Does early termination of my current model 3 lease make sense?

[SMPENNCH]

I am currently 22 months into a 36 month Model 3 lease. I am not sure if this makes sense but I’ve thought about early terminating my lease. I would then lease a new Model 3. My strategy, unless I am convinced otherwise, is to take advantage of the $7500 Federal credit and the $3500 MA state credit. Is my strategy flawed or does it have merit.

Thank you

 

[The_Observer]

I am sure the $7500 federal credit will still be a thing after 14 months, in fact, it will be a credit on the purchase price directly when buying the car after 2024. Unless the $3500 MA state credit is going away anytime soon, I don't see any reason to do any of this, or unless you believe the Model 3 will go up much higher in price?

 

[karkrazy]

How much is it going to cost you to terminate your lease?

 

[brianbcc]

Does the Federal credit apply to leasing?

 

[Willy’sEV]

Does the Federal credit apply to leasing?

When I run the car with the lease, I do not see the $7500 credit.

 

[SMPENNCH]

When I run the car with the lease, I do not see the $7500 credit.

Last year’s Inflation Reduction Act provided a federal tax credit of up to $7,500 to use toward an EV. Under the rules, a dealer can apply that credit to any leased electric vehicle, no matter where it’s made, to reduce a customer’s monthly payment

 

[SMPENNCH]

Does the Federal credit apply to leasing?

I was told it does

 

[SMPENNCH]

How much is it going to cost you to terminate your lease?

I just looked it up. It is $4788. That makes it unrealistic to consider. Thanks

 

[ATPMSD]

Based on your last post this is moot, but:

early terminating my lease

It is almost always a bad idea to terminate a lease early as you have to make all remaining payments in the lease. The only time it makes sense is when you can purchase the car and flip it for a profit. But the payoff will include those remaining payments, and then you will have to pay taxes.

I was told it does

Incorrect:

The federal tax credit belongs to the dealer, not to you, for a lessee. I would advice anyone who feels otherwise to talk to their tax accountant.

 

[johnnycnote]

Terminating a lase early means that you'll need to make all remaining lease payments, pay the amount of the early termination fee in your contract, and pay any disposition fees. You can consider sub-leasing if contractually allowed, but you are ultimately responsible for the lease. If the guy you sub-lease to decides to stop making payments, you're still on the hook...

The $7,500 credit on a lease goes to the dealer. While many dealers will prob pass it on to the consumer, they are under no obligation to do so...

 

[SMPENNCH]

Based on your last post this is moot, but:


It is almost always a bad idea to terminate a lease early as you have to make all remaining payments in the lease. The only time it makes sense is when you can purchase the car and flip it for a profit. But the payoff will include those remaining payments, and then you will have to pay taxes.



Incorrect:

The federal tax credit belongs to the dealer, not to you, for a lessee. I would advice anyone who feels otherwise to talk to their tax accountant.

Thank you