Honda Offers $6,500 Lease Credit On Clarity PHEV, But Only In ZEV States

DEC 12 2017 BY ERIC LOVEDAY 51

Honda has made a brazen decision to offer a generous lease credit of $6,500 on the Clarity PHEV, but only if you live in these states…

  • California
  • Connecticut
  • Maine
  • Maryland
  • Massachusetts
  • New Jersey
  • New York
  • Oregon
  • Rhode Island
  • Vermont

$6,500 Lease Credit, But Only For Some

Our inbox blew up with disgust early this morning. It’s not the first time a story such as this has popped up, but it is the first we’ve heard of such an act tied to the Clarity PHEV.

As it turns out, Honda is willing to cut you a pretty swell lease deal on the Clarity PHEV, provided you live in the states listed above. What Honda is doing is simple. It’s passing on the majority of the $7,500 the Clarity PHEV qualifies for, but only in some states.

Silver Honda Clarity PHEV Window Sticker

In other states like Florida, where a disgusted potential buyer tried to sign a lease deal, that money is all pocketed by Honda. There’s no $6,500 lease credit. In fact, there’s no lease credit at all.

Here’s the tale from that now-disgusted, but previously potential Clarity PHEV lessee:

I set my sights on buying the new Honda Clarity hybrid plug-in.

Here is my big expose and I am ready to yell it from the roof tops I am so turned off that Honda Financial Service has decided to pocket the $7,500 tax credit that these are eligible for!!!

Yes, if I had that big a tax burden I could buy one and take the full credit, like most Americans it is better to lease it and have the lease cash take in this case about $300 out of the monthly payments, right. That’s based on the numbers I got from Calling Fox Honda in Upstate Mew York one of the 10 states Honda financial is allowing a $6,500 lease cash incentive with an additional $1,700 from the state.

In fact look at the list of the 10 states they are at the top of the environmental and EV ready states not much incentive needed there?

But I live in South Florida, I have asked for 2 months if this clarity and the release dates, now it arrives and the local dealers in Pompano, Fort Lauderdale, west Palm, Fort Myers get the run around looking for the lease cash. I heard back yesterday that the head of Honda Florida said that there would absolutely be no lease cash here.

So, I ask you to help me! Please let everyone know that Honda has a great new hybrid that could have helped bridge the gap and pulled people towards EV but the fix is in and for reasons only k own to them they have decided to pocket the EV tax credit on all leased Clarity PHEV In 40 states.

We feel your pain.

Here’s some related documentation:

This has been an ongoing issue with some automakers. Not all, mind you, but some. It was a major source of hatred for BMW in the early i3 days when the automaker was pocketing quite a bit of the credit. That has changed now, with BMW openly giving most, if not all, of the credit to lessees.

Yet Honda, having witnessed past mistakes made by other automakers, still sees fit to boldly go into this gray area where us EV enthusiasts are willing to forever write them off.

Perhaps we’re being a bit too harsh. Honda is breaking no law, but still, we expect more from the Japanese automaker. The Clarity is a respectable PHEV, and loads of us surely would like to lease it, but probably not when we know there’s a $6,500 lease credit in those ZEV-credit driving states but not in others.

It’s time to step up to the plate Honda. Do what’s right.

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51 Comments on "Honda Offers $6,500 Lease Credit On Clarity PHEV, But Only In ZEV States"

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Spoonman.

This is a weird decision, and Chevy does it too by not including the credit in the lease with the Bolt. Since it’s a federal credit, why not encourage sales by passing on most of it to the consumer? They’re even keeping $1000 of it in the ZEV states.

WadeTyhon

My understanding is that Chevy artificially raises the residual value of the car rather than reducing the price. So it is factored in but it is not as obvious. I am not sure if Honda does this.

But right now there are other year end incentives at chevy dealers. Such as employee pricing discounts on most chevy vehicles (volt and bolt get about 3,500 off I believe.)

To the man in Florida – go check out the Volt, Bolt, or Fusion Energi and see if you can get a better deal.

