[M6-Coupe]

Originally Posted by Crazy1323

I am a tax attorney and handle EV credits at a very large company. This is 100% correct. BMW financial will receive a $7,500 federal tax credit when they lease this vehicle to you, but it’s up to BMW if they want to pass that on in the form of a rebate.

So for majority of people who get this car and obviously not eligible for $7500 tax credit, BMW is selling a $122500 car for $130000?

[Crazy1323]

Originally Posted by M6-Coupe

So for majority of people who get this car and obviously not eligible for $7500 tax credit, BMW is selling a $122500 car for $130000?

I’m not sure I quite understand your question.

When a car is leased, it is purchased from the dealership by BMW Financial and rented to the lessee. The vehicle is a business asset of BMW Financial since they purchased it to rent out. A commercial vehicle under 14,000 is eligible for the commercial clean vehicle tax credit of up to $7,500.

If a vehicle is purchased not for use in a business, like an individual buying a car, there is a completely different credit that applies with different rules. Since the M5 is not assembled in the US and is over $55,000 it would not qualify for those credits.

So a vehicle purchased by BMW Financial to rent/lease to someone has different rules than a vehicle purchased by an individual for personal use. If you lease an M5, the lessor (BMW financial in this case since they purchased the vehicle for their business use) will get a $7,500 tax credit. Some finance companies pass along this tax credit as a rebate. That is what Lexus did when I leased my wife’s TX 550h+. Since that car wasn’t eligible for the regular tax credit, I leased it, got a $7,500 rebate, and bought out the lease 30 days later.

[Moewron]

Originally Posted by M6-Coupe

So for majority of people who get this car and obviously not eligible for $7500 tax credit, BMW is selling a $122500 car for $130000?

The eligibility for the tax credit can rest in the car itself. From KBB, in part "Buyers must meet income restrictions."
and"
"Cars must fit under a price cap ($55,000 for sedans, $80,000 for trucks and SUVs), and meet an ever-tightening threshold ensuring that they don’t use critical materials from China. That threshold gets higher every Jan. 1 until 2028."

https://www.kbb.com/car-news/fewer-e...edit-on-jan-1/

[M6-Coupe]

Originally Posted by Crazy1323

I’m not sure I quite understand your question.

When a car is leased, it is purchased from the dealership by BMW Financial and rented to the lessee. The vehicle is a business asset of BMW Financial since they purchased it to rent out. A commercial vehicle under 14,000 is eligible for the commercial clean vehicle tax credit of up to $7,500.

If a vehicle is purchased not for use in a business, like an individual buying a car, there is a completely different credit that applies with different rules. Since the M5 is not assembled in the US and is over $55,000 it would not qualify for those credits.

So a vehicle purchased by BMW Financial to rent/lease to someone has different rules than a vehicle purchased by an individual for personal use. If you lease an M5, the lessor (BMW financial in this case since they purchased the vehicle for their business use) will get a $7,500 tax credit. Some finance companies pass along this tax credit as a rebate. That is what Lexus did when I leased my wife’s TX 550h+. Since that car wasn’t eligible for the regular tax credit, I leased it, got a $7,500 rebate, and bought out the lease 30 days later.

Now I dont understand.
Let’s say this is 130k car and BMWNA lease it to me. Who gets that 7500 if dealer sell me this car at MSRP?

[EUPremier]

Originally Posted by DocWeatherington

No, so BMW FS owns the car as you are renting it. The check from your insurance goes directly to BMW FS. For vechile registration purposes the lien lies with BMW FS and your a rider.



It is BMW FS option, not requirement to give you any of the equity. BMW FS , your insurance and then a third party negotiate the actual value which is agreed upon by all three parties - you have zero say in any of this. Your insurance pays any remaining balance absent your deductibles for cash value. However, your insurance will likely reimbursement your for sale tax paid.

Thus you pay 50k in a 3 year lease ...12 months in the car is total... they determined the 130k msrp car actually cash value is 100k... bmw gives actual pay off 80k as that's what remains on the loan... your insurance pays bmw fs directly 80k to close the lease out. Bmw has 20k which you paid.

Flip to that insurance pays cash value. That 20k as per the contract you signed BMW FS isnt required to give that back or even all of it and or in order to get any of it may require you to get another bmw.

