One More Look at Why Leasing is the Way to Go With Today’s Plug-In Vehicles

4 years ago by Inside EVs Staff 22

Even Less Than $199 Per Month

Even Less Than $199 Per Month

D. Abraham Ringer, a Certified Financial Planner practitioner and columnist at the Milford Daily News, recently tackled the subject of leasing versus buying plug-in vehicles.

Here's That $199 Special

Here’s That $199 Special

And while we strongly suggest that you read the article in its entirety (link at bottom of post), the gist of Ringer’s article is that leasing is the right way to go.

Here are a few graphs from Ringer’s Milford Daily News article:

“As a Certified Financial Planner practitioner, I would normally recommend buying a car outright rather than leasing it. However, in this case I believe that leasing represents a better value, because the tax credit is applied entirely to what you owe on the lease. In the case of the Leaf, the $7,500 is applied to the approximate full lease cost of $16,664 rather than the full purchase price of $28,800.”

“By leasing an electric car and using it as our primary car, I estimate that we can save around $200/month on gas. According to fueleconomy.gov the cost to drive the Nissan Leaf 25 miles is 87 cents in electricity charges. The cost to drive my SUV 25 miles is $6.68. The monthly savings on gas alone covers the entire lease payment on the Leaf. There are, of course, other costs associated with leasing a car, such as sales tax, the Massachusetts excise tax, insurance and registration. However, it certainly makes the marginal cost to add a second car incredibly reasonable. Maintenance costs on an electric car are also very reasonable and most often less expensive than a normal car due to fewer moving parts. You’ll never need an oil change!”

Again, we strongly suggest you follow the link below to read the complete article for more insightful details on why leasing is likely the more financially sound choice.
Source: Milford Daily News

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22 responses to "One More Look at Why Leasing is the Way to Go With Today’s Plug-In Vehicles"

  1. David Murray says:

    Fortunately.. I think with more and more used Volts and Leafs showing up on the market, I suspect buying used will be the best value over the next year or so. I think we’re still waiting for the price drop of the 2014 Volt to catch up to the used market.

    1. Josh says:

      Spot on David. My personal target is to pick up a 2011 Volt for $15k when my 2011 LEAF lease runs out in June ’14. My driving habits have changed and the extra AER doesn’t help me as much now.

      I would hold onto the Volt until I purchase a used Model S or a new Gen III (Model E?). There is really nothing out there I am compelled to buy new right now (within my budget).

    2. pjwood says:

      David,

      A car whose sales growth goes up ~50% per year, is a car with 50% more buyers. Used buyers, as well as new buyers. All looking for what were just few 2011 and 2012’s. So, there is this argument, as well as the market itself to suggest buying wasn’t so bad an idea.

      Higher miles, as well as not having to pay for the first year’s depreciation in the lease mayment, every 3 years, are other reasons buying may still be better. I haven’t seen many Volts hit 20k, and they’re going into their fourth year.

    3. Spec says:

      I hope you guys are right. I’d love to pick up a used Volt to go with my pure EV so I can get rid of the ICE clunker.

      1. SittingBull says:

        I sold my Tacoma and leased a Spark EV for $219/mth, taxes in. There was $2000 down which I disputed (stopped payment). Chevrolet and the dealer mislead me regarding the DC Fast Charge option due to ignorance and putting profit before all else. Two responses into the BBB dispute it looks good for me because they offered a 50/50 deal, but I want the option so I refused it. I’m waiting for them to invite me to small claims court, where I’ll get at least that, maybe even the car I wanted from the beginning. Either way, my lease was $219/mth+$0 down, or maybe $1000. down, we’ll see. My wife watched all this transpire from a safe distance but recently downgraded the insurance on her ICE from ‘business’ to ‘personal’, meaning no more than 4000 miles per year. I did the maintenance check, detailed it and put the cover on it. We’re living with just the EV and it’s lusted after. Palm Springs is like a movie set for EVs, nothing but sun, good roads and swimming weather all year. There are 5 level II chargers within a 1/4 mile radius. Maintenance from what I can see is just about zilch, for our 10,800 mile lease (36 months). The brakes are under warranty out to 100,000 miles, the battery 100,000, the motor some equally long distance etc.. At 10,000, I’m responsible for a tire check/fix/rotation and at 20,000, the manual says to “replace the cabin air filter’. In a few months, the sun will be filling it up, but that is a complicated arrangement around here, takes some time.

    4. scott moore says:

      Well, the good or bad news is that if the leaf were to go to 150 or 200 miles per charge, then the used market would drop dramatically.

  2. Charles Gaba says:

    I haven’t read the article in full yet, but in addition to his points, there’s another rather obvious reason why leasing a plugin EV for 3 years makes a lot more sense–at least in these early years of the industry–than buying outright: The advances in battery and related technology are moving at a VERY rapid pace.

    I don’t know how long most people normally plan on keeping a new car, but I would imagine 10 years is about average. If you buy a 2014 EV with the intention of holding onto it for a decade, you’re going to be losing out on whatever advances in efficiency/etc. come during that time (which are likely to be dramatic). If you lease the car for 3 years, you can easily replace it with the more advance model that comes out in 2017 without having to deal with the hassle of selling your 2014 model, etc.

