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I have a binding contract with VIN and have made downpayment. This satisfies the transition rule and will allow me to treat it as though it was placed in service, prior. https://www.google.com/amp/s/cleante...ax-credit/amp/
Well according to reddit, and contracts I've seen, usually they have this fine print on the bottom of any 'agreement' that you have not taken possession of. "The document is not an offer or contract for sale."
I too placed a deposit on the Rav4 Prime and had a VIN assigned as it is coming next month, but I'm not sure what the government needs to actually satisfy this requirement. If your downpayment was refundable, then it is most likely not a binding contract to purchase. (This is how it was exactly worded in the bill.)
Last edited by mathnerd88; Aug 9, 2022 at 04:33 PM.
Well according to reddit, and contracts I've seen, usually they have this fine print on the bottom of any 'agreement' that you have not taken possession of. "The document is not an offer or contract for sale."
I too placed a deposit on the Rav4 Prime and had a VIN assigned as it is coming next month, but I'm not sure what the government needs to actually satisfy this requirement. If your downpayment was refundable, then it is most likely not a binding contract to purchase. (This is how it was exactly worded in the bill.)
Looks pretty binding to me. Thats the last page of my buyer's order. Look at #15. Pretty sure this is as binding as it gets for car buying.
Looks pretty binding to me. Thats the last page of my buyer's order. Look at #15. Pretty sure this is as binding as it gets for car buying.
Looks like according to IRS guidelines, you have to put at least 5% nonrefundable deposit of the purchase price to qualify for the $7500 tax credit regardless if you have the purchase agreement or not. Looks like game is over. I would be careful if I were you unless you put down 5% deposit on your C40 and clarify with your tax attorney.
Last edited by mathnerd88; Aug 17, 2022 at 09:10 PM.
Looks like according to IRS guidelines, you have to put at least 5% nonrefundable deposit of the purchase price to qualify for the $7500 tax credit regardless if you have the purchase agreement or not. Looks like game is over. I would be careful if I were you unless you put down 5% deposit on your C40 and clarify with your tax attorney.
Downpayment percentage doesn't matter in the guidance given UNLESS it is being used as an indicator. In absence of this, the down-payment is an "indication of". Note, not the sole determining factor, or de-facto definition of. My Buyer's Order is binding, enforceable, and is dated 7/22. Whether I put down 5 or 50% is irrelevant, given this. The internal paperwork from Volvo also indicates the order at that time. Downpayment is used in lieu of any of this, so as to INDICATE a binding contract, and define it as such, sans the fancy paperwork. Per the guidance issued above, as it is listed as an indicator.
But yes, the tax deductibles have sunset, it seems, by and large for now.
Downpayment percentage doesn't matter in the guidance given UNLESS it is being used as an indicator. In absence of this, the down-payment is an "indication of". Note, not the sole determining factor, or de-facto definition of. My Buyer's Order is binding, enforceable, and is dated 7/22. Whether I put down 5 or 50% is irrelevant, given this. The internal paperwork from Volvo also indicates the order at that time. Downpayment is used in lieu of any of this, so as to INDICATE a binding contract, and define it as such, sans the fancy paperwork. Per the guidance issued above, as it is listed as an indicator.
But yes, the tax deductibles have sunset, it seems, by and large for now.
According to how I'm reading it (and how others on reddit are, some of them being contract lawyers) a purchase order agreement that doesn't have at least 5% nonrefundable deposit does not count as a binding contract since anyone can walk away but just lose the deposit that's less than 5%. If I were you, I'd really look into this as well. Just be prepared come tax time that you might not get the tax credit. The example explains it all "For tax purposes in general..." If your damage by walking away is just your deposit, and if it isn't at least 5%, it isn't considered a binding contract.
I'm still getting the Rav4 Prime regardless, but it really does make it harder to justify the purchase if that was the case.
The IRS did this on purpose to limit Rivian and Lucid preorders from actually getting the tax credit since the nonrefundable deposit is too low. Manchin does have ties to the oil industry- this makes sense.
Last edited by mathnerd88; Aug 18, 2022 at 09:10 AM.
