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LUCID Gravity Lease vs Finance

Elfin said:
People are seeking the $7500 credit which is only available on leases.
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my wife leases her vehicles because as a real estate professional she can write it off..plus EV tech has been changing so rapidly
 
hwy17er said:
my wife leases her vehicles because as a real estate professional she can write it off..plus EV tech has been changing so rapidly
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You would be able to write-off more with a purchase via Section 179 for her.

-iThinkEV-
 
iThinkEV said:
You would be able to write-off more with a purchase via Section 179 for her.

-iThinkEV-
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Yes, But then she would have been stuck with the crappy tech/charging/range limits in the Audi Q5 PHEV or the CCS/sub par UX in the Taycan and missed out on 3years free charging and have to eat the steep depreciation. This way she always has a nice new vehicle w/ updated tech and now I'm ready for her next lease (w/ reduced or no free charging) with solar at home.
I'm the one that buys and drives 'em 'til the wheels fall off!..Lets wear a Lunar Ti GGT out and see if the battery tech is antiquated and/or I'm too old to ski by then!
 
iThinkEV said:
You would be able to write-off more with a purchase via Section 179 for her.

-iThinkEV-
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For leased vehicles, a business can claim a Section 179 deduction only if the lease is structured as a capital lease rather than a standard operating lease. In most cases, a standard vehicle lease is an operating lease, which means you cannot claim the Section 179 deduction or depreciate the vehicle.
 
Has anyone tried to lease and do an early buy out? What fees did you have to pay?
 
Just out of curiosity from the group here, If I really want the bigger wheels; is it better to just buy them later and not have the increase in price embedded in the sales tax and lease?
 
illopp00 said:
Just out of curiosity from the group here, If I really want the bigger wheels; is it better to just buy them later and not have the increase in price embedded in the sales tax and lease?
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You still pay sales tax dependent on your residing State, but alleviate the finance charge against the lease. However, if you may find someone on the forum to swap wheels - as some changed their order for an earlier delivery but with the bigger wheel size & preferred the smaller.
 
illopp00 said:
Just out of curiosity from the group here, If I really want the bigger wheels; is it better to just buy them later and not have the increase in price embedded in the sales tax and lease?
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EV_wings

Post in thread 'Gravity Wheel Swap?'

jbrichgels said:
Our SA found a newly listed vehicle that meets all our order parameters except the wheels - this one has 20/21 and we want 21/22. Our SA said he sells different wheels for the Air all the time; they just don’t have the supply to do that for Gravity yet. So we took the car; the only thing we didn’t want is the one we can change sometime.
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My gravity just arrived at the delivery center today in PA, so I should be taking delivery in a week or so. Where are you located? Wanna swap wheels 😝?
@EV_wings @pyle112
 
My SA informed me that my Gravity is in Pre-VIN, so might have it by November. So now time to think about how I am going to pay for it. I have typically bought cars as new or semi-new and then hold for 8-10 years. I have never leased a car and I have cash available to pay outright but am seriously thinking about doing a 2 year lease for following reasons:

1. Take advantage of the Lucid Credit lease $7500 EV credit
2. I am moderately worried about long term viability of Lucid and a 2 year lease gives me time to evaluate Lucid (If Gravity deliveries continue to improve and Earth launch looks good in 2027, I will have less worries)
3. If Gravity value plummets well below my residual or if a new SUV is launched by other company, I can walk and more easily evaluate options.

My back of napkin math on lease logic shows that in a two year lease I will pay about $12,000 in interest over the 2 years lease with an effective interest rate of around 6%. But by getting the $7500 EV credit, my effective interest rate is closer to 3% which is acceptable. Let me know if my math is way off.

If at 2 years I decide I still love the Gravity, Lucid is on solid financial ground (or at least no pending bankruptcy rumors) and there are no new shiny objects attracting my attention, I decide to pay the residual to buy and keep the Gravity, are there any potential pitfalls at that point?

1. Are there any potential extra costs for buying at end of lease other than residual amount?
2. Since I will have already paid sales tax on the full car cost at initial lease start, I would assume I would not own new taxes on residual payout?

In the end, I am thinking about doing this to give myself some flexibility and don’t mind if from a pure financial perspective this might cost me a 1000 or so vs up front purchase and avoiding finance charges but want to make sure I am not overlooking something big that could come and bit me.
 
