Lease nearing end - can't decide what to do.

[adric22]

I have 5 months left on my 2011 Leaf. There are so many options, but all have pros and cons. I've been debating this in my head for 2 months already and can't decide. Just FYI we current have a 2012 Volt and 2011 Leaf. My Leaf SL has no DC fast charge port, but is otherwise in perfect condition and battery capacity has just recently lost its first bar. It has 30,000 miles and should have right around 36,000 at end of lease in 5 months. My current car payment is $411 (this was one of the first Leafs sold, lease deals were not so good back then.) Ideally, I'd like to lower my monthly payments.

Here are some of the scenarios being considered

• buy out the lease with a 5 year car loan. My residual is $14,995. So that should drop my monthly payments to somewhere in the $270 range. A nice boost to the monthly budget. Live with the shrinking range, which isn't much of an issue with my 12 mile daily commute. Once some equity is built, I could use it for a trade in on something better in a few years.
• Return the Leaf and lease a new Leaf. This would likely require a down payment which I may not have available. But it would still likely reduce my monthly payment, plus I'd get more cargo area, DC fast charge port, and 6.6Kw charging, and a brand new battery. All good things. But I still wouldn't be building an equity in the car.
• Return the Leaf and lease a second Volt. We love the one we have now, but my wife drives it most of the time. This would also probably require a down payment that I don't have.
• Return the Leaf and lease a C-Max Energi. My wife likes the Cmax and she'd drive it, and I would take over driving the Volt. A win for me, but she'd be burning a lot more gas and the car payment wouldn't be any cheaper than a Volt.
• Return the Leaf and lease a BMW i3 Rex. This would be a great solution, but I am not sure I could afford the payments on an i3, nor the down payment required.
• Return the Leaf and attempt to purchase a used Volt. A used one just might be cheap enough I could afford the payments on it without leasing. This would be a good choice as it would build some equity and eventually get paid off. But truth be, I'd really like a 2013 or newer Volt due to the higher range and some other features, but all of the good deals to be found are on 2011 and 2012 Volts. Unfortunately, even a used Volt would likely result in a car payment higher than the one I have now.

Some of the issues at play here are:

• I likely won't have a down payment. What money I had saved up has been eaten up by some recent unexpected medical bills. When we leased the Leaf and Volt we traded in other cars that had equity so we had a little bit of down payment the first go around. But since these are both lease cars, there will be no equity or trade-in. Lesson learned.
• The only used plug-in vehicles on the market are going to be Volts and Leafs. Obviously if I wanted a used Leaf I might as well keep my own as I have babied it and it is in perfect shape. I don't foresee any good deals on used Cmax Energi or BMW i3 anytime soon.
• I can't figure out the tax situation on my Lease. In Texas I understand you don't have to pay tax when buying out the Lease, assuming all of the tax was paid originally. But when I look at my lease agreement I see that I only paid around $800 in tax. That isn't enough to cover a $34,000 car, but I also had a trade-in that was around $13,000 that would lower the taxes. But I'm still not sure if I'll have to add taxes to my current Leaf if I decide to purchase it.

Any suggestions or options I hadn't considered?

 

[LTLFTcomposite]

I have toyed with the idea of buying out the car. We have already lost two bars, so the gamble there is whether we will lose the next two before the 60k mile/60 month mark, and what Nissan would do about it (would we get a new battery, or some cobbled up solution to get us back above 9 bars?).

It seems prudent to hold off on any decision until we see what happens with the "heat resistant" battery.

When we got the first Leaf it was with the idea that we might buy it out, but probably wouldn't. I'm thinking the next one may be leased with the mindset of a much higher probability of a buyout at the end. If the "money factor" is as low as people describe, that seems like a good way to go, in essence thinking of it as a low interest loan for a purchase, with an option to bail out if circumstances warrant.

 

[smkettner]

I would tend to suggest buying out your existing LEAF if you think you can drive it and it will fit your needs for 6 to 8 more years.
Battery seems to be holding up well although some have reported that second bar going fairly quick after the first.
No need to commit now as something may change in five months.

