Chevy just released lease program details!

[roundpeg]

You really need to follow the link in the very article you cited back to the image of the actual terms. I will post the direct link again:

https://forum.leasehackr.com/uploads/default/original/1X/243e85f7c43b540a738fa1f8fc7cfa41bd20464e.jpg

If you look at this (please, do) you will see the article does not use the correct figures for their calculations. Clearly the residual is not as high and clearly the CCR is shown as $0.

In their calculations they also include a downpayment, which violates their very own advice in their article "8 Things You Should Know Before Leasing." Number 8 is "Never put down a downpayment."

So yes, a lease is negotiable, but then, so is everything but death and taxes.

 

[michael]

.
All this information is helpful when sitting down with the dealer to negotiate my deal, but if your not truly willing to walk away from the deal, you can never get the best price. I know what I'm willing to pay. We'll either come to a figure that is acceptable to both of us, or I'll wait till they are more plentiful. If I extend my Fit EV lease, it is month to month - I can turn it in at any time with no penalty.

With the additional "discount" offered on a lease that is not available on a purchase, I'll be looking to lease. If I want to keep the car at the end of the lease, I'll offer fair market value. If they don't take it, there will be other used examples available (plus new 200+ mile options by that time). I find it highly unlikely that a 3 year old Bolt LT with 36K miles will be worth $22,497 (60% of MSRP). I'll take the artificially low interest rate and lease payments, and let GM Financial eat the depreciation while I delay my purchase.

s


I agree. Volts were never leased with the $7500 applied as a CCR, but rather as an artificial increase in residual. There are some subtle differences in the effect of one vs the other, but on balance I think applying it as a residual bump benefits both the lessor and the lessee:

CCR is subject to sales tax (at least in California, residual bump is not)
As DucRider points out, at lease end you may have the option to offer a realistic buyout (which Volt drivers are sometimes doing)

The leasing company does better with this approach as well if the car is totaled or stolen during the lease period...they are paid the outstanding balance which is higher in this case

IMO it is generally much better to lease an EV at this time. How many people do you know who bought a Leaf, Focus Electric, Volt, whatever and haven't been hurt by the decline in resale value? Those of us who leased are unaffected.

I think it's fair to say that ALL electric cars are unreasonable expensive if purchased at MSRP. Only those who cannot wait will rush into the initial buying flurry. GM would be nuts not to take advantage of this, find out what the market will actually bear. Later on, the Bolt will be priced at whatever level supports an acceptable sales rate.

 

[michael]

For laughs, let's see how this compares with what Tesla is offering.


According to their web site, a base 60 with no options has a cash price of

68,000 + 1,200 Doc/dest = $69,200

Their 15,000 mile 36 mile lease offer is

$5000 initial payment (initial deposit $2500 plus $2535 at signing)

Monthly payment $843 before sales tax

Total sum of payments 5000 + (35 x 843) = $34,505

For simplicity I will neglect money factor....

Approximate implied residual 69,200 - 34,505 = 34,695

34,695 / 68,000 = 51%

The above are rough numbers, of course, but it seems like even today's Bolt lease terms are significantly more generous than Tesla's

 

[roundpeg]

I agree. Volts were never leased with the $7500 applied as a CCR, but rather as an artificial increase in residual. There are some subtle differences in the effect of one vs the other, but on balance I think applying it as a residual bump benefits both the lessor and the lessee:

CCR is subject to sales tax (at least in California, residual bump is not)
As DucRider points out, at lease end you may have the option to offer a realistic buyout (which Volt drivers are sometimes doing)

The leasing company does better with this approach as well if the car is totaled or stolen during the lease period...they are paid the outstanding balance which is higher in this case

IMO it is generally much better to lease an EV at this time. How many people do you know who bought a Leaf, Focus Electric, Volt, whatever and haven't been hurt by the decline in resale value? Those of us who leased are unaffected.

I think it's fair to say that ALL electric cars are unreasonable expensive if purchased at MSRP. Only those who cannot wait will rush into the initial buying flurry. GM would be nuts not to take advantage of this, find out what the market will actually bear. Later on, the Bolt will be priced at whatever level supports an acceptable sales rate.

So here's what happens. You lease an EV and the leasing company gets your $7,500 tax credit. With that money in their pocket, they can use a portion of it (as you pointed out) to artificially inflate the residual. Which means you might get some of the tax credit back if you buy out the lease at the end. If you don't, the credit gets you potentially nothing, or only the value of the portion that was used to reduce the lease basis and your payments. It seems like a bird in the hand vs. two in the bush proposition.

