Looking at buying vs leasing - never leased before

[Anonymous]

I still owned my 2002 Prius until this year when I signed it over to my daughter who continues to drive it. In 2002 I didn't carefully consider if it would be obsolete in 3 years (it was one of the most advanced cars on the planet!), and it's still not obsolete 15 years later. It's still a car that gets my daughter around, even though it has a cassette tape player and a single disc CD player in it and no "infotainment" screen. I'm going to bet that she never drives it 500 miles on a tank of gas (I rarely did myself, maybe just once to prove I could do it), probably about 300 miles typically before filling up.

 

[LeftieBiker]

A few years ago, people were contending that 80 mile class EV's were entirely adequate,

Heh. Not too many were claiming that. They were what was available and affordable for us.

 

[SparkE]

A few years ago, people were contending that 80 mile class EV's were entirely adequate,

Heh. Not too many were claiming that. They were what was available and affordable for us.

My 80 mile EV is perfectly adequate for me (as the 2nd family vehicle). In fact, my wife and I "discuss" every morning who is going to drive the EV, and at what point during the day - as neither of us particularly want to drive the gasmobile on any given day.

 

[LeftieBiker]

Yes, the 80 BEV was always adequate for short commutes in a second car. The thing is, not that many people buy a new car with the intention of using it as that "second" car for short trips only.

 

[SeanNelson]

Yes, the 80 BEV was always adequate for short commutes in a second car. The thing is, not that many people buy a new car with the intention of using it as that "second" car for short trips only.

Yeah, I've never had the luxury of having a car solely for commuting use. Which is why I stayed on the BEV sidelines until the Bolt came along.

 

[SparkE]

Yes, the 80 BEV was always adequate for short commutes in a second car. The thing is, not that many people buy a new car with the intention of using it as that "second" car for short trips only.

Yeah, I've never had the luxury of having a car solely for commuting use. Which is why I stayed on the BEV sidelines until the Bolt came along.

Ah, but I am a "family" with multiple vehicles. (Which I think corresponds with many north american families.) A BEV and an ICE are perfectly compatible (if both partners don't need to drive 80 miles a day).

As I, personally, have said in the past (not a jab at anyone, just repeating myself) my next 'ICE' will be a PHEV (plug-in hybrid), when my PZEV (i.e., extremely low-polluting and fuel efficient vehicle) bites the dust.

 

[oilerlord]

My 80 mile EV is perfectly adequate for me (as the 2nd family vehicle).

Me too,

3, 6, 9 years from now - a 90 mile EV will still be a perfectly adequate city car as a compliment to a second ICE / PHEV vehicle for us. Do I "want" an EV with 200+ miles of range? Sure. Do I "need" it? Nope.

 

[JerryBob]

Pinned down a sales manager and asked how lease deals are calculated. The standard residual for a low mileage (less than 10,000 miles) lease is set at 61% of MSRP. They figure a 3 year old, 30,000 mile car is going to be worth 39% less. A $40,000 MSRP car will have a residual of $24,400. Take the $5,000 Federal tax credit GM gets off the MSRP to make it $35,000. $35,000 - $24,400 = $10,600. The $10,600 becomes your lease amount. $10,600/36 = $294.45 a month before sales tax on the $10,600 with no money down. If you can bargain down the $35,000 number lower then your lease payment goes down but the residual stays the same. If you want to buy the car off lease it will be $24,400 plus sales tax. A Lease is for people who can write the cost off on their taxes or want to get a new car every few years and don't want the hassle of trading in their old car and it maybe not being worth what they still owe on it. If you qualify for the full Federal tax credit (have more than $7,500 in tax liability) then you are better off buying if you are going to keep it for more than 3 years.

 

[DucRider]

Pinned down a sales manager and asked how lease deals are calculated. The standard residual for a low mileage (less than 10,000 miles) lease is set at 61% of MSRP. They figure a 3 year old, 30,000 mile car is going to be worth 39% less. A $40,000 MSRP car will have a residual of $24,400. Take the $5,000 Federal tax credit GM gets off the MSRP to make it $35,000. $35,000 - $24,400 = $10,600. The $10,600 becomes your lease amount. $10,600/36 = $294.45 a month before sales tax on the $10,600 with no money down. If you can bargain down the $35,000 number lower then your lease payment goes down but the residual stays the same. If you want to buy the car off lease it will be $24,400 plus sales tax. A Lease is for people who can write the cost off on their taxes or want to get a new car every few years and don't want the hassle of trading in their old car and it maybe not being worth what they still owe on it. If you qualify for the full Federal tax credit (have more than $7,500 in tax liability) then you are better off buying if you are going to keep it for more than 3 years.

