2023 Taycan $7500 Tax Credit with Lease vs No tax Credit purchase.

Icebergmikey

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Keep in mind, if you do decide to lease, you can write off some of your annual total payments through a business. After the term, possibly sell it to yourself.
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rich_r

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You will have to pay all remaining payments.You are not charged simple interest on a lease like on a finance. There's no principal amount that is reduced each month in a lease. Your payoff is just one less payment amount each month. A lease payment includes the depreciating cost + money factor. That is why you are taxed only on the payment amount in most states or tax on the entire cap cost.

If you're on a lease now, try asking for your payoff amount, they will even break it down for you. You'll be quite surprised on that figure.

Talking from experience ending my last 3 leases early.
I remember this being the case with BMWFS leases. But i looked into ending my Range Rover sport lease early (through Chase), and it looked like I would not be charged the "rent" portion on the remaining payments (which i was surprised by). Didn't end up pulling the trigger so I dont know for sure. Were your past leases also through Porsche?
 

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I leased and just received my first statement which gave me my PFS account number and enabled me to request my payoff amount. If I pay off my lease after making just my first payment, I will come out ahead by $3375. So acquisition fee + rent + ~$150 sales tax + whatever closing fees PFS charges takes out a good chunk of the $7500 but still worth it (if you don't actually want to lease).

If your dealer charges minimal fees and your state has low title/reg fees, you'll prob save even more.
 

whitex

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Keep in mind, if you do decide to lease, you can write off some of your annual total payments through a business. After the term, possibly sell it to yourself.
You can also depreciate the asset if your business buys it, so I'd always check with the accountant what it more beneficial to do, as that will depend on a number of situations. It's still better to not pay 9% interest at all vs. pay it and write it off.
 

whitex

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You will have to pay all remaining payments.You are not charged simple interest on a lease like on a finance. There's no principal amount that is reduced each month in a lease. Your payoff is just one less payment amount each month. A lease payment includes the depreciating cost + money factor. That is why you are taxed only on the payment amount in most states or tax on the entire cap cost.

If you're on a lease now, try asking for your payoff amount, they will even break it down for you. You'll be quite surprised on that figure.

Talking from experience ending my last 3 leases early.
I thought those types of leases were banned in the early nineties. I honestly don't think what you said above is true of most car leases. I usually read my contracts thoroughly and all the leases I've done had termination clauses which explicitly stated the unearned interest would not be charged. The only lease I ever terminated early, was coincidentally a Porsche car (though somehow the dealer gave me a lease through Bank of America) and I can tell you with certainty, the payoff amount was not even close to the sum or remaining payments plus residual. If it was, I would have kept the car as I terminated the least and sold the car for less than residual value would have been over a year later, so if it I had to pay all payments anyways and had a guaranteed value higher than current value of the car by just returning the car, I would have absolutely kept the car even if I was to just store it in a garage (since I needed a bigger car to haul family around). I terminated the lease to save on interest (which was high, it was dot com boom rates lease, not as high as today but still high).
 


whitex

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So the conclusion is … not worth the lease just buy and forget the $7500?
Cross posting from this tread:
https://www.taycanforum.com/forum/threads/loophole-in-the-ev-credit-lease-it.14607/

TLDR; it's probably not worth it if you lease instead of paying cash for the car, even if you terminate the least after minimum number of payments. It might be worth it if you were financing anyways and can significantly reduce the residual, or if you can invest some money at a yield percentage close to your lease APR every month so you have enough for residual at the end of the lease. If you were going to lease anyways, this definitely is a win.

Longer explanations with example calculations:
 
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Tomato

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I leased and just received my first statement which gave me my PFS account number and enabled me to request my payoff amount. If I pay off my lease after making just my first payment, I will come out ahead by $3375. So acquisition fee + rent + ~$150 sales tax + whatever closing fees PFS charges takes out a good chunk of the $7500 but still worth it (if you don't actually want to lease).

If your dealer charges minimal fees and your state has low title/reg fees, you'll prob save even more.
@whitex @Payton48 well now, I stand corrected. I didn't end my lease so soon but usually a year left on it. So the unearned interest wasn't much compare to a month or two into the lease. @Payton48 Did your payoff include sales tax?
 
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whitex

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Did your payoff include sales tax?
There is always sales tax on the payoff amount if you are buying the car, since you didn't pay it originally. Otherwise lease then payoff instantly would be a loophole around sales tax.
With latest information from @Payton48, make sure you pay it off before the second payment to come out slightly ahead.
He probably cannot do that. Majority of leases have a minimum number of payments before you even can pay it off. Porsche used to have 3 montly payment minimum but some recent reports here claim dealers insist of minimum 6 payments in the lease contract.
 


Payton48

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@whitex @Payton48 well now, I stand corrected. I guess PFS does it differently than my 4 previous leases. It was as recent as 2019 with BMWFS for my i8 and previous leases were with GM Financial, Ally and US Bank. @Payton48 Did your payoff include sales tax?

PFS includes sales tax in your payoff for some states but not in CA
 

Payton48

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There is always sales tax on the payoff amount if you are buying the car, since you didn't pay it originally. Otherwise lease then payoff instantly would be a loophole around sales tax.

He probably cannot do that. Majority of leases have a minimum number of payments before you even can pay it off. Porsche used to have 3 montly payment minimum but some recent reports here claim dealers insist of minimum 6 payments in the lease contract.
PFS does not include the sales tax for CA in payoff amount. I will have to pay that myself.

You can obtain a payoff amount as soon as you get your PFS account number, maybe earlier if you call in but I waited until I got my first statement. There is no penalty to the customer to pay off early. Dealers don't like it as they either get a penalty or perhaps just an incentive clawback. See relevant language from attached PFS lease contract.

Porsche Taycan 2023 Taycan $7500 Tax Credit with Lease vs No tax Credit purchase. PFS payoff
 

Tomato

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Payton48 said:
PFS includes sales tax in your payoff for some states but not in CA
Does your calculation of being ahead factor in the sales tax in addition to the payoff?
 

Payton48

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No I did not include sales tax but the $7500 should benefit me since it lowers the cap cost and subsequently, the buyout. Depends a bit on what number the dealer would have calculated tax on if I had purchased/financed.

How many payments you can make before breaking even/losing money is hard to tell since PFS doesn't provide the rent table but there's no benefit to waiting a few months other than keeping your dealer happy.
 

Payton48

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The month 1 lease payoff doesn't seem to pass the sniff test. How did you come up with the $127,802.29 figure?

In your model PFS is charging $13,234.80 just in buyout fees ($7802.29 + $7500 - $2067.49).
 

gt3dude

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Very interesting thread, ive bought cars from leases not Porsches and theyve never made me pay full MF of the entire lease.
 

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Very interesting thread, ive bought cars from leases not Porsches and theyve never made me pay full MF of the entire lease.
Porsche Financial won't charge the full MF/interest from the entire lease if you buy-out early...Someone posted a contract earlier on this thread, and that's the most accurate guideline!

The only thing really important to note is that the first payments are mainly interest...it becomes more principal as you go through the lease (so last payment is basically all principal). So, if you make 3 lease payments then pay-off, you're still spending a lot towards interest in order to save the $7,500.

Whether the potential savings is enough to justify leasing is up to everyone to decide on their own! The lower the Taycan trim, the more I'd sway towards leasing to take advantage of the credit.
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