Lease vs Buy - check out these numbers

[BooKittyLeaf]

So the wife & I have been going to the dealers & taking long test drives in the 2015 leaf -in Phoenix, AZ. - been to three so far. The Leaf is a fun car to drive & we are all for switching to electric as our daily miles are around 45 if we both use the car, about 20 miles a day separately with two leafs. Cant wait to get one or two!
We want to convert our monthly gas costs ($300 +/-) into a car payment for Leaf, thus its a wash. Plus @ $30 month for electricity - basically a new car for $0 -$30 a month depending on the pice of gas.

Lease vs Buy used my Pros & Cons

LEASE:
2015 SV - $249 month plus tax ($268) + $2399 down = a monthly payment +/- $334 x 36 months = $12,000 +/-
PROS: - after 3 years possibly better battery tech (Dual Carbon batteries??), longer range, can swap for newer technology
if battery looses capacity quicker than normal (in 120* arizona summers) who cares, not my car - turn it in.
CONS: - After 3 years no car, turn in inspection, disposition fee/turn in fee?, Pay for repairs, damage, excessive wear & tear (purely subjective)
Limited miles, cant really personalize - not your car - if you spill a drink - HOLLY CR@P!

BUY USED:
2011 - 13 SV, 11-12 bars, Active warranties, no B033 notification- $12,500 +/-
Regardless of the car, negotiate sale price to reflect $350 month for 36 months
PROS: -Own the car, do what you want, unlimited miles, drive for 10 + years?? pending the battery, still some warranty left.
After 3 years still have the car to use

CONSIDER this... At the end of each scenario I have:
- spent @ $12,000.
- its been 3 years - whats new in tech, battery, range improvements are available

With the LEASE - I end up with no car. Have to start a new lease or extend the one I have - continue payments. Perhaps pay fee/repair if turning it in or buy it for another $12,000 - 3 more years of payments for "old" technology

With the BUY - I still have the car. Perhaps at 11, 9, even 8 bars (if out of warranty). NO payments - so Monthly gas costs are now a SAVINGS of $300+ a month. can use this to buy another Leaf, 2 years old (2016 by then) & repeat the process.
Even if the range is down to 50% - we only need 40 miles a day. So we can drive it for a long time, or, for $100 a month get a new Lizard Battery & be back to 12 bars & full range for another 5+ years with a newer Technology Lithium Ion battery (Yes, the Lizard battery will fit all previous Leafs. 2011-12 will need an adapter - buy they can al benefit form new battery.

So, at the end of 6 years, we would have two Leafs - PAID FOR. With perhaps $100 a month on one for new battery for longer trips. second leaf can loose capacity to 6 bars? & still get me 25 miles a day to/from work

I know this sounds like a weird idea, but it makes more sense to me than to keep leasing with bigger payments.
The Cars themselves are almost the same years after year - subtle differences in accessories communication, etc... that we dont care so much about - Its the batteries that are KEY with these cars. Take a 2011 with worn out battery - swap to a new battery after 6-7 - "new" car again with the Lizard battery no less. So an $8,000 battery cost every 10 years is like $60 a month for cost of ownership - unless the car itself fails.

Buying a new car is out of the question as I do NOT pay for depreciation, dealer costs, destination charges & all the other Fees (just really bothers me!)

Anyway, appreciate any input as to the best way to buy a used Leaf, or anything else I might have missed in this scenario.

 

[pkulak]

I'm usually the only guy on here who will say that sometimes buying really is a good way to go, but in Phoenix? That battery could be completely toast in two years, with gas still cheap and 30-grand, 200-mile EVs on dealer lots. Meaning, you could take a hell of a bath. I'd lease.

 

[aarond12]

Agreed. At the end of your lease, if you like the car you can always buy it outright. You could make an intelligent buying decision at that time, for example: Has your battery degraded or is the lizard battery holding up well in Arizona? Do I want to jump on board one of the latest technology EVs or is this car adequate for my needs still? etc...