A few valid facts mixed in with a lot of misinformation.
There are much, much better sources than car dealers to learn about leasing, and many of the details have been discussed in other threads. An internet search will yield many good car leasing primers

Your info left out rent (interest), and all of the commonly charged fees. GM Financial leases give part of the Fed Tax Credit (they get the same $7500 an individual does, not $5000 as stated above) as a CCR (deduction from the selling price) and uses the rest to to help offset the artificially high residual.

 

[rocstar]

Pinned down a sales manager and asked how lease deals are calculated. The standard residual for a low mileage (less than 10,000 miles) lease is set at 61% of MSRP. They figure a 3 year old, 30,000 mile car is going to be worth 39% less. A $40,000 MSRP car will have a residual of $24,400. Take the $5,000 Federal tax credit GM gets off the MSRP to make it $35,000. $35,000 - $24,400 = $10,600. The $10,600 becomes your lease amount. $10,600/36 = $294.45 a month before sales tax on the $10,600 with no money down. If you can bargain down the $35,000 number lower then your lease payment goes down but the residual stays the same. If you want to buy the car off lease it will be $24,400 plus sales tax. A Lease is for people who can write the cost off on their taxes or want to get a new car every few years and don't want the hassle of trading in their old car and it maybe not being worth what they still owe on it. If you qualify for the full Federal tax credit (have more than $7,500 in tax liability) then you are better off buying if you are going to keep it for more than 3 years.

A few valid facts mixed in with a lot of misinformation.
There are much, much better sources than car dealers to learn about leasing, and many of the details have been discussed in other threads. An internet search will yield many good car leasing primers

Your info left out rent (interest), and all of the commonly charged fees. GM Financial leases give part of the Fed Tax Credit (they get the same $7500 an individual does, not $5000 as stated above) as a CCR (deduction from the selling price) and uses the rest to to help offset the artificially high residual.

Right - there is rent and sales tax (at least in NY). And the monthly rent is weird (at least to me!), because the add the residual back in and calculate the interest based on that inflated number. The salesman I was talking to last week did a reasonable job of walking me through how it works (I guess it was a slow day), and I later looked it up online and was able to confirm pretty much what he had told me. Edmunds does a nice job: https://www.edmunds.com/car-leasing/calculate-your-own-lease-payment.html

Regarding the Bolt specifically, he told me that the residual on the Bolt was 58% for 15k miles/yr, and 60% for 12k miles/yr. I had calculated it at 61% for 10k miles/yr, which matches what JerryBob mentions above.

Honestly, the biggest thing turning me off of leasing right now is the idea that there's this complicated contract and all this fine print that I'm going to have to worry about. If I buy the car, the pain is theoretically over once I make the payment. If I lease it, it seems like I have to worry constantly about whether I'm putting too much 'wear and tear' on it, and then I'll be forced to find a new car on a specific schedule. I'm still kinda leaning towards leasing, but also dreading it a bit.

 

[rocstar]

Oh - for what it's worth - the one dealer that gave me a more detailed quote (rather than just a number) listed a "rebate" (separate from their discount, and the NYS incentive) of $4350. So that appears to be a good chunk of the federal tax credit that they are passing along.

 

[LeftieBiker]

Oh - for what it's worth - the one dealer that gave me a more detailed quote (rather than just a number) listed a "rebate" (separate from their discount, and the NYS incentive) of $4350. So that appears to be a good chunk of the federal tax credit that they are passing along.

Better late than never!

 

[oilerlord]

My wife and I are going to test drive a red Bolt Premier tomorrow. We're not buying (yet), she just hasn't seen one, and I'm interested in her take on the car. My guess is it will get the thumbs down, but life is full of surprises This one has 5K miles on it, and is listed at $34,995. Looked it up...the dealer bought it at auction for just north of $30K so they would probably accept a $32,000 offer to clear it off the lot. Back in August, another one in the Bay area with only 1300 miles went at auction for $31,700.

I have no doubt that nearly new / used Bolt Premiers will soon retail at under $30K sometime in 2018. Fortune favors the patient.

 

[JerryBob]

http://www.qualitychevy.com/VehicleSearchResults?search=all&make=Chevrolet&model=Bolt+EV&trim=LT&year=2017
This is a dealership in Escondido, California. As predicted by oilerlord here is a $6,500 off MSRP sale on 2017 Bolts. I called the dealership and they said it apply's to sales as well as leases. The tricky part of leases is the turn in ceremony and not knowing what excessive wear and tear charges will be added.

