles regarding leasing and credits...

"The other issue is that when it comes to leasing Ford’s EVs, lessees cannot take advantage of the tax credits as part of a cost reduction on the car. Ford Financial services will not pass this rebate on. Several brands use the Federal EV tax credit as essentially an upfront discount on leases. For example, if you lease VW’s ID4, which like the Mach-E, has no margin between the invoice and MSRP, you get the $7,500 rebate which makes the VW lease much more competitive than a similarly priced Mach-E."

" Leasing likely doesn't earn you the credit. When you lease a new EV the tax credit still applies, but since it stays with the original owner, most OEMs don't pass on the credit when you lease. Instead, they keep the credit, like Ford is doing with the latest Mustang Mach-e, which qualifies for a full $7,500 credit. This may affect the lease price on certain EVs, since some manufacturers do choose to pass on the savings, like VW which offers a $7,500 zero-emission bonus for lessors on its 2021 ID.4."

Sources:
https://jalopnik.com/ford-wants-to-compete-with-tesla-but-its-dealers-are-g-1847694720
https://www.carsdirect.com/deals-articles/how-it-works-federal-ev-tax-credit

I, personally, can't understand why you would lease an F-150 Lightning when you can buy one with potentially $12,500 (if the new proposed bill passes) in instant up front savings and you can resell it for an extremely high price in 2-4 years. How much do you think my Lightning Pro that I would have only paid $27,474 for will be worth in 2-4 years? Leasing seems like a throw away at that point, though a lot of people enjoy not dealing with the hassle of selling.

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[sotek2345]

I had started this discussion in a thread about Battery Packs and didn't want to keep hijacking that thread. Here is more, recent, information about Leasing and Tax Credits.

According to these articles regarding leasing and credits...

"The other issue is that when it comes to leasing Ford’s EVs, lessees cannot take advantage of the tax credits as part of a cost reduction on the car. Ford Financial services will not pass this rebate on. Several brands use the Federal EV tax credit as essentially an upfront discount on leases. For example, if you lease VW’s ID4, which like the Mach-E, has no margin between the invoice and MSRP, you get the $7,500 rebate which makes the VW lease much more competitive than a similarly priced Mach-E."

" Leasing likely doesn't earn you the credit. When you lease a new EV the tax credit still applies, but since it stays with the original owner, most OEMs don't pass on the credit when you lease. Instead, they keep the credit, like Ford is doing with the latest Mustang Mach-e, which qualifies for a full $7,500 credit. This may affect the lease price on certain EVs, since some manufacturers do choose to pass on the savings, like VW which offers a $7,500 zero-emission bonus for lessors on its 2021 ID.4."

Sources:
https://jalopnik.com/ford-wants-to-compete-with-tesla-but-its-dealers-are-g-1847694720
https://www.carsdirect.com/deals-articles/how-it-works-federal-ev-tax-credit

I, personally, can't understand why you would lease an F-150 Lightning when you can buy one with potentially $12,500 (if the new proposed bill passes) in instant up front savings and you can resell it for an extremely high price in 2-4 years. How much do you think my Lightning Pro that I would have only paid $27,474 for will be worth in 2-4 years? Leasing seems like a throw away at that point, though a lot of people enjoy not dealing with the hassle of selling.

Ford offers something called "Ford Options" that is similar to a lease, but you take ownership and get the tax credit. It is basically a balloon payment loan (with low interest) for 36 or 48 months with a guaranteed buy back amount (the balloon). This is what I plan to use because it shifts the risk to Ford if the Lighting has any issues or technology surges ahead. I'd you like it at the end, or it had a higher resale value - buy out the loan and keep the truck. If not, give it back to Ford.

 

[BennyTheBeaver]

Here is the "Ford Options" details you are referring for anyone else unfamiliar:

https://www.ford.com/finance/finance-options/ford-options#OptionComparison

It shows the difference between Ford Options (which isn't technically a lease), regular purchase, and leasing.

I will agree that at the end of the day it serves the same purpose as a lease but through a different method.