 

[asimba2]

Personally, I would be more willing to purchase a 2nd generation LEAF than the 1st gen, and that is very likely what I will do. I suspect that the gen2 with the small battery will have a 100-110 mile range, improved battery tech or TMS and probably a lower price. If you start with a 100+ mile car it is certain to get you through your 45 mile commute for longer than a gen1.

I think we have similar situations, I also hate the idea of renting my car (leasing), also live in a very hot climate and also have a 40-mile RT commute. So far my 2013 has held up really well, with no noticeable loss of range, which I track with a spreadsheet. But I think a large factor my lack of degradation is the fact that my car sits in a parking garage all day that seems to stay 90 degrees when it's 110 + solar loading out in the sun.

 

[knightmb]

Here is my take on Lease vs. Buy.

Normally, I would tell someone to never, ever lease a vehicle because it is like throwing money down a sink. Especially for ICE vehicles. Always buy used when you can find a vehicle that is still within warranty and the owner took care of the vehicle. You don't take the 20% value loss hit that the original purchaser took when he/she drove it off the lot.

That being said, the Leaf was a unique use of the lease. First, the $7500 tax break. Normal people can't even use this tax break because it is not a refundable tax break, just a tax credit. So unless you can rack up $7500 in owed taxes, it won't make a dent come tax time. The dealership on the other hand, can use this tax break. So the dealership can knock $7500 off the price first thing. Great you say, but still you might get a lease that is $450 / month unless you put some large chunk of cash down first. The Nissan dealerships where I live will give 2 years of free charging at the local Blink,etc. charging stations with a purchase of a Leaf. So, at least with a new vehicle, that's like 2 years of free gas to paraphrase for the gas guzzlers. Another plus.

The downside, you are limited to miles and as mentioned other routine maintenance on the vehicle. You must turn it back in after 1,2,3 years of the lease. You don't want to spend time customizing a vehicle that is essential a rental vehicle with perks.

The best way to use both, starting with the Lease option. Lease the vehicle for the maximum number of years and get a buy-out offer at the end. Basically, it is like buying your own vehicle used. You benefit from being the only owner so you know if you did anything naughty to the vehicle and at the end of the lease, you buy it for thousands less and don't eat the "drive off the lot and lost a large amount of value". As for battery maintenance, the technology keeps getting better, so basically your car should run for a couple of decades if you take the money saved by not doing all the nickel and dime ICE maintenance and save it for future battery upgrades.

I have an 2000 Buick LeSabre that runs well and gets half-way decent gas mileages. The car is 15 years old now, sure, but it is paid for and still runs well. If I add up all the years of maintenance done to keep that ICE engine running (fuel pumps, alternator, water pump, engine valves, manifold, belts, oil, gas, etc) I would have enough money to buy 2 leaf battery packs already. It still cost less than getting another ICE vehicle, so I think a lot of the value anxiety leaf owners get is because they are used to owning an ICE vehicle that nickel and dime them for decades.

I bought a used 2013 Leaf because it had the newer heating/cooling technology, low mileage (10k miles), still in warranty for everything, has the bonus battery warranty on it as well. I only paid $15k for it. Half the price of a 2015, but nearly all the advantages of a new vehicle. If only it were as easy on ICE vehicles to just take out the old battery, put in a new one and now you have the newest technology to drive, people would complain less about the ICE they drive currently. :mrgreen:

My recommendation is to buy used first if possible, if not, lease for a long time, then buy-out the lost value and finally buy new if you have the cash to burn.

 

[apvbguy]

the normal thinking in the lease vs buy matrix is not applicable to the LEAF because of the nature of the car.
the technology is rapidly changing and coupling that with the battery degradation concerns make leasing these cars a far wiser move than owning.
I wonder what the early LEAF BUYERS would do if given the chance to redo their purchase.
IMHO I would recommend that the OP lease the car for 2-3 years, pay the costs of the money, and at the end of the term of the lease roll into a newer/better and more than likely less expensive car.

 

[bbrowncods]

1. Buy used.
2. Buy new if you can take advantage of the 7500 credit.
3. Lease if you cannot take advantage of the 7500 credit.

