Looking at buying vs leasing - never leased before

[rocstar]

I'm sure this has been covered a bunch of times, but I am having a tough time understanding how lease payments are being calculated. I've only every purchased (albeit less expensive) cars in the past, but I can afford to buy the Bolt outright if I need to. I'm in Upstate/Western NY, which offers a $2000 rebate (at time of purchase - you must keep the vehicle registered in the state for 3 years), and then of course there is the $7500 federal tax credit if I purchase.

The one dealer that has been willing so far to give me real quotes on leasing would not give me a piece of paper with all the actual numbers on it. What they showed me was really just a sheet of paper with with 4 rows of numbers: monthly costs with $0, $1000 down, $2000 down, and $3000 down. I had to ask them what the residual value or cost to purchase at the end of the lease would be, and the guy only told me verbally - $23826. This was for an LT with DCFC, Driver Confidence, Comfort & Convenience, interior protection package (all weather floor mats), and the bowties (which I couldn't care less about) - MSRP of $39710. When I started doing the math to figure out how the pricing compared to just buying it out, they seemed totally confused and said, "huh, I never thought to do that before." (Really? I'm a technical person so this seems incomprehensible, but anyway.)

With a $3000 down payment, they are offering ~$300/mo for 36 months on a 12,0000/yr lease. That, plus the RV, comes to just over $37600. (It was $37800 with the $1K or $2K down payment, and ~$38500 with no down payment.) So, as best I can tell, they are building the $2000 NYS rebate into the lease payments, but pretty much ignoring the $7500 federal tax rebate. That's not a very good deal, right? With supplier pricing, just buying the car outright is just under $40K including taxes/fees (and another dealer seemed to be going even cheaper), but then I'd get to take the $7500 tax credit myself.

 

[LeftieBiker]

As long as you can qualify for the full $7500 Federal credit (it has to be all owed in one year - this one) then buying is by far your best bet. GM actually pockets $5000 of the $7500, applying just $2500 toward the lease. Sometimes leasing makes more sense, as with a Nissan Leaf, because of how the lease is structured and the risk of obsolescence. In the case of the Bolt, though, if you can afford to buy it, then that is the way to go. If you were considering buying the car when the lease ended, then this is doubly true. Buy, don't lease it.

 

[EddrivesEV]

A major consideration in the lease vs. purchase decision is that you are driving technology.

Do you still use the same cellphone now that you purchased six years ago?

Do you want to be held captive to the same technology in your EV in 2021?

With a lease, you have the ability to opt out and walk away and see what the new state of the art is at that time.

 

[winterescape]

With a $3000 down payment, they are offering ~$300/mo for 36 months on a 12,0000/yr lease. .

I never leased before this car either. As already mentioned I know that a lot will change in 3 years and want to likely get something new then.

That is the exact car I leased in June and that is very expensive. With $2,200 down I am at $250 / month. (12K miles/ year)

Lease prices have improved substantially since I leased with nationwide rollout and GM allowing supplier price, incentives, etc...

This site is great to help you compare lease cost...
http://ev-vin.blogspot.com/2016/07/current-lease-offers-for-selected-evs.html

In your area a LT is currently $2K down, $118 / month for 10K miles / year
http://www.victorchevrolet.com/Weekly-Specials

 

[SeanNelson]

Do you still use the same cellphone now that you purchased six years ago?

I had my first cell phone for 8 years, and I'd still have my Samsung Galaxy S3 today if it hadn't died on me. It did everything I needed it to.

Do you want to be held captive to the same technology in your EV in 2021?

I waited for the Bolt because it had what I wanted. It'll still have all of that in 2021.

I'm still driving a camperized 1993 Grand Voyager that I bought new almost 25 years ago, and it still does everything just as well as it did when it was new. The new Pacifica hybrid is the first thing that's come along to make me think about switching, but even then it's hard to justify when the old van still works perfectly.

Sure, something compelling might come along. But I don't usually plan for obsolescence with my purchases.

 

[LeftieBiker]

Since this topic is active, I want to post a lease offer I'm negotiating. Keep in mind that prices are high and supply limited here in NY.

I'm going back and forth with the salesman. Here's where we are:

Bolt Premiere. Silver (so no extra paint charge)

* Driver Confidence II

* DCFC

* Probably a few other minor options like cargo cover

Capitalized cost after discounts: $36660

$1000 down, $383 a month for 39 months.

