Not long ago, car rentals were down. So much so that it was impact on used car marketNow, thanks to EVs, leasing is making a strong comeback. And thanks to tax credits, German luxury electric cars are being leased more than ever.
Car News reports that data from JD Power shows that in the first quarter of this year, Audi, BMW, and Mercedes had the highest EV leasing rates in the industry. Nearly every EV sold by each automaker during that time was a lease.
Audi, BMW, and Mercedes-Benz had the highest EV leasing rates in the United States in the first quarter of this year. Ninety-four percent of Audi’s EV sales were leases. Mercedes-Benz leased 93 percent and BMW leased 89 percent, according to J.D. Power. For all three brands, EV leasing market share increased more than 20 percentage points year-over-year.
You can thank the EV tax credit for that high lease price. Normally, only 15 EV models qualify for a $7,500 federal tax credit when they’re financed. Car News say that with prices ranging from $51,000 to nearly $200,000, almost every German electric car is out. However,thanks to a loophole Under the Inflation Reduction Act, leasing is classified as a “commercial enterprise,” meaning that virtually any electric vehicle leased can receive the full $7,500 credit. That’s why sales of luxury German electric vehicles are booming. And it helps dealers move metal that would otherwise be held back.
Vice President of Sales and Marketing, Mercedes-Benz Financial Services said. Car News that it helps the brand’s customers try out the latest technology and gets them back to the dealership to buy another car sooner than they would have if they had financed a car. “The only real difference between the current programs is the tax benefit for leasing,” he said.
However, not all the pictures are rosy. Car News said the three-year lease cost is still $1,800 more than a gas-powered car. And the savings, incentives and tax credits on the car are still not enough to make some customers consider an electric car. said a partner at an Audi dealership outside Cleveland, Ohio. Car News How many customers don’t even care to talk about electric cars.
Sales associates at Audi Cuyahoga Falls, a Cleveland suburb, are struggling to convert gasoline-powered car buyers to electric-vehicle buyers. Most customers “don’t even want to talk about it,” said Pat Primm, a partner at Cascade Automotive Group, which owns the store. The dealership’s primary EV leasing customers already know they want to switch to electric and are leasing because of the incentives, he said.
EV inventories also increased, with Data from Cox Automotive shows slowing sales, inventory sitting on lots longer. Electric cars sit on lots for an average of 104 days, a month longer than gasoline cars. Leasing isn’t always the best way to get a car, either, as our car buying expert Tom McParland points out. shown.
