After a year of tiptoeing around the idea, Nissan has decided to provide the option of leasing battery packs to consumers. This is in an effort to mitigate any potential concern from consumers about taking care of an electric car battery, which are often the most valuable component of an EV, as well as one of the priciest items to replace or fix. Nissan has provided an estimate of $150 per month for those who are interested in leasing an EV battery.
This strategic decision on Nissan’s part reflects how tricky it can get for consumers as they consider leasing or buying their electric vehicle. The base price for a new Nissan Leaf is approximately $30,000 and rolls out into the market in limited quantities. Meanwhile, the Mitsubishi i-MiEV sells for about $47,000 in Japan, and the Chevy Volt is priced at $40,000.
Separating the monthly price for a battery lease from the original purchase price would explain how Nissan could offer the Leaf at such a competitive price, compared to other popular EVs models such as the ones listed above. While the company isn’t sure if this battery lease option will be available only for the Renault-brand EVs, they have expressed that they also want to make investing in a Nissan EV simple for consumers.
Be careful about the fine print with this option, though. BNET, an established business website, warns that leasing a battery is just basically splitting a monthly car payment into two. Car buyers should compare the rates of purchasing a battery and EV with leasing them. EV drivers will spend much less on electricity charging than they would with conventional gasoline. The economic advantage of spreading out $4000 to $5000 worth of battery lease payments would depend on prices at the pump and number of miles driven.
Nissan is also considering the option of leasing the vehicle as a whole, with batteries included. This would conglomerate the payments for consumers into one easy monthly payment, a much more attractive idea. You might want to also evaluate how residual value would come into the picture. The value of an electric car with diminished battery capability could backfire on those values.
Moreover, plug-in car batteries will have as much as 80% of their useful life left when they’re no longer powerful enough for use in EVs. A leasing firm could find other uses for them in stationary systems so that your money won’t go to complete waste should you decide to purchase your own battery. Nissan isn’t the only company considering the battery lease option: Better Place, a start-up company based in the UK, offers battery recharging and swapping services similar to the way cell phone plans work.
If your current lease is about to end and you’re considering a new lease, have you given the Toyota Prius any thought? To give you an idea of what some of the advantages and setbacks would be in committing to a Prius lease, please read on.
It is essential that you do some basic research before contacting a dealership or talking to an agent. This is so that you get an idea of what you’re going up against. Get a general lease quote from at least three different websites online. Then, compare this to the sticker price of the Prius if you were to purchase the vehicle. How do the rates compare? Would a leasing contract be more cost-effective in the long run?
Since the Prius is still a fairly new model, its life span is comparably shorter than more established Toyota vehicles, including their SUV and petroleum-fueled sedans. It may also be a harder re-sell should you decide to buy it and then sell it in a few years, according to some car experts. This is because automakers are still in the process of developing new green cars, so in a few years, there will most likely be better Priuses in the market at a cheaper cost than your older edition.
However, other auto experts contend that the Prius indeed has a good re-sell value, if you maintain its condition and perform routine check-ups. For example, Consumer Reports gives the Prius a 5 out of 5 score for reliability. A typical 2003 Prius with 62,000 miles can be sold for $15,000—much more than what you’d get for a petroleum-fueled vehicle with the same statistics.
An EV lease is calculated using three variables: sales price, residual value, and money factor. For electric cars, Toyota and other automakers will offer larger incentives if you decide to purchase or lease an EV, as compared to a regular car. On the other hand, it’s not beneficial for them to put incentives on a vehicle that is selling well even before it hits the lot, such as trucks and the Toyota Highlander.
Since leasing an electric vehicle is a fairly new phenomenon for car consumers, it may seem like an initially complicated journey that’s filled with unanswered questions and puzzling policies. People also would understandably question how cost-effective it is to lease an EV. In the past, buying was probably the only cost-effective option.
Since gasoline prices have spiked in 2008, however, electric car leases have become more prevalent and now include more favorable options than ever before. In some cases, leasing is the most cost-effective strategy. Instead, what consumers should worry about more is the supply issues that most EVs currently have. Most automakers only release a limited number of a specific EV model each season. So, if you are interested in leasing an upcoming electric car, prepare for the purchase months ahead of time since most are on a first-come, first-served basis.
For example, consider the 2012 Toyota Prius, one of the most prevalent EV models in the market today. Nowadays, Prius leases are as much as $100 higher per month than they were several months ago. This is due largely to the catastrophic events that occurred in Japan recently, which devastated the auto industry there. But car companies are jumping back quickly into the game. The Prius and other electric car models are rapidly being developed and manufactured by bulk.