According to how I'm reading it (and how others on reddit are, some of them being contract lawyers) a purchase order agreement that doesn't have at least 5% nonrefundable deposit does not count as a binding contract since anyone can walk away but just lose the deposit that's less than 5%. If I were you, I'd really look into this as well. Just be prepared come tax time that you might not get the tax credit. The example explains it all "For tax purposes in general..." If your damage by walking away is just your deposit, and if it isn't at least 5%, it isn't considered a binding contract.
I'm still getting the Rav4 Prime regardless, but it really does make it harder to justify the purchase if that was the case.
The IRS did this on purpose to limit Rivian and Lucid preorders from actually getting the tax credit since the nonrefundable deposit is too low. Manchin does have ties to the oil industry- this makes sense.
Read my contract. You cannot just "walk away" without being taken to court for failure to perform. The downpayment literally isn't mentioned. What the IRS is stating is for contracts that are only a buyer's order with a small downpayment/reservation, but not failure to perform legality verbage.
Read my contract. You cannot just "walk away" without being taken to court for failure to perform. The downpayment literally isn't mentioned. What the IRS is stating is for contracts that are only a buyer's order with a small downpayment/reservation, but not failure to perform legality verbage.
Regardless, just be prepared that there’s a chance that you won’t get $7500 credit.
Again, it is up to IRS. It’s not about being taken to court. It’s about how much damages you get if you fail to fulfill the contract and if the damages are less than 5% of vehicle price, it isn’t considered a binding contract according to IRS for tax purposes. You can take the dealer to court for not fulfilling the contract, sure but that’s not what IRS is defining as a binding contract for $7500 credit purposes.
Last edited by mathnerd88; Aug 18, 2022 at 10:43 AM.
Regardless, just be prepared that there’s a chance that you won’t get $7500 credit.
Again, it is up to IRS. It’s not about being taken to court. It’s about how much damages you get if you fail to fulfill the contract and if the damages are less than 5% of vehicle price, it isn’t considered a binding contract according to IRS for tax purposes. You can take the dealer to court for not fulfilling the contract, sure but that’s not what IRS is defining as a binding contract for $7500 credit purposes.
The interesting this is that the IRS guidance specifically calls out that even if the contract is not enforcable by state law (which in most cases non-refundable deposit contracts are non-enforceable), they provide a safe harbor by stating that damages of at least 5% (even in a non-enforceable contract) counts as a written binding contract for the purposes of the tax credit. If they hadn't added that provision, most contracts would not be binding because they are not enforceable by state law.
It is unlawful for any dealer licensed under this article to do any of the following when brokering a retail sale:
(b) Accept a purchase deposit from any consumer that exceeds 2.5 percent of the selling price of the vehicle described in the brokering agreement.
(c) Fail to refund any purchase money, including purchase deposits, upon demand by a consumer at any time prior to the consumer's signing of a vehicle purchase agreement with a selling dealer and taking delivery of the vehicle described in the brokering agreement.
Regardless, just be prepared that there’s a chance that you won’t get $7500 credit.
Again, it is up to IRS. It’s not about being taken to court. It’s about how much damages you get if you fail to fulfill the contract and if the damages are less than 5% of vehicle price, it isn’t considered a binding contract according to IRS for tax purposes. You can take the dealer to court for not fulfilling the contract, sure but that’s not what IRS is defining as a binding contract for $7500 credit purposes.
...literally read the first sentence of the IRS guidelines...It clearly describes what a binding contract is. It LATER goes to list criteria that CAN BE considered to be binding (more than 5% down). The damages in my contract are "you buy the car!" Read it. It's binding. For the whole 100% car. You. Must. Buy. It. Or you will be dragged to court where you will be assessed something, I guess? (undefinable...)
Last edited by Unobtanium; Aug 18, 2022 at 04:03 PM.
The interesting this is that the IRS guidance specifically calls out that even if the contract is not enforcable by state law (which in most cases non-refundable deposit contracts are non-enforceable), they provide a safe harbor by stating that damages of at least 5% (even in a non-enforceable contract) counts as a written binding contract for the purposes of the tax credit. If they hadn't added that provision, most contracts would not be binding because they are not enforceable by state law.
Exactly. In my state, it IS enforceable. However, like you note, it provides OTHER ways of defining a valid contract for this purpose, and has been listed as 5%+ down.
Exactly. In my state, it IS enforceable. However, like you note, it provides OTHER ways of defining a valid contract for this purpose, and has been listed as 5%+ down.
