Data Shows 93 Percent of Those Who Obtained an Electric Vehicle in Late 2012 Choose to Lease Rather Than to Buy

10 months ago by Eric Loveday 16

Or Lease Me for as Low as $199 Per Month

Or Lease Me for as Low as $199 Per Month

It’s no secret that there are some smoking hot lease deals out there for electric vehicles.  In fact, $199 per month seems to be the target right now, but is there any evidence out there that proves these lease specials work?

Honda Released This Graphic On The Competition And Leases

Honda Released This Graphic On The Competition And Leases (Click to Enlarge)

Why yes…yes there is.

Experian Automotive, the data research arm of the auto finance company, reports that 93% of those who obtained an electric vehicle in the fourth quarter of 2012 leased it rather than bought or financed it.

93%!!!

Surely there are more reasons, aside from just reduced monthly payments, to explain why leasing was the dominant choice.  There’s that “this is new, unproven technology” theory and even the “battery technology will evolve so quickly that I don’t want to be locked in” approach that sways some towards leasing.  Experian Automotive even suggests that the reason for leasing has to do with that $7,500 tax credit and what it does to residual values.

Whatever the reasons may be, that 93% was not what we we’re expecting.

This does mean that soon there will be a ton of just-off-lease electric vehicles flooding the used auto market.  But with the ever-advancing EV technology, would a lightly used, three-year-old electric even appeal to you?  If so, at what price?

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16 responses to "Data Shows 93 Percent of Those Who Obtained an Electric Vehicle in Late 2012 Choose to Lease Rather Than to Buy"

  1. Future Leaf Driver says:

    At under $20k they sell well to the market that cant afford the $40k price tags!!

  2. bloggin says:

    So it does make sense that the Focus Electric sales are up 157% over 2012, since you can get a fully loaded Focus Electric for just $36/mo than a base Leaf S.

    1. Suprise Cat says:

      Oh yea, the Focus EV sold so much better than the Leaf…

    2. Aaron says:

      And you can get all the “stop safely now” you want with the FFE! What a bargain!

      1. bloggin says:

        It looks like Leaf owners are reporting a similar issue:

        “#2013 Leaf with 980 miles, has been running perfectly since we got it a month ago
        #charged last night to 100 miles because i am expecting a long day of back and forth trips today
        #Driving wife to work and suddenly car gives “low power” (not sure of right name for it). and i pretty much lose all power, pull over and park, power down, power up and shows i have 85 miles, drop her off..
        #heading back home, same thing happens….
        #dropped it off at nissan dealer on way home.”
        http://www.mynissanleaf.com/viewtopic.php?f=30&t=12122

        Based on this owner, it took about 2 months to resolve, but it turned out to be a bolt that was not tightened properly within the battery pack during instal. Not sure if this was the solution for others reporting the same issue.

  3. Brian says:

    I’ve mentioned this before, but I personally leased in order to claim the full tax credit. I wouldn’t get it otherwise, so leasing/buying out is cheaper than buying outright for me. The economics would be different if the tax credit were instead a point-of-sale rebate. When leasing, it essentially is.

    1. Suprise Cat says:

      So in USA the subsidiary is only a write off from your income tax?

      In most european states, the subsidiaries are direct payments to you or the car the dealer or they are cut off from the VAT/car tax.

      1. Brian says:

        That’s correct. So 1) you have to owe at least $7500 in federal income tax for the year and 2) you have to wait until you file your taxes to get it back (i.e. after the new year)

        1. Dave R says:

          Actually, if you are smart about your fed witholdings you could reduce the amount of withholdings through the year and effectively get the tax credit before you get the car. There is no reason to keep on paying extra when you will just be getting it back when you file your taxes.

  4. Aaron says:

    When my $69/month lease on my i-MiEV expires in 2015, I’m looking forward to some inexpensive, off-lease EVs.

  5. Suprise Cat says:

    > “battery technology will evolve so quickly that I don’t want to be locked in”

    That’s a total false thinking. No car manufacturer will use any fancy new experimental battery technology and risk hundred of thousands cars mass dying after a few years.
    It will take several years of intensive testing before they can use in a mass product. There will be only a slow, but steady evolution of battery technology. Also there is still the possibility to upgrade a bought car with an advanced battery at a later time.

    1. KenZ says:

      Totally agree with the first part. Not so sure on the second part in actuality; may depend on the mfr and the car and the sales volume.

      Slow and steady battery evolution for sure. What may change is better management systems, improved charging protocols (behind the scenes; ways to improve charge rate or mitigate capacity loss on charging), and possibly form factor-decisions to implement more options (e.g. if Nissan could go back in time, other than the obvious temperature control they likely would have implemented, what if they’d sized the compartment to fit either their standard 70-80 mile battery and a 100 mile battery option?).

      That, and possibly things like level 2 charging coming standard on all vehicles.

      So I think what we’ll see three years down the line is no massive changes in the batteries themselves, but in the all the things that affect the batteries, from protection technology to charging improvements to standard rapid charge features.

      But yes, I completely agree with your conclusion that there will not be any earth shattering battery changes in the next three years.

  6. io says:

    Sorry but that 93% number is just not plausible at all, even for Q4 2012, at a time when one could already get $199/mo lease deal on the Leaf, but those thinking of buying were more likely to be waiting for the cheaper/better 2013 model which still wasn’t available.
    (btw, this is probably the reason this financing company, which benefits from people leasing, not buying, picked this specific period in the first place)

    In Q4 2012, Tesla wasn’t offering leases, and sold some 2500 Model S.
    During the same period, ~4600 Leafs, 457 FFE, 150 i-MiEV and 131 Rav4 were sold or leased (http://insideevs.com/monthly-plug-in-sales-scorecard/)

    Even if ALL the non-Tesla EVs were leased, the lease-to-purchase ratio still remains below 70%. I suspect that the real number is much lower, maybe in the 50~60% range, nowhere near what Experian claims.

    1. miimura says:

      Not only that, but Toyota does not give RAV4 EV lessees the full benefit of the tax credit. TFS keeps about $4,000 in their own pocket for each leased vehicle. So, naturally, the percentage of purchases are higher for that vehicle.

      1. laguna_b says:

        By my calculation Toyota keeps 100% of the tax credit and puts it in their pockets. The RAV4 is cheap and noisy SUV with state of the art Tesla drive system. Unfortunately, due to it have a HUGE drag coefficient, it uses close to 400WHrs/mile versus my Ford Focus EV which is in the 285WHr/mile range (actuals) and has about the same range.

  7. laguna_b says:

    I leased a Ford Focus EV for $195/mo plus tax. $2500 at signing (California rebate $2500 erased this). The car is FULLY equipped lacking perhaps electric seats and remote garage door opener. I leased for EXACTLY the same reasons as the article states. Contrary to the other commentors I see a vast improvement coming in battery technology in the 3-5 year range which will propel densities by 1.5 – 3X range. Many technologies existing today are yet to be proven and commercialized but a 5 year horizon with the right investment should yield the top range of my prediction. 3X chemistry exists today, just needs to be produced.
    I expect that if I am not ready for a new vehicle in 3 years, I can re-lease or buy the FFEV for <50% of residual for all the reasons mentioned.