The disclaimer is additional state tax credits will affect the relative cost of purchase.

1. is the least expensive. 3. is most expensive because at the end of the lease you have no car and have to buy one (either your lease car, or new technology, ICE, etc.).
In all cases you can buy/lease new technology. Buying used or new allows you to choose when that will be. With a lease you are stuck until the end and then you have to make the decision right then (if you need a replacement to drive). If you own you can do it whenever you desire.

I used the above analysis except that used Leafs in June 2014 were Gen1, so I discounted that option and went with option 2 (I could take advantage of the 7500 credit).

 

[asimba2]

3. Lease if you cannot take advantage of the 7500 credit.

Not true, in fact Nissan applies the credit immediately as if it were down payment.

 

[BrockWI]

I believe he was suggesting if you can't take advantage of the $7500 credit lease so Nissan takes it off the top.

For us when we ran the numbers buying it outright we couldn't use the whole tax credit so we leased, it is less expensive, by about $1000 for us to lease then buy out at the end if we want to. The advantage of course is if we have the option to turn it in. The big disadvantage, which we hadn't counted on is the mileage limit and sticking to it as we go. We could easily move 80% of our driving to the leaf, but have to keep it about 50% due to the lease. We go back and fourth about just running the mileage way up and buying it out at the end, but the thought of getting a newer model with twice the range is to tempting.

 

[mikesus]

Really it comes down to the tax credit. IF you can use all of it, you are getting a new car for $7500 off. I think they are still offering 0% so you get a free loan on the car. With the new lizard pack, you should do fine here in the valley of the sun. Without it? I don't think I would take the chance.

Another factor here is that there ARE Quick Chargers here. (a few are down, but you will want to get the 6.6 at least) When you figure in 2 years of free charging on new, that adds up.

I do have a leafdd and leaf spy if you decide on a used and want the battery checked out...

 

[Bob]

I love my Leaf. I bought it and won't sell or trade it.

But we've had a lot of people here report that, before model year 2015, Leaf batteries deteriorate quickly in heat, in some cases losing >25% capacity in one year. Some of the fastest deterioration came from people in Phoenix.

Nissan has new battery chemistry for 2015 and believes that it is much better in the heat, but there is no public history on the new battery yet.

Until we get more history on modern batteries in hot climates, I strongly recommend that anyone in Phoenix or LA buy a Prius instead.

But if you have your heart set on a Leaf now and have a commute <40 miles round trip, go for the used Leaf. Your math is accurate. The used Leaf is a much better value.

Bob, in frigid New England

 

[Deleted member 15072]

I would recommend looking into buying first
Then lease with zero money down second.

We bought our leaf with 0% for 6 yrs, $3,500 back back for financing, $1,000 off for VPP discount, plus the $7,500 tax credit. Our payment is about $80 more than a 36 mo lease.

Having no interst and building equity in the vehicle made the purchase a better option for us.

As far as the lease goes, you are just renting the vehicle each month. So if you put $2,500 down at the start of the lease, you should consider that in your total cost out of pocket. Another twist of faith to think about with your lease with down payment, if the car gets totaled in an accident, you lose all, your money. The insurance pays off the vehicle not you...

Cheers

 

[apvbguy]

Having no interst and building equity in the vehicle made the purchase a better option for us.

building equity in a depreciating asset?? if the money is in your pocket you can earn interest on it rather than pay interest on money that you are expecting to get back.
some y'all may know a lot about technology but not too much about finance

 

[BooKittyLeaf]

......building equity in a depreciating asset?? if the money is in your pocket you can earn interest on it rather than pay interest on money that you are expecting to get back.some y'all may know a lot about technology but not too much about finance......

Agreed, thats why I dont prefer a lease - your basically paying the depreciation, then still have to buy the car at the end if you want it - Im sure the dealers love that

Its why I dont buy NEW cars either - you pay all the depreciation.

Buying a 2 year used car means your buying a depreciated car at market value, or, what its actually worth.

