I just can't find the info I need. In 3-4 weeks my Leaf will be here. I opted for a lease, but I will purchase if it is significantly cheaper to do so. I live in Washington. As far as I know, Washington exempts sales tax for purchase of electric vehicles, unless I'm wrong and that maybe expired December 2010? My sales quote is $385/month lease, with 2K down. At a meet-up with the sales guy he mentioned "of course, the price will go up with the addition of state sales tax to the monthly payment." Ugh. Does WA state charge the tax on the lease of a electric vehicle? If the price goes up any more, It might be worth it to make the purchase instead. So... has anyone in Washington state got the straight skinny on the pros and cons between the lease and the purchase?
Lease versus purchase (buy)
- Thread starter Livemeyer
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SteveInSeattle
Well-known member
I know for certain that there is no sales tax on a purchase.
derekjsmith
Well-known member
Livemeyer said:
Yes we leased and no (WA) sales tax on the monthly lease payment until Jan 2014. We have a 39 month lease so at the worst we end up paying tax on the last couple of payments. But the most likely will be we have already traded in it on a Leaf Gen II/III or a ESFlow or whatever it will be called.
A
Anonymous
Guest
Correct, no tax on the Leaf either way (purchase or lease) at least for now.
I went over the numbers with my dealer, and his numbers lined up exactly with my calculations so I believe him. Comparing a 3-year purchase versus a 3-year lease with buy-out at the end, you DO save a little money by purchasing. However, that difference for me (.00204 money factor for lease, or a 4% loan for purchase) only worked out to be about $900 savings. The other factor was that for a lease, your monthly payments would be significantly lower (like half) for the first three years, then you write a massive check for the remainder. Basically a balloon payment at the end.
The numbers change a bit if you do a longer loan term, obviously. Another scenario he ran for me was this:
Purchase: 5-year loan @ 4%
Lease: 3 year lease, then finance the buyout for another 3 years (6 years of payment, 4%)
I think that scenario came up with about $1700 savings if you buy
For me, personally, I opted to lease. Worst case, I figure, my wife falls in love with the car and doesn't want to give it up at the end of the lease. It means that we'll essentially spend an extra 900, but the first three year payments are lower so it essentially delays half the payments until that 3-year mark. This is a pretty cheap safety net in the case that in 3 years there is a "better" EV out there that we would want to move into.
SO, my opinion is that FINANCIALLY speaking (at least for my credit tier), it's better to lease unless you KNOW you want to own the car for it's entire life. HOWEVER, it's really a personal thing. What are you planning to do with the car? Mod it out? Put on a LOT of miles? Put on VERY FEW miles? All of those decisions come into play, and everyone has their own desires and ideas of what they're going to do with their car, so there isn't one decision that is right for everyone. This is the first vehicle I have ever leased, because I tend to take great ownership in my vehicles and I want them to be MINE, but for the Leaf there are just too many unknowns for me and I feel a Lease is the safest option. For my needs, anyway.
Oh, I should also add that with a lease, the condition of the vehicle when you turn it in can come into play. I'm not sure how all that works, but if you're planning to abuse it, that might come into play as well!
I went over the numbers with my dealer, and his numbers lined up exactly with my calculations so I believe him. Comparing a 3-year purchase versus a 3-year lease with buy-out at the end, you DO save a little money by purchasing. However, that difference for me (.00204 money factor for lease, or a 4% loan for purchase) only worked out to be about $900 savings. The other factor was that for a lease, your monthly payments would be significantly lower (like half) for the first three years, then you write a massive check for the remainder. Basically a balloon payment at the end.
The numbers change a bit if you do a longer loan term, obviously. Another scenario he ran for me was this:
Purchase: 5-year loan @ 4%
Lease: 3 year lease, then finance the buyout for another 3 years (6 years of payment, 4%)
I think that scenario came up with about $1700 savings if you buy
For me, personally, I opted to lease. Worst case, I figure, my wife falls in love with the car and doesn't want to give it up at the end of the lease. It means that we'll essentially spend an extra 900, but the first three year payments are lower so it essentially delays half the payments until that 3-year mark. This is a pretty cheap safety net in the case that in 3 years there is a "better" EV out there that we would want to move into.