I don't see the Bolt as being "unreasonably" expensive, minus the total $10,000 we can get off MSRP here in California. Yet I know if I waited until the middle of next year to buy one, I might very well see them for less. What one does with that knowledge is a question only the person who is making the decision can answer. For myself, I am (1) driving a car nearly 14 years old, and it's getting creaky; and (2) I have use for the tax credit this year, but I am less certain about next. The other concern others may not share is over the future of the tax credits. I have a feeling they have a big target painted on them, and may not survive the coming year.

All that said, everybody's milage will vary.

 

[Michael1]

Where are you getting these lease details?

The CA EV credit is $2500 only for low income. It drops to $1500 after that, and then $0 for increasing incomes.

Michael

That's not correct. 2500 is normal on an EV...1500 was for Volt. Goes up or down from there for low or high incomes

Above 150K single, 300K joint, ineligible

Below some level, $2000 bonus.

Thanks for the correction. The $2000 bonus is set for 300% of poverty level. Of course, anyone at 300% of poverty level, unless they have some huge assets built up, shouldn't be buying a new car anyway.

 

[DucRider]

Thanks for the correction. The $2000 bonus is set for 300% of poverty level. Of course, anyone at 300% of poverty level, unless they have some huge assets built up, shouldn't be buying a new car anyway.

The Spark EV leases @<$100/m make the car free to low income buyers (if they have the credit rating to qualify for a lease). Would even pretty much cover taxes & tabs.

 

[montreid]

That's the rub for EV on lower SES -

1. usually renters - so no Level 2 usually - or even garage to park/charge at home
2. credit - not 'well qualified' for these lease terms
3. commute - more than 40 one way to employment center that doesn't have chargers either

--this is the hard part of EV.

My family+friends in Central Valley being PAID to drive their Sparks. Free car and covers insurance too -- win/win/win

Now if only the Bolt is heavily subsidized like the Spark.

 

[ssspinball]

I've been saying this exact thing for at least a month. Seems it's finally finding an amen corner now that the actual lease terms are leaking out, and lo and behold, GM is not subsidizing this car right out of the gate.

With a 61% residual they are most definitely subsidizing the Bolt right out of the gate. Most Chevy cars are firmly in the 40% range on 36 month lease, but don't take my word for it, just look at the entire 2016 residuals yourself. The Cruze is in the 40% range and the Sonic and Spark are in the 30% range!

 

[DucRider]

I've been saying this exact thing for at least a month. Seems it's finally finding an amen corner now that the actual lease terms are leaking out, and lo and behold, GM is not subsidizing this car right out of the gate.

With a 61% residual they are most definitely subsidizing the Bolt right out of the gate. Most Chevy cars are firmly in the 40% range on 36 month lease, but don't take my word for it, just look at the entire 2016 residuals yourself. The Cruze is in the 40% range and the Sonic and Spark are in the 30% range!

From past posts, roundpeg believes that if GM is subsidizing leases on the Bolt, that amount would also be available on purchases.

It's hard to pin an exact number on the subsidy as part of the federal tax credit is being used to increase the residual. This works to the benefit of CA residents who are leasing due to sales taxes. If the entire $7500 was used as a Capital Cost Reduction (CCR), the customer would owe tax on that amount at the time of sale. Instead GM is using $2500 as a CCR (taxable) and $5000 to inflate the residual (non-taxable). Lease payments are reduced by the same amount either way, only the sales tax due changes (~$500).

By my calculations, GM is also sweetening the lease deal by offering below market financing and some additional "optimism" on the value of a 3 yr old Bolt. The reduced MF is worth ~$800, and my opinion is they are adding at least an additional $1750 to the residual (and that's with a fairly generous real market residual).

 

[roundpeg]

To repeat what I have said many times before, unless this changed today, GM is not offering any CCR on Bolt leases. I've linked directly to this information firsthand (more than once), so I cannot imagine why we are still hearing this.

The "subsidy" you are seeing is the $7,500 tax credit being back-ended as an inflated residual. If you don't buy out the lease the leasing company keeps that money (and doesn't say thank you very much). This only makes financial sense if you either can't afford to buy outright or won't qualify for the full tax credit. Otherwise you are simply talking yourself out of whatever portion of your tax credit the leasing company decides to keep.

 

[Schnort]

The "subsidy" you are seeing is the $7,500 tax credit being back-ended as an inflated residual. If you don't buy out the lease the leasing company keeps that money (and doesn't say thank you very much). This only makes financial sense if you either can't afford to buy outright or won't qualify for the full tax credit. Otherwise you are simply talking yourself out of whatever portion of your tax credit the leasing company decides to keep.

Not really. And completely opposite of reality, actually.

An inflated residual leaves the lease company holding the bag (i.e. the difference between the agreed upon residual and the actual value of the car). If you buy out a car with an inflated residual, then you're basically screwing yourself by purchasing a car above market rate.