10,000 mile per year lease

I don't have the residual or money factor yet, but the residual should be 55% and I'm guessing the MF is .005. If I can get the payment to $350, possibly with $2k down, then I may either order or lease a Cajun Red Premiere they have in stock. This is once I'm fairly sure the tax credit will be gone for 2018.

 

[oftheseven]

NY and CA pricing and demand will be different by here's may take on leasing. I've leased my last 4 cars:

2012 Honda Odyssey
2014 Ford Cmax Energi
2015 VW eGolf (totaled 4/17)
2017 Bolt LT - because of totaled VW
2017 Bolt LT - because 2014 Cmax lease expired

For this type of technology I've only benefited from leasing. My monthly payments have gone down from each lease and the range has improved. Only downside is insurance for Bolt is more expensive than other cars.

The residual is high for the Bolts so I don't plan to purchase after lease, except for maybe someone else's lease return.
GM isn't currently passing on the $7500 federal credit so you don't have that as an incentive but the lease deals have been getting better month to month.

My LT with fast charger, driver conv/comfort package: $39,295 MSRP lease deal was: 259/mo for 36months @ 15K miles/yr, $1000 down.

 

[michael]

As long as you can qualify for the full $7500 Federal credit (it has to be all owed in one year - this one) then buying is by far your best bet. GM actually pockets $5000 of the $7500, applying just $2500 toward the lease. Sometimes leasing makes more sense, as with a Nissan Leaf, because of how the lease is structured and the risk of obsolescence. In the case of the Bolt, though, if you can afford to buy it, then that is the way to go. If you were considering buying the car when the lease ended, then this is doubly true. Buy, don't lease it.

I do not agree with this. On an Electric car, it has generally been better to lease, leaving the leasing company with an obsolescent car and allowing you to lease the next generation.

It is NOT true that GM "pockets" some part of the tax credit. They apply it to an artificially increased residual which in turn reduces the lease payments.

Those who bought (rather than leased) a Leaf, Focus, Volt, Rav4 etc etc. are holding the bag with a tremendously depreciated car. Those who leased them turned them in after three years and got a Bolt, Gen2 Volt, etc etc.

 

[LeftieBiker]

I do not agree with this. On an Electric car, it has generally been better to lease, leaving the leasing company with an obsolescent car and allowing you to lease the next generation.

The OP is happy with the features of the Bolt, and expects to keep it. Buying is better in that circumstance, given the way GMAC leases are structured.

It is NOT true that GM "pockets" some part of the tax credit. They apply it to an artificially increased residual which in turn reduces the lease payments.

Heh. The increased residual does two things. It saves the lessee about $300 over the course of the lease (as quoted to me by a pro GMAC guy) and it makes the car too expensive to buy when the lease ends. Given the choice between "giving" GM $5000 and getting back $300 to lease a car you can't afford to later buy, or getting $7500 from the Feds to buy the car, the choice is fairly clear. The Bolt is not a 75 mile range Leaf. Its specs will still be good in five years. As long as someone wants to keep the car, buying a Bolt is much better.

 

[rocstar]

A major consideration in the lease vs. purchase decision is that you are driving technology.

Do you still use the same cellphone now that you purchased six years ago?

Do you want to be held captive to the same technology in your EV in 2021?

With a lease, you have the ability to opt out and walk away and see what the new state of the art is at that time.

I tend to be a "buy and hold" sort of person (still driving my 2001 Toyota Echo, purchased new)! But the new tech and changing state of the art makes me consider it this time around.

 

[rocstar]

For this type of technology I've only benefited from leasing. My monthly payments have gone down from each lease and the range has improved. Only downside is insurance for Bolt is more expensive than other cars.

I have noticed that all the advertised lease deals always require you be coming in off another lease. It's like, "once you're in, you're in" - but (EV tech questions aside) I have had a hard time seeing a good reason to "get in" (aside from suddenly finding myself in need and not being able to afford to buy). I can certainly see the benefit if you like to switch things up - but I hate shopping!

 

[EddrivesEV]

Do you still use the same cellphone now that you purchased six years ago?