SO, my opinion is that FINANCIALLY speaking (at least for my credit tier), it's better to lease unless you KNOW you want to own the car for it's entire life. HOWEVER, it's really a personal thing. What are you planning to do with the car? Mod it out? Put on a LOT of miles? Put on VERY FEW miles? All of those decisions come into play, and everyone has their own desires and ideas of what they're going to do with their car, so there isn't one decision that is right for everyone. This is the first vehicle I have ever leased, because I tend to take great ownership in my vehicles and I want them to be MINE, but for the Leaf there are just too many unknowns for me and I feel a Lease is the safest option. For my needs, anyway.
Oh, I should also add that with a lease, the condition of the vehicle when you turn it in can come into play. I'm not sure how all that works, but if you're planning to abuse it, that might come into play as well!
evnow
Well-known member
In this sub-forum there are a couple of stickies. Look at them, there is more info than you would ever wantLivemeyer said:
lemketron
Well-known member
I'm still trying to wrap my head around this. I "get" that some people may want to just hand the car back at the end of the lease, and that was my thinking last year too.blorg said:
But along with that goes the idea of having paid, what, $350-$400/month for three years? (I have no idea what the lease payments work out to...?) That's $11K to $15K that you're also "walking away from".
This is compared to buying... in CA with both tax credits I end up paying a little over $20K for the car, so it looks like the "gamble" is asking whether or not the car will still be worth $5K at the end of the third year, right? Or $10K even. If it is, then (at least in CA) buying would seem to totally make sense (to me anyway).
Yes, there will be more choices available in three years, but I just can't imagine that any of them are going to significantly erode the value of the Leaf so much that it would be worth less than $10K.
Am I missing something? (I'm definitely interested in this very timely topic as tonight my dashboard changed from "June" to "week of April 22", even though I have not received any "seven days to delivery" email.)
davewill
Well-known member
The only thing you missed is that even with the lease, the 5K CA rebate still goes in your pocket, so reduce that 11-15k by that much.lemketron said:
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Anonymous
Guest
NOT being in CA, the breaks I get are the 7500 tax credit and no sales tax.
Lease is $350/month for 3 years (plus about $2k down payment for what I did), residual at the end of that (what I would buy the car out at the end if I wanted to) would be about $15k (can't remember the exact number, it's in my paperwork).
Yes, it means I'm paying about $14k to "rent" the vehicle for 3 years.
BUYING, if I did the same 3-year term, would effectively double my monthly payment. So leasing, then buying at the end, it means I'm pushing off half my monthly payment 3 years down the road, and I'm paying $900 to do so. But the other benefit is that at the end of those three years, I get to decide AT THAT POINT whether it is worthwhile to own it, or if I would rather upgrade to something new.
What will my Leaf be worth in 3 years? More than $15k? Then it would probably be better to buy. If EV prices continue to drop and continue to increase range, etc, then the first generation Leaf might be worth less than $15k.
Essentially I'm POTENTIALLY paying an extra $900 to hedge my bet as to whether we still like the car in 3 years and how much it's worth at that time.
Now, regarding the tax credit and whatnot, that's all built into the lease price. That means that if I give the car back in 3 years, I really only got half of that tax credit, since I only paid for half the car. So that could factor into it as well.
Basically, for me, it comes down to the fact that I don't hold a lot of faith in v1 of a totally new style of vehicle, and I also certainly don't hold a lot of faith in Nissan customer service based on how they have treated me with my Murano and how they treat others on various Nissan owner forums. So FOR ME, leasing is definitely the right choice. I'm not saying it is for everyone, but for me and my situation, it's definitely worth it to me to have that extra protection.
Lease is $350/month for 3 years (plus about $2k down payment for what I did), residual at the end of that (what I would buy the car out at the end if I wanted to) would be about $15k (can't remember the exact number, it's in my paperwork).
Yes, it means I'm paying about $14k to "rent" the vehicle for 3 years.
