marshallinwa
Posts: 154
Joined: Wed Nov 30, 2016 11:20 pm

Re: Buy vs. Lease

Thu Jan 26, 2017 7:04 pm

LeftieBiker wrote:
Leasing is not for people who have the mentality of wanting to keep a car for a decade or so.


They are basically saying, to retirees and others with low taxable income, "If you want to actually own a Bolt, win the lottery."


Not every retiree has a low income. Plus even if their retired income is low due to not spending much of their savings, in some cases, the retiree may have an enough 401k or equivalent savings that can be converted to a Roth Ira and use up $7,500 federal tax credit, if they should choose to spend their savings on an electric car.

Frankly, I think low income individuals would be better off investing in increasing their skill set so they can earn more money then buying a new car.

Personally, these electric cars have been depreciating so much over three years, that I've been considering a used Kia Soul EV. What still keeps me looking at the Bolt is the range issue with these used EVs, the upgrade to my electrical panel, and the on-board charger issue with the Kia Soul EV.
Last edited by marshallinwa on Thu Jan 26, 2017 8:39 pm, edited 1 time in total.

JupiterMoon
Posts: 245
Joined: Mon Dec 12, 2016 2:16 am

Re: Buy vs. Lease

Thu Jan 26, 2017 7:32 pm

I think a great idea that I'd definitely sign up for in order to keep my EV for a longer period of time is to lease the battery pack. Like Renault is offering as a ln option for the Zoe.

The Zoe's new pack is identical to the old one size wise and is directly replaceable with older Zoe's already out on the road.

In three years, six years, whatever, the Bolts pack could be upgraded to a newer denser, faster charging pack that can be simply dragged and dropped into your current Bolt.

That's how I think it should be. It would also raise residual values of EVs as most people judge the their depreciation on battery tech and not much else.

JupiterMoon
Posts: 245
Joined: Mon Dec 12, 2016 2:16 am

Re: Buy vs. Lease

Thu Jan 26, 2017 7:36 pm

marshallinwa wrote:
LeftieBiker wrote:
Leasing is not for people who have the mentality of wanting to keep a car for a decade or so.


They are basically saying, to retirees and others with low taxable income, "If you want to actually own a Bolt, win the lottery."


Not every retiree has a low income. Plus even if their retired income is low due to not spending much of their savings, in some cases, the retiree may have an enough 401k or equivalent savings that can be converted to a Roth Ira and use up $7,500 federal tax credit, if they should choose to spend their savings on an electric car.

Frankly, I think low income individuals would be better off investing in increasing their skill set so they can earn more money then buying a new car.

Personally, these electric cars have been depreciating so much over three years, that I've been considering a using Kia Soul EV. What still keeps me looking at the Bolt is the range issue with these used EVs, the upgrade to my electrical panel, and the on-board charger issue with the Kia Soul EV.


Easier said than done in terms of investing money into acquiring a new skill. This country's economic structure is very unforgiving and people have little to no safety net to fall back on if they are required to earn more money while doing something else at the same time.

And gets even harder when your age goes up and you've got a system that couples ones healthcare with having to have a job. It's such a broken system it's embarrassing.
Last edited by JupiterMoon on Wed Mar 08, 2017 5:45 pm, edited 1 time in total.

LeftieBiker
Posts: 793
Joined: Tue Jan 10, 2017 7:13 am

Re: Buy vs. Lease

Thu Jan 26, 2017 8:16 pm

And they call EV enthusiasts "elitists"... I guess a few of them actually are.
2018 Nissan Leaf SL with Pro Pilot

2009 Vectrix VX-1 with 18 Leaf modules.

wwhitney
Posts: 135
Joined: Thu Sep 01, 2016 4:05 pm

Re: Buy vs. Lease

Thu Jan 26, 2017 8:32 pm

floamis wrote:I'm pretty sure the urge to get the latest and greatest (whether it's Bolt 2.0, Model 3, or Leaf 2.0) for me will be overwhelming in 3 years time. That has certainly been the case with other sorts of tech for me! I will gladly pay the premium on a lease to satisfy that urge (as well as the curent urge for the Bolt) down the line.

You can satisfy that urge with a purchase as well, by selling the car in 3 years. The economics of the lease versus buy question then becomes a question of forecasting the value of the car in 3 years, arguably a difficult forecast.