Gap insurance on leases is included and provided by BMW, there won't be a gap as you've already given a state-of-the-art bridge to cover the gap. Thus any negative equity is eaten by BMW FS.

To also note your still required to make payments even if the car is a total loss until the contract is closed during that negotiation period.

Wowsers. I live in Europe. That sort of sharp practice would be totally illegal here.

We also don’t do money factor (MF). It’s just a plain interest rate which is easy for anyone to understand.

[Crazy1323]

Originally Posted by M6-Coupe

Now I dont understand.
Let’s say this is 130k car and BMWNA lease it to me. Who gets that 7500 if dealer sell me this car at MSRP?

It is always the purchaser who gets a tax credit. If you lease a car, you are not the purchaser.

When you lease a car, you are not buying it. BMW Financial Services, not BMWNA, purchases the car.

Since BMW FS is buying the car to use in a business (the business of renting cars) BMW FS would receive a $7,500 tax credit. BMW FS is under no obligation to pass along that credit in the form of a rebate.

[M6-Coupe]

Originally Posted by Crazy1323

It is always the purchaser who gets a tax credit. If you lease a car, you are not the purchaser.

When you lease a car, you are not buying it. BMW Financial Services, not BMWNA, purchases the car.

Since BMW FS is buying the car to use in a business (the business of renting cars) BMW FS would receive a $7,500 tax credit. BMW FS is under no obligation to pass along that credit in the form of a rebate.

Thanks for explanations.

[Moewron]

That's a great way to put it.

And this tax credit may be reflected to some extent in the leasing numbers, or in specials they run.

[comebackbmw]

Sorry to disappoint you guys but M5’s doesn’t qualify for your tax credit. 🥲

The tax credit of $7500 or any amount of an ev is only applicable if the vehicle is made in USA and has the msrp of $55000 or lower for a sedan.
Since m5 are made in Germany and it’s $140k you cannot get that credit.

Here’s IRS information :: https://www.irs.gov/credits-deductio...-2023-or-after

To qualify, a vehicle must:

Have a battery capacity of at least 7 kilowatt hours
Have a gross vehicle weight rating of less than 14,000 pounds
Be made by a qualified manufacturer
Undergo final assembly in North America
Meet critical mineral and battery component requirements (as of April 18, 2023)
The sale qualifies only if:

You buy the vehicle new.
The seller reports required information to you at the time of sale and to the IRS.
Sellers are required to report your name and taxpayer identification number to the IRS for you to be eligible to claim the credit.
In addition, the vehicle's manufacturer suggested retail price (MSRP) can't exceed:

$80,000 for vans, sport utility vehicles and pickup trucks
$55,000 for other vehicles

[Crazy1323]

There are two separate credits for EV’s that are both $7,500.

The one you are referring to is for non-commercial vehicles. If a vehicle is leased then it is a commercial vehicle and the rules you posted do not apply. Only the battery capacity matters. Since with a lease BMW FS is buying the vehicle to then rent it, that makes it a commercial vehicle and BMW FS will get a $7,500 tax credit for the M5. We can just hope they start to pass that along as a lease rebate.

Originally Posted by comebackbmw

Sorry to disappoint you guys but M5’s doesn’t qualify for your tax credit. 🥲

The tax credit of $7500 or any amount of an ev is only applicable if the vehicle is made in USA and has the msrp of $55000 or lower for a sedan.
Since m5 are made in Germany and it’s $140k you cannot get that credit.

Here’s IRS information :: https://www.irs.gov/credits-deductio...-2023-or-after

To qualify, a vehicle must:

Have a battery capacity of at least 7 kilowatt hours
Have a gross vehicle weight rating of less than 14,000 pounds
Be made by a qualified manufacturer
Undergo final assembly in North America
Meet critical mineral and battery component requirements (as of April 18, 2023)
The sale qualifies only if:

You buy the vehicle new.
The seller reports required information to you at the time of sale and to the IRS.
Sellers are required to report your name and taxpayer identification number to the IRS for you to be eligible to claim the credit.
In addition, the vehicle's manufacturer suggested retail price (MSRP) can't exceed:

$80,000 for vans, sport utility vehicles and pickup trucks
$55,000 for other vehicles

[comebackbmw]

Originally Posted by Crazy1323

There are two separate credits for EV’s that are both $7,500.

