California deals for December - Clarity PHEV base or touring ???

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4sallypat

4sallypat

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Looking for a new Clarity PHEV and wanted to know how CA folks are being quoted by dealers.

Found the best bargain using leasing = $7600 incentive.
Financing only has a $1000 incentive.

Leasing is smart for me as I plan to buy out the low RV (42%) at the end of the lease (assuming the car does well during the 3 years).

So far:
Base Clarity: $7600 Honda incentive + $500 employee discount + $2500 dealer discount.
$320 / month including 9.5% tax - 36/12 - $1000 DAS thru Honda Financial...

Anyone else get a better deal ??
 
Hello all,
New old guy here who just leased one for my wife.

Don't have previous experience with leasing a car and while shopping we focused on the bottom line to decide on the best deal for us.
Ended up with a zero down 36 month lease that will cost us a total $13631.47 tax and license included.

So far I've found $3950 in CA rebates that we qualify for and have submitted applications.
 
amauri said:
So far I've found $3950 in CA rebates that we qualify for and have submitted applications.
Click to expand...
What are those rebates. I only know of the $1500 from the State and $450 from SoCal Edison. Are you including an additional utility rebate for installing a sub panel and separate meter?
 
4sallypat said:
Looking for a new Clarity PHEV and wanted to know how CA folks are being quoted by dealers.

Found the best bargain using leasing = $7600 incentive.
Financing only has a $1000 incentive.

Leasing is smart for me as I plan to buy out the low RV (42%) at the end of the lease (assuming the car does well during the 3 years).

So far:
Base Clarity: $7600 Honda incentive + $500 employee discount + $2500 dealer discount.
$320 / month including 9.5% tax - 36/12 - $1000 DAS thru Honda Financial...

Anyone else get a better deal ??
Click to expand...

Here is the thread on pricing. You can also find threads specific to leasing with a search.

The leasing incentive you show includes the $7500 tax credit that the leasing company gets. If you buy, you get the $7500 tax credit plus the $1000 incentive. So, in terms of incentives, buying is the better deal.

https://www.insideevsforum.com/community/index.php?threads/price-paid.686/
 
rodeknyt said:
What are those rebates. I only know of the $1500 from the State and $450 from SoCal Edison. Are you including an additional utility rebate for installing a sub panel and separate meter?
Click to expand...

We qualified for a $3500 rebate from CARB and $450 from SCE.
I am also looking into getting $250 from the AQMD if I decide to purchase a level-2 EVSE.
 
Sandroad said:
Here is the thread on pricing. You can also find threads specific to leasing with a search.

The leasing incentive you show includes the $7500 tax credit that the leasing company gets. If you buy, you get the $7500 tax credit plus the $1000 incentive. So, in terms of incentives, buying is the better deal.
Click to expand...

At first we wanted to purchase the car, but after looking at all the numbers the lease was a better deal.

I realize Honda gets the tax credit if we lease.
But taking that into account, the lease was a much better deal.
 
I did not get the impression that the lease was a much better deal. The deal is $289 for 36 months, $3000 down and about $15,500 in residual value at the end of the lease. This means that if you want to buy your car in 3 years you will have paid $29K. However, I financed and paid $30K with a 0.9% APR which will cost me about $350 in interest during 3 years. I also get the $7500 federal rebate. So for about $23,000 I own the car. Of course, I did not include taxes and other fees. Also, if I don't want to keep the car after 3 years I can sell it myself for about $15,000 which is roughly about half of what it cost me. However, since I got my rebate of $7500 it would have cost me about $7500 to drive this car for 3 years. If you lease, you will pay $13,400 to drive the car for 3 years and you may be charged additional fees for mileage, mandated repairs etc. By the way, if you buy the car you can also get the california rebate also (not available for lease?)
 
It looks like @amauri is getting an increased CARB rebate based on a lower income level (<300% of Fed Poverty level, actual $ limit varies based on household size), so would not qualify for the entire $7,500 Fed Tax Credit. This could be a case where leasing might very well be a better deal. This is not unusual for people with money to buy/lease a new car, but low income (retired, etc).
 
amauri said:
At first we wanted to purchase the car, but after looking at all the numbers the lease was a better deal.
Click to expand...
Leasing makes sense if you don't owe taxes (Federal).
For me, leasing is the better deal for me as I don't owe taxes at the end of the year.

Looking at the BASE Clarity - 2 scenarios for me:

1. Leasing gives me the best deal as I get an "instant" $7600 price reduction off MSRP using Honda's Lease incentive.
This assumes the dealer passes the $7600 to you - some dealers are greedy and will keep the money for themselves - so it pays to shop around.
Also, for those that do not have to pay income taxes at the end of the year, it makes more sense to take the discount up front.
Leasing the car gives me the dealer discount, $7600 incentive, and any other incentive (military, college grad, employee), etc..
When I did the math, I end up paying about $28K total for the vehicle if I lease it for 3 years then opt to keep it at lease end and refinance the low residual for 2 years.