For a detailed example, take a loaded LT with an MSRP $39,790, a sales price of $1,000 off MSRP, 9% sales tax, $400 in license fees, and an $80 doc fee. The out the door cost to purchase is $42,761. If you lease for 36 months at 0.00072 money factor, $2,500 in CCR from GM, a 60% residual, and a $2,500 driveoff payment, your monthly payment including tax will be $402/month. If you get $2,500 from the California rebate program, your total lease cost is $14,465 (that's 35 * $402 plus $395 disposition fee).

If instead you finance the car at, say, 3% on a 5 year loan, again with $2,500 driveoff reimbursed by the $2,500 California rebate, that's a $737/month payment, assuming no loan fees. After 35 payments of $737, your remaining loan balance will be $17,140. If you pay off the loan at that point, your total cost for the car will be $35,435 (that's 35 * $737 + $17,140 - $7,500 federal tax credit).

So in this example, if the 3 year old Bolt can be sold for at least $21,000 in 2020, you'll be better off buying than leasing. If the 3 year old Bolt is worth less than $21,000, you'll be better off leasing. This assumes the cash flow works for you either way, ignores the differential time value of the two cash flow schedules, and includes some rounding at a couple steps.

Note that the lease in this example has a residual of $23,874 and a capitalized value of $35,614, so the total lease fees and interest are $2,532. While the loan interest is $2,674. That is, while the lease has an effective interest rate of 1.73%, it has $990 in acquisition/disposition fees, so the total cost is close to the 3% interest on the loan. If the loan rate were lower, the breakeven 2020 market value would be lower. For example, at 0% loan APR, it would be $18,300 (that's $32,761 net cash purchase cost - $14,465 lease cost).

Cheers, Wayne

floamis
Posts: 7
Joined: Thu Jan 05, 2017 3:25 pm

Re: Buy vs. Lease

Thu Jan 26, 2017 9:51 pm

wwhitney wrote:
floamis wrote:I'm pretty sure the urge to get the latest and greatest (whether it's Bolt 2.0, Model 3, or Leaf 2.0) for me will be overwhelming in 3 years time. That has certainly been the case with other sorts of tech for me! I will gladly pay the premium on a lease to satisfy that urge (as well as the curent urge for the Bolt) down the line.

You can satisfy that urge with a purchase as well, by selling the car in 3 years. The economics of the lease versus buy question then becomes a question of forecasting the value of the car in 3 years, arguably a difficult forecast.

For a detailed example, take a loaded LT with an MSRP $39,790, a sales price of $1,000 off MSRP, 9% sales tax, $400 in license fees, and an $80 doc fee. The out the door cost to purchase is $42,761. If you lease for 36 months at 0.00072 money factor, $2,500 in CCR from GM, a 60% residual, and a $2,500 driveoff payment, your monthly payment including tax will be $402/month. If you get $2,500 from the California rebate program, your total lease cost is $14,465 (that's 35 * $402 plus $395 disposition fee).

If instead you finance the car at, say, 3% on a 5 year loan, again with $2,500 driveoff reimbursed by the $2,500 California rebate, that's a $737/month payment, assuming no loan fees. After 35 payments of $737, your remaining loan balance will be $17,140. If you pay off the loan at that point, your total cost for the car will be $35,435 (that's 35 * $737 + $17,140 - $7,500 federal tax credit).

So in this example, if the 3 year old Bolt can be sold for at least $21,000 in 2020, you'll be better off buying than leasing. If the 3 year old Bolt is worth less than $21,000, you'll be better off leasing. This assumes the cash flow works for you either way, ignores the differential time value of the two cash flow schedules, and includes some rounding at a couple steps.

Note that the lease in this example has a residual of $23,874 and a capitalized value of $35,614, so the total lease fees and interest are $2,532. While the loan interest is $2,674. That is, while the lease has an effective interest rate of 1.73%, it has $990 in acquisition/disposition fees, so the total cost is close to the 3% interest on the loan. If the loan rate were lower, the breakeven 2020 market value would be lower. For example, at 0% loan APR, it would be $18,300 (that's $32,761 net cash purchase cost - $14,465 lease cost).

