Better to buy or lease an electric car?

leaf-brick-building1editors-blog-entry3I’ve never understood car leasing. Economically, it just doesn’t seem to make sense. If saving money is the goal, it makes a whole lot more sense to buy a used car rather than to lease one.

In fact, in almost any other situation — except for the one we’re about to face (assuming affordable production EVs actually arrive here in Colorado sometime 😉 – I would never consider leasing.

But this situation is different. You see, with EVs, the whole technological leap-frogging issue is far more pronounced than with gasoline cars.

Most U.S. consumers are buying their LEAF

leaf-tiny Have you been wondering what percentage of consumers are buying a Nissan LEAF in the U.S. as opposed to leasing one?

We certainly have, especially since well over 4,000 Nissan LEAFs have been delivered in the U.S. so far.

A source who you could say is “in the know” on this told us that up to 90% of consumers who’ve had a LEAF delivered in the U.S. have opted to buy rather than lease.
That’s almost precisely the opposite of what Nissan anticipated, our source tells us.

We’re not as surprised as Nissan.
Given the late 1990s and early 2000s GM and Toyota debacles, which saw the automakers confiscate leased EVs from consumers and destroy them, we can see why, this time around, a lot of early EV adopters would want to ensure this doesn’t happen to them. After all, when you buy a car, the carmaker cannot take that car back.

But it’s hard to believe that this is the only reason so many people appear to be buying, rather than leasing, Nissan LEAFs.

What do you think, why are more people in the U.S. apparently buying LEAFs than leasing them, at least so far?

[If you know anything more about what’s going on in the U.S. in terms of people buying or leasing a LEAF and/or about what’s going on in the UK, Japan, and other LEAF markets, in terms of leasing vs. buying, we’d love to hear from you!]

19 years with same Acura Integra
Buy a gas car tomorrow, and you can be pretty sure the basic technologies that run the car aren’t going to radically change or become hugely cheaper overnight. I am, after all, driving around in the same 1992 Acura Integra I bought new off the lot 19 years ago, and, believe me, it can more than hold its own against any comparable brand new car model on all the important measures, except, possibly, on safety (it has no air bags or anti-lock brakes).

But buy an EV tomorrow, and you can be pretty certain that battery technology, and even EV technology, will be a lot better five years from now and, furthermore, that this technology will be light years better 10 years from now.

And I’m not even going to talk about EV technology 20 years from now. Because if I do everyone will think I’m absolutely crazy to think I’m going to be able to pull off the same 19-year gig I’ve done with my Integra with any new electric car we happen to buy within the next year or so.

19 years with a 2012 EV?
Basically, buy an a production EV such as a Nissan LEAF, Mitsubishi iMiEV, Ford Focus Electric, etc. sometime within the next year or so and you can pretty much expect that the technology you’re driving – especially the battery technology – will be quickly outdated and overtaken.

Technologically speaking, then, leasing an EV makes a lot of sense. Sign onto a three-year lease, wait for EV technology to improve and then buy a newer, better, technologically superior EV after three years, or maybe do two separate three-year leases on two different EVs and then buy a new EV six years from now.

However, economically speaking, the advantage isn’t nearly so clear. In fact, to me, leasing an EV – or any car – seems like a waste of money. You’ll never recoup the $400+ monthly payments for, say, a 2012 Nissan LEAF, and, after three years, you will have forked over something approaching $20,000 (with the deposit, fees, etc.) with no hope of any long-term payback — for instance, in the form of multiple years of maintenance-free, payment free driving — on that money.

Battery pack replacement cost?
Meanwhile, if you buy a new EV, and you’ve got good federal and state tax credits – for us, $7,500 federal credit and $6,000 State of Colorado credit for a total of $13,500 — you may be pretty darn close to paying off your EV after your first three years. Plus, you’re looking at no significant cash outlays for your EV for at least five, maybe seven, years thereafter depending on the life of your battery pack.

[Battery pack replacement cost for a LEAF, Focus Electric, etc. is something I would like to know more about, something I haven’t seen any media report on, and something which I plan on researching soon.]

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In comparison to someone who buys an EV outright, those who lease are looking at three years of additional lease payments after their first three-year lease runs out, or five, or more, years of car payments if they decide to buy their second EV rather than lease it.

Buying looks better than leasing
On the other hand, in theory, those who opt to lease their first EV will be able to more easily and quickly make the move to new and improved EV technology.

In the end, I’m pretty sure we’re going to buy our EV, rather than lease, even though I feel a bit anxious about buying “old” technology.

What about you? What are you going to do – and why?


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