 

[apvbguy]

......building equity in a depreciating asset?? if the money is in your pocket you can earn interest on it rather than pay interest on money that you are expecting to get back.some y'all may know a lot about technology but not too much about finance......

Agreed, thats why I dont prefer a lease - your basically paying the depreciation, then still have to buy the car at the end if you want it - Im sure the dealers love that

Its why I dont buy NEW cars either - you pay all the depreciation.

Buying a 2 year used car means your buying a depreciated car at market value, or, what its actually worth.

I think that you've gotten all backwards because you pay the cost of depreciation when you buy, when you lease all you pay for is the usage of the vehicle (money) for the agreed upon term.

 

[BooKittyLeaf]

Maybe I dont get it -

Buying NEW - obviously Im paying for depreciation and all the added dealer costs - for the privilege of being the first owner

Leasing I think follows the same principle, but under a different payment plan with an option to give up the car

Let me run some numbers, rounded out for easy calculation

Say I leased a 2015 S with charge pkg (I just happen to have those numbers from a test drive)
0 Down, $444 month, 36 months with a 12,500 residual (Basic non promotional lease, I didnt negotiate anything - just wanted to see the residual)

Essentially thats gonna be $16,000 paid after 3 years.
Then Buy it for $12,500 (dont know if there is tax on that - lets say there is not) for another 3 years of payments of $360 (including say 3% interest)

So, $16,000 + $13,000 (adj for interest on loan) = $29,000 - Spreading 29,000 over the 6 years would yield

- MSRP is - 32,230 less the Nissan Cash $8,450 = $23,730 Then add all the Dealer BS, fees, bla.... bla.... bla & the Adjusted Cap Cost is $27,333
Leases is a bit more ($29,000 vs $27,333) - and not counting the Dispersion fee at the end and any charges for repairs wear & tear

So I have now paid all the dealer costs, and Depreciation, and can now buy the car at its depreciated value, or give it up & the dealer can sell it for a profit

The new promotion on the SV (bit more expensive) is $2,400 down, $250 month, 36 month ends up being (with tax) $12,000 paid to use the car
I dont know what the residual is - I will find out Sat as a dealer we spoke with offered us an opportunity to tale a new Leaf out for a 2 hour test drive so we can put 40 miles on it to see if meets our needs. I will be asking for all the numbers on the promo lease.
My bet is the Residual us jacked up to provide the lower monthly payments.

 

[apvbguy]

Maybe I dont get it -

Buying NEW - obviously Im paying for depreciation and all the added dealer costs - for the privilege of being the first owner

Leasing I think follows the same principle, but under a different payment plan with an option to give up the car

Let me run some numbers, rounded out for easy calculation

Say I leased a 2015 S with charge pkg (I just happen to have those numbers from a test drive)
0 Down, $444 month, 36 months with a 12,500 residual (Basic non promotional lease, I didnt negotiate anything - just wanted to see the residual)

Essentially thats gonna be $16,000 paid after 3 years.
Then Buy it for $12,500 (dont know if there is tax on that - lets say there is not) for another 3 years of payments of $360 (including say 3% interest)

So, $16,000 + $13,000 (adj for interest on loan) = $29,000 - Spreading 29,000 over the 6 years would yield

- MSRP is - 32,230 less the Nissan Cash $8,450 = $23,730 Then add all the Dealer BS, fees, bla.... bla.... bla & the Adjusted Cap Cost is $27,333
Leases is a bit more ($29,000 vs $27,333) - and not counting the Dispersion fee at the end and any charges for repairs wear & tear

So I have now paid all the dealer costs, and Depreciation, and can now buy the car at its depreciated value, or give it up & the dealer can sell it for a profit

The new promotion on the SV (bit more expensive) is $2,400 down, $250 month, 36 month ends up being (with tax) $12,000 paid to use the car
I dont know what the residual is - I will find out Sat as a dealer we spoke with offered us an opportunity to tale a new Leaf out for a 2 hour test drive so we can put 40 miles on it to see if meets our needs. I will be asking for all the numbers on the promo lease.
My bet is the Residual us jacked up to provide the lower monthly payments.

your confusion is caused by adding the purchase of the vehicle to the equation, eliminate the purchase and rework your numbers

 

[Deleted member 15072]

You both are missing key components. The original posted asked about leasing vs buying. Not whether or it buying new is better choice financial.

