Looking at buying vs leasing - never leased before

[LeftieBiker]

If the residual increases by, for example, $5000, it saves you almost exactly that much over the duration of the lease.

I'd really like to see the math on that. I suspect that you are assuming that the $5k MUST be financed over the lease term, when the reality is that most residuals can be adjusted and only the non-residual portion of the lease is financed. IOW, GM could set the residual $5k higher without taking the $5k from the Federal rebate and without making the lessee pay for it.

 

[rocstar]

Don't count on getting the full $7,500 tax credit. You only get whatever your tax bill is. If you are owed a refund you get nothing. If you owe $1,000 that,s all you get.
https://www.edmunds.com/fuel-economy/the-ins-and-outs-of-electric-vehicle-tax-credits.html

It is completely unrelated to what you "owe" at the time of filing (payment due or refund) , but based entirely on your tax liability for the year. Your tax bill (or refund) when you file is your tax liability minus your payments (withholding or quarterly estimated taxes are most common).

I believe DucRider is right. It is based on how much you owe. Whether you are due a refund or not is based on whether you have already paid more than you owe. If I owe $20000 in taxes for the year based on my tax bracket and other deductions, but I've already paid $21000 in withholding from my paycheck, then I would be due a $1000 refund. If I buy the Bolt and take the $7500 credit, it reduces my tax liability from $20000 to $12500. So then I would be due an $8500 refund.

 

[mwk]

I've never leased a car before now. I usually buy them, pay them off and drive them into the ground. But with the Bolt, I felt as if the EV market is just now coming alive and as mentioned in earlier postings, it's technology that may very well become obsolete in three years.

If I were to buy the car and pay it off in five years (best I could afford to do), I feel at that point the technology may well be so far advanced over now, that I would want to trade it in on a new model. I just feel like this type of car, at this moment in time, it's better to hedge your bets and lease.

 

[LeftieBiker]

The car may prove to have serious design or build issues, but this idea that a 200+ mile range car with 200HP and advanced safety features will somehow be obsolete in three years is silly. Unless you want a self-driving car or one with a sophisticated Nav system, the Bolt's level of technology will still be acceptable in five years.

 

[TimBolt]

Purchasing the Bolt was not an option for me since I can’t claim the $7500 federal tax credit.

I leased my Bolt back in June from a Long Island dealer in NY, I pay $250 a month for a 10k per year lease, and my total out of pocket was $2500. The sticker was $39,500 for an LT with all available options.

I never got bogged down with residual values and money factors, etc. I just thought that $250 a month was a pretty good deal for a car with a $40k sticker, even with $2500 down. I’ve seen lease deals posted that are better or worse, but mine seemed to be in the ballpark.

This was also my first lease, my last car was a VW TDI. VW bought that back, and paid me 65% of what I paid for it in 2010, I’ll never get a deal like that again!

 

[TimBolt]

Don't count on getting the full $7,500 tax credit. You only get whatever your tax bill is. If you are owed a refund you get nothing. If you owe $1,000 that,s all you get.
https://www.edmunds.com/fuel-economy/the-ins-and-outs-of-electric-vehicle-tax-credits.html

The $7500 tax credit is deducted from the total federal tax you owe in the year you buy the car. Most tax refunds are for overpayment of taxes through payroll deductions, but it’s your total federal tax obligation that’s important, not your refund amount.

Also, based on recent proposed legislation in Washington, the $7500 credit may disappear on 1/1/2018.

If that happens there will be plenty of Bolts on every dealer lot, but they’ll not be cheap.

 

[TimBolt]

One note on residual value. Although the lease agreement offers the leasee the option to purchase the car at lease end at the stated residual value, the reality is that the price is negotiable if the actual market value of the car is lower than the stated residual.

GM and the dealer don’t want to get stuck with off-lease cars, and they will certainly deal to make a sale.

At lease end, if you’re interested in buying the car, check Edmunds or KBB to get an idea of the actual value, and negotiate based on that if it’s lower than the residual value.

 

[oilerlord]

Those who bought (rather than leased) a Leaf, Focus, Volt, Rav4 etc etc. are holding the bag with a tremendously depreciated car. Those who leased them turned them in after three years and got a Bolt, Gen2 Volt, etc etc.

While true, the flip side of is that the next buyer has the opportunity to buy that tremendously depreciated car, and own it outright. The two year old EV I bought had 6,000 miles on it, and I picked it up for about the total cost of a 36 month lease. No lease payments for me in perpetuity, no mileage restrictions, and whatever "residual value" the car has when I choose to sell it gets paid to me.

I like when the community labels an off-lease EV with all the desirability as an old, obsolete cell phone...in fact, I'm counting on it. When the time comes to make a deal on another EV, I can use it to my advantage.

 

[SparkE]

Those who bought (rather than leased) a Leaf, Focus, Volt, Rav4 etc etc. are holding the bag with a tremendously depreciated car. Those who leased them turned them in after three years and got a Bolt, Gen2 Volt, etc etc.