It says if it is enforceable AND it does not limit damage to a certain amount (as in only losing your deposit.), NOT OR (literally the first sentence), then it is a binding contract. THEN it goes on to state if you put a significant amount of deposit in (5% or greater) then it is viewed as a binding contract (and that it would not count as limiting damages to a certain amount). This means if your contract only limits your damages to your deposit that is less than 5%, such as losing your deposit if you only put less than 5% in, is NOT a binding contract.
Please read it again a couple more times, and it'll become clearer. I'm sorry to break it to you, because I had the same exact reaction when people started posting this, and argued against them. But after re-reading it a couple more times, it becomes so much clearer.
Last edited by mathnerd88; Aug 19, 2022 at 06:45 AM.
The interesting this is that the IRS guidance specifically calls out that even if the contract is not enforcable by state law (which in most cases non-refundable deposit contracts are non-enforceable), they provide a safe harbor by stating that damages of at least 5% (even in a non-enforceable contract) counts as a written binding contract for the purposes of the tax credit. If they hadn't added that provision, most contracts would not be binding because they are not enforceable by state law.
Please read my post above. The first sentence already stipulates that a binding contract has to be enforceable AND that the damages if you do walk away do NOT amount to a specified amount (such as losing your deposit.) THEN it goes to say that if you deposited more than 5% that's nonrefundable, then it is a binding contract. (The deposit would negate the damages clause if you do walk away do not amount to a specified amount as stipulated in the first sentence.)
Trust me, so many people are arguing about this, but the language is clear. You and Unobtanium are not alone. On reddit, people have been trying to use all your arguments, but if you read it, then it becomes clearer.
Last edited by mathnerd88; Aug 19, 2022 at 06:49 AM.
Exactly. In my state, it IS enforceable. However, like you note, it provides OTHER ways of defining a valid contract for this purpose, and has been listed as 5%+ down.
Either way, if your damages if you cancel your contract amount to the more than 5% of the price of the car, then you're good. If your damages only end up being your deposit, it isn't. IRS isn't going to check the nitty gritty. They're just going to see how much down payment/deposit you made.
It'll just be a hot mess regardless.
Last edited by mathnerd88; Aug 19, 2022 at 06:56 AM.
Either way, if your damages if you cancel your contract amount to the more than 5% of the price of the car, then you're good. If your damages only end up being your deposit, it isn't. IRS isn't going to check the nitty gritty. They're just going to see how much down payment/deposit you made.
It'll just be a hot mess regardless.
I agree with what you are saying now/what I understand you to be saying, now. My contract is such that you CANNOT cancel the contract. You have BOUGHT that car and you better figure it out, lol. It's actually kindof crazy how "heavy" that contract was.
Please read my post above. The first sentence already stipulates that a binding contract has to be enforceable AND that the damages if you do walk away do NOT amount to a specified amount (such as losing your deposit.) THEN it goes to say that if you deposited more than 5% that's nonrefundable, then it is a binding contract. (The deposit would negate the damages clause if you do walk away do not amount to a specified amount as stipulated in the first sentence.)
Trust me, so many people are arguing about this, but the language is clear. You and Unobtanium are not alone. On reddit, people have been trying to use all your arguments, but if you read it, then it becomes clearer.
Maybe you should re-read what I wrote more clearly because it’s the same as what you just said…
Just an update, so far "fuel" is costing me $60 a month on average instead of the $4-500 I was paying in the RDX, but the C40 is kindof "meh" overall. I am trading for an EV6 GT when they drop.
Just an update, so far "fuel" is costing me $60 a month on average instead of the $4-500 I was paying in the RDX, but the C40 is kindof "meh" overall. I am trading for an EV6 GT when they drop.
If everything else was similar (price of vehicles and insurance), a savings of $400+ a month is a BIG deal. Dang, you must drive a heck of a lot to put $400-$500 of petrol in your tank monthly - like 2k+ miles? At that rate, you'll be upgrading EV's every few years - as battery warranty will be a big deal to stay within the coverage - just in case something go haywire.
All the Hyundai and Kia dealers in the areas that have EV vehicles are price gouging big time, most with "market adjustment prices" of $5K+. That's just wrong IMO. Why not look at a used Tesla Model 3 Performance - very similar to the EV6-GT and with prices dropping and inventory rising on used cars - a deal can be hard.
