I am going to buy a Leaf instead of leasing

[georgia2013]

I am strongly considering buying a Leaf. Here is a quick breakdown of my analysis. I can buy a Leaf for $1,000 below invoice because of my company being on Nissan's "Friends and Family" Vehicle Purchase Program list, which means a 2013 S model would cost $25,986. After the federal credit of $7,500 and state (Georgia) credit of $5,000, my net cost to purchase would be $13,486! Financing this amount over 5 years would equate to a monthly payment of $236, which is roughly what I pay now per month for the gas in my current vehicle. I have a 70 mile round trip commute to work everyday, but can charge for free at work (I work for a big energy utility so we have roughly 30 charging stations in our parking deck). I expect to put 20,000 miles on the Leaf each year, which means the 100,000 mile warranty on the battery will last for five years (same as the period I plan to finance). After taking all of this into consideration, the five year gas savings offsets the five year car payments total making my Leaf free. Does anyone see any bad assumptions in my analysis?

 

[mwalsh]

Only one. I think you might be confusing the capacity warranty with the defects warranty. Capacity is only covered for 60,000 miles over 5 years. Thought the defects warranty is good for 8 years/100k.

But you otherwise sound like a pretty good candidate, so long as charging at work doesn't become a problem.

 

[derkraut]

IMHO, the Leaf purchase would be an outstanding choice.

 

[mksE55]

if yoiu buy ,the 7500 is a tax credit you have to qualify for and not everyone got the credit or even all the credit. You didnt mention where you live if its hot climate I would vote it down. I still think you will not be happy, battery loss is still to great for a car that really only has a 70 mile range in real world and that doesnt include AC or Heat , it is shorter in the winter. I only drive about 30 miles a day and now at 3 bar loss , if i dont charge 2 -3 x a day I could not do 70 mile trip. if you have any side trips it puts you in the worry zone. if Texas didnt have the heat factor I think my needs would have been perfect. small town. a lot of 5-8 mile trips with some 30 mile round trips on occassion. but battery loss will put shorten your excitement , if you live in a cool climate then you may be ok and charging stations help but you still have to wait for a charge unless you have the quick charge port and stations then life would be grand. just my take but real world and 2 yrs later.

 

[SanDust]

Buying a Leaf is a bad idea. If you lease you can buy if at the end of the lease for the purchase price minus the depreciation payments. A three year paid trial without a downside (other than the acquisition fee). Too many issues with loss of battery capacity to risk buying. Plus I'm assuming that Nissan will come out with the Gen II Leaf with a better battery with more range sometime in the next three years.

 

[Randy]

I am strongly considering buying a Leaf. Here is a quick breakdown of my analysis. I can buy a Leaf for $1,000 below invoice because of my company being on Nissan's "Friends and Family" Vehicle Purchase Program list, which means a 2013 S model would cost $25,986. After the federal credit of $7,500 and state (Georgia) credit of $5,000, my net cost to purchase would be $13,486! Financing this amount over 5 years would equate to a monthly payment of $236, which is roughly what I pay now per month for the gas in my current vehicle. I have a 70 mile round trip commute to work everyday, but can charge for free at work (I work for a big energy utility so we have roughly 30 charging stations in our parking deck). I expect to put 20,000 miles on the Leaf each year, which means the 100,000 mile warranty on the battery will last for five years (same as the period I plan to finance). After taking all of this into consideration, the five year gas savings offsets the five year car payments total making my Leaf free. Does anyone see any bad assumptions in my analysis?

The only thing I would add, Georgia, is that our company is also on the VPP program. My disappointment is that the $1,000 under invoice price thing is not cut and dried. The deals that I've been privy to from our employees show me that the dealers are not honestly marking the car down the full $1,000, and sometimes they try to sneak in items that raise the price while not providing much value. And the model "S" cars are hard to find out here as well...Just something to keep in mind when you do the deal. They may try to sell you up to a more expensive model and the price they offer may not be the full $1,000 under invoice....Buyer beware....

 

[RonDawg]

Normally, I would not recommend buying a Leaf for reasons explained here and elsewhere, especially if you live in the southern part of the US as you do. But, if you feel you have done the calculations correctly and that this Leaf truly becomes "free" after accounting for savings in fuel and ICE-specific maintenance, then go for it.

