Financing

Jehorton

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Any idea on how Rivian will provide financing options? I see many people on this forum probably can flat out purchase these vehicles but for me I’d have to sell my current ICE and finance the rest. Curious to know if COX will be the one financing and how they currently go about the numbers and interest rates could / would be.
 

DucRider

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Very unlikely to be promos like 0% interest out of the gate.
Current new car rates seem to be in the 4-5% range, depending on a lot of factors like credit score, amount down, term, etc.
Right now, a $70K purchase with 20% down, excellent credit, with a 48 month term will be about $1,600/mo

If you know what interest rates will be a year from now, please let me know ;)
 

OldEVGuy

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Any idea on how Rivian will provide financing options? I see many people on this forum probably can flat out purchase these vehicles but for me I’d have to sell my current ICE and finance the rest. Curious to know if COX will be the one financing and how they currently go about the numbers and interest rates could / would be.
RJ was talking about a subscription program as a possibility. In April, I asked Rivian about it, and was told they were exploring it internally. They went on to say leasing/financing options will be available, sometime after the launch of the configurator.

With how rapidly this EV technology could be changing in the coming years, I’m either going with a subscription, if available, or a lease, depending on final costs.
 
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Jehorton

Jehorton

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RJ was talking about a subscription program as a possibility. In April, I asked Rivian about it, and was told they were exploring it internally. They went on to say leasing/financing options will be available, sometime after the launch of the configurator.

With how rapidly this EV technology could be changing in the coming years, I’m either going with a subscription, if available, or a lease, depending on final costs.
I really hope this is an option. I don’t know how I could go through the configuration before having financing or subscription talk first. Idk if I’ll even be able to afford this truck.
 

sevengroove

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Right now, a $70K purchase with 20% down, excellent credit, with a 48 month term will be about $1,600/mo

If you know what interest rates will be a year from now, please let me know ;)
Tesla's are currently about 2.49%. You've got to factor in the $7.5k tax credit that Rivians will be eligible for as well (assuming the program is still around in 2021). Both of those will result in a lower net price.

With how rapidly this EV technology could be changing in the coming years, I’m either going with a subscription, if available, or a lease, depending on final costs.
This would be a nice option to have. It's interesting to see how Tesla is operating in the space - they clearly value their cars enough to not offer a buyback option on the leases. On the flipside, there will be a whole lot more EVs on the market in the next 3-5 years so values could drop.
 

electruck

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You've got to factor in the $7.5k tax credit that Rivians will be eligible for as well (assuming the program is still around in 2021). Both of those will result in a lower net price.
Not on a purchase. You pay full price and then claim the credit whenever you file that year's taxes and then you can only claim the credit in an amount up to the lesser of $7500 or your actual tax liability.

EDIT: Here's a good read for those wanting more info.
 
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Babbuino

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Not on a purchase. You pay full price and then claim the credit whenever you file that year's taxes and then you can only claim the credit in an amount up to the lesser of $7500 or your actual tax liability.

EDIT: Here's a good read for those wanting more info.
Guess ill sell stock to owe more taxes and get a full benefit of the 7.5k tax break.
 

DucRider

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Guess ill sell stock to owe more taxes and get a full benefit of the 7.5k tax break.
If you have a traditional IRA, converting it to a Roth will generate a tax liability and the money becomes tax free when you tap it in retirement. Also no mandatory distributions.
 

skyote

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If you have a traditional IRA, converting it to a Roth will generate a tax liability and the money becomes tax free when you tap it in retirement. Also no mandatory distributions.
Wife (CPA) & I were discussing this the other day. You can even take regular 401K distributions (penalty-free) due to COVID (CARES Act) legislation, and spread the tax liability over several years.
 

sevengroove

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Not on a purchase. You pay full price and then claim the credit whenever you file that year's taxes and then you can only claim the credit in an amount up to the lesser of $7500 or your actual tax liability.

EDIT: Here's a good read for those wanting more info.
It takes a little planning, sure, but assuming you can afford a $70k car you probably earn enough to owe at least $7,500 in taxes for an entire year after all other credits and deductions are accounted for. Also worth mentioning based on the article you linked that even if your employer is withholding taxes from your paycheck, that is considered part of the tax liability for these calculations. So for example, say you make $100k in 2020 through your job, your tax liability (after credits and deductions) is $20k, and employer withheld $20k, you still get the full 7.5k EV credit despite not owing anything more in taxes on tax day.
 

electruck

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It takes a little planning, sure, but assuming you can afford a $70k car you probably earn enough to owe at least $7,500 in taxes for an entire year after all other credits and deductions are accounted for. Also worth mentioning based on the article you linked that even if your employer is withholding taxes from your paycheck, that is considered part of the tax liability for these calculations. So for example, say you make $100k in 2020 through your job, your tax liability (after credits and deductions) is $20k, and employer withheld $20k, you still get the full 7.5k EV credit despite not owing anything more in taxes on tax day.
Yes, all true. However, the main point I was trying to make is that you can't simply subtract $7500 off the purchase price of the vehicle when talking about financing. You will pay full price up front and get that $7500 back at a later date (over a year later in some cases). That means if you're financing the vehicle, you're going to be borrowing that $7500 and it will reflect in your monthly payment. It also means you're paying tax on that $7500.
 

sevengroove

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Yes, all true. However, the main point I was trying to make is that you can't simply subtract $7500 off the purchase price of the vehicle when talking about financing. You will pay full price up front and get that $7500 back at a later date (over a year later in some cases). That means if you're financing the vehicle, you're going to be borrowing that $7500 and it will reflect in your monthly payment. It also means you're paying tax on that $7500.
Gotcha, yup those are good points - will need to pay interest on that $7.5k if financed, and tax can add up too. Agree that it's not a straight $7.5k reduction.

It makes a lease/subscription option slightly more attractive because Rivian will presumably subtract the full 7.5k from your lease payments, correct?
 

thrill

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...It makes a lease/subscription option slightly more attractive because Rivian will presumably subtract the full 7.5k from your lease payments, correct?
Probably. BMW did that for my i3s. They did verify my income first before offering the price reduction incentive, so I'm guessing the end buyer's tax category still applies even when leasing.
 

electruck

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Probably. BMW did that for my i3s. They did verify my income first before offering the price reduction incentive, so I'm guessing the end buyer's tax category still applies even when leasing.
Hey, that wasn't my post you quoted... that was sevengroove. :oops:
 

DucRider

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so I'm guessing the end buyer's tax category still applies even when leasing.
No. The leasing company gets the tax credit no matter who they lease to.
 
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