If everything else was similar (price of vehicles and insurance), a savings of $400+ a month is a BIG deal. Dang, you must drive a heck of a lot to put $400-$500 of petrol in your tank monthly - like 2k+ miles? At that rate, you'll be upgrading EV's every few years - as battery warranty will be a big deal to stay within the coverage - just in case something go haywire.
All the Hyundai and Kia dealers in the areas that have EV vehicles are price gouging big time, most with "market adjustment prices" of $5K+. That's just wrong IMO. Why not look at a used Tesla Model 3 Performance - very similar to the EV6-GT and with prices dropping and inventory rising on used cars - a deal can be hard.
-Yes, 2500 miles or so per month.
-The battery won't randomly combust at 100K miles unless I get very unlucky, but yes, warranties that extend it exist. That said, Kia's past performance with EV batteries is excellent, little to no degradation.
-The model 3 is a car. The EV6 is an SUV. I want an SUV.
-I don't pay over sticker by more than $1K, and that better include doc fees or floor mats or something. Who even does that?
A lot of the EV battery horror stories come from the era of no liquid cooling.
When my battery becomes pathetic, I plan to repurpose it to power my house. For a minimal adaptation expense, I can install it as a backup power source. It will charge off of my solar, and even if 50% of its storage capacity is gone by then (wow...a LOT! That would be insane...), it's still worth 38kWh of backup power, which is pretty legit! So I am not paying $25K for just a new EV battery, but ALSO for a whole-house nearly 40kWh backup. Meaningful.
Just an update, so far "fuel" is costing me $60 a month on average instead of the $4-500 I was paying in the RDX, but the C40 is kindof "meh" overall. I am trading for an EV6 GT when they drop.
With the used car market quickly cooling off, if you don't like the EV6, the game of car carousel might get very expensive very fast.
It could, but EV's are still a hot item. They will cool faster than non-EV's, and limited production models like the EV6 GT will cool last of all.
It will all cool off - easy money is gone, and most can't afford an expensive EV. All the FOMO and high demand from the last two years is losing steam - just look at the 15k repos daily and people trying to unload their expensive monthly payments.
The EV6 GT is a low production vehicle - similar to a Mache GT - those are for the enthusiast buyers.
It will all cool off - easy money is gone, and most can't afford an expensive EV. All the FOMO and high demand from the last two years is losing steam - just look at the 15k repos daily and people trying to unload their expensive monthly payments.
The EV6 GT is a low production vehicle - similar to a Mache GT - those are for the enthusiast buyers.
Easy money is gone but so is production. Many car makers have cut production by 50% or more. Due to limited supply, pricing will remain high and dealers will keep charging markup. What looks scheduled to fall somewhat are used car prices, but I don't see even those cratering again because of demand. Because of interest rates, my guess is more and more people coming off a lease will choose to buy their car and keep driving it which again will keep used car prices elevated.
Easy money is gone but so is production. Many car makers have cut production by 50% or more. Due to limited supply, pricing will remain high and dealers will keep charging markup. What looks scheduled to fall somewhat are used car prices, but I don't see even those cratering again because of demand. Because of interest rates, my guess is more and more people coming off a lease will choose to buy their car and keep driving it which again will keep used car prices elevated.
Nope - those days of over valued new and used vehicles are dwindling fast. Go look at all the car lots filling up and big resale car companies loosing money big time. Over FOMO demand, has spotted and falling. No different than real estate.
Nope - those days of over valued new and used vehicles are dwindling fast. Go look at all the car lots filling up and big resale car companies loosing money big time. Over FOMO demand, has spotted and falling. No different than real estate.
Correct, prices on used cars are rapidly falling and profits are down for the first time in a while. There is still a bit of a supply issue with some new cars but what will force dealers' hands is the interest rate, as a $50K car with a high interest rate is going to cause people to pause and many just won't be able to buy right now under the conditions. Factor in the layoffs we are seeing, a possible recession...playtime for the dealers is over.