Your round trip commute is already at the very edge of even a new Leaf's realistic range, and you can expect that to get worse with time, so make absolutely sure that you will have charging abilities to get home from work, even if it means scouting out a public station along the way as a "just in case" measure and paying for any charge.

I would also recommend getting a 240 volt EVSE at home (whether a dedicated one or an upgraded OEM) and not relying primarily on your workplace's free charging. Again this would seem unnecessary when the car is new, but as it gets older (particularly after the 5 year/60k capacity warranty expires) you may find that 120 volt charging won't have a quick enough turnaround time, especially in winter (and the S uses the same power-hungry heater as the older cars).

 

[KJD]

I am strongly considering buying a Leaf. Here is a quick breakdown of my analysis. I can buy a Leaf for $1,000 below invoice because of my company being on Nissan's "Friends and Family" Vehicle Purchase Program list, which means a 2013 S model would cost $25,986. After the federal credit of $7,500 and state (Georgia) credit of $5,000, my net cost to purchase would be $13,486! Financing this amount over 5 years would equate to a monthly payment of $236, which is roughly what I pay now per month for the gas in my current vehicle. I have a 70 mile round trip commute to work everyday, but can charge for free at work (I work for a big energy utility so we have roughly 30 charging stations in our parking deck). I expect to put 20,000 miles on the Leaf each year, which means the 100,000 mile warranty on the battery will last for five years (same as the period I plan to finance). After taking all of this into consideration, the five year gas savings offsets the five year car payments total making my Leaf free. Does anyone see any bad assumptions in my analysis?

If you think that a LEAF battery will last 100,000 miles in GA heat, then I got some ocean front property in southern Utah I want to sell you. :shock:

 

[RonDawg]

Buying a Leaf is a bad idea. If you lease you can buy if at the end of the lease for the purchase price minus the depreciation payments. A three year paid trial without a downside (other than the acquisition fee). Too many issues with loss of battery capacity to risk buying. Plus I'm assuming that Nissan will come out with the Gen II Leaf with a better battery with more range sometime in the next three years.

Originally, I thought that buying at the end of a full-term lease was going to be more expensive than just buying it from the beginning. But, I did some calculations, using my own lease as the basis, and I was surprised at the results I came up with: assuming a purchase price that is the same as the Capitalized Cost, I would actually save almost $2k if I bought it at end of lease over buying it outright.

And that assumes a cash transaction for both types of purchases; if I get a 3 year loan at 4.5% APR for the loan residual, I would only be paying 855.32 more overall than if I had purchased the car outright and financed at Nissan's current no interest loan offer.

I think a big reason for that is that Nissan and/or my dealer threw in another $2650 in incentives on top of the Federal tax credit. I may not have gotten this amount off had I purchased for the same price as the stated Capitalized Cost, which itself represents some money off sticker price.

This might be a better option for the OP, but of course YMMV so compare the calculations from any proposed lease offer as opposed to buying outright. Also be prepared for the possibility of having to pay for overmileage fees at end of lease should the OP change his mind about buying, about $1200 per year of the lease term (assuming a 12k per year lease) in his case.

 

[Yogi62]

1 question, do you get the same $5,000 state credit if you lease?

The OP only NEEDS 35 mile range, so that will be fine at 9 bars. Free at work and a top off at home.

 

[planet4ever]

I can buy a Leaf for $1,000 below invoice because of my company being on Nissan's "Friends and Family" Vehicle Purchase Program list, which means a 2013 S model would cost $25,986. After the federal credit of $7,500 and state (Georgia) credit of $5,000, my net cost to purchase would be $13,486! Financing this amount over 5 years would equate to a monthly payment of $236, which is roughly what I pay now per month for the gas in my current vehicle.

It's a great deal, but surely you realize that you can't finance only $13.5K unless you can come up with $12,500 cash + all closing costs. You aren't going to get that $12,500 back until sometime next year, at best. If your state taxes aren't high enough, you may not get all your $5,000 for several years. If your federal taxes aren't high enough for this year, you won't ever get all the $7,500 back. So for starters you have to plan to finance the whole cost of the car less whatever cash reserves you can apply to it.