Cheers, Wayne


Understandable. I probably should've mentioned that a reason for me to lease is the ease of it all. The payments are simpler, and lower. I don't have to apply for the $7,500 tax incentive. I also don't need to worry about the depreciation. I won't lose sleep if it turns out leasing cost more than buying. More importantly, I don't need to have to sell the car later on. I know I don't plan on keeping the car for more than 4 years, so why not lease in my case? I understand leasing is not usually the better financial decision, but at least for the Bolt, it is the better decision for me right now.

stevewa
Posts: 81
Joined: Thu Dec 15, 2016 9:01 pm

Re: Buy vs. Lease

Sun Jan 29, 2017 6:47 am

We debated long and hard about this. I'm a big believer in buying things and getting their full value out of them. But in this case we went with the 36 month lease. To get to a payment we'd be comfortable with would have meant a large downpayment, effectively gambling on whether or not the federal tax credit will exist by the time we file our 2017 taxes. Plus, we got badly burned on the poor resale of the LEAF which we purchased outright in 2011 (this is probably the biggest influencer on our decision making as of now).

I'm also amazed at how much simpler the entire process is for a lease versus buying. We spent maybe 15 minutes with the finance manager versus the hours it always seems to take for a purchase.

We will see how I feel about it in three years when I'm facing any return fees or a inflated purchase price for a used car, but right now it seems like we made the right choice.

Our lease details:

Trim Level LT
Options Fast Charge provision
Comfort/Convenience package
Driver Confidence package
Kinetic Blue Metallic

Total list price with Destination 39,690.00
Plus Title/License/Registration +384.00
Plus Lease Acquisition fee +595.00
Plus Documentation fee +115.00
Gross Capitalized cost 40,784.00
Cap Cost Reduction -4,076.81 (2,500 from GM, balance cash down)
Adjusted Cap Cost 36,707.19
Residual Value -23,020.20
Depreciation and amortized amounts 13,686.99
Rent Charge +1547.85
Total base of scheduled payments 15,234.84
Monthly payment 423.19

Our cash down plus first monthly was $2000. If we had done no cash down our drive off would have been in the $470 range.

Lithim
Posts: 4
Joined: Sun Jan 10, 2016 5:21 pm
Location: Houston

Re: Buy vs. Lease

Mon Jan 30, 2017 12:47 am

Heres one testimonial for leasing:
In 2013 I leased (first time ever) a 2012 electric car for two years. Toward the end of the lease I contacted the finance company to ask about negotiating the residual value. They were not willing to discuss the issue.
On the day I was turning in the car at the end of the lease I asked the salesman at the dealership to contact the finance company. Lo and behold they offered a price that was about 43% of residual. I took the deal and am now the owner of my formally leased car.
My year car can now be purchased used at various sites across the country for about 67% of the price I paid almost two years ago.
Stay charged my friend
2012 Mitsubishi I-Miev
Silver with DC/DC QC
Owned, previously leased

Jerry85

Re: Buy vs. Lease

Sun Feb 26, 2017 1:32 pm

Lithim wrote:Heres one testimonial for leasing:
In 2013 I leased (first time ever) a 2012 electric car for two years. Toward the end of the lease I contacted the finance company to ask about negotiating the residual value. They were not willing to discuss the issue.
On the day I was turning in the car at the end of the lease I asked the salesman at the dealership to contact the finance company. Lo and behold they offered a price that was about 43% of residual. I took the deal and am now the owner of my formally leased car.
My year car can now be purchased used at various sites across the country for about 67% of the price I paid almost two years ago.
Stay charged my friend


Great experience! Good for you. Haven't you encountered any problems in your car? Your story could be a great encouragement in leasing a car. Maybe your leased car is in good condition and you are a good owner of it. That is because you maintain your car until now and get some profit on it in the future.

ssspinball
Posts: 126
Joined: Fri Jan 08, 2016 2:02 pm

Re: Buy vs. Lease

Thu Mar 02, 2017 3:01 am

Lease for 2 years with the $7500 credit back from the leasing company. Then lease again for 2 years with another $7500. That's what I'm doing. No unknown depreciation risk AND cheaper than a purchase. ;)

Of course this requires a manufacturer that offers competitive 2 year leases and the full $7500 credit, which Chevy currently doesn't.

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