Buy vs. Lease

[Anonymous]

With leases for a premiere coming in around $450-$500/mo, does it make sense to buy? It seems like then one could claim the full $7500 fed and $2500 CA which would bring the price to $32K-ish. Throw $2-3K for a down and you're looking at payments (60 mo) of $450-ish again. Thoughts?

 

[JupiterMoon]

Depends on your car owning philosophy.

If you buy, you know pretty much where you stand on your payments and also your ownership of the car.

If you lease now, it's likely you're not getting a good deal. If you lease a little later, I'm 100% sure you'll get a better deal (as far as leases go).

It's a personal choice and comes down to all the factors that you feel are important.

 

[dan2112]

How long are you planning to keep the car? Keep in mind EVs have the worst resale value (excluding Tesla). The depreciation is HUGE ( :mrgreen: ). If you plan to basically run it into the ground for 10 years - great. But it will be basically worthless. My 2014 LEAF SL that I leased that cost 36K (MSRP) could be had at auction for 8k today. I know that is not a great comparison but it gives you an idea. I fully expect the Bolt to loose ~60% value in 3 yrs - so for me lease was the way to go.

 

[michael]

In the case of EVs, leasing looks better for now. Technology is rapidly improving, costs are dropping. As stated above, depreciation is very high, and with good reason.

It seems likely that Bolt prices will drop with time, but this would apply both to purchase and to lease. Right now the Bolt is a hot, gotta-have-it item. This won't last forever.

I have leased three EVs and am absolutely glad I went in this direction.

Even if you lease, you get all of the $2500 and most or all (depending on how the lease is structured) of the $7500. Ford, for example, generally applies the $7500 as if it were a down payment. GM applies some in this manner and some as an artificial increase in residual. The net effect is generally similar so long as the full $7500 gets somehow applied.

 

[gpsman]

I've been thinking about this since October & the day I placed my order. The slow roll out has given me more chance to think. I just got a VIN and "prepping to ship" message so I will need to make up my mind in 2 to 4 weeks.

I STILL CAN'T DECIDE!

I've read just about every blog, article and thread.

I STILL CAN'T DECIDE!!!

So I have basically concluded there is NO BETTER DEAL one way or the other. At this point, it is a tie.
I can afford to go either route.

I THINK I will want an upgraded "something" in 3 years.

On the other hand, my previous vehicles I have kept 18, 16, 12, and I still have an 11 year old hybrid now.
( And the 16 y.o. was a 2000 Honda Insight and the NiMH batteries lasted 16 years.... my current hybrid has 11 year old NiMH batteries and I get the same Ah out of them now as when new...). So I expect the Bolt will last 10 - 15 years too. IF I want to keep it that long.

Also I always like to tinker and modify my vehicles. Solar panels anyone????
I have never leased and don't know the rules about tinkering and modifiying. What if I get a scratch or dent during my lease? Or seat or carpet stains?

I think I'd have no problem staying under 12,000 miles per year. 15,000 for sure.

Any help helping ME decide is appreciated.

 

[LeftieBiker]

I have never leased and don't know the rules about tinkering and modifiying. What if I get a scratch or dent during my lease? Or seat or carpet stains?

You have to return the car in pretty much the same condition it was in when new. You can wait until the end of the lease to do this. You can pay a third party to fix damage to lease specs, fix it yourself, or you will get a damage estimate after the end of lease inspection, which you can simply pay. If you expect serious wear and tear, price wear and tear insurance - about $20 a month on our Prius PHEV. If you will be leasing or buying another vehicle from the same manufacturer, some damage (up to $500 on a Nissan) can be "forgiven" or negotiated away.

 

[Schnort]

You definitely don't want to mechanically tinker or modify the car. The lease assumes you are returning a saleable car with nothing but routine wear and tear. Door dings, etc. and scratches from kicked up road rocks are usually forgiven, but the expectation is the car can be resold as an exemplary used car with minimal reconditioning or you will be responsible for the difference in value.