Hart Ed

That makes it official: The Honda Clarity PHEV is a Compliance Vehicle

Richard Joash Tan

I’s NOT nice to sday that the Clarity PHEV is a compliance vehicle. It’s NOT! I will buy a fully loaded Clarity PHEV soon!

GM offers lease incentives for Bolts and Volts in non-CARB states, it’s just less than in the CARB states. I the diff between CARB/non-CARB states for Bolt lease incentives is ~$2,250, while the difference for the Volt is at least that much.

Crazy that Honda is completely nixing any lease incentives though! So soup for you, non-CARB’ers!

WadeTyhon

I expect the cars to be cheaper to lease in CARB states due to the ZEV mandate, local incentives plus more dealer discounts due to higher inventories. You Californians in particular are super spoiled with your dirt cheap EV pricing! 😉

But this is a bit extreme and blatantly obvious. Offer the federal discount or don’t!

Chris O

Price gauging for new model s isn’t exactly unheard of. If you don’t like the deal, just walk away or wait for a bit until demand drops and the industry gets desperate to move the (compliance) metal.

floydboy

WTF? What price gouging?!

zzzzzzzzzz

Duh. It passes CARB ZEV credit value, not income tax credit. How can it pass CARB credits that it doesn’t receive in non-CARB states like Florida?

It should pass income tax credit too, but it is another story. As far as these $199/month leases for $35k MSRP Clarity Electric are concerned, I suspect that this $7500 credit is already accounted for, either by artificially high residual, or whatever else tricks.

Where are you seeing $199/month?

Honda’s nationwide website shows $739/mo for 3 years with no down payment, $675 with $2k, etc.

https://automobiles.honda.com/tools/payment-estimator?vehiclemodelseries=clarity-plug-in-hybrid&modelYear=2018&ModelID=ZC5F1JGW

Oh, you were talking about the pitiful 89-mile Clarity BEVs…

They are selling those at a deliberate loss and only in CA, solely to gain ZEV credits.

It’s a ridiculous car, the newest yet possibly the shortest-range BEV on offer with 5 seats.

Chaz

The purely electric version is also available in Oregon now. If I could just dial back my expectations back about five years, I think that I would be rather impressed.

zzzzzzzzzz

Clarity Electric is selling in non-CARB states too. It is now all over Florida. No need to trash it just because it is electric and doesn’t have the approved Cult badge.

While the range is suitable for commuting only, its size and comfort features are way higher than most of electric alternatives in the market today. If you don’t need 200-300 mile (but still limited) range, why pay second mortgage size payment at $1000/month for a car when you can have bigger passenger volume car for less then $200/month? Some people in California got it for $166/month with CA incentives.
https://forum.leasehackr.com/t/2017-honda-clarity-electric-36-mo-20k-for-199-mo-with-899-due-not-including-taxes-registration-and-fees-ca-and-or-residents-only/25217/42

Clarity PHEV has just appeared. While it doesn’t have promotional lease, the MSRP is under $40k, so you should be able to lease or buy it for much less than $700/month eventually.

Spoonman.

Is the travel provision still expiring at the end of 2017, so automakers will have to offer ZEVs in all of the ZEV states?

WadeTyhon

Last time I checked yes. And unlike Nissan, GM, BMW… Honda has sold very few ZEV or TZEV vehicles even in California. So they probably need to play catch up in many of those states.

Lurfy

As of 31 Aug, Honda had 24,422.82 Zev credits. Tesla had 29556. Fiat in lead with 91,000

WadeTyhon

Yep, although it should be noted that is what they had in their “bank” of credits. 🙂

Tesla has accumulated *way* more than that over the years. But Tesla sells the majority of their credits to other automakers. Tesla provided 51,776 credits split between Subaru, Fiat, and Toyota over the past year for instance.

Between BEV and TZEV(PHEV) credits: Ford, Fiat, GM and Toyota all have pretty similar banks of credit. PHEVs can still account for 55% of all ZEV credits next year.

Yes, except for FCVs. Their credits are still eligible to “travel”.

I dunno. It *is* cynical, but if stuff like that helps states that are “on the fence” to go full ZEV (looking at you, WA, no excuses left now…), then all’s well that ends well.