The below article specifically describes what it looks like on the Mach-E.

https://www.carsdirect.com/deals-articles/ford-mustang-mach-e-buying-vs-leasing-vs-ford-options

 

[astricklin]

I had started this discussion in a thread about Battery Packs and didn't want to keep hijacking that thread. Here is more, recent, information about Leasing and Tax Credits.

According to these articles regarding leasing and credits...

"The other issue is that when it comes to leasing Ford’s EVs, lessees cannot take advantage of the tax credits as part of a cost reduction on the car. Ford Financial services will not pass this rebate on. Several brands use the Federal EV tax credit as essentially an upfront discount on leases. For example, if you lease VW’s ID4, which like the Mach-E, has no margin between the invoice and MSRP, you get the $7,500 rebate which makes the VW lease much more competitive than a similarly priced Mach-E."

" Leasing likely doesn't earn you the credit. When you lease a new EV the tax credit still applies, but since it stays with the original owner, most OEMs don't pass on the credit when you lease. Instead, they keep the credit, like Ford is doing with the latest Mustang Mach-e, which qualifies for a full $7,500 credit. This may affect the lease price on certain EVs, since some manufacturers do choose to pass on the savings, like VW which offers a $7,500 zero-emission bonus for lessors on its 2021 ID.4."

Sources:
https://jalopnik.com/ford-wants-to-compete-with-tesla-but-its-dealers-are-g-1847694720
https://www.carsdirect.com/deals-articles/how-it-works-federal-ev-tax-credit

I, personally, can't understand why you would lease an F-150 Lightning when you can buy one with potentially $12,500 (if the new proposed bill passes) in instant up front savings and you can resell it for an extremely high price in 2-4 years. How much do you think my Lightning Pro that I would have only paid $27,474 for will be worth in 2-4 years? Leasing seems like a throw away at that point, though a lot of people enjoy not dealing with the hassle of selling.

The current tax credit is not 'up front' and I believe the proposal for $12500 is also not going to be up front. You will get it when you file your taxes. So you have to be able to get financed for the full purchase price and make payments at the full price between the time that you purchase the vehicle and when you get your tax return the following year. Then you will have to refinance the loan if you want to lower your payment.
Currently the tax credit is non refundable meaning that if in the year that you purchase the vehicle you have less that $7500 in total tax liability then you do not get the full $7500. The proposal has the credit being refundable. However, nothing has been passed yet and it won't be for several months so I would plan on the credit being what it is today and nothing more as it's quite possible it will get changed or removed before being passed.

Tldr; Plan for the credit to stay as it is and then be happy if it is more.

 

[EVTruckGuy]

The current tax credit is not 'up front' and I believe the proposal for $12500 is also not going to be up front. You will get it when you file your taxes. So you have to be able to get financed for the full purchase price and make payments at the full price between the time that you purchase the vehicle and when you get your tax return the following year. Then you will have to refinance the loan if you want to lower your payment.
Currently the tax credit is non refundable meaning that if in the year that you purchase the vehicle you have less that $7500 in total tax liability then you do not get the full $7500. The proposal has the credit being refundable. However, nothing has been passed yet and it won't be for several months so I would plan on the credit being what it is today and nothing more as it's quite possible it will get changed or removed before being passed.

Tldr; Plan for the credit to stay as it is and then be happy if it is more.

The proposed credit will provide up front money at the time of sale, which is different from the existing tax credit.

 

[Sgt Beavis]

The proposed credit will provide up front money at the time of sale, which is different from the existing tax credit.

This is correct. It is proposed as a point of sale rebate. The dealer would get the $12K after the transaction is done. This would make leasing a much more viable option. It’s definitely what I’m going to do if the bill gets passed.

 

[shutterbug]

This is correct. It is proposed as a point of sale rebate. The dealer would get the $12K after the transaction is done. This would make leasing a much more viable option. It’s definitely what I’m going to do if the bill gets passed.

