At the end of March of this year, Nissan caught the EV community off guard by announcing a very reasonable price for their 100 mile electric car, $32,780 ($33,720 for the higher SL trim), which would be lowered to $25,280 (SL-$26,220) with help from the US federal government’s $7,500 rebate program.
Additionally, Nissan released details of a accompanying lease program. A consumer could find themselves driving a LEAF SV for $349 a month ($379 for a SL), with $1,999 down (which does include the first payment), and of course signing over those $7,500 government dollars to Nissan.
At this point of the article, if you really have your heart set on the lease, and have already made up your mind (or you are a Nissan executive that has just happened by the site today), I suggest you stop reading at this point.
There, now that those pesky people are gone. I’d just like to say that in relation to the value in buying the car, the lease is not very good choice.
I’m not going to go down a long and winding road about why I have that opinion. It is right there in Nissan’s fine print, “Based upon $32,780 MSRP plus $820 destination charge. Adjusted Net capitalized cost of $24,441 includes $7,500 manufacturer incentive for federal tax credit available to NILT by law, and $595 non-refundable acquisition fee.”
So with your payments and fees you are looking at well over $22,000!!! Gah! The whole car is only $32,780!
Now I know a lot of people are going to not calculate that $7,500 into ‘the math’ of cost of ownership, but that is cash in the bank to you if you are making the purchase of the car. In this leasing scenario it is certainly being transferred to the benefit of the manufacturer to make the lease more palatable.
Still for some, a lease is the way to go because they simply don’t care about cost, they don’t want the hassle of owning a car, maintaining it long term, or worrying about flipping it when they move to a new vehicle…and that is fair ball. The lease is for them.
Also, some people simply can’t come up with the $32,780+ while waiting for their $7,500 rebate. Again, fair ball, if they really want to drive a EV, this is the only option available, and the lease is for them.
So why has this article extolling the virtues of purchasing over leasing only appeared now on the site? Why not months ago? Well, there was as big question mark that maybe would make the lease worthwhile, and that was the battery.
Would the battery live up to expectations? Would it have problems? What was the longevity? All very much unknowns, and without a announced extended warranty at the time, it seemed like the battery would be a burden around the necks of purchasers. A leasing scenario in this case would put this weight on Nissan’s shoulders, a tradeoff of sorts would be in play.
If Nissan ened up putting a 3/36 warranty on the battery, or even a 5/60, the proposition of potentially owning a lemon after a few years, or even a car that had been outdated with new technology, may have meant a very low residual for the purchaser (as well as numerous headaches).
However, the surprise announcement from Nissan that they would offer a 8 year/100,000 mile warranty on the battery, while being a great thing for the purchaser, really put a nail in the coffin of fiscal sense for the leasee.
Why put out over $22,000 to drive a LEAF for 36 months only to give it back with nothing to show, as well as being penalized if you drive the vehicle over 36,000 miles (assuming the LEAF has a standard Nissan lease-3/36 and a .15 penalty per mile over).
Therefore, the few extra thousands to purchase the car gets you another 5 years and at least 64,000 miles of worry free driving (a electric car is all about the battery)…and no tricky ‘was it worth it/will it still be worth it’ to buy out my lease at this point math.
Then there is the ‘new‘ residual. When the battery situation was in flux, and a unproven commodity, the residual expectation was all over the map. Now, potential buyers of used LEAFs know they have a guaranteed 100,000 miles coverage in their EV, much more coverage than any standard car.
No one can say for sure, but I’d wager a 3 year old LEAF with less than 36,000 miles on it is worth a heck of a lot more than the $10,000ish premium you paid to buy it outright. Maybe even $10,000 more.
In this case…I’m a buyer.