As an example, we live in So. Calif. and my wife just leased a 2019 Ford Fusion PHEV and the dealer took the $7500 rebate off the top of the sticker price...
Sort of, please don't take this the wrong way, I would like to share what I know so it can benefit all of us as consumers. Keyword in your statement above is "lease". On a lease the manufacturer generally gets the $7500 tax credit, but the dealer can pass those savings on to you in the form of a dealer discount which will lower the sales price of the vehicle and thus lower the sales tax. They don't have to pass the savings to you, it's negotiable.
On a "sale" you the consumer are eligible for the tax credit. You don't get the benefit of a $7500 reduced sales price for CA sales tax purposes. In CA you pay tax on the full sales price after dealer discount but before any manufacturer rebates or tax incentives. I hate it that certain states do this (charge you sales tax for rebates you've received), but it is what it is.
In addition Calif. has a $1500 that she herself applies for afterwards ...
Correct, or increased by 2k to $3500 for folks with income below 300% of the poverty level based upon size of household, but again this shouldn't impact what you pay in sales tax on a "sale". I don't believe it would impact what you pay in sales tax on a "lease" either, especially since you are applying for the rebate after you've left the dealer and paid your sales tax.
Most dealers in this area do the same, including Tesla. In fact, if you look at the prices for Tesla online that show their prices with the rebate factored in.
I suspect Tesla shows what savings a consumer may realize in a "sale" if you qualify for the federal and state tax credits. I'll wager there is a fine print disclaimer on their website explaining that there are no guarantees you will qualify. Again, you aren't going to get a break on CA sales tax for tax credits when purchasing a vehicle. The exception is if you are doing a "lease" and then you would get the benefit of the $7500 federal credit reducing your sales price the dealer calculates sales tax on if you negotiate this with the dealer. Again I doubt you would get a sales tax break on the CA tax credit but I admit I haven't researched this portion.
It is actually much better that way because you’ll pay sales tax on the final price, not the sticker price. Sort of like a deduction on your taxes.
Agreed, but getting the $7500 CA sales tax break is only on a leased vehicle.
That being said, I personally think all the car manufacturers jack up the sticker price on EVs and PHEVs just so they can artificially lower the final price using the Gov. rebates and then take that as a profit. Just my opinion but I’d still rather have a lower sticker and less sales tax then personally take the rebate.
Yes! Anytime a government subsidy is involved in a market the seller will try and funnel as much of that subsidy in to their own pocket instead of yours. At first glance one might feel lucky to get a $7500 tax credit and think they've done great on a deal. I was just explaining this yesterday to my wife as we drove to pick up our new Pachy. In reality the dealers have taken a piece of the pie by jacking up their prices, or reducing the dealer discount they are willing to offer. The manufacturer does the same thing by increasing the MSRP that their economists have determined will be just enough to siphon off a portion of the government subsidy, while not being too expensive so that they still have willing buyers and haven't priced themselves out of the market due to competitors. FCA is in a special place with the Pachy because there are no real hybrid competitors in this price range for a vehicle this size with these mpg's. So they only have to worry about consumer demand at the MSRP they set. These vehicles were pushing 50K when they were first introduced a few years ago with no or miminal factory incentives and dealer discounts. They were playing the waiting game by pricing in a manner where they could maximize profits on a few sales, while keeping production low so as to not create a glut of vehicles and force themselves to offer rebates, or their dealers to offer discounts. Waiting for that sucker to walk in and pay full price because they had to have it. That didn't work out for them as well as they planned, because you can buy new old stock 2018's today for about 10k off. These folks at the manufacturer and dealer are smart people, that's why they are rich, but sometimes their plans don't work out perfectly. That is when a consumer can swoop in and get a deal, but don't be fooled by dealers when they say they are losing money on your deal. They are not. The dealer's profit streams have changed in the past 25 years. It used to be they would buy a vehicle from the manufacturer and sell it for MSRP which was 15-20% over their invoice price. They might give you a deal and charge less than MSRP but then they would still retain around 10% profit over invoice. Now you see invoice price is a mere few hundred dollars over MSRP. How the heck is a dealer keeping the lights on and paying staff and living in a mansion if they are only making a few hundred bucks on a deal? They aren't making a few hundred bucks. They are making much more on the back-end through manufacturer-dealer incentive programs. Great for them to do it this way because the consumer has no idea just how much the dealer is truly making on a deal, but they waive that invoice sheet around and make us think we are getting a great deal paying invoice when really we are not. There's at least a few thousand in profit for a dealer selling vehicles at invoice. I just bought one dealer discounted ~4,300 under invoice before factory rebates. I'll take odds the dealer didn't lose a penny on my deal, otherwise they would not have sold the vehicle.
Now, as far as Just taking money off the sticker, that can depend on demand, time of the month or year...many factors including location. When I got my 2017 Pac Limited not only did they take $6,000 off the top, they paid off my 2015 Honda Pilot of $23,000 - and got me the same lease payment as I had with my mid-level trim Honda.
Agreed, there are many factors at play and they are ever changing. You need to find a dealer that needs to make their quota to increase their manufacturer bonus, or wants to clear out really old inventory because, well, it's old, and perhaps other factors like manufacturer requiring them to clear the units and spiffing them for it. There can be other factors as well, like who you negotiate with (salesperson, vs sales manager vs. internet sales manager)