I had my first cell phone for 8 years, and I'd still have my Samsung Galaxy S3 today if it hadn't died on me. It did everything I needed it to.

Do you want to be held captive to the same technology in your EV in 2021?

I waited for the Bolt because it had what I wanted. It'll still have all of that in 2021.

I'm still driving a camperized 1993 Grand Voyager that I bought new almost 25 years ago, and it still does everything just as well as it did when it was new. The new Pacifica hybrid is the first thing that's come along to make me think about switching, but even then it's hard to justify when the old van still works perfectly.

Sure, something compelling might come along. But I don't usually plan for obsolescence with my purchases.

You're not understanding my point, so I will make it one last time and move on:

I kept my 1983 car 13 years
I kept my 1997 car 12 years
I plan to keep my 2008 car as long as possible.

These are all pre-technology automobiles.

I then leased a 2013 Chevy Volt and replaced it with a 2017 Chevy Bolt.

These are technology automotibles; just like my iPhone 3g, 5 and 6+ are when originally I had Blackberrys, and Nokias and a Palm before technology took over the cellphone/smartphone world (they are all sitting in a box with all their accessories; want them?).

 

[rocstar]

With a $3000 down payment, they are offering ~$300/mo for 36 months on a 12,0000/yr lease. .

That is the exact car I leased in June and that is very expensive. With $2,200 down I am at $250 / month. (12K miles/ year)

This site is great to help you compare lease cost...
http://ev-vin.blogspot.com/2016/07/current-lease-offers-for-selected-evs.html

In your area a LT is currently $2K down, $118 / month for 10K miles / year
http://www.victorchevrolet.com/Weekly-Specials

Thank you very much for your comments and the links! I would seriously consider a lease at that price, even though my nature is resisting.

The Victor Chevy ad is funny - since when does a Bolt have power seats? I may have to reach out to them as well as Van Bortel which is nearby as well. They may just be trying to get rid of them - I hadn't bothered talking to those 2 dealers because they only had a couple Bolts in stock, compared to others in the area that have 10 or more.

 

[rocstar]

GM actually pockets $5000 of the $7500, applying just $2500 toward the lease.

That pretty much lines up with what I was calculating - but is this a known fact or something? I would expect them not to apply the whole thing, but I was surprised that it wasn't more. (and I was annoyed that I couldn't look at a piece of paper that would actually show me the math... )

Since this topic is active, I want to post a lease offer I'm negotiating. Keep in mind that prices are high and supply limited here in NY.

I'm going back and forth with the salesman. Here's where we are:

Bolt Premiere. Silver (so no extra paint charge)
* Driver Confidence II
* DCFC
* Probably a few other minor options like cargo cover

Capitalized cost after discounts: $36660
$1000 down, $383 a month for 39 months.
10,000 mile per year lease

I don't have the residual or money factor yet, but the residual should be 55% and I'm guessing the MF is .005. If I can get the payment to $350, possibly with $2k down, then I may either order or lease a Cajun Red Premiere they have in stock. This is once I'm fairly sure the tax credit will be gone for 2018.

Ooh, no one around here has the red! I'm not really willing to pay extra for color but I do think the red and blue both look sharp.
It also seems like the residual values around here are more like 60-61%.

Good luck with your negotiations! I am still leaning towards buying (since we can take the credit and I'm not counting on it being around after this year), but it is definitely a big purchase. So I have to do some more shopping around and decide what I want to do.

 

[LeftieBiker]

I ended up with this offer:

$36660 capitalized cost

10,000 mile lease (I drive maybe 4k miles a year since I retired) and 39 months

$2k down

$356 a month (plus tax, paid separately in NY)

Residual about $24,500. (57%)

Money factor .00199, IIRC.

If I have to get a new EV before January I'll likely get a red one with this offer. I'd have to pay the extra $400 for red. I'd also have to buy snow tires right away, so I'd be paying an extra $1k or so for the color and tires. Not a cheap proposition. They have 2 or 3 red ones in stock in Albany NY, BTW. ;-)

LeftieBiker wrote:
GM actually pockets $5000 of the $7500, applying just $2500 toward the lease.