The one you are referring to is for non-commercial vehicles. If a vehicle is leased then it is a commercial vehicle and the rules you posted do not apply. Only the battery capacity matters. Since with a lease BMW FS is buying the vehicle to then rent it, that makes it a commercial vehicle and BMW FS will get a $7,500 tax credit for the M5. We can just hope they start to pass that along as a lease rebate.

You are right and the link to the business purpose vehicle is here:

https://www.irs.gov/credits-deductio...vehicle-credit

My question is, if you don’t lease it but purchase it and register under your business, won’t it make it easier for you to claim this $7500 then instead of relying on bmwfs to pass along your credit?

I would just purchase under my business. No?

[masd79]

What doesn’t make sense then is why was bmw giving this credit to their Xm buyers recently?

[Crazy1323]

Originally Posted by comebackbmw

You are right and the link to the business purpose vehicle is here:

https://www.irs.gov/credits-deductio...vehicle-credit

My question is, if you don’t lease it but purchase it and register under your business, won’t it make it easier for you to claim this $7500 then instead of relying on bmwfs to pass along your credit?

I would just purchase under my business. No?

It isn’t just that it is purchased by a business. It needs to be “used in a trade or business and of a character subject to depreciation”. The vehicle meets this definition for BMW FS because they are renting it out in exchange for rental payments, so they are using the vehicle to operate their business with a profit motive.

Whether or not this vehicle meets the business use test is based on your facts and circumstances. That is a conversation between you and your tax advisor.

[comebackbmw]

Originally Posted by Crazy1323

It isn’t just that it is purchased by a business. It needs to be “used in a trade or business and of a character subject to depreciation”. The vehicle meets this definition for BMW FS because they are renting it out in exchange for rental payments, so they are using the vehicle to operate their business with a profit motive.

Whether or not this vehicle meets the business use test is based on your facts and circumstances. That is a conversation between you and your tax advisor.

Yes if I use it under my business and use for business purposes, then I will buy it not lease it under my business and get my credit right away.

[DocWeatherington]

Originally Posted by masd79

What doesn’t make sense then is why was bmw giving this credit to their Xm buyers recently?

Supply and demand.... Bmw has problems moving the XM, I got 30k+ off a leased on one with this credit.

M5 not the case, hot freshness no deals

[subterFUSE]

Originally Posted by masd79

What doesn’t make sense then is why was bmw giving this credit to their Xm buyers recently?

XM is the 2nd worst selling BMW model in the lineup, so they are beyond desperate to sell them. They can't even give those cars away.

[M6-Coupe]

Originally Posted by subterFUSE

XM is the 2nd worst selling BMW model in the lineup, so they are beyond desperate to sell them. They can't even give those cars away.

XM was bad BMW marketing decision especially when there are wellknown/good selling X5M/X6M in lineup.
BTW which one is the worst selling BMW?

[subterFUSE]

Originally Posted by M6-Coupe

BTW which one is the worst selling BMW?

Z4 holds that distinction.

[M6-Coupe]

Originally Posted by subterFUSE

Z4 holds that distinction.

Always wondering why Z4 is not a high selling car.
I mean this is a fun car for young people. Maybe because BMW is actually killing this car by not including in M-Car category??

[subterFUSE]

Originally Posted by M6-Coupe

Always wondering why Z4 is not a high selling car.
I mean this is a fun car for young people. Maybe because BMW is actually killing this car by not including in M-Car category??

It's a 2 seat convertible with very little storage space. Just not a practical car at all. I think it's more of an empty-nester weekend car than a young person car.

Where I live, the high school kids drive M3/M4. If you see an M3/4 on the road, you can pretty much assume it's a 17 year of kid driving it.

[M6-Coupe]

Originally Posted by subterFUSE

It's a 2 seat convertible with very little storage space. Just not a practical car at all. I think it's more of an empty-nester weekend car than a young person car.

Yeah the same as 911 , R8 and similar cars. Not to say this is the same level car but I mean the same category of 2 seat convertible.

Where I live, the high school kids drive M3/M4. If you see an M3/4 on the road, you can pretty much assume it's a 17 year of kid driving it.

I know.... Not sure why world is changed this way... a +80k car with +500 hp.
That's why M3/M4 insurance is too high...

[SHARMAATL]

Has anyone gotten a lease quote yet on the Touring?