Bdr100 said:
My SA informed me that my Gravity is in Pre-VIN, so might have it by November. So now time to think about how I am going to pay for it. I have typically bought cars as new or semi-new and then hold for 8-10 years. I have never leased a car and I have cash available to pay outright but am seriously thinking about doing a 2 year lease for following reasons:

1. Take advantage of the Lucid Credit lease $7500 EV credit
2. I am moderately worried about long term viability of Lucid and a 2 year lease gives me time to evaluate Lucid (If Gravity deliveries continue to improve and Earth launch looks good in 2027, I will have less worries)
3. If Gravity value plummets well below my residual or if a new SUV is launched by other company, I can walk and more easily evaluate options.

My back of napkin math on lease logic shows that in a two year lease I will pay about $12,000 in interest over the 2 years lease with an effective interest rate of around 6%. But by getting the $7500 EV credit, my effective interest rate is closer to 3% which is acceptable. Let me know if my math is way off.

If at 2 years I decide I still love the Gravity, Lucid is on solid financial ground (or at least no pending bankruptcy rumors) and there are no new shiny objects attracting my attention, I decide to pay the residual to buy and keep the Gravity, are there any potential pitfalls at that point?

1. Are there any potential extra costs for buying at end of lease other than residual amount?
2. Since I will have already paid sales tax on the full car cost at initial lease start, I would assume I would not own new taxes on residual payout?

In the end, I am thinking about doing this to give myself some flexibility and don’t mind if from a pure financial perspective this might cost me a 1000 or so vs up front purchase and avoiding finance charges but want to make sure I am not overlooking something big that could come and bit me.
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You’ll have to pay sales tax (again) when you buy out the lease - even at end of term.

As for Lucid long term, I have never leased, so I leased because a) depreciation on my other EVs has been absurd, b) tech changes a lot with EVs and c) I was worried about Lucid.

Now that I have my Gravity and have driven the Air, I think there’s no chance Lucid disappears. Their tech is amazing and unique enough that someone will buy it. Not sure who, but it’s not Fisker. It’s not going to just disappear. Too much solid and proprietary tech. Could BK, but some legit company would buy the tech, etc.

That said, I still wanted to “hedge” depreciation and new tech and I’ve learned over five EVs I like having what’s new and hate knowing my car is worth 40% of purchase price three years after purchase - I’m looking at you 2022 Model X!
 
My understanding is you only pay sales tax on the value you've used (purchased price minus residual), so when buying out the lease you will owe sales tax on the residual.
 
Ron_Burgundy said:
You’ll have to pay sales tax (again) when you buy out the lease - even at end of term.
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This depends on the state. Where I live (Virginia) you pay the sales tax on the entire price of the car at lease inception. I know, unfair. But if you buy out the lease at the end of the term, the sales tax is zero.
 
thyname said:
This depends on the state. Where I live (Virginia) you pay the sales tax on the entire price of the car at lease inception. I know, unfair. But if you buy out the lease at the end of the term, the sales tax is zero.
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Yeah, I did a little google searching and found that in my state, Texas, it is the same. Pay tax on full price at beginning and then if you buy at end of lease, no more tax.

So, with that resolved, are there any other issues I should consider before thinking of leasing with possible intent to buy at end of lease?
 
Bdr100 said:
Yeah, I did a little google searching and found that in my state, Texas, it is the same. Pay tax on full price at beginning and then if you buy at end of lease, no more tax.

So, with that resolved, are there any other issues I should consider before thinking of leasing with possible intent to buy at end of lease?
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I live in the Dallas area and did a lease buy out a couple years back. n Texas, on a standard auto lease the leasing company owes the 6.25% motor-vehicle sales tax on the car’s purchase price when it’s titled; Lucid usually pass that cost to you at lease start, which is why it feels like you’re paying ‘full tax up front.’ You don’t pay tax on the monthly lease payments. If you later buy the car, Texas treats that buyout as a new sale, so you owe 6.25% tax on the buyout (or SPV if applicable). There’s no credit for the tax paid at the start of the lease because that was paid on behalf of the lessor. So yes, you will need to pay tax again at the buy out time. Totally unfair but that is how it is.
 