While true, the flip side of is that the next buyer has the opportunity to buy that tremendously depreciated car, and own it outright. The two year old EV I bought had 6,000 miles on it, and I picked it up for about the total cost of a 36 month lease. No lease payments for me in perpetuity, no mileage restrictions, and whatever "residual value" the car has when I choose to sell it gets paid to me.

I like when the community labels an off-lease EV with all the desirability as an old, obsolete cell phone...in fact, I'm counting on it. When the time comes to make a deal on another EV, I can use it to my advantage.

That's what I am planning on doing.

1) negotiate to buy at end of lease at pennies on the dollar

2) buy someone else's lease return if (1) doesn't generate a 'good enough' price

 

[LeftieBiker]

Nissan never negotiated on residuals until last year, when they turned the process over to their dealers. They did offer fixed discounts on numerous occasions, but you couldn't negotiate with them. I don't know what GM will do about Bolt residuals. If I have to lease a Bolt I'll make sure that the residual high, in the hope that if I like the car, they'll negotiate - but I'm not counting on it.

 

[globecanvas]

One comment on leasing, which I've heard others mention as well: if you lease, consider erring on the high side on your mileage allowance. We put about 12k per year on our previous vehicle over the past 5 years, so we got a 12k/yearlease based on that, but we're now 4 months into the lease and we're on target for 15k/year. The problem is that the Bolt is just really fun to drive, neither my wife or I ever wants to drive our old truck instead, and we look for excuses to drive the Bolt. So we'll end up paying a penalty when we end the lease.

 

[winterescape]

One comment on leasing, which I've heard others mention as well: if you lease, consider erring on the high side on your mileage allowance. We put about 12k per year on our previous vehicle over the past 5 years, so we got a 12k/yearlease based on that, but we're now 4 months into the lease and we're on target for 15k/year. The problem is that the Bolt is just really fun to drive, neither my wife or I ever wants to drive our old truck instead, and we look for excuses to drive the Bolt. So we'll end up paying a penalty when we end the lease.

That is a great point to make but also a really fun problem to have!

 

[rocstar]

So, this week the story seems to be changing... all the dealers in my area are strongly pushing leases. I am finding it tough to compare apples to apples (some are including the $2000 NYS rebate in their quotes, others are not, and no one has provided the money factor), but I am now getting offers of $260-$290/mo x 36 on a 15,000 miles/yr lease. The residuals are high, though, (58-60%) so it probably wouldn't make sense if I wanted to keep the car. What is the benefit to Chevy of setting such a high residual - just getting the cars off the lots now?

Buying the car outright looks like it would be around $28500 (including sales tax and after the NYS rebate and $7500 federal tax credit). Is the right thing to do to subtract the total lease cost (let's say $11000) from that number, and then decide whether I think I could resell the car at 3 years for that price ($17500)? Or, close enough that I'd still feel good about it if I decided not to keep it longer? I mean, it will definitely be worth something - but that still feels optimistic to me.

Dumb question from someone who has only ever purchased cars outright (no financing) - do these lease offers even mean anything without them running a credit check? My credit is excellent, so is it safe to trust the numbers that they are telling me?

 

[DucRider]

....The residuals are high, though, (58-60%) so it probably wouldn't make sense if I wanted to keep the car. What is the benefit to Chevy of setting such a high residual - just getting the cars off the lots now?

High residual = lower payments = move units. GM Financial is using part of the Fed Tax Credit to raise the residual value. Probably hedging that used EV prices may rise with the sunset (or repeal) of the Fed Tax Credit. If the market value of the car is less than the residual (very likely) at the end of the lease, you can negotiate a purchase price (but you have to be willing to give up the car if they are unreasonable).

....Dumb question from someone who has only ever purchased cars outright (no financing) - do these lease offers even mean anything without them running a credit check? My credit is excellent, so is it safe to trust the numbers that they are telling me?

The offer will always be for good credit. Sometimes ads will have fine print with a number (650, 700, etc) or just a disclaimer that not everyone will qualify.

 

[Anonymous]

Those who bought (rather than leased) a Leaf, Focus, Volt, Rav4 etc etc. are holding the bag with a tremendously depreciated car. Those who leased them turned them in after three years and got a Bolt, Gen2 Volt, etc etc.

While true, the flip side of is that the next buyer has the opportunity to buy that tremendously depreciated car, and own it outright. The two year old EV I bought had 6,000 miles on it, and I picked it up for about the total cost of a 36 month lease. No lease payments for me in perpetuity, no mileage restrictions, and whatever "residual value" the car has when I choose to sell it gets paid to me.

I like when the community labels an off-lease EV with all the desirability as an old, obsolete cell phone...in fact, I'm counting on it. When the time comes to make a deal on another EV, I can use it to my advantage.

That's what I am planning on doing.