Correct, prices on used cars are rapidly falling and profits are down for the first time in a while. There is still a bit of a supply issue with some new cars but what will force dealers' hands is the interest rate, as a $50K car with a high interest rate is going to cause people to pause and many just won't be able to buy right now under the conditions. Factor in the layoffs we are seeing, a possible recession...playtime for the dealers is over.
wait times for most cars is on the order of months. Even if demand falls 50% we are still talking a 3 to 6 month wait. What % of buyers are cash buyers? They will buy no matter what. Cars will go up in price because dealers will have to make money from the car and not from financial products. So things are changing, not going back to old ways.
wait times for most cars is on the order of months.
Not where I live and this is dependent on the manufacturer and model e.g. if I want a new MDX I have my pick of 100+. The Integra is starting to pile up also.
Even if demand falls 50% we are still talking a 3 to 6 month wait. What % of buyers are cash buyers? They will buy no matter what. Cars will go up in price because dealers will have to make money from the car and not from financial products. So things are changing, not going back to old ways.
A low percentage, as most are not going to be able to drop $50K on a car. And they make money at MSRP so anything additional is extra profit. I agree that we probably won't be going back to the old way (it was a pretty wasteful model) but the pendulum is swinging back in the consumer's favor quickly.
Not where I live and this is dependent on the manufacturer and model e.g. if I want a new MDX I have my pick of 100+. The Integra is starting to pile up also.
A low percentage, as most are not going to be able to drop $50K on a car. And they make money at MSRP so anything additional is extra profit. I agree that we probably won't be going back to the old way (it was a pretty wasteful model) but the pendulum is swinging back in the consumer's favor quickly.
Easy to find gas cars. Hybrid or EV is very hard. Gas prices will only go up from here. Pure gas esp the 20 mpg types are a poor deal.
Easy to find gas cars. Hybrid or EV is very hard. Gas prices will only go up from here. Pure gas esp the 20 mpg types are a poor deal.
Exactly, when I went on Autotrader to see what C40's like mine were selling for, I found 0 2023's within 500 miles of me, and only 3-4 2022's, all selling for +- 2K of MSRP. with 800-8500mi on them, even used. Carvana offered me $54K (paid 61K) even though I fudged the mileage at 14,000 because I was curious what higher miles would do.
Exactly, when I went on Autotrader to see what C40's like mine were selling for, I found 0 2023's within 500 miles of me, and only 3-4 2022's, all selling for +- 2K of MSRP. with 800-8500mi on them, even used. Carvana offered me $54K (paid 61K) even though I fudged the mileage at 14,000 because I was curious what higher miles would do.
I think I heard that Carvana stock cratered this week. I don't follow it, but I saw a headline on CNBC.com
I think I heard that Carvana stock cratered this week. I don't follow it, but I saw a headline on CNBC.com
Naturally. They have old gas cars which they bought at stupid prices while the music was playing. Now the music has stopped. Supply of hybrid and electric is very constrained.
I think I heard that Carvana stock cratered this week. I don't follow it, but I saw a headline on CNBC.com
Originally Posted by anoop
Naturally. They have old gas cars which they bought at stupid prices while the music was playing. Now the music has stopped. Supply of hybrid and electric is very constrained.
They are having serious titling issues in many states too and really screwing over their customers and it's a shame, as this was an interesting business model that could have gone far.
let’s assume you’re right. How do these companies run their business for the next 3 to 5 years?
IDK, I will personally wait until I see at least 50% of EVs on the roads before I buy one. Right now a lot of people buy them out of fear for tomorrow.
IDK, I will personally wait until I see at least 50% of EVs on the roads before I buy one. Right now a lot of people buy them out of fear for tomorrow.
Its more mature technology, but these cars usually lack of power and do not provide huge savings. Some large sedans like Lexus, only give you 10mpg more than their non-hybrid version but have a premium price to pay and reduced HP.
Last edited by russianDude; Nov 6, 2022 at 02:55 PM.
IDK, I will personally wait until I see at least 50% of EVs on the roads before I buy one. Right now a lot of people buy them out of fear for tomorrow.
I know several people that have purchased EV's over the past couple years. Not one of them bought it out of fear. Most bought it for being fun to drive and the ability to charge at home.
I know several people that have purchased EV's over the past couple years. Not one of them bought it out of fear. Most bought it for being fun to drive and the ability to charge at home.
yup, there are those people too that buy them because they are fun to drive. Nothing wrong with it, But As far as gas savings go, I still cant justify buying one. They do cost a lot more money.