 

[evnow]

Return the Leaf. In 5 months you would also get the "hot battery" Leaf - and you can checkout i3.

If you want a used Leaf, you should be able to get one from cooler places with lower mileage for less than $14.5k - though I don't see the point of getting one.

 

[LTLFTcomposite]

Regarding the lack of down payment, I think some have reported applying their $1k early adopter loyalty/sympathy bonus to the next Leaf.

 

[johnrhansen]

It would be nice to know what you could sell your car for later on if you decided to buy out the lease. If it is worth more than what you paid, your decision is reversible. If it is less, then you will be forced to drive it until you pay it off. You could also just buy a cheap ice car to lower your total driving costs so you can save money to pay off your bills.

 

[mikeyd810]

I think given what you have outlined I would probably do another lease, saves you from having the down payment hopefully and should hopefully lower your monthly payment. We're all unfortunately in this bad area between major model refreshes. IMHO i wouldn't worry about building equity in a car since it's a depreciating asset, hopefully once your second Leaf lease is up you have some better options for buying some new tech used Leaf/Volt/Ford's.

 

[DanCar]

Zero down leases are somewhat common. Although I suspect you still have to pay taxes and other fees. My co-workers have gotten deals for around $200 a month with zero down. My recommendation is continue to lease. You can do the same with a volt, rex, or ford, although the Nissan deals seem to be the best.

 

[wwhitney]

Obviously if I wanted a used Leaf I might as well keep my own as I have babied it and it is in perfect shape.

I don't think that is obvious at all. If the market price for a comparable used Leaf is less than your lease residual, then you may be better off turning in your Leaf and buying a used Leaf.

Cheers, Wayne

 

[QueenBee]

When we leased the Leaf and Volt we traded in other cars that had equity so we had a little bit of down payment the first go around. But since these are both lease cars, there will be no equity or trade-in. Lesson learned.

What lesson was that? If the lease was a fair deal the whole point is that your monthly payments cover the depreciation and interest.

 

[LTLFTcomposite]

Obviously if I wanted a used Leaf I might as well keep my own as I have babied it and it is in perfect shape.

I don't think that is obvious at all. If the market price for a comparable used Leaf is less than your lease residual, then you may be better off turning in your Leaf and buying a used Leaf.

Cheers, Wayne

JMO, it would have to be significantly less to be worth it. A friend of mine once said, "I don't mind a used car as long as I was the guy that used it"

 

[DaveinOlyWA]

I have 5 months left on my 2011 Leaf. There are so many options, but all have pros and cons.

first of all; you need to shop around. don't know how you can make an imformed decision without knowing what your new lease prices would be.

2nd of all; assuming a downpayment on a new lease is probably wrong. you have $1000 loyalty cash at work here! the big thing is can you re lease and get a 2013? will be tight. the deals they are offering means supplies will be gone quick. but they are essentially giving out interest free loans. what was the rent charge on your 2011?? mine was in the thousands. my rent charge on my 2013?? $35.75.... ya thats right. about as close to interest free as you can get.

3rd of all; the new range means your wife can switch to the LEAF and not have range issues for a while. you reduce your Volt's mileage, and your commute is well within the Volt's range so you are back to 100% EV

4th of all; you can end your 2011 lease early so the thought of getting the 2013 is not all that far fetched.

5th of all; did not read your post. only the title so you *might* have to discount my post if its already been discussed... sorry but at work and time is limited!

 

[apvbguy]

Obviously if I wanted a used Leaf I might as well keep my own as I have babied it and it is in perfect shape.

I don't think that is obvious at all. If the market price for a comparable used Leaf is less than your lease residual, then you may be better off turning in your Leaf and buying a used Leaf.

I don't get it, why would replacing his older leaf with another older leaf is the way to go? a lateral move like that doesn't make much sense to me

 

[LTLFTcomposite]

I don't get it, why would replacing his older leaf with another older leaf is the way to go? a lateral move like that doesn't make much sense to me

If his residual (buyout price) on the lease is $15k but used ones of the same vintage are going for $10k, he'd be better off turning in the one he has and buying a used one on the open market rather than buying out his leased one. My guess is though that the decision won't be that cut-and-dry, more likely the used ones will be going for just a little less than the turnback residuals.

