Purchase vs Finance Prices - quoted differently

Hello everyone. Our household is in search of a eco friendly, energy efficient vehicle. My husband likes the LEAF, so began our search. From everything that I have read and researched I now know not to buy a used LEAF; which was our first inclination. So we've looked into buying one outright (cash) or considered financing based on current promotions. I am a numbers person and something just doesn't make sense to me, and I am hoping you can shed some light:

I've been pricing the 2013 or 2014 S w/QC (a must have since I commute ~70 miles RT daily). Currently the incentives are a $2500 Captive Cash rebate from NMAC for financing with 0% APR for up to 72 months. Not a bad deal given the $7500 tax credit and $2500 state credit that would be coming our way. However, when I have asked for quotes for an outright sale and then asked for a financing quote of the same car, I am getting different prices. Here's an example from a dealer quote:

Red LEAF 2013 with Quick Charge:

CASH PURCHASE:
This net price is calculated as follows: MSRP $31,355.00
Nissan Discount and Rebates $0.00
Dealer Nissan Discount $5,700.00
Total Cost: $28,700.00

OR

FINANCE:
This net price is calculated as follows: MSRP $31,355.00
Nissan Discount and Rebates $2,500.00
Dealer Discount $3,055.00

Total Cost: $25,800.00

Total Savings: $5,555.00

So the difference between buying the car cash here is $700 more than if I were to finance it . Why the disconnect? Outside of this just being a shady practice :?: - after all the purchase price should be the same regardless of whether I pay for it cash vs. financing - I can only assume that the dealer is looking for a way to increase their profit. With 0% financing, there is very little room, outside of volume sale rewards to the dealership, so I understand that the dealership must make some money somewhere. This example is one of the smaller variances. All dealerships that I have requested for quotes have come in with a differential, some as aggregious as $2000 difference between cash purchase and finance.

Does anyone have any advice as to how to best approach this? I am disenchanted by this and other dealership experiences that I've had. I will post those and which dealerships they are so that others can beware.

We are now looking at leasing as an option, but we're not completely there. I appreciate your guidance mynissanleaf forum members!

I won't make you feel any better but we ran in to the same thing at two different dealers and just leased it instead. Our initial intent was to just lease it, pay off the lease and buy it in a few month. But now after finding these forums and learning a bunch, we will just let it sit on the lease and see whats up in three years.

The dealership makes more money when you finance versus paying cash.

muncan said:

I've been pricing the 2013 or 2014 S w/QC (a must have since I commute ~70 miles RT daily).

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1. 70 miles is at the very upper end of the limit of the LEAF for a daily commute. Nearly all LEAF owners wouldn't recommend it for much more than a 40 mile commute so that you have room for AC/heat and side trips in the day. The only caveat is if you can charge at work, at which point you can do 70 miles without issue at all.

2. Definitely lease. The lease deals are great and it gets hot in Ramona in the summer which only accelerates capacity loss, though you probably work closer to the coast. You will have trouble making it 70 miles after 2 years for sure unless you can keep your speeds down on the freeways. Between Ramona and I15 you can drive pretty efficiently because the speeds are lower, but not as good as one might think because of the hills and stop lights.

A Prius would definitely be a good fit for a 70 mile commute and if you are into electrified vehicles you will want to consider the Volt, C-MAX Energi, Fusion Energi and Prius plug-in.

Another option is to lease a RAV4-EV, but it's a bit more expensive.

drees said:

1. 70 miles is at the very upper end of the limit of the LEAF for a daily commute. Nearly all LEAF owners wouldn't recommend it for much more than a 40 mile commute so that you have room for AC/heat and side trips in the day. The only caveat is if you can charge at work, at which point you can do 70 miles without issue at all.

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I work next to UCSD's campus which has a few Blink charging stations. I also saw that there are a few along UTC and then there is the dealership in Poway. I am counting on this being available to me in order to make it. My husband is concerned that if I rely on QC rather than an hour of 220v at a Blink that I will in effect degrade the battery faster.

drees said:

2. Definitely lease. The lease deals are great and it gets hot in Ramona in the summer which only accelerates capacity loss, though you probably work closer to the coast. You will have trouble making it 70 miles after 2 years for sure unless you can keep your speeds down on the freeways. Between Ramona and I15 you can drive pretty efficiently because the speeds are lower, but not as good as one might think because of the hills and stop lights.

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I am trying to convince my husband about leasing. He was considering buying and then selling in 3 years. Based on what I have read I'm a little trepedacious to invest our funds in a car whose battery may or may not keep its battery life after 2-3 years. I don't know that we would be able to sell it for more than we would owe.

Any recommendations as to ethical and reliable dealerships around San Diego or OC? I had a horrible experience with Pacific Nissan this week after being quoted a cash price by the General Sales Manager, his confirmation at least 3 times in email (which we had and they later found as well) and then personally at the dealership that he would honor the quote; only to 1) not have the color of the car that he quoted me on, then doing a bait and switch with other colors and 2) when we were ready to purchase, all of a sudden he couldn't come out to talk to us and the salespeople and manager he sent out kept on saying they didn't know how he had come up with the figures he did...but they could give us the absolute bottom price of $XXXXX which was at least $2000 higher than the quote on a car with $4K less in MSRP. We ended up walking away. I have reported this to Nissan Headquarters as well.

If your husband is already wanting to sell the car 3 years down the road, definitely lease. Leafs depreciate rapidly and unless you put a large down payment, after 3 years you could still be potentially upside down.

My car, which was valued around $35k at time of sale, has a unrealistically optimistic residual value of $16,800 after 3 years/36k miles. I expect its actual value to be closer to $13k when it's time to give it back to Nissan.

Because of your expected mileage (about 17k/year by my calculations, excluding weekend/day off trips), your husband may think leasing is a bad idea. But Nissan's excess mileage penalties are 15 cents/mile. If you get a 15k/year lease, and put 17k/year on it, that's 6,000 excess miles, or $900 in excess mileage penalties over the life of the lease. I would weigh that against the cost of buying, and losing a ton of money on depreciation, plus having to sell or trade the car vs. just handing over the keys, writing a check for the excess miles and disposition fee, and walking away.

You may even want to consider a 2 year lease instead of a 3 year one, so you're not making payments on a car that is past its 3 year/36k bumper to bumper warranty. You won't qualify for the $2500 CVRP rebate but that's currently out of money anyway, and the waiting list could be months long.

muncan said:

I work next to UCSD's campus which has a few Blink charging stations. I also saw that there are a few along UTC and then there is the dealership in Poway. I am counting on this being available to me in order to make it. My husband is concerned that if I rely on QC rather than an hour of 220v at a Blink that I will in effect degrade the battery faster.

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An hour of L2 should definitely get you lots of headroom - if you go this route you'll obviously want to make sure you get the QC package if you are looking at the S trim.

Since you will likely be using Poway Nissan for charging periodically, I would recommend shopping there. There are basically only two Nissan dealers, Mossy and Pacific, all the Mossy Nissan's are basically the same. I think you'll find that most San Diego LEAF owners bought from a Mossy Nissan dealer.