If you lease a leaf you purchase the vehicle a particular price say 28k and your lease payment is for $299.00 for 36 months with 12,000 or less in miles per year. At the end you have the option to purchase the vehicle for about 16k. The remaining value of your 3 yr old car.

If you purchase said leaf for 28k you get additional $3,500 off the purchase price and zero interest for 72 month. For the first 36 month, I will pay additional $40 per month, but I don't have to worry about the number of miles per month or wear & tear. I original thought keeping the miles under 1000 miles per month would be easy on our leaf but nope. We put on ~300 miles a week because it's a lot of fun to drive.

So let's see, one option has you put $2,500 down and pay $299 per month for 36 months for a total amount $13,264 with an option to purchase $15,500 plus interest.

2nd option, zero down and $340 per month for 72 month (no interest). After 36 months, this option has paid $12,240 and still owes $12,240.

I fail to see where I'm losing money. The depreciation of the vehicle happens in both options equally. Option 1 gives me the choice of not buying the vehicle after 36 mos but I pay more for that option.

I'm a really happy with my purchase.

 

[BooKittyLeaf]

Thanks for all the suggestions.

I Bit the bullet and leased a new 2015 Leaf SV, Black/Black with LED QC Pkg few days ago

Totally AWESOME car!

DETAILS...

First, We had to have Black/Black SV w, LED QC - didn't want Leather.

There were two in town - I had the Vins & locations.

Tax Credit - We would only get/qualify for +/- $1,500 of the $7,500 - so negotiating the Total sale price was key as there was not much for me on the back end.

Let the Fun Begin ..... Interesting story

1) PURCHASE - $27,500, 0%, 72 months - $381 month

I initially planned on buying. My wife & I were at DEALER "1" ,4 miles from us for 3 hours hammering out a deal. I got them to $27,500 out the door, all costs,fees, tax, etc... with 72 month 0%. Negotiated on a specific VIN, they would secure the car after the purchase agreement was signed. Myself, the Sales Man AND the Desk Manager signed signed the agreement, as well as the title, reg, plates, & other Paperwork. I was very clear and specific on the details. Car would be ready next day. Come in, go through financing & take delivery.

We showed up next day. No Car. Why? Salesman said could not secure the car. What does that mean. After digging I got the real answer. The REAL store manager saw the deal the next morning & said No way - wasn't selling the car for that - they screwed up & gave me to many discounts - deal off. I explained & showed him the Signed Purchase Agreement signed by HIS guys. He said thats not a contract! So then, what is that I asked. He went about a bunch of BS.

I could tell I was not gonna win this so I left.

I scanned & emailed that agreement to 5 other dealers around me that evening & said whoever can met or beat it had my business - I will buy it today.

They all called next afternoon. EVERY single other dealer said they looked at the numbers and saw right away the problem and said no one will sell you an SV equipped like that for $27,500.

Interesting!!

So, I decided to get creative, and as a bonus, I had plans for DEALER "1" !

2) LEASE
48 month, 15k miles, $328 including tax, int, Residual $11,257, MF .00053, Adj Cap $25,310

Basically a Lease & Purchase plan where in the end, I will have purchased the car for $28,128.
Not bad for a new 2015 SV with LED QC... also had BS like floor mats, cargo net, safety kit, first aid kit, hologram kick plate - came with, so all is good.
Plus, this gives me the option to :
A) Buy out the leas anytime & refi for 72 mo ending with a purchase price of $28,128 + tax & interest.
B) Keep the Lease & buy at the end - this leaves the option to give it up after 4 years if the 2019 Leafs are really THAT much better.

I am going with option A.

