Giveaway leases on Fiat electric?

Two of my coworkers just leased Fiat EVs. They say the current deal is $65/month for three years, 15,000 miles per year. $5K is due at signing but the California rebate gives you back half of that, so the effective price is about $130.

I don't need another car, but this seems quite a deal for someone who wants a small EV

michael said:

$5K is due at signing but the California rebate gives you back half of that, so the effective price is about $130.

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Maybe. It depends on your income. You are not guaranteed to get $2,500.

http://www.edmunds.com/car-news/california-ev-rebates-now-based-on-income.html

As of last July, the CA EV rebate phases out with higher income levels (potentially all the way to zero). But, the good news is, poorer applicants can qualify for even more than $2,500 back now.

But, anybody purchasing an EV is still eligible to claim the Federal tax credit. (But, that too, is also somewhat "income-sensitive", since it is a credit towards tax liability, which can vary with income level, and you may not be able to use the entire credit.)

Please....the $2500 doesn't apply if your family income is above $500,000 (or your individual income over $250,000). I don't think these are people interested in the Fiat electric. This is a Tesla issue.

For any normal person living in California, the $2500 applies and possibly more. To bring up the 0.5 percenters is ridiculous.

Furthermore, the $7500 is not an issue since this is a lease. Since it goes to the leasing company, the individual's income is completely irrelevant.

So for all practical purposes, anyone in California who might reasonably be interested in a Fiat (or any moderately priced EV) gets the $2500, maybe even more.

michael said:

I don't think these are people interested in the Fiat electric. This is a Tesla issue.

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Well, maybe.

A lot of people where I work make over $250,000 and -- judging from our parking lot over the last couple years -- are very interested in non-Tesla EVs. There are plenty of cars like the Fiat, e-Golf, and tons of Leafs. Do they all "need" $2,500 (or even $7,500) off? -- surely not. Did the rebate still incentivize them? -- I would say definitely yes.

The new CA law is obviously now biasing the incentive towards those who might not otherwise be able to afford any EV. That said, I don't think the evidence is in yet whether a means-based incentive is more effective than a "universal" incentive that simply applies to everyone who might be interested in an EV.

You can view either option as being the "fair" choice -- one option (the new one) attempts to actively "be" more fair in an affirmative action type of way, and the other option (the old one) is, technically, completely neutral and, in that sense, fair.

Anyway, if the goal of the incentive is to sell more EVs, does biasing it towards a poorer population necessarily imply that it will be more effective in achieving that goal? I don't know, but it doesn't seem like a foregone conclusion -- we'll see. The change in the law seems to be more about the state reacting to a negative public perception that "rich Tesla owners" are getting hand-outs.

The rebate now seems to have taken on a role as some kind of social aid program, asking the question, "Is the rebate helping more lower-income people buy EVs, while others who don't 'need' a rebate one will get no incentive at all?" When, really, the question should simply be, "Is the rebate incentivizing more EV purchases than not?" These two concerns could potentially be orthogonal.

Further, it is entirely possible that the new incentive rules, although they might "feel good", could actually be less effective than a universal rebate. What if lower-income folks tend to have longer commutes and therefore will find the typical EV impractical, regardless of cost? What if lower-income folks tend to rent and could therefore be more likely to lack convenient home-charging options, again decreasing EV appeal? A rebate can't really make up for these issues.

IMO, the primary concern of the CA incentive should be about its effect on the environment and EV industry, and not whether any individual EV buyer "deserves" a rebate (whatever that means). The rebate should not be about the merit or need of buyers, but about its effectiveness for sellers. It should function mainly to tip the market towards more EV sales.

If a car manufacturer wants to sell more vehicles, do they bias the discount only towards people with less income? No, they simply either universally discount their price in the marketplace, or the bias (if any) is aimed at whatever group they currently think a discount will appeal to.

michael said:

Furthermore, the $7500 is not an issue since this is a lease. Since it goes to the leasing company, the individual's income is completely irrelevant.

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True, and understood. I was just pointing out that, although the CA rebate (for purchases or leases) is now limited, the Federal credit (for purchases) was not affected.

michael said:

So for all practical purposes, anyone in California who might reasonably be interested in a Fiat (or any moderately priced EV) gets the $2500, maybe even more.

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I was interested in the FFE -- and am happy I bought it before last July instead of after.

Okay, here's the latest, straight from the horse's mouth....
https://cleanvehiclerebate.org/eng/information-fiscal-year-2015-16-income-limit-changes

"Implementation of the income eligibility changes is anticipated in mid-March 2016. The implementation date will be announced at least two weeks prior on the ARB and CVRP websites and through a press release. CVRP will continue to operate without income eligibility changes until the implementation date."

"A subset of applicants will have their income verified. Applicants selected for income verification must submit IRS Form 4506-T, Request for Transcript of Tax Return. Alternate proof of income such as recent tax returns may be submitted as approved by the project administrator."

I wonder if the subset will be random, or targeted at those that buy a Tesla, Porsche, Volvo, i8, ELR, S-Class, etc...

Glad I got my wife's B-Class already, rebate came on Saturday. After March they may have targeted my application since it's a freaking Mercedes. If so, the extra paperwork would be a total waste of time... I'm well under that half-million income limit, mostly because I was too damn lazy to drive to Chino Hills to buy my Powerball tickets. Bought locally, only won $4.

Anyway, back to the Fiat - that killer deal has been persistent since December, and not just from one dealer (keeping track of them here). I swear I see more 500e than any other 500 variant here in So Cal. I suspect the deals will continue at least until the Chrysler Pacifica PHEV is introduced later this year.... Apparently FCA needs more emissions credits than they gain from selling the 500e, according to this article by insideevs.

One of my co-workers has a 500e, got it for $2500 down + tax and license, $85/month, 24 months. He got the $2500 back using the California rebate. Screaming deal. I considered it when I bought my FFE, but just didn't like the 500.....just too small for me.

I think a half dozen more may show up here. It's going to put a large bite on our workplace charging capacity.

At this low price, it makes sense for the guy whose daily driver is a big pickup or SUV to get the Fiat as a commuter/grocery getter and save the monster for weekend use

I would totally get one of those just as an extra car for that price. I can't imagine that insurance is too expensive for it. I'm sure that for a lot of people they could get it as an extra car & still come out ahead with the gas savings. Gas prices in MN are down around $1.75/gal now, which makes gas savings relatively small for most people to switch to an EV, but in Cali the economics are different.

That's what I was thinking. Unfortunately my wife put a stop to that plan....

Didn't unplugged get a Fiat 500e? I think he picked up one of them on a really cheap lease like that.