To lease or not to lease that is the question

[biggsy]

First off let me say I did not lease but bought the 2014 model to be delivered later this week.
After scouring the ev forums I find it amusing that people are adamant about leasing this tech versus buying. Indeed even the dealerships are pushing this.

Here is some food for thought:

To lease or not to lease .....hmm

Neofightr,

You are buying and happy with that choice, but you have now spent nearly two pages defending/attempting to justify your decision.

We all agree the LEAF is a good EV, Telsa is great but out of the average buyers price range.

For some, YES, buying is the better choice. If 12-15K miles/yr is an issue then by all means purchase. From a pure math standpoint, leasing is costing me a total of 33.66 Rent, $595 Acquisition fee, and either $395 if I don't buy or $300 if I do buy. So at a maximum of $1024.66, I purchased an option to buy my LEAF for $12,522 in 3 years. If the car is worth more than $12,522, I can buy it at MY option, not the dealer's. If it is worth less than $12,522, I pay $395 and walk away.

If you are correct and replacement battery technology is in place I wasted $928.66 over 3 years, over buying last year. Could I have gotten a better deal by purchasing last year, maybe. I leased the S model, for 94% of MSRP ($31,305 MSRP vs $29,425 agreed price). If you got significantly under 94% of MSRP great, I don't think I could have beaten it by much. All of the other costs are the same whether it is a purchase or lease, at least in my state.

I am basically opposed to leases for most of the reasons you state. However, $1024 to hedge my bet on a $30,000 car is worth it to me, interest on a car loan would cost more. If you have the money to pay cash that is another reason to purchase as opposed to lease. Whether the dealer makes money or not, I don't care, he watches out for his interest and I watch out for my interest.

Also, based on your statements, you are buying a new car about every 5 years anyway so why are you now looking long term instead of your normal 5 years, what makes the LEAF different?

 

[Weatherman]

It's all a numbers game and you Sir are going along for the ride because that financial arm of the dealer is going to make sure that the PREDICTED residual value is at it's lowest possible value so they can get the maximum payment from you.

And this is where NMAC made a mistake, especially with the 2011 and 2012 MY LEAFS. In most cases the residual is higher than they could ever expect sell the car for when it's turned in.

Ally and US Bank may do a bit better when they try to sell end-of-lease Volts. The unfortunate move by Ally and US Bank is that they essentially killed off any possiblity that lessees will try to buy the cars at lease end. This is because they inflated the residual by the $7,500 tax credit. The residual on Volt leases is very high.

 

[neofightr]

Actually, you don't. The $7,500 comes right off the top of the cap cost on the lease so you get it all directly and immediately, and it goes straight to Nissan (NMAC), not the dealer.. Some other manufacturers like Toyota are playing games with the federal tax credit but not Nissan. I think you need to do a little better job of research before spouting such things... Being so much in error on a simple thing such as this brings the rest of your "conclusions" in to question...

By leasing you, basically give the fed tax credit ($7500 currently) to the dealership (owner) and let them decide how much they want to pass on to you via crafty lease numbers and upgrade perks.

You can bring my conclusions to question all you want and I highly recommend you do your own research scouring the net like I have. I think you will see in the end.
And I can spout all I want just like you.

Your perception of my error is just that, your perception. Good day Sir!

 

[leafmealone]

Just imagine how quiet the main streets will be in 7 years time. Oh lordy I can't wait.

Once your fixated on something else, think about how quiet this post will be.

I can't wait.

 

[neofightr]

Also, based on your statements, you are buying a new car about every 5 years anyway so why are you now looking long term instead of your normal 5 years, what makes the LEAF different?

Short answer: I am not, I am perfectly happy at the end of 5 years and when the battery warranty is almost done to get a new EV, preferably Tesla but maybe Nissan.
My point has always been, I fully expect the resale value for my leaf to be just as good as the Fit (adjusted for purchase) I am trading in. In fact I wouldn't be surprised if it's much much more because guess what? The wait times for the really practical EVs are going to be horrific. And I will have the luxury of placing my order early and cashing in on the high demand of my used leaf All the while still enjoying the freedom of EV.

Leaf owners take heart, life is going to be good in 4-5 years.