Interesting Side Note:
In financing they offered the 4 yr, 60,000 mile Term Care extended warranty thing - $1,600 with $0 deductible. Includes FREE consumables (Brakes, battery (12v), Headlight bulbs, Alignments, wipers & stuff, AND free replacement key FOB once a year if I loose one ($400 nissan MSRP each time). Being that they get Kudos for selling this, and its a HUGE profit margin for them, I said YES providing they: 1) Reduce the MF to subsidize the cost of this plan enough so that my actual cost is $3 extra a month ($144 term). They did - monthly payment went from $325 to $328 including all tax, int and the MF went from .00150 to .000053 - basically free. Not bad!

How I made this work.
I emailed all 5 dealers my Lease offer for this specific SV optioned Leaf - I included the two VIN #
48 month, 15k miles, $0 down, $300 month TOTAL, Residual of $11,000. Yes, I am quite optimistic!
I had 4 dealers after this car to make a deal. One dealer (41 miles away) had both of the cars on his lot. One Dealer (6 miles away) secured one of the cars for me, had it on his lot, before we had a deal thinking I would pay whatever just because he had it.

Negations went on via phone & email. for 3 days. Everyone had their "issues", "I cant control that cost", "Set by Nissan", bla bla bla.

The Dealer 30 miles away had one vin as a dealer trade, 36 days ago. so I KNOW they wanted to get that off their lot ASAP as after 30 days it starts to cost them $$ each day they have it... a nice bargaining chip!

So in the end (Monthly payment in all cases includes all tax, interest, etc...) ,
- The dealer that secured it for me (6 miles away) had the highest price at $379 mo, $11,925 residual.
- ALL but one dealer said residual was FIXED by nissan at 34% ($11,925)
- Two dealers came in at $335 month & wouldn't budge
- One Dealer (41 miles away) said he would do $330 mo, $11,257 residual - WINNER!
- Note: I even extended an olive branch to Dealer "1" to make a lease offer & give him a SECOND opportunity to earn my business (he was the closed dealer at 4 miles away). I had a feeling he wouldn't - he did not even make an offer!

So, I printed up the winning deal with the winning Dealers logo on top, signed it & emailed it to them. They signed it & emailed it back.

I drove out there to get the car.

All went well (as described above) -

WHEW! what an ordeal

Two Side Side notes:

1) Regarding Dealer 1. I will be taking my new Leaf to them to have all the scheduled maintenance done that costs me nothing, including the first 2 free battery checks - just to say thanks for nothing, as they will get nothing from me except the "friendly" reminder that they lost my business over a few hundred bucks!

Any Maintenance/accessories I will pay for, I will be taking to a dealer 10 miles away that was a great guy to negotiate with - real straight shooter & fun to talk to. His offer was just a bit high in the residual to win the bid. I did stop by a couple days later & we talked for 30+ min - we are both car guys.

2) The Drive Home!!!
The winning dealer was 41 miles away. The leaf had a 57% charge with 48 miles on Range when the charging station broke. So they detailed it out & I said I will take a chance & drive it home - I have the free roadside protection, right.

At about 5 mils from home on the freeway Im at 9% battery, 1 battery bar showing & 7 range miles
I get off the fwy & take city streets. Accelerate slowly, drive 40mph, eco mode & B mode. Im watching the Battery go to 5% & then it just shows "- - -". Range shows "- - -" and Im 2 miles from home.
Im thinking .... is this what Range Anxiety is?

I pull into the drive way - yup... made it without hitting turtle mode!

So, why didnt I just stop along the way & grab a charge??? I dont know! I think I just wanted to see if I could make it!

Plugged into 110v. next morning, 11 hours later ,It was at 57%. Then, using Plug Share, I found a FREE L2 charger 2 miles away. Of I went. Two hours on that and I was at 90%

Ohhhh Yeaaa! Now its time to play with my Leaf & get it all set up!


So... thats my Leaf Acquisition story!

 

[BooKittyLeaf]

Just noticed I have to change my signature as NOW I HAVE A LEAF!