If you take the default values from http://leasehackr.com/calculator/ (MSRP of $30000, sales of $28000, residual of 60%) and compare incentive of $7500 & residual of 60% vs. incentive of $0 and 85% residual (which would be (60%*MSRP + $7500)/MSRP), you see the difference in cost to you being ~$500, which is basically the interest over 3 years of the $7500)

You can do the same calculations at $7500 and 35% or $0 and 60% (if you think that the 60% is the improved residual).

Now, if the company is bumping up the residual by less than the $7500, then absolutely, they're pocketing the difference.

 

[roundpeg]

From what I am hearing, lease holders often make offers to buy out the lease at the end of term and feel like they made a great deal if the price is below the inflated residual. The bag the lease company is holding is filled with money. Yours.

 

[michael]

Not really. They feel happy if they pay the fair going price.

In California, a lease in which the 7500 is reflected in an artificially increased residual (if fairly applied) is better for the customer than one in which the 7500 (also if fairly applied) is treated as a capital reduction.

The general approach in a lease is to expect to dump the car at the end, not to buy it. If you expect to keep the car beyond 3 or whatever years, then yes, buy. But in the case of EVs, after three years it's almost always better to get something new.

I simply don't care what is the residual, money factor, or anything else. I only care that there is zero driveaway and that the monthly payments are what I want them to be. I never go into a lease worrying about what will happen if I choose to buy it out, because I won't.

 

[dan2112]

Talking w/ local dealer in the Bay Area and he balked at the 300 lease price point. Granted I was talking a Premium trim, but he said it would be well over 400 and closer to 500. Has anybody heard anything regarding the lease pricing?

Dan

 

[roundpeg]

Using the online lease calculators, it's tough to get the lease on a Premier under $400 without assuming a discount you aren't going to get or a cash incentive you also aren't going to get. Not now anyway. Maybe in six months or a year.

From these discussions on leasing I gather a few things. One is that some folks have never had the experience of owning a car free and clear, so for them, the goal is manageable payments. For others such as myself who've never had a car payment (recognizing that I am in probably a small minority) the object is buying the car you want to own at a price you can afford.

 

[michael]

You are SOOOOOO wrong. Until I switched to plug in cars (BEV and EREV) I ALWAYS bought cars. In fact, I bought used cars, often three year old cars off lease. It DID make sense to own. With EV's, it makes better sense to lease, at least for now. The government gives me $10,000 every three years (for the moment), basically subsidizes $277 of the lease. And the car makers throw in a bunch of incentives because the need to move EVs.

I think you are correct in suggesting Bolt will not get significant discounts or incentives right away. The car will be in demand. I have always said that I intend to get a Bolt once the initial buying flurry dies down. One of my Volts comes due in March, the other in May. I intended to wait til then to replace. The May car has a lease payment of $230/month, so if necessary I will extend that to let Bolt prices fall.

Previously owned (not leased) cars include:

BMW 328
BMW 330
Acura MDX

You're right...I did much better buying those used than leasing them new. But this is different. I was happy with a 3 year old BMW. I absolutely don't want a three year old EV...they are obsolescent which is why they are so low priced.

 

[roundpeg]

Sounds like I am so wrong and so right, all at the same time. I hear that from the spousal unit too.

 

[dan2112]

Using the online lease calculators, it's tough to get the lease on a Premier under $400 without assuming a discount you aren't going to get or a cash incentive you also aren't going to get. Not now anyway. Maybe in six months or a year.

From these discussions on leasing I gather a few things. One is that some folks have never had the experience of owning a car free and clear, so for them, the goal is manageable payments. For others such as myself who've never had a car payment (recognizing that I am in probably a small minority) the object is buying the car you want to own at a price you can afford.

Can you share a screenshot of the numbers you are using ... I must be using it wrong :?

 

[michael]

If I can get a lease..

On a Premier
15,000 miles
Zero driveaway
Anything under $400 with tax

I will take the deal on the spot

Low 4's will be a good deal compared to what I spent on my first Volt and my Focus electric

 

[oilerlord]

I absolutely don't want a three year old EV...they are obsolescent which is why they are so low priced.

I wouldn't necessarily put an obsolete label on all used EV's.

In my case, the current lease deal on a 2016 Mercedes B250e is $329/month + $4,123 due at signing + $595 turn in fee. Total cost: $16,562. For $6,438 more, I own a 2014 with 6,000 miles on it, and plan to drive it for at least 6 years, with no monthly payments (ever), or mileage restrictions. The 2014 is nearly identical to the 2016 model. In 2022, my car will still have some residual value, either in resale or just as a second car for a family member.

I get that it's "nice" to drive a new car every three years but the "per month", perpetual car payment model never made sense to me. Maybe I'm just old school.