 

[freqflyer]

Are many people purchasing the excess wear protection along with the lease? Generally we steer away from warranty sales (due to their profitability to whomever is selling them) but there does seem to be many uncertainties on how Chevy will treat damage on the returns. Like the extended warranty coverage, they extol the great virtues of the car all the way until you are about to finalize payment.

 

[dan2112]

Are many people purchasing the excess wear protection along with the lease? Generally we steer away from warranty sales (due to their profitability to whomever is selling them) but there does seem to be many uncertainties on how Chevy will treat damage on the returns. Like the extended warranty coverage, they extol the great virtues of the car all the way until you are about to finalize payment.

No. If you plan to put more than 10k on it in a year get the appropriate milage with the lease. The only wear and tear on this car if it is anything like the LEAF is tires. And this car is just like any other Chevy and a lease is a lease. The inspection is done by a independent third party. Take care of the car - drive it like you own it and you will have no issues.

 

[JupiterMoon]

I've been thinking about this since October & the day I placed my order. The slow roll out has given me more chance to think. I just got a VIN and "prepping to ship" message so I will need to make up my mind in 2 to 4 weeks.

I STILL CAN'T DECIDE!

I've read just about every blog, article and thread.

I STILL CAN'T DECIDE!!!

So I have basically concluded there is NO BETTER DEAL one way or the other. At this point, it is a tie.
I can afford to go either route.

I THINK I will want an upgraded "something" in 3 years.

On the other hand, my previous vehicles I have kept 18, 16, 12, and I still have an 11 year old hybrid now.
( And the 16 y.o. was a 2000 Honda Insight and the NiMH batteries lasted 16 years.... my current hybrid has 11 year old NiMH batteries and I get the same Ah out of them now as when new...). So I expect the Bolt will last 10 - 15 years too. IF I want to keep it that long.

Also I always like to tinker and modify my vehicles. Solar panels anyone????
I have never leased and don't know the rules about tinkering and modifiying. What if I get a scratch or dent during my lease? Or seat or carpet stains?

I think I'd have no problem staying under 12,000 miles per year. 15,000 for sure.

Any help helping ME decide is appreciated.

Try something different...lease this time. If you don't like it, you'll know in three years and your next car you can buy. It's pretty simple.

 

[wongfeihong187]

Yes, my wife's Leaf is up in May, and we are definitely NOT going to buy a Bolt or electric vehicle. Technology is still new and I expect the prices to drop, and the selection of EV's to be greater in three years. You will be fine with a lease, in fact it'll be perfect time to consider a Tesla model III in three years >

 

[michael]

Yes, and I agree with the word "consider". Who is to say what will be best then.

 

[roundpeg]

It will depend a great deal on whether you have the tax liability to be able to claim the $7500 federal tax credit in whole or large part. If you can and you lease you are in effect gifting the value of the tax credit in full to the leasing company. They may "give" part of it back to you in the form of an artificially inflated residual or reduced capitalization, but from what I've been seeing on lease terms, only in part. In general the math on leasing looks pretty horrifying to me if only because I am getting full value from the tax credit, and I would not want to expose myself to another negotiation with the leasing company in three years.

 

[Nagorak]

I think the truth is that right now you're not getting a great deal on the lease (possibly not either way, but definitely not on the lease). The talk of GM "inflating the residual", in my opinion is an optimistic description of the situation. The reality is they're using the normal depreciation curve (not an exceptional thing), and but they're keeping most of the Federal rebate. So, if the car's value does hold up and you want to buy it, in the end you're worse off than if you bought in the first place. If it doesn't, then you can only hope they give you the discount on the purchase price (otherwise you'll be looking at the nearest used car lot selling them and buying someone else's vehicle). There's probably a decent chance that you can buy for a better price at the end of the lease, but nothing is set in stone. It's a bit of a roll of the dice.

If you think you're going to hold for at least 5-6 years, and you can take the whole Federal tax credit, then buying may be the safer option. The major risk is with battery degradation, but unlike previous electric cars like the Leaf, the Bolt has enough excess range that you can afford to lose some. Let's say it lost half its range after ten years, it would still have more range than the current Leaf starts with. So, I think a sane argument can be made for simply buying.