tonybot said:
I live in the Dallas area and did a lease buy out a couple years back. n Texas, on a standard auto lease the leasing company owes the 6.25% motor-vehicle sales tax on the car’s purchase price when it’s titled; Lucid usually pass that cost to you at lease start, which is why it feels like you’re paying ‘full tax up front.’ You don’t pay tax on the monthly lease payments. If you later buy the car, Texas treats that buyout as a new sale, so you owe 6.25% tax on the buyout (or SPV if applicable). There’s no credit for the tax paid at the start of the lease because that was paid on behalf of the lessor. So yes, you will need to pay tax again at the buy out time. Totally unfair but that is how it is.
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Thanks. After further research (Motor Vehicle Tax Guide on Comptroller.Texas.Gov) shows that you get double taxed if you buy out your lease. This extra tax wipes out most of the $7500 lease credit and so if I am seriously thinking of keeping Gravity long term, leasing is a non-starter, particularly with the current high money factor (interest rate) on Gravity leases.
 
Bdr100 said:
Thanks. After further research (Motor Vehicle Tax Guide on Comptroller.Texas.Gov) shows that you get double taxed if you buy out your lease. This extra tax wipes out most of the $7500 lease credit and so if I am seriously thinking of keeping Gravity long term, leasing is a non-starter, particularly with the current high money factor (interest rate) on Gravity leases.
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We are in the same boat but in Houston - was planning on buying but debating leasing - and now back to thinking that buying outright is the best financial decision. We plan to keep the car through the warranty period and not any longer.
 
Bdr100 said:
My SA informed me that my Gravity is in Pre-VIN, so might have it by November. So now time to think about how I am going to pay for it. I have typically bought cars as new or semi-new and then hold for 8-10 years. I have never leased a car and I have cash available to pay outright but am seriously thinking about doing a 2 year lease for following reasons:

1. Take advantage of the Lucid Credit lease $7500 EV credit
2. I am moderately worried about long term viability of Lucid and a 2 year lease gives me time to evaluate Lucid (If Gravity deliveries continue to improve and Earth launch looks good in 2027, I will have less worries)
3. If Gravity value plummets well below my residual or if a new SUV is launched by other company, I can walk and more easily evaluate options.

My back of napkin math on lease logic shows that in a two year lease I will pay about $12,000 in interest over the 2 years lease with an effective interest rate of around 6%. But by getting the $7500 EV credit, my effective interest rate is closer to 3% which is acceptable. Let me know if my math is way off.

If at 2 years I decide I still love the Gravity, Lucid is on solid financial ground (or at least no pending bankruptcy rumors) and there are no new shiny objects attracting my attention, I decide to pay the residual to buy and keep the Gravity, are there any potential pitfalls at that point?

1. Are there any potential extra costs for buying at end of lease other than residual amount?
2. Since I will have already paid sales tax on the full car cost at initial lease start, I would assume I would not own new taxes on residual payout?

In the end, I am thinking about doing this to give myself some flexibility and don’t mind if from a pure financial perspective this might cost me a 1000 or so vs up front purchase and avoiding finance charges but want to make sure I am not overlooking something big that could come and bit me.
Click to expand...
@Bdr100 this was super helpful for me. Like you, I tend pay cash and keep my cars a long time. Many years ago I leased two vehicles and swore I’d never do it again. I take very good care of my vehicles and felt like I was returning them new. I didn’t buy them out because the buy-out was higher than the market value, and the leasing company was unyielding on the buy-out price. However, I’m considering leasing for the reasons and logic you mentioned. In Georgia you pay sales tax on the lease amount (the depreciation), and then later on the buyout (residual). So, I’m not double taxed on the entire amount. Over on the lease thread it was mentioned that 36 months was kinda the sweet spot for leases.
 
If you change the state in which you register a leased car, does it change the lease tax treatment?
 
ClearlyLucid said:
@Bdr100 this was super helpful for me. Like you, I tend pay cash and keep my cars a long time. Many years ago I leased two vehicles and swore I’d never do it again. I take very good care of my vehicles and felt like I was returning them new. I didn’t buy them out because the buy-out was higher than the market value, and the leasing company was unyielding on the buy-out price. However, I’m considering leasing for the reasons and logic you mentioned. In Georgia you pay sales tax on the lease amount (the depreciation), and then later on the buyout (residual). So, I’m not double taxed on the entire amount. Over on the lease thread it was mentioned that 36 months was kinda the sweet spot for leases.
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Thanks. Yeah, I wish we were like Georgia. Being double taxed kind of wipes out most of the lease credit.
 
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