In answer as to why every 5 years not say 7 or 10?:
Simple answer to that really, technological advances, in the past my reason has been for the "now affordable" creature comforts for the cars including IPOD playing, bluetooth phones, navigation sytems etc. It has never been for performance and since I always look for best gas mileage that has been a no-brainer.

Typically these upgrades trickle down to the more affordable cars over the span of a few years, hence my 5 year cycle.

This time on the other hand, a huge and I mean huge incentive to buying the leaf became readily apparent. Keep in mind I was very happy driving along in my almost five year old Fit, having not payed a single penny in interest or higher insurance rates for the entire time with the car. Saved a lot of gas over the years compared to SUVs etc.
And I got the absolute maximum trade-in value for the Fit based on Kelly and Edmunds. I paid just about $1k below the perceived value for the 2014 Leaf based on Kelly/Edmunds estimates.
My trade-in after my tax credit deduction paid for 47% of my Leaf. I secured an interest-free loan for the remainder. This is why I will never ever lease sure it's convenient, relatively safe but pricey and in the end you have nothing to show for it.

And here is the kicker, for the first time in my Adult car-buying life, I don't care if I paid above sticker price for this car. In fact I want to fly over to Japan and hug the CEO of Nissan and thank him from the bottom of my heart for not playing the game that the other big american car makers, Honda, Chevy and Toyota are doing with Hybrids. And then I want to kiss his feet for not sleeping in bed with the oil barons and pimping the Fuel-cell solution. See my other post as to why buying that type of car is a really really bad idea.

And don't get me started about Tesla, Tesla is the Google of the Car industry. That is why I really hope I can buy a reasonably priced Tesla a few years from now.

They along with Nissan's help have torn apart the monopoly the oil barons had established. And they did it right under their noses. Keep in mind the oil industry has been throwing billions of their profits at shutting down battery companies and corrupting/stalling political EV initiatives over the years.

Why do you think we have yet to see real progress made in solar panel tech in the past 20 years? Is it the panels? I seriously doubt it, it's the battery banks that would make solar panels more feasible, affordable and practical in the home. Sure the oil barons focused on stalling/eliminating car battery tech but the side effect is they stalled all advancements for high capacity batteries hence why solar panels are still not popular outside the desert. But that as you can imagine is about to change.

Sure Nissan and Tesla could have played ball and decided to support the Fuel Cell (future Oil Baron monopoly) initiative in earnest like Toyota or worked on their own new plug-in hybrid but no these two companies are bringing down the oil giants one battery at a time.

God bless them!

 

[MarkC]

I've been a member for several months but post very little as I do not won an electric car at all just now. I also frequent the Volt and Focus EV forums as I try to learn all I can about the choices in electrified transportation, while at the same time finish paying for my 2010 Prius.

But, I want to add a thought about why a person might lease an EV instead of buy it. If I bought an EV, I could take "up to $7,500" tax credit. I don't have enough tax liability, so I could only take about $6000 tax credit. Since the remainder does not roll over, I lose the other $1500 in tax credit.

If I purchased the Leaf SV with a minimal down payment, the payments would be $550.00 per month plus any interest on a $33,000 loan over 60 months {loan amount picked from mid-air}. On my income, that would be tough. Then, when I do get my tax credit, I would need to go to my credit union and refinance the car to lower the payments. Now, you are welcome to your way to obtain the car, but please don't slam people who may could afford to lease one and then buy it out at lease end {if they choose to}, where they may not be able to comfortably afford to buy a new one.

BTW, I look forward to "hearing" what you acquired after you sign the papers.

 

[LTLFTcomposite]

I think I know where the OP is coming from, I'm not keen on playing this leasing game long term. This time was an exception... but... for the replacement coming up in a few months, I am thinking now if the "money factor" on a lease is near zero, why not lease with the intent to buy it out, in essence getting an interest-free car loan for three years? You also get the added benefits of not wondering whether there will be some IRS technicality that cuts you out of the $7500, and if it turns out you are less in love with the car than you thought you would be at the end of three years you have the option of giving it back to them without worrying about the resale value... for example, in the case where the car turned out to be a lemon (or even just a little tangy) or more capable versions/models from Nissan or anyone else are making it look obsolete.