The other thing is, the Bolt's value may hold up better than the Leaf/etc. because it's actually a viable mainstream car. The Leaf and other low range EVs are very much fringe models. Yes, you can justify how most people don't drive more than 40 miles, but the reality is you still end up with situations where you can easily exceed those cars' ranges. With a fully charged Bolt you almost never will exceed its range unless you intentionally try by going on a road trip.

However, it could also be that the Bolt turns out to be a disaster for one reason or another. It's not likely based on GM's experience with the Volt, but it's possible. Leasing protects you from that. For example, if the batteries degrade really badly, then you may be happy to have had a lease. (I don't really anticipate problems with the electric drive itself because it's similar enough to the Volt's, and we haven't seen serious problems with them, but I suppose it's possible.)

I think with the current lease terms I'd lean toward buying, provided you can get the full Federal Rebate, and you're willing to keep it at least 6-10 years. I think the current lease numbers are kind of a rip off, and I don't really trust the "inflated residual" talk.

( And the 16 y.o. was a 2000 Honda Insight and the NiMH batteries lasted 16 years.... my current hybrid has 11 year old NiMH batteries and I get the same Ah out of them now as when new...). So I expect the Bolt will last 10 - 15 years too. IF I want to keep it that long.

I had a 2001 Honda Insight... The battery had to be replaced at least four times. It could have been five (I don't want to have to check my records). The battery did not last more than two years after replacement. Honda claimed that we "drove too little"--as if that made sense, or was any sort of excuse.

I'm glad you didn't have problems yourself, but that certainly wasn't the experience of everyone (not just me). The Honda Insight is what convinced me that hybrids were not a viable technology (could just be Honda's crappy battery management system). I was actually relieved when the car was finally totaled by a UPS truck (fortunately no one was seriously hurt).

 

[LeftieBiker]

As I just wrote elsewhere on this site, the Bolt lease may be one of the few to not go up if the Federal tax credit gets axed. Why? Because GM is already keeping most of it, and the lease terms are so bad for lessees that they will probably have to just eat the loss and keep offering the same deal, with the $2500 CCR coming out of their pockets. Of course, that wouldn't be great, as many of us are hoping for better lease terms by Summer.

 

[SeanNelson]

The other thing is, the Bolt's value may hold up better than the Leaf/etc. because it's actually a viable mainstream car.

There's an argument to be made for the idea that the 2017 Bolt EV may hold it's value a bit better over the coming 3 or 4 years than electric cars have in the past. This is based on the assumption that this is the first of a wave of 200+ mile EVs at this price point. It's taken about 5 years of EV sales before this jump in range has occurred. If there's a similar length of time before 300 or 400+ mile range cars comes out, then the kind of incremental advances in range we've seen in other vehicles will be less of a deal on the Bolt because it's already starting out with a pretty substantial range. Thus, it may hold it's value a bit better. Certainly a LOT better than a 2016 Nissan Leaf, whose range now suddenly seems pretty paltry by comparison.

Of course this is highly and wildly speculative, but we can still hope, yes?

 

[michael]

If you go back three years and read the posts on the various forums, you will see lots of people saying things like "My Focus Electric (Leaf, Spark, etc) will last forever, nothing will wear out". Turns out not to be the case. Hopefully in three years the Bolt will seem dated. I'm leasing.

 

[roundpeg]

If you go back three years and read the posts on the various forums, you will see lots of people saying things like "My Focus Electric (Leaf, Spark, etc) will last forever, nothing will wear out". Turns out not to be the case. Hopefully in three years the Bolt will seem dated. I'm leasing.

That would be a ludicrous assumption to make for any consumer product, so anyone who thinks this might be true is truly getting what they deserve. This is not IMO a reasonable or sound argument in favor of leasing.

 

[JupiterMoon]

If you go back three years and read the posts on the various forums, you will see lots of people saying things like "My Focus Electric (Leaf, Spark, etc) will last forever, nothing will wear out". Turns out not to be the case. Hopefully in three years the Bolt will seem dated. I'm leasing.