1) negotiate to buy at end of lease at pennies on the dollar

2) buy someone else's lease return if (1) doesn't generate a 'good enough' price

I am new to the forum and am considering getting a Bolt this month. I have never leased a car, like many in this thread, but am considering it. One thing that all the interesting comments brought to mind: REGARDLESS of whether or not Trump and the Republicans kill the $7,500 tax credit after 2017, Chevy will at some point have sold more than 200,000 plug-in cars. That will likely be inside of three years. Then the value of a used Bolt should be higher because that $7,500 won't be available to anyone. On top of that, an electric car is NOT simply a "technology" good like a smartphone that will be "obsolete" in three years. Even a smartphone is not obsolete, e.g. an iPhone typically continues to work well for three years or more and operating system updates keep it fresh. A car like the Bolt that is well designed and reliable and fun to drive today will still be those things in three years. The battery capacity loss should be fairly low, about 10% -15% maybe? I lean towards buying, not leasing. I don't have to have the latest fashion in cars, but I am very interested in getting an electric car--with good range like the Bolt--now. The next gen Leaf won't be available until February (?) and it won't have the same range. In Minnesota I know that winters will reduce the effective range, so I want the Bolt. Plus the lease deals that I've seen here don't seem to be nearly as good as what others have posted.

 

[DucRider]

I am new to the forum and am considering getting a Bolt this month. I have never leased a car, like many in this thread, but am considering it. One thing that all the interesting comments brought to mind: REGARDLESS of whether or not Trump and the Republicans kill the $7,500 tax credit after 2017, Chevy will at some point have sold more than 200,000 plug-in cars. That will likely be inside of three years. Then the value of a used Bolt should be higher because that $7,500 won't be available to anyone. On top of that, an electric car is NOT simply a "technology" good like a smartphone that will be "obsolete" in three years. Even a smartphone is not obsolete, e.g. an iPhone typically continues to work well for three years or more and operating system updates keep it fresh. A car like the Bolt that is well designed and reliable and fun to drive today will still be those things in three years. The battery capacity loss should be fairly low, about 10% -15% maybe? I lean towards buying, not leasing. I don't have to have the latest fashion in cars, but I am very interested in getting an electric car--with good range like the Bolt--now. The next gen Leaf won't be available until February (?) and it won't have the same range. In Minnesota I know that winters will reduce the effective range, so I want the Bolt. Plus the lease deals that I've seen here don't seem to be nearly as good as what others have posted.

When the tax credit goes away (sunset or repeal) it is very likely the price for a new Bolt will drop. It already has a~$5K lower MSRP in Canada (with the current exchange rate).

The better lease deals you are seeing in other areas are because of a lower selling price and not directly related to the lease/buy question. Dealers in CA are offering heavy discounts off of MSRP (some subsidy by GM in "select" markets - CA seems to have the most, but I have seen a few smaller ones in OR).

 

[winterescape]

From someone who also had never leased, a lot can change in 3 years in the EV market space, as fantastic as the Bolt is, carefully consider if you really want to own it in 2021.

Chevy Spark EV (2013 -2016)
0-60 7.5 to 8 seconds
20kWh battery pack (21.3 – 19kwh depending on MY and supplier)
Range 82 miles
130 hp motor

Chevy Bolt (2016 -?)
0-60 6.5 seconds
60kWh battery pack
Range 238 miles
200 hp motor

 

[LeftieBiker]

Again, if the Bolt's specs exceed the needs of a driver now, they are not likely to be inadequate in three years. The Spark was a small compliance car with very limited range. The Bolt is not. My only concerns about buying a Bolt would be build quality issues and design issues like the seats and infotainment system.

 

[Semilinear]

I think both schools of thoughts make sense: if Bolt meets driver's needs today, it wouldn't become obsolete in 3 years vs. the EV technology evolves so fast these days, Bolt would become obsolete in 3 years...! My own case falls into the latter logic - I want to have a range of at least 300 miles, because I occasionally travel 200 miles round trip to work. So lease is my choice. I cancelled my Tesla Model 3, day 1 reservation, because I don't know when they can deliver and I heard their model S/X have some QC issues. Also in 2020, I hope there would be more choices on the market, like this one: https://en.m.wikipedia.org/wiki/Mercedes-Benz_EQ#Concept_EQ_C

FYI - The Bolt lease I got last week is: 0 down, $370/month, 12000miles, 36 months.

 

[michael]

From someone who also had never leased, a lot can change in 3 years in the EV market space, as fantastic as the Bolt is, carefully consider if you really want to own it in 2021.

Chevy Spark EV (2013 -2016)
0-60 7.5 to 8 seconds
20kWh battery pack (21.3 – 19kwh depending on MY and supplier)
Range 82 miles
130 hp motor

Chevy Bolt (2016 -?)
0-60 6.5 seconds
60kWh battery pack
Range 238 miles
200 hp motor

This is exactly the point. A few years ago, people were contending that 80 mile class EV's were entirely adequate, but from today's perspective they are obsolescent.

Three years from now?