Many dealers are even starting to offer leasing incentives on the Prius and other Japanese EVs again, so check with your local dealership to see what type of discounts can be applied. But also be aware of the red tape involved. Calculate how much the lease would cost you in the long run, until the end of the lease contract period. Measure this number against the out-the-door price if you were to purchase the EV instead. Which would be the better deal? Sometimes, the leasing option is the better decision.
Electric car leasing used to be limited to dealers, who could set firm rates with which the consumer would have to oblige to. Now, consumers can choose the vehicle they’d like and work either with or without a dealer to find the best deals online. Just like auto insurance and auto listings, there are hundreds of sites online that offer free leasing quotes. Many are interactive and list contact information, such as LeaseCompare.com. You’ll be able to apply for credit online too.
The North American branch of the luxury car company plans to offer 700 electric vehicles for leasing in the U.S. The ActiveE, which is based off of BMW’s 1-series compact coupe, will be available for leasing to the public in five regions: New Jersey, New York, Connecticut, Boston, and California. After a $2,250 down payment, consumers can expect to shell out $499 a month as per the leasing contract.
The company has expanded the model’s 24-month trial to new markets. The ActiveE is BMW’s second electric car. It is a prelude to its first all-electric car, the i3, which will be released into the auto market in the year 2013 and designed specifically for driving in cities and other densely populated areas.
With bold exterior lines and a luxurious cabin that is signature of BMW, the ActiveE is sure to be a prime competitor in the green car market. It features four seats and uses the same lithium ion batteries that will be used in the future edition of the i3. BMW spokespeople have declared that the battery pack is expected to produce a total range of 100 miles.
In addition, Rich Steinberg, who is the manager of EV operations for BMW in North America, stated that the company will be offering a new application for Apple and Android devices. Called “BMW Evolve,” this application will help drivers decide whether or not they would like to lease the ActiveE. This is the first type of application of its kind by a major auto corporation.
Steinberg also explained that the ActiveE’s batteries will cool or heat while still being plugged into a wall outlet for charging. This strategy will allow for the model’s 100 mile range and optimize its driving performance.
The ActiveE has a 170 horsepower electric engine. It can go from 0 to 60 miles per hour in under 9 seconds. Before the ActiveE, BMW’s first mass EV was the Mini. A total of 450 Minis was introduced to New Jersey, New York, and Los Angeles, three of the most densely populated urban cities in the country.
After the introduction of the ActiveE this fall and promoting the leasing method, BMW’s next scheduled step will be to offer its first four-cylinder engine in the U.S. market after more than a decade. The Z4 sDrive28i will be available in late fall.
Compared to Nissan, Toyota, General Motors, and other automaker giants, Mazda lags behind in the recent rush to develop green vehicles. In an effort to catch up and become a main contender, Mazda is in the process of developing its own EV for leasing and plans to begin in Japan next year. They have plans to expand to the United States and other countries if the leasing goes well.
Mazda’s EV will be based off of the design and technology of its Demio sub-compact, which is called Mazda 2 overseas. The car’s driving range is expected to be 120 miles on a single charge. The company has expressed that it is time for them to take part in the green car movement, particular to support those who are short-range commuters. And, since Mazda is based in Japan where a dense urban landscape reigns supreme, it is the perfect place to start.
The company has yet to release specific information about their latest model. Price, overseas sales plans, target numbers, and even which type of battery they plan to use is still unknown to the public. What is known thus far is that leasing of the alternate Mazda 2 will be available mainly to government organizations and company fleet customers. It will then proceed to mass consumers in Japan and has hopes to expand on a global scale.
However, Mazda definitely has its work cut out. Once the green Mazda 2 is released in 2012, it will immediately experience the fierce competition of the established Nissan EV, the Leaf. The Chevrolet Volt has already established a presence in the Japanese auto market as well. Other automakers, such as Toyota, are also planning to amplify their EV presence in that country.
Mazda officials expressed hopes that the leasing option will make their first EV model more competitive with the other companies. Though it would be a year younger than most electric vehicle models, the green Mazda 2 is currently in the making and will join the movement for greener auto technology.
Ever since General Motors introduced its Chevrolet Volt last summer, it has been pushing the appeal of leasing this EV, which is the better bargain than purchasing it, experts say. The Volt was integrated into the market after three years of buzz and skepticism from critics in the automobile arena. It GM’s first plug-in hybrid and has been said to represent the company’s green future. The sticker price is $41,000, but the leasing option pushes it up to compete against EV giants like the Nissan Leaf.