That would be a ludicrous assumption to make for any consumer product, so anyone who thinks this might be true is truly getting what they deserve. This is not IMO a reasonable or sound argument in favor of leasing.

Leasing is excellent if you can write off your vehicle (like I do). Leasing is excellent if you want a new vehicle every few years that has a fully warranty and service package and headache free driving and ownership (like I do). Leasing is excellent if you want hassle-free ownership overall (like I want). There are fees for such a hassle-free experience but IMO it's worth it so long as you are aware of the fees and terms and clearly know what you are getting yourself into.

Leasing is not for people who count every penny and make their car a priority in their lives. Leasing is not for people who obsess about what the future value of their vehicle will be and how much money they are wasting, etc. Leasing is not for people who have the mentality of wanting to keep a car for a decade or so.

As I've gotten older and have more money, these kinds of issues matter far less to me. I can understand if someone is in a bind or has hardship and is struggling to make ends meet. I've been there, I know what it's like. I know how painful and tough it can be. But since I'm not in that position, I can now not worry about how much money I'll save in 10 years with not leasing versus buying, etc.

I don't want to waste anymore time at the dealer or a repair station fixing BS on my car. I'm done with that. I want a car that I do not have to touch or fix for the term of my ownership. It's a different philosophy and approach. So I'll do my best to get a reasonable lease (which the Bolt currently is NOT), and spend my time and money elsewhere like on a nice vacation, going out to dinner, etc...and not having to worry about how much my car is costing me per mile, per year, or 5 years from now.

 

[roundpeg]

Leasing is excellent if you can write off your vehicle (like I do). Leasing is excellent if you want a new vehicle every few years that has a fully warranty and service package and headache free driving and ownership (like I do). Leasing is excellent if you want hassle-free ownership overall (like I want). There are fees for such a hassle-free experience but IMO it's worth it so long as you are aware of the fees and terms and clearly know what you are getting yourself into.

Leasing is not for people who count every penny and make their car a priority in their lives. Leasing is not for people who obsess about what the future value of their vehicle will be and how much money they are wasting, etc. Leasing is not for people who have the mentality of wanting to keep a car for a decade or so.

As I've gotten older and have more money, these kinds of issues matter far less to me. I can understand if someone is in a bind or has hardship and is struggling to make ends meet. I've been there, I know what it's like. I know how painful and tough it can be. But since I'm not in that position, I can now not worry about how much money I'll save in 10 years with not leasing versus buying, etc.

I don't want to waste anymore time at the dealer or a repair station fixing BS on my car. I'm done with that. I want a car that I do not have to touch or fix for the term of my ownership. It's a different philosophy and approach. So I'll do my best to get a reasonable lease (which the Bolt currently is NOT), and spend my time and money elsewhere like on a nice vacation, going out to dinner, etc...and not having to worry about how much my car is costing me per mile, per year, or 5 years from now.

Several of your arguments are contradictory, or are puzzling, at least.

Leasing, it appears, is great for people who really like the idea of having a new car every few years. I've heard that reasoning expressed for leasing an EV here any number of times. It's like your phone, it's gonna be obsolete in three years. To me, those are the people who are making a car a priority in their lives. Leasers are the ones who like to say they totally fooled the leasing company into giving them an unrealistic residual. A buyer and keeper does not care in the least about the future value of the car. They don't care because they have no reason to care. They plan on keeping the car until it has negligible value.

I paid cash for the Bolt, just as I have for every car I've ever owned. This is not being in a "bind" but just the opposite. Being in a bind, to me, is being forced to turn in a car after an arbitrary time period and having to get another even though I might be perfectly happy with the one I am driving. I'd pay to avoid that hassle. Fortunately, avoiding it actually costs less.

Are you talking about repairs outside of warranty? My last car I've owned for nearly 14 years and I think it's had two out-of-warranty repairs aside from oil changes. So it's difficult to know what kind of BS you are talking about here. Maybe you've owned some really lousy cars, I don't know.