 

[neofightr]

I've been a member for several months but post very little as I do not won an electric car at all just now. I also frequent the Volt and Focus EV forums as I try to learn all I can about the choices in electrified transportation, while at the same time finish paying for my 2010 Prius.

But, I want to add a thought about why a person might lease an EV instead of buy it. If I bought an EV, I could take "up to $7,500" tax credit. I don't have enough tax liability, so I could only take about $6000 tax credit. Since the remainder does not roll over, I lose the other $1500 in tax credit.

If I purchased the Leaf SV with a minimal down payment, the payments would be $550.00 per month plus any interest on a $33,000 loan over 60 months {loan amount picked from mid-air}. On my income, that would be tough. Then, when I do get my tax credit, I would need to go to my credit union and refinance the car to lower the payments. Now, you are welcome to your way to obtain the car, but please don't slam people who may could afford to lease one and then buy it out at lease end {if they choose to}, where they may not be able to comfortably afford to buy a new one.

BTW, I look forward to "hearing" what you acquired after you sign the papers.

As much as you don't like to hear this, you should really be looking into a used Leaf. They are already starting to hit the market. See earlier posts.

It's all about living within your means. I have lived by this rule for the past 20 years and as a result I am debt free outside a house mortgage which is 70% paid.
This Leaf will be my first car loan in 12 years.

Unlike my peers, I did not buy "stuff" (Jet skis, luxury cars the latest iphones with $200 ATT monthly contracts) just to be the cool kid on the block when I was younger. I am not implying that about you since I have no clue about you.

I will say is this and hopefully this will hit home for you. 13 years ago I was fired from my job during the IT bust 1999/2000. I knew the next few years would be painful for me but what really hurt was having to trade-in my beloved 1999 Firebird Trans-am (High-end $35k) for a banged up used car. Keep in mind this Transam was only two years old and I had 10k left on the loan (big down payment).

As painful as that loss was I was grateful that my dream car could still provide me with a used car that kept me going for 3 years while I trained for a new career.
I would have never had this 2nd chance had I leased a BMW or Corvette barely making the lease payments etc etc.

Learn to live within your means and good things will come in due time. If you push your luck and try to hang with the higher income brackets you are begging for a financial disaster.
I have seen 2 relatives do this in the past 20 years and both of them declared bankruptcy. One has even done it twice. All because his pride didn't allow him to live within his means.

Judging by your example, the prudent way to go is to finance an under $18k Leaf. This means probably waiting another year for the used leaf market to grow. This will allow you to start saving up for a down payment so you would have lower monthly payments and you will be more easily able to afford the 100/mo battery coverage which will guarantee the car will always work for you for many years.

BTW Since you asked what I will get at signing, I will get the high-end leaf minus the premium package, I don't care for the Bose or extra cameras. That's "stuff" that my ego has already had many years ago. Factoring in the tax credit I will get next year and will immediately transfer to the loan, my interest-free loan after trade-in will be $16k.

A brand new EV for $16k and all it took was a 2009 Fit in good condition (below average mi.) and the tax credit and no down payment. This is why you really should consider buying a car like a used Leaf vs. leasing it. I am making a big assumption here, you have good credit which has nothing to do with your income level.

 

[neofightr]

I think I know where the OP is coming from, I'm not keen on playing this leasing game long term. This time was an exception... but... for the replacement coming up in a few months, I am thinking now if the "money factor" on a lease is near zero, why not lease with the intent to buy it out, in essence getting an interest-free car loan for three years? You also get the added benefits of not wondering whether there will be some IRS technicality that cuts you out of the $7500, and if it turns out you are less in love with the car than you thought you would be at the end of three years you have the option of giving it back to them without worrying about the resale value... for example, in the case where the car turned out to be a lemon (or even just a little tangy) or more capable versions/models from Nissan or anyone else are making it look obsolete.

Hey if the intent is to really buy it, I say go for it, just keep in mind the dealership is going to offer you a deal on a new one that will be out of this world I am sure and you are right back where you started.

Hey after reading everything I said on the topic, if you still feel right about doing another lease then more power to you because you made an informed decision.