And what others have said about the battery is true. The battery might last you 30K-50K in Georgia. The capacity warranty is only good for 60K miles, and that is only for 70% of original capacity. After that you are on your own unless you accept their perpetual $100/month extended capacity warranty (also for 70%). Can you live with 70% capacity? Quite likely yes with your 35 mile one way commute, if you charge both at home and work, but it won't be enough otherwise. A 70 mile commute doesn't get you to 20K miles/year, so you are obviously planning to use the car on weekends. Can you also live with a 50 mile range for that?

On the other hand, 20K/year is too many miles for a lease, so you may well have to buy (or buy out the lease). I just want you to go in with your eyes open. Good luck!

Ray

 

[braineo]

Go for it. I'm also in Atlanta and even with spurs of high speed driving I'm averaging about 34mph. I work about 26 miles from work and I can do 3 one way trips with one charge. I charge to 100% each day and put 10,000 miles in 8 months w/o any degradation.

I also purchased due to the 12.5k tax credits which are sweet. May be looking for another Leaf at year end so I can benefit from them in a short period of time. Key is to negotiate the best purchase price up front.

 

[sonnylax]

1 question, do you get the same $5,000 state credit if you lease?

Yes. Georgia residents with $5k of tax liability get a $5k credit, if they lease or purchase a Zero Emission Vehicle (vehicle cost must be above $25k).

 

[garymelora]

Remember also that you will pay sales tax on the full sales price before tax credits.

Making sure that you will get the entire $7500 tax credit is key. Most Americans would not. If your income is that high, you may want to consider buying a Tesla.

Leasing every 2 years means getting the tax credit every 2 years. That could make the cost of ownership lower over the long run as well as the short run.

 

[TimLee]

I can buy a Leaf for $1,000 below invoice because of my company being on Nissan's "Friends and Family" Vehicle Purchase Program list, which means a 2013 S model would cost $25,986. After the federal credit of $7,500 and state (Georgia) credit of $5,000, my net cost to purchase would be $13,486! Financing this amount over 5 years would equate to a monthly payment of $236, which is roughly what I pay now per month for the gas in my current vehicle.

It's a great deal, but surely you realize that you can't finance only $13.5K unless you can come up with $12,500 cash + all closing costs. You aren't going to get that $12,500 back until sometime next year, at best. If your state taxes aren't high enough, you may not get all your $5,000 for several years. If your federal taxes aren't high enough for this year, you won't ever get all the $7,500 back. So for starters you have to plan to finance the whole cost of the car less whatever cash reserves you can apply to it.

And what others have said about the battery is true. The battery might last you 30K-50K in Georgia. The capacity warranty is only good for 60K miles, and that is only for 70% of original capacity. After that you are on your own unless you accept their perpetual $100/month extended capacity warranty (also for 70%). Can you live with 70% capacity? Quite likely yes with your 35 mile one way commute, if you charge both at home and work, but it won't be enough otherwise. A 70 mile commute doesn't get you to 20K miles/year, so you are obviously planning to use the car on weekends. Can you also live with a 50 mile range for that?

On the other hand, 20K/year is too many miles for a lease, so you may well have to buy (or buy out the lease). I just want you to go in with your eyes open. Good luck!

Ray

+1
I still love my 2011 LEAF that I bought, but the one mistake was probably in buying instead of leasing. Although at the time lease prices were very high, and at the end of 5 to 6 years I may be at about the same point financially either way. But by buying, I'm locked in, and now after the fact I now know that Nissan will not sell a replacement battery. They only plan they have is to rent a replacement at $100 per month, starting sometime in 2014. So in general, buying is a bad idea.
The only problem with the lease is your 20K per year number.
But a five year loan on something like the LEAF is also a bad idea, as it may not work very well for a full 5 years in GA at 20K per year.
Take a lot closer look at lease alternatives for 3 years, and keeping your miles on the lease under 15K per year, before considering a 5 year loan purchase. Which I personally think is probably not the right thing to do.

 

[ksnogas2112]

Remember also that you will pay sales tax on the full sales price before tax credits.

Making sure that you will get the entire $7500 tax credit is key. Most Americans would not. If your income is that high, you may want to consider buying a Tesla.

Leasing every 2 years means getting the tax credit every 2 years. That could make the cost of ownership lower over the long run as well as the short run.