It is not automakers’ faults that US environmental policy is so geographically checkered and temporally unreliable. The only reliable, responsible and self-consistent part of US policy towards car technology, is indeed the California-led ZEV policy (and that too, has the fuel-cell anomaly built into it).

Clarity is still offered nationwide, and as I understand people with $7.5k Fed tax liability can purchase outright (or take a loan) and pocket the full rebate, right?

Btw, unless I’m mistaken the $7.5k is counted off everything, including tax already withheld, Social Security, etc.

William

Clarity EV, not for sale, lease only, 3 year maximum.

JyChevyVolt

Honda will offer 2 year extension like the Fit EV. The fit EV extension was a fantastic lease deal. $199/month, unlimited mile, maintenance and insurance.

The PHEV is offered nationwide. The article is about the PHEV version.

The BEV is a laughable ZEV compliance play, lease-only and California-only AFAIK.

As to social security etc., I may be wrong. From my own filling out tax returns, it has seemed that the system treats all obligations and credits as a single pot. But I may be wrong.

JyChevyVolt

Every EV, except Tesla, is a compliance car. Wait til the tax credit goes away and you’ll see a whole new level of compliance.

3laine

i3 isn’t a compliance car. It’s sold readily all over the US and a lot of the world. Has it’s own platform. It’s arguably the most ground-up EV design. It was advertised during the Super Bowl…

Tom

There is NO WAY you can be honest and still maintain that the Chevy BOLT, designed from the ground up as an BEV with 238 miles of range is a compliance car……….

William

Clarity EV, not for sale, lease only, 3 year maximum.

Spoonman.

I’d never heard that the credit counts against Social Security obligations. Do you know where I could find out more about that?

Nix

“unless I’m mistaken the $7.5k is counted off everything, including tax already withheld, Social Security, etc.”

It includes “Federal Income Tax Withheld” (line 2 on your W-2 form your employer provides).

It DOES NOT include “Social Security Tax Withheld” or “Medicare Tax Withheld” (lines 4 and 6 on your W-2’s).

It is only a tax credit that can be applied to federal income tax, and no other taxes.

zzzzzzzzzz

Assaf:

No, $7500 is not for tax withheld nor for self-employment tax nor for state tax. It is for federal income tax due, and it must be in the same year. It may disappear or not for 2018 tax year.

I think it goes to line 54 on form 1040. If it exceeds tax minus credits in the lines above, too bad.

See form 8936 instructions.
https://apps.irs.gov/app/picklist/list/priorFormPublication.html?resultsPerPage=200&sortColumn=sortOrder&indexOfFirstRow=0&criteria=formNumber&value=8936&isDescending=false

William

“for reasons only k own to them”, is a slip of pen!

Let the helpful Honda folks keep their “OWN” metal, “K”!

Honda, Keep your Kompliance Kar!

Steve

MA is included but not shown in your list of states.

gary

I don’t think the $6500 Lease Cash offered in ZEV states is due to the Fed Tax Credit, but rather the (partial) value of ZEV credits.

If you were an automaker rolling out a car 3 weeks before the Tax Credit goes away (at least potentially), are you going to set up a special finance program for those 3 weeks? It is unlikely that many cars will wind up sitting on dealers lots due to the lack of the Tax Credit as a CCR.
Test drove a Touring model yesterday and had them run the lease numbers. $O down (drive off = first payment) was $567.65/mo in Oregon (a ZEV state with no sales tax).

Nix

Well, you certainly can look at it as Honda screwing EVERYONE (including CARB state buyers) out of their federal $7500 tax credit, while giving out $6500 in CARB incentives back to CARB state buyers.

But I don’t really think that makes it any better.

Richard

I’m confused. If I live in California and lease that phev clarity and get the $6,500 lease credit, do I get to deduct the $7,500 off my federal taxes?

Spoonman.

No. Honda/the leasing company claims the $7500 credit.