 

[LTLFTcomposite]

I'm not sure leasing with intent to buy is a good deal... while there are a couple pluses noted, potential drawbacks I see are inception and termination fees. Looks like Nissan perennially forgives the termination fee if you buy or lease another new Nissan, but not if you buy out the one you have. Another minor drawback here in Florida the annual registration on a leased car is about $50 more than a car you own.

 

[TomT]

I did extensive research when I leased my Leaf. and have numerous additional times since. You are simply dead wrong (on this and many other lease-related items). But, if it makes you feel better to live in a fog, by all means be my guest... Oh, and you have earned the distinction of being added to my Foe list.

You can bring my conclusions to question all you want and I highly recommend you do your own research scouring the net like I have. I think you will see in the end.

 

[neofightr]

First off let me say I did not lease but bought the 2014 model to be delivered later this week.

This went from a 'question' to a 'justification' from the first line.

It's called a rhetorical question. I don't see rules that prohibit this on this forum.

 

[neofightr]

I did extensive research when I leased my Leaf. You are simply dead wrong (on this and many other lease-related items). But, if it makes you feel better to live in a fog, by all means be my guest...

[ quote="neofightr"]You can bring my conclusions to question all you want and I highly recommend you do your own research scouring the net like I have. I think you will see in the end.

[/quote]
Dead wrong eh? Let revisit this in the forums exactly 4 years from now. What do you say? In the mean time I suggest you start saving up on your internet reference articles to justify your case and I will do the same.

See you in 4!

 

[abasile]

The closest I ever intend to come to leasing a car is picking up a rental car at an airport while traveling.

Sure, maybe I'd have come out ahead if I had leased rather than purchased my early 2011 LEAF. But so what? At worst, maybe I spent several thousand more than necessary, considering how fast depreciation has occurred. I'd rather have the peace of mind of driving my own car and not someone else's, with no payments and no haggling with NMAC. And I'm more likely to keep the car longer, which saves money in and of itself.

For more of a sense of freedom and peace in life, my advice to anyone would be to live more frugally, get out of debt ASAP, maintain a good amount of savings, and only pay cash for cars. If you can only spend $2000 cash, then get an older, relatively fuel efficient car. Maybe trade up to a used Prius when you have a bit more cash to spend. Eventually, if all goes well, maybe a used Tesla! I wish I had started following this advice at a younger age.

 

[TomT]

Yes, I agree.

The Leaf is the only car I have ever leased and data from Leafs since then has validated that decision in my case. YMMV, of course!

Only pay cash for cars.

 

[neofightr]

The closest I ever intend to come to leasing a car is picking up a rental car at an airport while traveling.

Sure, maybe I'd have come out ahead if I had leased rather than purchased my early 2011 LEAF. But so what? At worst, maybe I spent several thousand more than necessary, considering how fast depreciation has occurred. I'd rather have the peace of mind of driving my own car and not someone else's, with no payments and no haggling with NMAC. And I'm more likely to keep the car longer, which saves money in and of itself.

For more of a sense of freedom and peace in life, my advice to anyone would be to live more frugally, get out of debt ASAP, maintain a good amount of savings, and only pay cash for cars. If you can only spend $2000 cash, then get an older, relatively fuel efficient car. Maybe trade up to a used Prius when you have a bit more cash to spend. Eventually, if all goes well, maybe a used Tesla! I wish I had started following this advice at a younger age.

Agree about the cash but seriously doubt you made the wrong choice by buying. It's all about the predicted value when you sign the lease and take a look at the comments just posted by someone who leased about termination fees etc. At least one lessee is being upfront about it.

And judging by your car's mileage and years owned you DEFINITELY made the right choice considering you are 9k+ plus miles above lease restrictions so don't feel bad.

BTW:Your car stats are impressive do you feel the Leaf has lived up to it's promise? Can I ask given the mileage what do you think would be an average range for your car now?

 

[abasile]

And judging by your car's mileage and years owned you DEFINITELY made the right choice considering you are 9k+ plus miles above lease restrictions so don't feel bad.

True - when I bought the LEAF, I only expected maybe 10k miles per year, tops. Wanting to drive electric as much as possible, and changes in my circumstances, resulted in more mileage.

BTW:Your car stats are impressive do you feel the Leaf has lived up to it's promise? Can I ask given the mileage what do you think would be an average range for your car now?