 

[caffeinekid]

In Texas I understand you don't have to pay tax when buying out the Lease, assuming all of the tax was paid originally. But when I look at my lease agreement I see that I only paid around $800 in tax. That isn't enough to cover a $34,000 car, but I also had a trade-in that was around $13,000 that would lower the taxes. But I'm still not sure if I'll have to add taxes to my current Leaf if I decide to purchase it.[/list]

Any suggestions or options I hadn't considered?

When you lease a vehicle, you only pay taxes on the depreciated value, which would be the difference between the purchase price and the residual- minus any credit for the value of your trade-in upon initial purchase. In a nutshell, if you were to buy out your lease you would owe taxes on the residual value. Also, Nissan has fees for buying out your lease that would be owed as well.

The time to do a lease trade was yesterday since all of the incentives were in play until then. But now is a new year and you will probably want to wait until the next incentive program comes out. As you already stated, if you decide to buy the lease out and want to keep payments low, you would have to finance for a relatively long time, which -among other things- might not equate to a very good APR on the note. Plus you are stuck with the same car for 8 or 9 years.

Its a shame that we here in Texas don't actually see those proverbial $199/month leases that the west coast seems to have available.

 

[IBELEAF]

I am going through similar dilemma with lease nearing the end, but I think the options are limited at least if you want something larger and efficient for family of 4. I was really counting for a bigger plugin available by now such as Outlander PHEV, but it's delayed now... I heard that you could extend your lease somewhere, but I haven't confirmed if it's possible because that would be a great option for me.

 

[JeremyW]

I honestly don't think you can build any equity in something with a 660 pound rapidly depreciating (and degrading!) asset attached to it!

I'd lease a second volt.

 

[evnow]

I'd lease a second volt.

Why a volt, if you are anyway leasing ?

 

[Bicster]

When you lease a vehicle, you only pay taxes on the depreciated value, which would be the difference between the purchase price and the residual- minus any credit for the value of your trade-in upon initial purchase. In a nutshell, if you were to buy out your lease you would owe taxes on the residual value. Also, Nissan has fees for buying out your lease that would be owed as well.

The time to do a lease trade was yesterday since all of the incentives were in play until then. But now is a new year and you will probably want to wait until the next incentive program comes out. As you already stated, if you decide to buy the lease out and want to keep payments low, you would have to finance for a relatively long time, which -among other things- might not equate to a very good APR on the note. Plus you are stuck with the same car for 8 or 9 years.

Its a shame that we here in Texas don't actually see those proverbial $199/month leases that the west coast seems to have available.

You live in Texas. You should know better. Paying sales tax only on the depreciated value of the vehicle is a leasing perk we don't get in this state.

In Texas, when you lease, you pay sales tax on the full sale price of the vehicle. That's why leases here are almost always more expensive than in other states.

The Texas perk is this: If you have a trade-in, the value of the trade is deducted from from the new car purchase price, before tax is calculated. That is true for a lease or a purchase. So if you have a trade-in worth $5000 (obviously not leased), and buy or lease a $20,000 car, you pay taxes on $15,000.

That's how OP ended up paying only $800 or so in taxes on his lease.

 

[DaveinOlyWA]

I am going through similar dilemma with lease nearing the end, but I think the options are limited at least if you want something larger and efficient for family of 4. I was really counting for a bigger plugin available by now such as Outlander PHEV, but it's delayed now... I heard that you could extend your lease somewhere, but I haven't confirmed if it's possible because that would be a great option for me.

probably not enough but you can extend up to 6 months. beyond that, Nissan might be willing to work on a case by case scenario but guessing that would depend on what terms you currently have. if its a 2011, I am sure they would since it would benefit them. if its a 2012... then... maybe not so rosy a picture.

oh wait! forgot you dont have LEAF any more. I would lease simply for something to drive until LEAF 2 comes out...