David Murray

Honda is probably behind on their ZEV credits since they haven’t had any EVs for sale in those states for a while.

jim stack

It used to be Arizona was included but our Dept of Environmental Quality LOL dropped out of the Clean Car states. They were paid off by the car dealers association #$%&*%$@

Honda has made a brazen decision to offer a generous lease credit of $6,500 on the Clarity PHEV, but only if you live in these states…
California
Connecticut
Maine
Maryland
New Jersey
New York
Oregon
Rhode Island
Vermont

Dan

Arizona is a red state (the Alabama of the west).

Nix

lesson 1: If you live in a non-CARB state, contact your state representatives and tell them that your state should join the CARB states.

lesson 2: Don’t buy from companies who aren’t loyal to EV buyers.

JyChevyVolt

So much is the lease? I would love to lease the PHEV version too.

God/Bacardi

This was pointing out but I’ll expand in simpler terms…

If you go to Honda.com and price out a pure base Clarity PHEV, the lease payment estimate is $739/mo with $0 down…However, while that is at MSRP, Honda’s calculator does not factor in TTL, which would most likely take the payment over $800/mo…However a realistic assumption you’ll get a discount and could lease this for $0 down and $739/mo over 36 months…Now if you want true $0 down, the first months payment is absorbing into the remaining months…6500/35 = a $181.71 payment discount or $557.29/mo payment with $0 down and this again is the bare bones base…You could probably beat that price with a fully optioned i3 REX without too much trouble…

This is a terrible lease; might as well get the cheaper fuel cell version…

So the Clarity PHEV is technically available in all 50 states, but only morons would lease it in the non-CARB states. Good way to ensure most sales are in the CARB states and garner those ZEV credits while still being able to say “Sure, we are selling it nationwide! *fingers crossed behind back*”

Spoonman.

Sure, but if you have $7500 in federal income tax obligations it’s a very reasonable buy. They are stocking it in non-ZEV states, like Pennsylvania.

JyChevyVolt

Just buy the vehicle and get the full tax credit.

You don’t hear people complaining about no State​ tax in Florida. Everyone had a choice to move to a state that’s​ more environmentally​ friendly State.

If you don’t have enough tax liability to get the full credit, then move some money from your Traditional IRA to Roth IRA to trigger tax liability.

JyChevyVolt

Do people deserve the full tax credit when they are leasing the vehicle for only 3 years?

God/Bacardi

The general consensus from the public is yes…Most automakers ignore this data and elect to offer lease discounts in other areas of the lease…

JyChevyVolt

The fair thing to do is to split the tax credit between Honda finance and the buyer. Honda finance should get 70% and the buyer 30%, assuming 10 year life of vehicle.

Asking for full tax credit when leasing is gaming the system.

God/Bacardi

There are so many aspects of the lease, not just lease cash…Primarily you have residuals, money factors, “lease cash” and targeted incentives (think grad bonus, lease loyalty)…Then there are other factors such as what credit score you need to have qualify for the lowest money factor (GMF is 620, Maserati is reportedly 750) and how much of a discount you get for a single pay lease…What’s all that boring stuff mean?

The Bolt EV doesn’t offer a ton of lease cash but it’s an incredibly low lease in the CARB states…Fiat 500e often also offers very attractive leases…

Mark.ca

“The fair thing to do is to split the tax credit between Honda finance and the buyer. Honda finance should get 70% and the buyer 30%, assuming 10 year life of vehicle.”

Do you work for a bank or something? In your view, i should let Chase take most of the credit just because they finance the VW lease i got.
No, they do not deserve to get anything more than th credits are already getting…and shame on all that don’t provide full credit to the consumer, the intended target of the credit. With these low range evs you do have to make certain compromises so the credit sould be a buffer against that and the price increase of an ev.

AJ

Called 5 dealerships here in Northern California. The minute I mentioned the 6500 credit, they stopped interacting with me.

It looks like they are definitely aware of it, but don’t want to pass it to the customers.

Didn’t expect this from Honda

Ccroucher

I am still 12 months from the end of my Ford C-Max Energi lease. When I signed I was given an up front $6500 credit. Honda told me they could do the same and I live in VA. I now wonder if they are “fibbing” just to keep me interested. I will never buy an EV or PHEV without a tax credit.