That pretty much lines up with what I was calculating - but is this a known fact or something? I would expect them not to apply the whole thing, but I was surprised that it wasn't more. (and I was annoyed that I couldn't look at a piece of paper that would actually show me the math... )

The information is available, but considering how many people tell me this is a good thing that helps the lessee, it isn't exactly readily available from dealers or GM. They must be really modest!

 

[SeanNelson]

I tend to be a "buy and hold" sort of person (still driving my 2001 Toyota Echo, purchased new)! But the new tech and changing state of the art makes me consider it this time around.

One of the interesting wrinkles in the "tech" argument is that with Android Auto and Car Play much of the "Tech" functionality will evolve with the phone apps. So in at least some aspects the Bolt won't be left behind.

 

[winterescape]

With a $3000 down payment, they are offering ~$300/mo for 36 months on a 12,0000/yr lease. .

That is the exact car I leased in June and that is very expensive. With $2,200 down I am at $250 / month. (12K miles/ year)

This site is great to help you compare lease cost...
http://ev-vin.blogspot.com/2016/07/current-lease-offers-for-selected-evs.html

In your area a LT is currently $2K down, $118 / month for 10K miles / year
http://www.victorchevrolet.com/Weekly-Specials

Thank you very much for your comments and the links! I would seriously consider a lease at that price, even though my nature is resisting.

The Victor Chevy ad is funny - since when does a Bolt have power seats? I may have to reach out to them as well as Van Bortel which is nearby as well. They may just be trying to get rid of them - I hadn't bothered talking to those 2 dealers because they only had a couple Bolts in stock, compared to others in the area that have 10 or more.

Glad to help. I noticed that power seat error too ;-) Bob Johnson also runs a promo where they beat any advertised lease deal by $20 or $30 per month, the offer varies. http://www.rjchevrolet.com/WEEKLY-AD-NEW

also, remember that the GM dealers can "locate" a car for you. Simply meaning that they frequently swap cars with local dealers. My friend just leased from victor and the car came from bob Johnson. I would second your instinct to add Van Bortel to your list, they have a great reputation and they have been running some great Bolt lease offers http://www.vanbortelchevrolet.net/Lease-Specials

 

[JerryBob]

Don't count on getting the full $7,500 tax credit. You only get whatever your tax bill is. If you are owed a refund you get nothing. If you owe $1,000 that,s all you get.
https://www.edmunds.com/fuel-economy/the-ins-and-outs-of-electric-vehicle-tax-credits.html

 

[michael]

I do not agree with this. On an Electric car, it has generally been better to lease, leaving the leasing company with an obsolescent car and allowing you to lease the next generation.

The OP is happy with the features of the Bolt, and expects to keep it. Buying is better in that circumstance, given the way GMAC leases are structured.

It is NOT true that GM "pockets" some part of the tax credit. They apply it to an artificially increased residual which in turn reduces the lease payments.

Heh. The increased residual does two things. It saves the lessee about $300 over the course of the lease (as quoted to me by a pro GMAC guy) and it makes the car too expensive to buy when the lease ends. Given the choice between "giving" GM $5000 and getting back $300 to lease a car you can't afford to later buy, or getting $7500 from the Feds to buy the car, the choice is fairly clear. The Bolt is not a 75 mile range Leaf. Its specs will still be good in five years. As long as someone wants to keep the car, buying a Bolt is much better.

He misinformed you. If the residual increases by, for example, $5000, it saves you almost exactly that much over the duration of the lease.

Leases aren't that complicated. The total payments are the difference between the capitalized cost less the residual, plus a comparatively small amount of interest. If the capitalized cost changes or the residual changes, the total payments change by almost that same amount (excepting the carrying costs which are comparatively small)

Yes, you are right, an increased residual makes it generally unattractive to purchase at end of lease, but in the case of an EV, that hasn't been a good option in any event due to obsolescence and battery fade.

 

[DucRider]

Don't count on getting the full $7,500 tax credit. You only get whatever your tax bill is. If you are owed a refund you get nothing. If you owe $1,000 that,s all you get.
https://www.edmunds.com/fuel-economy/the-ins-and-outs-of-electric-vehicle-tax-credits.html

It is completely unrelated to what you "owe" at the time of filing (payment due or refund) , but based entirely on your tax liability for the year. Your tax bill (or refund) when you file is your tax liability minus your payments (withholding or quarterly estimated taxes are most common).