New e-Golf for less than $10k? What the hell am I missing?

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In a couple responses I've seen people referring to the manufacturers getting the tax incentives.

In actuality, the lessor receives the tax incentives (since the lessor is the "owner" of the asset).
In VW's case, it looks like the manufacturer because most people don't distinguish between VW Finance and VW Auto Group.
They are two separate entities, though.

It would be more apparent if your bank offered to hold the lease agreement. Then it would be Chase or Citibank or wherever receiving the $7,500, you driving the car, and VW getting the $30K from the bank. It's the same way with VW Finance, you, and VWAG but since the names have VW in them it can get confusing.

The reason I bring this up is that you know where the money is coming from and where it's going. Manufacturers aren't being penalized for success. They may be making sales but they aren't getting the money (directly). If they can sell a car for $30K with incentives they'll continue selling that car for $30K after incentives. It's the same in their pockets either way. The difference is that some *buyers* will be priced out of market because they won't be able to finance that remaining $7.5K.

From the manufacturers perspectives, they probably consider all of these EV sales as losses. Other than Musk, no sellers consider these as money makers. They cost more to make than they can sell them for, they don't have maintenance like a non-EV, and they are necessitating expensive infrastructure and support rollouts. VW, for example, probably trained more technicians about eGolfs than the eGolfs they managed to sell this year.


Aside from all that, I seriously doubt the spread of a used eGolf is going to be between $10K-$15K. For one, that's a 50% price spread. For another, VW is obsoleting its own models. This is true with any consumer electronics and it's going to remain true with our new form of consumer electronics in the form of an electric vehicle. Why would you pay higher monthly installments to own your 3 year old leased car than simply leasing a brand new one with even better technology, updated platform, and longer range?

If you compare a 2016 eGolf to a 2016 Golf (in 2019) with identical mileage and condition, it wouldn't make financial sense to pay more or even the same for the eGolf. It'll have less range (than both the Golf and a newer model eGolf), less features, and lower resale value (all things being equal the eGolf is a niche product as compared to a Golf). I'm not sure where the KBB numbers are coming from, but they aren't for a 2016 eGolf because they aren't in the database yet. The eGolf hasn't even been out long enough for any to be coming off lease...but the ones that were on lots due to returned leases certainly indicate a not-quite-rosy picture of what values *will* be in the near future for these 1st generation eGolfs. *spoiler* They're going to be low, very low. In fact, I wouldn't be surprised if they became unsellable. It all depends on if VW is willing to negotiate but I can almost guarantee that the cars coming off-lease will not be worth their paper debt.

Some people plan on having their car for the next decade. But others plan on having car payments for the next 10 years. Which population do you think VW is going to aim for with their EVs? It's no different than their fuel-based models. VW and its dealership network needs you to come in so they can generate a sales statistic. To that end, getting your butt into a new car is where all the incentives are going to land and their older models will just become the losses that were already built into their profit model before they decided to manufacture an eGolf in the first place.
 
Sptgolf said:
Farfle,
You can take advantage of the tax credit even if unemployed as long as you lease the car. With a lease, the finance company buys the car, claims the tax credit, and passes it through to you by reducing the sales price. The overall lease depreciation cost is reduced by $7,500. Check out leasehackr.com to see how it works.

As far as I know, you can't get a lease if unemployed.
 
bizzle said:
In VW's case, it looks like the manufacturer because most people don't distinguish between VW Finance and VW Auto Group.
They are two separate entities, though.

It would be more apparent if your bank offered to hold the lease agreement. Then it would be Chase or Citibank or wherever receiving the $7,500, you driving the car, and VW getting the $30K from the bank. It's the same way with VW Finance, you, and VWAG but since the names have VW in them it can get confusing.

Legally they are separate entities. However, because they are the manufacturer's own financing arm, they are allowed to pass the credit onto the consumer. AFAIK that cannot be done if you use some other lessor (Wells Fargo, B of A, Chase, etc.).
 
RonDawg said:
bizzle said:
In VW's case, it looks like the manufacturer because most people don't distinguish between VW Finance and VW Auto Group.
They are two separate entities, though.

It would be more apparent if your bank offered to hold the lease agreement. Then it would be Chase or Citibank or wherever receiving the $7,500, you driving the car, and VW getting the $30K from the bank. It's the same way with VW Finance, you, and VWAG but since the names have VW in them it can get confusing.

Legally they are separate entities. However, because they are the manufacturer's own financing arm, they are allowed to pass the credit onto the consumer. AFAIK that cannot be done if you use some other lessor (Wells Fargo, B of A, Chase, etc.).
As far as I know, that shouldn't make any difference. The lessor gets the credit. I don't think there's an stipulation that "allows" a captive financing agent to pass it on since there's nothing preventing them from doing so in the first place. It's their choice to offer that as an incentive but I would be surprised if a private lender wouldn't pass the credit to the consumer similarly since they'd want the lessee's business. The manufacturer doesn't have any relationship to the credit other than it being tied to their sales numbers.

All that said, I haven't taken the time to read through the relevant laws on this.
 
RonDawg said:
Farfle said:
As a side note, I'm really confused why nearly every topic on this forum is about leasing an e-Golf, rather than buying them. Is this like a common sense thing with EV drivers that I'm not aware of?

I don't have the stats, but I suspect more battery electrics are leased than purchased.

I found the stats while researching something else. Per Green Car reports, 75% of BEVs are leased, vs. about 50% for luxury cars and 28% for all cars in general. That's much higher than I originally thought. It was even higher in 2013 and 2014: 80% of new BEVs were leased.

http://www.greencarreports.com/news/1100513_electric-car-drivers-love-em-but-dont-buy-em-why-leasing-rules
 
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