Leasing is still more expensive than Ford Options financing. Off the top of my head, leases require acquisition fees at the beginning of the lease as well as GAP insurance. And at the end of the term, if you want to keep the vehicle, you just pay off the balance and there no additional fees.

 

[Pioneer74]

Leasing is still more expensive than Ford Options financing. Off the top of my head, leases require acquisition fees at the beginning of the lease as well as GAP insurance. And at the end of the term, if you want to keep the vehicle, you just pay off the balance and there no additional fees.

Ford leases include GAP insurance, FWIW.

 

[metroshot]

Agree with @sotek2345

Ford Options seems like the best of both worlds (lease & buy) - you can still get the tax credit as well as the lower monthly payments with a balloon due at the end (like a lease RV).

Since it's a first year, new model, new design vehicle, I typically would lease it see if the car is worthy of keeping at the end (buyout price on residual contract).
If the car is a problem then I am not out the down payment (financed) and the vehicle is returned without having to pay for the remaining RV.

This Lighting I am hoping will have minor issues and not have major issues like the Chevy Bolt battery fires....

 

[astricklin]

Personally, when we order, I will be basing my decision based on the tax credit that exists. We don't know what may or may not be passed in the future and I'm not going to make financial decisions based on hope.
If the tax credit changes before my vehicle is in production then I could change my order if I want to, if not then I will just get additional money off the vehicle that I chose originally.

 

[shutterbug]

Ford leases include GAP insurance, FWIW.

So, are you saying that the same monthly payment (and same down payment) as Options will include GAP insurance at no extra cost, or are you saying that GAP insurance is a mandatory add on to lease payment?

 

[Pioneer74]

So, are you saying that the same monthly payment (and same down payment) as Options will include GAP insurance at no extra cost, or are you saying that GAP insurance is a mandatory add on to lease payment?

I'm saying that whatever price Ford quotes you for a "Red Carpet Lease" includes GAP insurance. You can't decline it. That is why, to me, it makes no sense to put anything down on a Ford lease. If you drive it off the lot and it's totaled in the first mile you drive, you'll lose your down payment.

I don't know about "Options". I never discussed that with my salesperson.

 

[shutterbug]

I'm saying that whatever price Ford quotes you for a "Red Carpet Lease" includes GAP insurance. You can't decline it. That is why, to me, it makes no sense to put anything down on a Ford lease. If you drive it off the lot and it's totaled in the first mile you drive, you'll lose your down payment.

I don't know about "Options". I never discussed that with my salesperson.

As I understand Options and RCL have the same residuals. If you put nothing down or minimal amount, the monthly payment will be higher. Add GAP on top of that, and the lease is simply more expensive than Options, which was my original point.

 

[BennyTheBeaver]

The current tax credit is not 'up front' and I believe the proposal for $12500 is also not going to be up front.

Incorrect, the current proposal is up front. As long as you qualify based on MSRP purchase price and income you can recieve the full amount of the credit up front. This is because now the Dealer can claim the credit allowing you a cash discount essentially.

The current EV credits will not exist when you finally do get your truck. Whether they will exist as they are currently trying to pass them or a variation of it, something will change.

You can choose to not speculate on what they may be, but that's alot of what this forum is...speculation on what may be coming (whether it's features, MSRP for trim levels, tax credits, range, electrical connections...most of the chatter is speculation).

This thread is discussing the difference in purchase options.

Buying up front, or doing Ford Options will net you the eventual credit. Leasing will not, on a lease Ford keeps the credit for themselves as shown in the multiple articles above.

 

[BennyTheBeaver]

This is correct. It is proposed as a point of sale rebate. The dealer would get the $12K after the transaction is done. This would make leasing a much more viable option. It’s definitely what I’m going to do if the bill gets passed.

According to the above articles a pure Lease would net you $0 in tax credits. Ford Options or Purchasing would allow you to reap the tax benefits.

According to the above articles...Ford is keeping all tax credits for leases to themselves.

Based on what I've read, a pure lease seems like, by far, the worst option out of the 3 listed here.

Ford Options seems like the best in my opinion.

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