I wouldn't necessarily agree. I bought and there's no way I could get a Tesla. But it did take both my pay and my wife's pay to get the $7500 and that was barely.

<edit> and I really wish I'd leased. Especially now with the super leases that are out there.

 

[WetEV]

If you think that a LEAF battery will last 100,000 miles in GA heat, then I got some ocean front property in southern Utah I want to sell you. :shock:

Battery loss model predicts just about that. 105,000 miles, to be more precise.

http://www.mynissanleaf.com/wiki/index.php?title=Battery_Capacity_Loss" onclick="window.open(this.href);return false;

 

[WetEV]

And what others have said about the battery is true. The battery might last you 30K-50K in Georgia.

Georgia is a lot cooler than Phoenix AZ, and the correlation between capacity loss and mileage driven in Tony's Tempe Test suggests 35K miles to 70% in Arizona. And that is probably low, for several reasons. On the other had, battery capacity loss model predicts 58k. For Phoenix, that might be high, for several reasons, like higher solar loading.

Remember for the battery, it is the heat, not the humidity.

Why do you think Georgia will be worse than Phoenix?

 

[georgia2013]

First of all, thanks everyone for the replies. I am new to this forum and am impressed with everyone's willingness to help. I did want to clarify a few things based on feedback so far. I am actually an accountant so I do understand the issue of having to finance the tax credits. My plan is to finance the initial purchase price, then pay down the loan once I get the cash back after filing my tax return. At that point I will refinance the loan to lower the payment to reflect the paid down balance. As far battery degradation goes, like I mentioned in my original post, my one way commute is 35 miles to work which provides over 20 dedicated charging stations, meaning I will leave everyday with full charge. With that in mind, even if I have major degradation issues, as long as I can get 35 miles on a full charge, the Leaf will accommodate my needs. My 35 mile requirement also eliminates the issue of waiting for better technology before buying. Even if a future Leaf model gets 200 miles on a full charge, I would see no benefit from that, except for not having to charge at work which will not be a burden anyways. I want to reiterate that the Leaf will be used only as a commute vehicle. Another point to address is that even though I do live in Georgia, which can experience hot summer months, the Leaf will always be parked in either an enclosed garage at our house, or the covered parking deck at my work. I do not know if that matters, but I think it is worth noting that it will never be left sitting in the hot sun all day. Finally, as others have mentioned, leasing really is not an option for me given my 20,000 mile per year need, meaning that the question is not so much buy vs. lease, as it is should I buy given that buying is my only option...which leads to the bigger question of can I expect to get 5 years/100,000 miles out of my Leaf. If so, I would much rather put money each month towards a car payment as opposed to a BP gas pump. Thanks again for everyone's input!

 

[TimLee]

Another point to address is that even though I do live in Georgia, which can experience hot summer months, the Leaf will always be parked in either an enclosed garage at our house, or the covered parking deck at my work. I do not know if that matters, but I think it is worth noting that it will never be left sitting in the hot sun all day. Finally, as others have mentioned, leasing really is not an option for me given my 20,000 mile per year need, meaning that the question is not so much buy vs. lease, as it is should I buy given that buying is my only option...which leads to the bigger question of can I expect to get 5 years/100,000 miles out of my Leaf. If so, I would much rather put money each month towards a car payment as opposed to a BP gas pump. Thanks again for everyone's input!

Take a careful look at what your garage temperatures are compared to ambient.
In my case, the garage ceiling isn't insulated. Also the garage is on the southwest side. So in very hot sunny weather, in my case it is better to leave the garage door open. (And yes, it would be better to insulate the garage attic and/or put in AC for the garage set at an 80 F set point.)
Hope you enjoy your purchase LEAF. Just wanted you to be aware there are uncertainties at the +4 +5 year point that are at best ill defined.
I'd also suggest you try catching end of year close out if possible to save $. There is another thread on MNL where someone on the east coast managed to buy a 2012 LEAF for <17K out of pocket form a Carmax Nissan dealer. That was an amazing deal. May not be as many deals this year as the 2014 may not be much different. Some indication that 2014 model change is happening now or soon, so now or in the next few weeks / months is the time to catch a deal on a 2013. Just make sure you get the Power Distribution Module software fix.