The sticker price for the Chevy Volt is more than most had expected, but for good reason. This EV can go up to 40 miles using only its electric battery before switching over to the onboard gasoline engine. Its range extender is more than 300 miles, making it ideal for daily commutes and city driving.
One of the main concerns of GM was how to successfully sell the car at that slightly pricey cost. The answer is the leasing option: With $2,500 at signing, a Volt lease is $350 per month for a three-year contract. This makes it comparable to the Nissan Leaf, which has become the Volt’s main competitor this summer.
The reason why leasing is such an influential decision on both the consumer and company’s parts is because no one is sure just how durable the lithium ion batteries are yet, not even GM. Since the Volt is a fairly untested new model, whether or not its batteries are going to be long-lasting will have to be put to the test by the first wave of its drivers. The only thing certain at this point is that its batteries will be costly to replace if an issue were to turn up.
The lease deals with this uncertainty and can put consumers more at ease. They wouldn’t have to worry about the well-being of the lithium ion batteries in the long run because the contract would be for three years, at which point they can return the EV back to the dealership. GM has stated that this takes quite a load of worry off the consumer.
Meanwhile, the Leaf is an all-electric vehicle that can cover 100 miles on a full charge. However, unlike the Volt, it has no range extending gas engine. The Leaf leases for $1,999 at signing and $349 per month. Its sticker price is $32,780, but the current $7,500 tax credit incentive knocks its final base price to just $25,280.
Additional state incentives, according to which state you reside in, would further chip away at the price you pay. In Georgia and California, for example, the government will deduct $5,000 off of your purchase. In Oregon, expect to pay $1,500 less than the sticker price.
Volt production will be limited to 10,000 vehicles this year and available only in six states: California, Connecticut, Michigan, New Jersey, New York, and Texas. The first deliveries of the Volt will begin this November.
This summer, car giant Volvo announced that it is on the lookout for 400 pre-adopters to test the prototype of its C30 electric car, an all-battery powered 24 kWh vehicle. This limited range, special edition vehicle will be leased for just a cool $2,100 per month to those lucky 400 people.
The intentions of the prototype is to help identify technological challenges, such as battery packaging and various safety issues. Volvo boasts that the C30 is a cool and fun-to-drive vehicle, and have hopes that it will soon become good competition with leading EVs in the market, including the Toyota Prius, Chevy Volt, and Nissan Leaf.
Powered by a lithium ion battery, the electric C30 can reach a top speed of 81 miles per hour and a range of 94 miles. Before it handed over the keys to the 400 leasers, Volvo began building the test fleet last year. The battery itself can be charged through a regular household power outlet and requires eight hours for a full charge. The lease contract is for a two-year period.
To any given EV enthusiast, the trade off is understandably steep but possibly worth the hefty price tag. A car buyer can either invest in the standard C30, four-passenger, two-door hatchback. Or, for over seven times more that cost, he or she can cruise around town in its exotic, much more eco-friendly sibling.
The news of this leasing price represents just how expensive developing a marketable electric vehicle can be since the market is still in its growing stage. In related news, Nissan expressed displeasure at the fact that many automakers in the country are retailing their famous Leaf model for $32,780, even before the government’s $7,500 tax credit to the car buyer.
To break even with the leasing price offered to its customers, Volvo is appealing to a cluster of heavily subsidized, green organizations, and government fleet users to soften the blow of the price hit once the company launches its upcoming EV. They estimate that 300 C30 models could be leased in Europe and 100 in the U.S., with 50 available on the West Coast and the other 50 on the East Coast.
This leasing strategy on Volvo’s part sounds like a win-win situation for them so far. If the plan goes well, it would also benefit green corporations as well as other EV advocating entities.
Once you’ve made the big decision to purchase an electric car, the next step is to figure out whether or not to lease or buy your chosen model. Though this is an issue that all car consumers have to mull over, there are additional elements that come into play with EVs. Below are helpful points on federal and state subsidies to consider as you research your ideal plug-in car deal.
Local, state, and federal incentives: More than ever, it’s time to take advantage of all the subsidies and incentives that the U.S. government offers to those who are purchasing electric cars. If your vehicle meets a certain criteria, and it will, there is a cornucopia of rebates, credits, and other nifty perks for green cars. The most you can receive as a tax credit is $7.500. Cars that qualify for this amount include the Chevy Volt, Nissan Leaf, and Tesla Roadster.
