I am somewhat surprised that in 2017 there is still so much confusion on leasing vs. buying. For reference, I was previously a consumer law attorney and spent 6 years as a finance and insurance director for several large so cal car dealerships. Leasing is not rocket science. There is NO special price or discount. There are, however, ways to leverage a lease or purchase in ways that suit your needs (if you understand the choices before you). Regardless, you should ALWAYS negotiate price BEFORE you talk finance terms (lease or buy) (note to maximize your deal you should also leave out any trade value discussions for a separate part of the transaction...every piece is under your control and handling them separately keeps everything on the up and up).
Once the price is established, then you can enter discussions on lease vs. buy. Ironically this choice should be less about the #'s and more about your intended use. Without too much depth, leasing rewards those who intend to own a car for less than 3-5 years (with 3 typically being the sweet spot). Because of the rapidly evolving battery technology, multiple manufacturers efforts to bring new products to market, incredibly poor resale values for most other pure electrics, battery performance after 3 years in many models and the tax incentives, leasing is most often a better "choice" for the majority of consumers (if you leased a leaf 4 years ago, you saved around $1500 in sales taxes, were able to leverage the tax credit into the front end of the lease and Nissan "bought" the car back from you for an highly inflated residual value relative to the market value...If you owned the leaf, you had to wait for the tax credit (and be able to use it all), paid the entire sales tax bill and owned a car 3 years in that you most likely didn't want to own due to range anxiety (from personal experience my mom's leaf had a 55 mile range after 3 years and 30k miles) and you could only trade it in for a fraction of the residual value that you could have had had you leased it.
When you lease you SHOULD NOT shop for a payment. You should ask for the following:
1. Capitalized Cost (this just a fancy way of saying "sales price" and the # should be the amount you negotiated BEFORE you told the dealer you wanted to lease).
2. Term and mileage limits (note that for tax rebate purposes the term MUST be > than 30 months...you can often pre-pay for additional mileage up front at a lesser rate so if you know you will exceed 15k/year pre-paying is often a good deal).
3. Drive off (this is the amount of down payment (called "capitalized cost reduction"...which, in a lease, you honestly should NEVER have, but that is more of a personal viewpoint), sales taxes on the cap cost reduction, first month's payment (you pay your payment at the start of each month, inc month 1), bank fee (if there is one), security deposit (if there is one). That is all that should be paid up front. Note that the rebate credit ($7500 and $2500 in CA for qualifying income earners, goes in as "capitalized cost reduction" which is why leasing is so favorable for electrics.
4. Money factor (a fancy term for "interest rate")
5. Residual % (AKA how much you pay for the car (plus tax) upon termination (also can be viewed as a "guaranteed future value" that the bank is offering you on termination. Note the residual value is determined from MSRP (this is the ONLY place that matters) and is usually in the range of 60% or so for a 36 month lease.)
Cost of the lease is calculated in this manner:
MSRP x Residual % = Residual Value
Cap Cost - Cap Cost Reduction = Net Cap Cost
Total amount of Depreciation = Net Cap Cost - Residual Value
Base monthly payment = Total Amount of Depreciation/term
Rent/finance fee = (Net Cap Cost + Residual) x Money Factor
Total Payment = Base monthly payment + Rent/finance fee
Total payment is plus your local (address-based) sales tax.
That is all there is to the math.
I keep reading that GM is not applying the Fed Tax credit to this deal. Not sure how that is so since it belongs to the consumer. As long as you DO NOT sign anything assigning YOUR RIGHT to the tax credit to GMAC then they will not get it. You will have a higher price (less cap cost reduction) but you can apply for the tax credits directly on your own even if you lease. I am interested in anyone's experience in this area. If GM is indeed "stealing" (IMO) the fed tax credit from the consumer that would be an interesting consumer class action suit. If I negotiate all the terms (as stated above) and then walk into finance and suddenly the cap cost reduction of $7500 is being applied to the deal that I was quoted...that is fraud and actionable...I may have to go get one myself and see about the outcome.
