End of Lease Decision Framework

[JJMcCoySeattle]

Hi All

I'm about 1 year in to my 2-year lease on a 2012 Leaf. Everything's working well. With my partner using the Leaf for a long-ish commute (30 mi each way) several days a week, we'll be on track to use most of the 24,000 miles on the lease agreement. And we're saving quite a lot on gas (especially with free Level 1 charging at my partner's work).

I'm fully sold on EVs, but I'm starting to think through whether I'd continue leasing this car or trade up to a newer model when the time comes.

I've never leased or renewed a lease before. Does anyone have a line on what 2nd stage lease deals Nissan might be offering and how to think through the terms and price? I suspect that Nissan's discounting and performance enhancements on the 2013 model will make the residual in my contract feel rather high, if that's the basis for continuing a lease.

Thanks in advance.

 

[DaveinOlyWA]

i am also a leasing newbie and did not know a "re-lease" was an option. if it is, it has been hush hush so far. Now, a purchase is an option but with so much more to come in the (hopefully) very near future, I think leasing right now is the way to go. I will be leasing again in 2014. As far as 2 year or 3? have to see what is being offered. generally 2 year leases give the better deal although I find it difficult to understand that logic but we shall see in 4 months

 

[babynuke]

This is what I was told this past Friday when I picked up my new 2013 leased LEAF Model S.
I asked specifically if I was to lease again in 3 years, would I have to pay anything down like I did this time going from a car I owned to a lease.
They said no, only the fees and taxes on the new lease and whatever options I chose.
Ty

 

[DaveinOlyWA]

oic. i am completely missing the point. Yes, re-leasing a NEW LEAF is definitely an option and I will exercise this Jan but not sure that is what the OP is saying

I'm fully sold on EVs, but I'm starting to think through whether I'd continue leasing this car or trade up to a newer model when the time comes.

 

[EatsShootsandLeafs]

"renewing" a lease isn't a thing; it doesn't exist.

At end of lease you have three options:

1) Bail from a leaf entirely; turn it in and be done with it
2) Buy the car at whatever the residual is (you can see your lease doc to find that out)
3) Lease a new leaf

You may get a discount on a new leaf (maybe) if you already have leased one and/or you may be able to get out of your current lease a few months early if desperate to lease a new vehicle from Nissan (sometimes manufacturers offer this without penalty).

 

[TomT]

Rule 1: Don't believe anything a dealer tells you unless independently verified!

This is what I was told this past Friday when I picked up my new 2013 leased LEAF Model S.
I asked specifically if I was to lease again in 3 years, would I have to pay anything down like I did this time going from a car I owned to a lease.
They said no, only the fees and taxes on the new lease and whatever options I chose.

 

[SanDust]

At end of lease you have three options:

1) Bail from a leaf entirely; turn it in and be done with it
2) Buy the car at whatever the residual is (you can see your lease doc to find that out)
3) Lease a new leaf

I believe you can also extend the lease for nine months. That might be of interest if a new model you're interested in is coming but you need a few months.

 

[mkjayakumar]

I called NMAC and they told me that I can get out of this Lease and into a new Nissan lease:

- 3 months ahead with no penality
- Nissan pays $1000 towards your next purchase

 

[Bazooka]

I've also been wondering about what my options will be at the end of my Leaf lease (Leafease?) in early 2015. Given the very high proportion of Leafs that are leased, I believe I heard recently online that it's over 90%, I would not be surprised at all if Nissan did one or both of the following to avoid having a lot of them come back all at once:

1. Offer a "residual rebate", e.g. buy the car at the residual value in the lease terms, minus some incentive of, perhaps, a couple of thou$and.

2. Offer to extend the lease for one or two years with full battery coverage and at a reduced rate, to reflect the depreciation that's already taken its toll on the value of the car.

Depending on the likely deals, I doubt I would be interested in option 1, simply because there will surely be some very tasty options, including the Leaf 2.0, on the market by then (or soon after). But I do love my Leaf, so if I could get one more year at something like a 30% lower monthly payment, I'd be very tempted. Two more years might be stretching it -- the siren call of those new models, and all that.

 

[morlglums]

I've also been wondering about what my options will be at the end of my Leaf lease (Leafease?) in early 2015. Given the very high proportion of Leafs that are leased, I believe I heard recently online that it's over 90%, I would not be surprised at all if Nissan did one or both of the following to avoid having a lot of them come back all at once:

1. Offer a "residual rebate", e.g. buy the car at the residual value in the lease terms, minus some incentive of, perhaps, a couple of thou$and.

2. Offer to extend the lease for one or two years with full battery coverage and at a reduced rate, to reflect the depreciation that's already taken its toll on the value of the car.

Depending on the likely deals, I doubt I would be interested in option 1, simply because there will surely be some very tasty options, including the Leaf 2.0, on the market by then (or soon after). But I do love my Leaf, so if I could get one more year at something like a 30% lower monthly payment, I'd be very tempted. Two more years might be stretching it -- the siren call of those new models, and all that.

Is there any precedent for either of these cases? I am unfamiliar with leasing (the Leaf is my 1st), but I thought the only option was to buy-out or walk away. You assume there will be a "glut" of returned cars in couple of years, but in comparison to any other Nissan model, won't these numbers be tiny?

I for one would seriously consider option 1...it sounds like the residual for similar cars leased just a month or two after mine (june '13) are much lower.

-m

 

[Deleted member 9549]

"renewing" a lease isn't a thing; it doesn't exist.

At end of lease you have three options:

1) Bail from a leaf entirely; turn it in and be done with it
2) Buy the car at whatever the residual is (you can see your lease doc to find that out)
3) Lease a new leaf

4) you can try to extend your lease at the same rate. This is usually approved for 3 months, sometimes for a second 3 months. It's not automatic, need to call NMAC and request it close to the end of the lease.