    1. Gene says:

      Charles, what “advances in battery and related technology” over the past 3 years would you site as worth spending all that lease money on? The 2014 Nissan Leaf’s battery is expected to be pretty darn similar to the 2011 Nissan Leaf. Even Tesla’s batteries aren’t technologically advancing “at a VERY rapid pace” that I’ve heard. What specifically are you thinking of?

      The dropping prices are a different argument, but that must slow down at some point soon…as will the incentives…

    2. GeorgeS says:

      I agree Charles. Let me just throw in another suggestion:
      With the technology changing as fast as it is even 3 year leases can be too long.

      Therefore:
      Why not TAKE OVER someones used lease. Yes you can do it and here is an example.:

      My Volt lease is 1.5 years old. My payments are 500$/mo because I payed MSRP.

      If I put my lease out for take over I could probably only get 250$/mo for it.

      This is an incredible deal for someone. They could drive a near new Volt for 1.5 years for 4500$. At that point in time that person could switch to another EV of his choosing……perhaps he could take over a Tesla S lease.

      It’s all available at leasetrader dot com

  3. Mark says:

    Agree with article however it does not apply for certain situations

    1) I’m on pace to avg 20k per year
    2) Illinois offers 10% msrp state credit on purchases only

    2013 Leaf

  4. Bloggin says:

    Leasing an EV is just common sense, that is just not too common today.

    Buying an EV today is like buying a $30k iPhone. You know in 18 months a more advanced and cheaper version will be released, which cause the one you own to rapidly lose value.

    EVs are technology, and the old buy it and keep it for 10 years and expect it to retain value over time concept does not work. Simply because in 5 years, the 200 mile EV will cost less than the 100 mile EV. And in 10 years, the 300 mile EV will cost less than the current 100 mile EV. On the other hand, a plug-in hybrid is a different story and has a much longer shelf life like a traditional ICE vehicle.

    Just like EV owners don’t buy and EV with the expectation of looking for a plug everywhere they go, cause they don’t look for a gas station on every trip with their ICE vehicle. And unlike driving an ICE vehicle, their cheaper, more convenient, always available gas station is now in their garage.

    1. Dr. Kenneth Noisewater says:

      What’s the mileage on those leases though? If you roll >12k miles per year, those additional charges can add up.. Plus, the depreciation hit folks complain about factors in the $7.5k + state credits at purchase, so a Volt going from $40k to $26k looks a lot worse than the $32.5k to $26k after the fed credit.

    2. io says:

      My cellphone is over 3 years old. Sure there are now faster/larger models, but none of them makes “better” phone calls.

      Plug-in or not, future better (or cheaper) vehicles won’t somehow make existing ones drive any differently. They’d still work just as well.

      The main reason I went electric was to reduce my environmental footprint; the second was financial.
      EVs are already very efficient; I don’t expect much progress in this area for the foreseeable future. Switching EV every few years, for no other reason than some primitive, materialistic satisfaction about having “the latest”, would go against these goals.

      [Additionally, I drive more than most leases would allow anyway]

  5. Brian says:

    I did the math, and it was definitely cheaper for me to lease/buy out than to purchase outright. Like many Americans, I don’t make enough money to qualify for the full tax credit. As an added bonus, I have the ability to easily upgrade if an advancement comes by 2015. But if one doesn’t, I keep the car I have because it works for me as is.

  6. brainknow says:

    i bought my Leaf and plan to sell it overseas when done. The US is blessed with the cheapest EV prices in the world!

  7. Steve says:

    Leasing doesn’t pencil out so well when you drive 16k miles a year.

    1. Both the Honda Fit EV and Toyota Rav4 EV each have an unlimited mileage option, as did the BMW ActiveE.

      1. io says:

        True, but both are hard to get, and cost more than most other EVs.

        Also, neither quick-charges (at least, outside Japan). My EV gets driven just as much as Steve’s and that option helps make this possible. I bought my Leaf.

  8. Ryan says:

    Full electric option on Prius or Volt. Will GM or Toyota be first?

    1. Brian says:

      No way would Toyota be first to this. However, I’m not certain that GM is going to go all-electric on the Volt. People already have a hard time understanding the car, no need to muddy the water farther with an all-electric version. If anything, they will continue pushing other electrics like the Spark EV.

  9. Dave K. says:

    I bought my 2011 Leaf, but if I had the option of the new leases it would be tempting! I actually think I am OK though as I plan to keep the car basically forever, my commute is short, chargers are plentiful and getting more so, I can charge at work, my utiliy offers a great TOU rate, ect. So even if the battery loses 40% of it’s range I’m OK, by then (10 years?) I expect one of those new tech batteries will be available so I will just replace it and keep the car.

  10. charles says:

    The biggest reason to lease is every two years you can suck another $7500 out of the public tit. At 12,000 miles a year that means Uncle Sam takes 31.25 cents from your neighbors for every mile you drive. You only pay about a tenth of that amount in electricity.