The LEAF has been great, with one major exception. I think the range is down a bit under 20% compared to new, call it 17%. So, given that the 2011 LEAF had an EPA range rating of 73 miles, it would be fair to say it's now down to about 60 miles. That seems roughly consistent with my experience. And I should add that I live in a relatively cool climate, being up over 6000 feet elevation in the Southern California mountains, so my car's battery has held up better than most CA cars. That is generally good, except that I am highly unlikely to qualify for the battery capacity warranty. Based on statements made by Nissan a few years ago, I didn't think my battery's capacity would drop this much until at least five years into ownership.

If I were looking to purchase a LEAF now, I would wait until later in the year to be sure to get the newer battery with a more heat tolerant chemistry. Don't trust anything a car salesman tells you about the battery!

I'm also not crazy about the LEAF's seemingly arbitrary limitations on regenerative braking at higher speeds, but that should be a pretty minor issue for most owners.

 

[JeremyW]

It's all fun and games until you loose a capacity bar... :?

 

[cwerdna]

Since you are an expert on leasing let's talk about residual value.

I am not a leasing expert.

By definition courtesy of your link:
Residual Value: This is the leasing company's prediction of what the car will be worth at the end of the lease. The residual value is also important because it affects your monthly payment. The higher the residual, the lower your monthly payments.

Yes. I know this.

It's all a numbers game and you Sir are going along for the ride because that financial arm of the dealer is going to make sure that the PREDICTED residual value is at it's lowest possible value so they can get the maximum payment from you.

FWIW, the residual on my Leaf is $20601.60. IMHO, that's an inflated value. Many others will chime in saying their residual is inflated. If I choose to, I believe I can buy a comparable used '13 Leaf when I turn in my Leaf at the end of its 2 year lease for least than that.

The resale-value calculations are from MSRP, not net purchase price, and they don't, of course, include the $7,500 federal tax credit, which most shoppers who could afford to buy any of these vehicles would receive. There are also many not-insignificant regional and state incentives that might apply.

The only state financial regional/state incentive applicable to me is http://energycenter.org/clean-vehicle-rebate-project" onclick="window.open(this.href);return false;. One must lease for at least 3 years or buy and keep for at least 3 years to be eligible for CVRP. I went in KNOWING I'm not eligible for CVRP because at the time, a 3 year lease was overall more expensive per month even AFTER receiving a $2500 check from the CA govt.

I don't have time to respond to all the misinformation in your posts. You seem to know little about leasing the Leaf and go around bashing leases. You seem very enthusiastic, judging by your very long posts but they are very full of incorrect information.

Let's take a step back about all your FUD. For leasing, the cost that matters is the down payment + (# of payments * monthly payment) = total cost of lease. You also need to factor in the $395 disposition fee if you decide to turn in the car at the end w/o leasing another Nissan/Infiniti or buying the vehicle for residual + purchase fee ($300 in my case) at the end.

You may soon wind up on my foes list too as I have no time to read misinformation nor time to step in to correct all of it.

Re: your rant against hydrogen FCEVs, hey I'm not fan of them either. I agree w/most of your points re: hydrogen FCEVs, infrastructure, etc. Just because Toyota's going that direction and making a bunch of noise it about it now doesn't mean I agree w/it for MANY reasons.

As for Altima Hybrid, my mother has one. She's had it since early 08.

 

[cwerdna]

Actually, you don't. The $7,500 comes right off the top of the cap cost on the lease so you get it all directly and immediately, and it goes straight to Nissan (NMAC), not the dealer.. Some other manufacturers like Toyota are playing games with the federal tax credit but not Nissan. I think you need to do a little better job of research before spouting such things... Being so much in error on a simple thing such as this brings the rest of your "conclusions" in to question...

By leasing you, basically give the fed tax credit ($7500 currently) to the dealership (owner) and let them decide how much they want to pass on to you via crafty lease numbers and upgrade perks.

Yep. TomT is correct.

As part of the research, the OP needs to actually understand leasing a Leaf and the handling of the $7500 Federal tax credit, instead of cherry picking, and conflating it w/other issues. He's already made up his mind based upon faulty information.