 

[JJMcCoySeattle]

Interesting discussion. I would hope that there would be some creative thinking from Nissan at the end of the lease period here. I'll have to think about the math more, but I sense there may be some zone of mutual benefit for me and for Nissan, if we can both be flexible.

From my perspective, if my only option is to buy the car for the stated residual, then I'm certainly incentivized to turn the car back in and let Nissan take the loss.

From their perspective, they have to know this will happen, a lot, on the leases they signed in 2012. So I have to think they're incentivized to be creative with extensions. Especially with eco-minded consumers who aren't going to want another car's production emissions on their conscience.

Somewhere in there, there's an extension payment amount that we both might like. If they offered me another year or two at 90% my current monthly payment, I'd probably do it.

 

[malloryk]

I need help figuring out what to do with my lease. It's up the beginning of Jan, the residual is $15,934, there's almost 19K miles on the car. I have a 4-mile commute and I still have all my capacity bars but I do notice a drop in range. But I make very few long-distance trips. What would you do?

 

[LTLFTcomposite]

Buyout is not totally uninteresting as I doubt I could find another car that nice for 15 and change. One nice thing about the car I have is I know where it has been and how it has been treated. I don't mind a used car but whenever possible I like to have been the guy that used it
Wild cards are what happens with the battery warranty, and is it possible they will replace it with the new hot weather battery. I wouldn't buy the car at the residual price with the existing battery that is in decline. Even if they put a new improved battery in it before the lease ends there are concerns... being out of warranty, there's no telling what else could go, there's no history as to what repairs will cost, and zero alternatives to get it fixed anywhere other than Nissan. Car craps out, they tell me I need a flux capacitor for $3500 and I just have to take it in the chin. Put all that together and leasing a new one looks pretty good if I can get the right deal.

 

[Deleted member 9549]

In general, I think the technology is still developing too quickly to make purchasing the best choice. Nissan and most others are offering awesome lease deals. All lease deals are not created equal. I've seen the same car listed for almost double the lease payment.

I'd say look at what lease deal you can get on a new lease. It may surprise you and be much lower than your old used vehicle. Its a new car so you don't have to worry about how its been treated. Its a lease so you don't have to worry about battery degradation, or a better battery coming out in a couple of years. VPP can help.

 

[SanDust]

I need help figuring out what to do with my lease. It's up the beginning of Jan, the residual is $15,934, there's almost 19K miles on the car. I have a 4-mile commute and I still have all my capacity bars but I do notice a drop in range. But I make very few long-distance trips. What would you do?

Your residual is a few thousand above the fair market value. Basically you made a good decision when you leased because the residual turned out to be lower than the lessor bet it would. Buying the car at the residual turns the win into a loss. That doesn't make a lot of sense.

If Nissan is willing to sell it to you below the residual then that might work. Otherwise look at leasing a new Leaf, Spark EV or a Fiat 500e. You'd get $2500 from CARB if you leased a new car, you'd be avoiding the $2500 loss on your Leaf, and you wouldn't be on the hook for repairs. Three more years of worry free driving for less money seems like a deal. You might also want to look at certified Leaf resales. No idea what the prices on those are.
Long terms EV relationships require a TMS. Short term flings do not.

 

[edatoakrun]

I need help figuring out what to do with my lease. It's up the beginning of Jan, the residual is $15,934, there's almost 19K miles on the car. I have a 4-mile commute and I still have all my capacity bars but I do notice a drop in range. But I make very few long-distance trips. What would you do?

Your residual is a few thousand above the fair market value...

Actually, the retail value of your LEAF today would appear to likely be above your residual today:

http://motors.completed.shop.ebay.com/Cars-Trucks-/6001/i.html?LH_Complete=1&Make=Nissan&_nkw=leaf%20&_cqr=true&_dmpt=US_Cars_Trucks&_gcs=13&_ipg=50&_nkwusc=LEAQF&_pcats=6000&_sofindtype=22&_sop=7&_rdc=2&_trksid=m194&ssPageName=STRK:MEFSRCHX:SRCH" onclick="window.open(this.href);return false;

But that could change in the next few months, as BEV prices are very volatile, fluctuating with both gas prices and the changing sales/lease deals offered on new BEVs.

IMO, you never really know what a used car is worth, at a given time in a local market, until you get the high offer.

See what the '14 LEAFs (and other new BEVs) offer next year. Maybe there will be a better option for you then.

Remember, the transaction costs on a car sale/lease are very high in CA (Sales tax and other fees) so take these costs into account, when it is time to make your decision.

 

[LTLFTcomposite]

The other variable is condition, ranging from garage kept cream puffs to rolling fast food garbage cans.

 

[malloryk]

hhmmm, thanks, everyone for your input. I guess now I'm leaning toward turning it in and getting something new. I really didn't want to get into a new lease but it's looking like it's the best option right now. And there's no way I can go back to gas. I considered a plug-in hybrid but... I just don't want another gas engine. I might go test drive that Spark.

 

[DaveinOlyWA]

I need help figuring out what to do with my lease. It's up the beginning of Jan, the residual is $15,934, there's almost 19K miles on the car. I have a 4-mile commute and I still have all my capacity bars but I do notice a drop in range. But I make very few long-distance trips. What would you do?

tough decision but have to stick by my statement that the LEAF is currently not a car worth buying so I would re lease a new 2014. the scuttlebutt says you can extend your lease X months (have heard various figures) but might be worth

a) extending lease to get a 2014
b) extending lease then taking advantage of lower prices during 2013 MY fire sale

either way; you will get the loyalty discount as a current LEAFer so I would have to say your best bet is to upgrade to new

but then again; it all really boils down to how good a deal you can wrangle on your new lease.