2. Finance the car and I would not get the $7600 up front incentive but I would get the $7500 tax credit which does not help me - if I don't owe taxes at the end of the year, then it's a wasted credit.
Financing the car, Honda gives only $1000 incentive.
Financing gives you a discount by the dealer and $1000 incentive so you are paying sales tax on the who amount up front and rolled into your financing.
For me, I would end up paying about $35K for a financed car including 5 years of interest and full sales tax.

In both cases (leasing or financing), you still get the state rebate, local power company rebates, and HOV stickers.....

For me, without a Federal tax liability, leasing is the much cheaper way to go because the residual value (RV) is so low that it makes it affordable and sensible to buy out the lease at the end and own it.
 
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To clarify, as I understand it, it isn't whether you "owe" taxes at the end of the year. You must pay at least $7500 in Federal taxes for the year to make full use of the credit. If you pay $20,000 in Federal taxes throughout the year, for example, on an income of $100,000, and then do your taxes and find you should have only paid $18,000... You should be able to add the credit and get a check back from the government for $9500 ($2000 plus $7500 tax credit).

If, on the other hand you pay $2,000 throughout the year in Federal taxes on an income of $20,000, and this is your true tax liability -- then you will get only $2,000 back if you add the tax credit.

In this last case, leasing will probably be better since the dealer can get the full $7500 and should be able to pass it on to you.
 
banshee2008 said:
To clarify, as I understand it, it isn't whether you "owe" taxes at the end of the year. You must pay at least $7500 in Federal taxes for the year to make full use of the credit. If you pay $20,000 in Federal taxes throughout the year, for example, on an income of $100,000, and then do your taxes and find you should have only paid $18,000... You should be able to add the credit and get a check back from the government for $9500 ($2000 plus $7500 tax credit).

If, on the other hand you pay $2,000 throughout the year in Federal taxes on an income of $20,000, and this is your true tax liability -- then you will get only $2,000 back if you add the tax credit.

In this last case, leasing will probably be better since the dealer can get the full $7500 and should be able to pass it on to you.
Click to expand...

Correct, you can only get back what you put in. For me it’s not an issue, but I’ve heard from people that were trying to spread it over a few tax years to get the full amount. I don’t know if that is allowed, but people were going to try.
 
For those who don't earn enough to have a $7,500 tax liability, but have a regular IRA you can do what we did. We converted regular IRA funds to Roth IRA funds to create a $7,500 tax liability. Now we don't have to pay taxes on those converted dollars and we don't have to withdraw them at age 70-1/2.
 
I was told by my tax preparer CPA that the $7500 is a tax credit - not a refund.
In order to recoup the $7500 on my Federal 1040, I have to owe over $7500 in order for the credit to apply.
Otherwise, he said, if I owe less, I can carry over to the next tax year.
 
4sallypat said:
I was told by my tax preparer CPA that the $7500 is a tax credit - not a refund.
In order to recoup the $7500 on my Federal 1040, I have to owe over $7500 in order for the credit to apply.
Otherwise, he said, if I owe less, I can carry over to the next tax year.
Click to expand...

This is why I ended up leasing as well. I qualified for the great fiancing options but it would have been a lot more out of pocket and monthly, plus I wasn't sure if I'd get the full tax credit. So I opted to lease since they took that amount off up front.
 
4sallypat said:
I was told by my tax preparer CPA that the $7500 is a tax credit - not a refund.
In order to recoup the $7500 on my Federal 1040, I have to owe over $7500 in order for the credit to apply.
Otherwise, he said, if I owe less, I can carry over to the next tax year.
Click to expand...

You do not have to owe more than $7500 for the credit to apply. The credit applies to federal taxes owed UP TO $7500. I'm not a CPA or a tax attorney, so I'm not qualified to give advice. But, I can direct your CPA to IRS form 8936 and its instructions. The electric vehicle federal tax credit is entered on line 54 of form 1040 (Other Credits) and is a direct subtraction from line 47 (Tax owed). Please also have your CPA double check on whether the credit can be carried over if you don't have a tax liability of at least $7500 in the year you buy the Clarity. There is no indication of that on forum 8936. @banshee2008 uses accurate examples above for the credit.
 
4sallypat said:
I was told by my tax preparer CPA that the $7500 is a tax credit - not a refund.
In order to recoup the $7500 on my Federal 1040, I have to owe over $7500 in order for the credit to apply.
Otherwise, he said, if I owe less, I can carry over to the next tax year.
Click to expand...
Sandroad is right. If your tax liability is only $5000, you'll get a $5000 credit. The rest can't be carried over, you lose the $2500. Leasing would be better in this case.
 
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