When you lease an electric vehicle, the federal tax credit technically goes to the lease provider. In effect, you’re giving up the lump sum in favor of lower monthly payments, which works out in your favor ultimately. It’s a win-win situation for both the leaser as well as the person who’s leasing.
Additionally, at the state level, the rebate potential can knock off hundreds, if not thousands, of dollars from the final cost of your EV. For example, in California where hybrid vehicles are becoming exponentially popular, many electric cars qualify for up to $5,000 in rebates, including the Leaf, Roadster, and Toyota Prius. (Note: The Volt currently doesn’t meet the state’s AT-PZEV requirement and thus doesn’t qualify for the full rebate).
But ride this wave of incentive quickly, as government incentives are expected to level off once EVs become a more stabilized part of the car market. These bonuses might not necessarily be available after this “adopter” phase. For instance, the $7,500 federal tax credit is predicted by experts to be phased out after the first 200,000 qualifying vehicles are sold by a particular manufacturer. California’s Clean Vehicle Rebate Project offers rebates on a first-come, first-served basis as well, until its $9.1 million worth of funds dries up.
To find out the specific criteria of your region for subsidies on leased EVs, contact your state’s energy office website, talk to your auto insurance agent, and check out the Department of Energy’s guide to tax breaks.
Do you have any additional tips in terms of taking advantage of government EV incentives?
If you’re reading this, chances are you’ve been considering an electric car as your next big investment. What are some of the most significant advantages of leasing your EV?
Leasing is probably the easiest way to get a brand new EV into your garage. This is because when you’re leasing, you’re less likely required to slap down a hefty down payment before you get to take the keys. Instead, the other party will allow you to sign the paperwork for it and pay monthly installments. There’s little hassle and no great initial expense with this method. The same applies towards the end of your lease: You won’t have to worry about ever dealing with a very large lump of cash at any particular time.
Since you never technically owned the car, you won’t have to suffer the setbacks of depreciation either. At the end of the contract then, you’ll be able to drive away with yet another new vehicle without a lot of red tape. For example, if you plan on buying a 2012 Coda Sedan next year, you can simply swap your existing lease over to that vehicle and enjoy the benefits right away. Or, if you don’t like the car for some reason, you can simply walk away once the lease period ends and there will be no strings attached.
Yet another advantage is being able to drive your EV under a warranty. Since electric vehicles are currently a growing market, with the leasing method, you’ll always be on the cutting edge of what’s hot because you can simply switch over to the next car you’re eyeing.
Most lease policies contain a mileage limit in the fine print. You’ll have to worry about this much less with an EV compared to a conventional gas guzzler though. This is because you’ll be less likely to break the limit since EVs have a more limited range. However, if you do drive the car to its full range every time you take it for a spin, then you might have to be more cautious about this.
Do you know of any other advantages of leasing an electric car? Please share.
In another blog post, we talked about some of the best advantages of leasing your electric vehicle. It’s not all rainbows and butterflies with this method, however. Below are some potential setbacks to look out for should you decide to lease your new EV.
Though you’ll be paying a lot less with the down payment, leasing is likely to cost more in the long run, since finance charges are often at a higher rate this way. You’ll also be substantially penalized should you decide to break the leasing contract earlier than the end date, for some reason. Once you lease a car, whether or not it’s a plug-in hybrid, the best bet is to stick through until the contract is over. And, just like when you rent an apartment, leasing an EV is like paying a good amount every month for something you won’t ultimately get to keep.
With a leased electric vehicle, you’ll be having less freedom in terms of what you can do. Leasing a car is almost like renting it for a long period of time. Once you return the vehicle, the leaser will expect the car to be in good shape. If you have a dog who likes to chew on the leather interior, or if you tend to bump your front gate from time to time as you back out of your driveway, these defects will probably slap you on the hand with a fee at the end of your contract.
In contrast to the above, if you decide to buy your new electric car, you could essentially do whatever you’d like to the car, and no one would penalize you a fee for it (though of course, this is highly recommended against since it will decrease its retail value). If you get attached to the car, you’ll be able to keep it, instead of having to give it up again to the leaser.
Moreover, you won’t have to stay within a specific mileage limit or keep it for a certain time frame. Leasing contracts will set up a criterion you must adhere to, but with a purchased EV, you’ll have a lot more freedom and leeway.
Do you have any other cons of leasing an EV?