 

[PackardV8]

This one has 5K miles on it, and is listed at $34,995. Looked it up...the dealer bought it at auction for just north of $30K so they would probably accept a $32,000 offer to clear it off the lot.

From shiny-future-mode-mobil to just another 25% depreciated used car at auction in months; ain't the US car market wonderful?

BTW, that's a great buy and your wife should love driving her Cajun Red Bolt; mine does.

jack vines

 

[michael]

http://www.qualitychevy.com/VehicleSearchResults?search=all&make=Chevrolet&model=Bolt+EV&trim=LT&year=2017
This is a dealership in Escondido, California. As predicted by oilerlord here is a $6,500 off MSRP sale on 2017 Bolts. I called the dealership and they said it apply's to sales as well as leases. The tricky part of leases is the turn in ceremony and not knowing what excessive wear and tear charges will be added.

The fine print says...

OFFER INCLUDES DISCOUNT BELOW MSRP AND CASH ALLOWANCE. NOT AVAILABLE WITH SPECIAL FINANCING,LEASE OR OTHER OFFERS. MUST FINANCE WITH GM FINANCIAL. INCLUDES CALIF CLEAN AIR REBATE.

So the real discount is $4000 which has been widespread. They are claiming the $2500 as if an actual discount

 

[Nagorak]

http://www.qualitychevy.com/VehicleSearchResults?search=all&make=Chevrolet&model=Bolt+EV&trim=LT&year=2017
This is a dealership in Escondido, California. As predicted by oilerlord here is a $6,500 off MSRP sale on 2017 Bolts. I called the dealership and they said it apply's to sales as well as leases. The tricky part of leases is the turn in ceremony and not knowing what excessive wear and tear charges will be added.

The fine print says...

OFFER INCLUDES DISCOUNT BELOW MSRP AND CASH ALLOWANCE. NOT AVAILABLE WITH SPECIAL FINANCING,LEASE OR OTHER OFFERS. MUST FINANCE WITH GM FINANCIAL. INCLUDES CALIF CLEAN AIR REBATE.

So the real discount is $4000 which has been widespread. They are claiming the $2500 as if an actual discount

Fine print or not they are offering the best deal I've managed to find lately. It was $245/month with nothing down. At least that was what was quoted to me (didn't go through with the lease). At least among So. Cal dealers I didn't manage to rustle up anything better. Rydell was asking $290 after tax. Community Chevy came back with an insane $386/month (not sure what the guy there was smoking).

Unfortunately, when I sat down in the Bolt LT I discovered the complaints about the seats weren't an exaggeration. The car had literally the most uncomfortable seats I've ever sat in before. Part of the problem might be that I'm tall, but there was almost no padding and the seat was pushing into the upper part of my back in an extremely displeasing way--the support just wasn't in the right place. I also tried a Premier and the seats were better--only mildly uncomfortable rather than bed of nails uncomfortable. :? Either way, I'm afraid I have to rule the Bolt out over this (200 mile range isn't much use if you don't think you'd even want to ride 20 miles in it).

 

[oilerlord]

Unfortunately, when I sat down in the Bolt LT I discovered the complaints about the seats weren't an exaggeration. The car had literally the most uncomfortable seats I've ever sat in before. Part of the problem might be that I'm tall, but there was almost no padding and the seat was pushing into the upper part of my back in an extremely displeasing way--the support just wasn't in the right place. I also tried a Premier and the seats were better--only mildly uncomfortable rather than bed of nails uncomfortable. :? Either way, I'm afraid I have to rule the Bolt out over this (200 mile range isn't much use if you don't think you'd even want to ride 20 miles in it).

There's a DIY post in the seatzilla thread that involves the easy addition of foam inserts into the seats that makes them more comfortable, and it's reversible. It isn't like there are a lot of "affordable" 60 kWh EV's available *yet*. It's absolutely ridiculous that something like that should even be a consideration with a car with an MSRP above 40 large, but we do love our electric cars nonetheless. Quirky goes with the territory.

 

[rocstar]

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?

Still curious about this.

 

[LeftieBiker]

These leases are not designed to make it appealing to buy the car. A $17,500 residual is a bit steep, so unless GMAC offers a discount you likely won't want to buy it. Still, if you treat cars gently, and want to know that a used Bolt's first owner was you, then it might be worth it for that reason alone.