BUYING, if I did the same 3-year term, would effectively double my monthly payment. So leasing, then buying at the end, it means I'm pushing off half my monthly payment 3 years down the road, and I'm paying $900 to do so. But the other benefit is that at the end of those three years, I get to decide AT THAT POINT whether it is worthwhile to own it, or if I would rather upgrade to something new.
What will my Leaf be worth in 3 years? More than $15k? Then it would probably be better to buy. If EV prices continue to drop and continue to increase range, etc, then the first generation Leaf might be worth less than $15k.
Essentially I'm POTENTIALLY paying an extra $900 to hedge my bet as to whether we still like the car in 3 years and how much it's worth at that time.
Now, regarding the tax credit and whatnot, that's all built into the lease price. That means that if I give the car back in 3 years, I really only got half of that tax credit, since I only paid for half the car. So that could factor into it as well.
Basically, for me, it comes down to the fact that I don't hold a lot of faith in v1 of a totally new style of vehicle, and I also certainly don't hold a lot of faith in Nissan customer service based on how they have treated me with my Murano and how they treat others on various Nissan owner forums. So FOR ME, leasing is definitely the right choice. I'm not saying it is for everyone, but for me and my situation, it's definitely worth it to me to have that extra protection.
My dealer, Nissan Sunnyvale, says that if leasing, you need to pay sales tax on the $7,500 credit, reducing it to $5,833.56. The quoted lease -- 36 months, 12k miles per year, 45% residual, 9.5% local sales tax -- amounted to $557.08/month. Ok, this includes the $820 destination charge, and doesn't include a $2,000 down payment like Nissan uses to come up with their $379/month Leaf SL lease number, but it still seems crazy high to me.
HIOJim
Well-known member
And don't forget that leasing is not the same as buying. Want to add tinted windows? You better buy. Want to mod the sound system? Not if you lease. Feel like adding some of the many mods that are already on the table or sure to come? Gotta buy.
Of course, if you can't get the tax credits, lease. But leasing definitely has its down side and should not be discounted.
Of course, if you can't get the tax credits, lease. But leasing definitely has its down side and should not be discounted.
A
Anonymous
Guest
HIOJim said:
That's another good point I forgot to mention. Definitely if you want to mod your car, buying is better. And there's the mileage restriction as well. Both those things don't really affect me (at least for the Leaf) so I kind of forgot about that.
FYI, depending on your lease, some things like window tinting CAN be done to your lease vehicle. Depends on what your leasing company (or dealer?) allow. I was told that tinting the windows would be perfectly fine, but it would be better to have THEM do it and have the price wrapped into the lease.
garygid
Well-known member
Only $900 "penalty" for leasing?
Sounds too low for CA.
Maybe $900 per year?
I thought the "penalty" for lease-then-buy over cash-buy
was about $3500, ignoring time-value of money.
Roughly 5% of 30k = $1500 a year x 3 = $4500.
Am I mistaken (again)?
Sounds too low for CA.
Maybe $900 per year?
I thought the "penalty" for lease-then-buy over cash-buy
was about $3500, ignoring time-value of money.
Roughly 5% of 30k = $1500 a year x 3 = $4500.
Am I mistaken (again)?
wwhitney
Well-known member
The penalty is $900 in fees, plus whatever interest you pay on the lease.garygid said:
If you want to minimize that interest, then you should do a one pay lease. Then you are just paying interest on the residual for the term of the lease. E.g. 4.9% * 3 years * $16,000 or so (if I recall correctly). That makes $2,400.
So the minimum penalty for leasing, with a 0% discount rate, is $3,300. Of course a 0% discount rate isn't reasonable; if you use a 3% discount rate, the penalty is only $1,860.
Cheers, Wayne
LEAFfan
Well-known member
garygid said:
You need to quantify your figures because in my case, leasing is MUCH less expensive than buying. All you 'rich' people seem to forget that not everyone can get the full $7500. If I were still working full time, no problem, but I'm semi-retired now, so I can receive the full $7500 off with leasing. Another great advantage of leasing is that in about 3 years or so, I will be able to choose a different EV if there are big changes and improvements, such as the VW Golf E-Motion. :mrgreen:
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Anonymous
Guest
OK, hopefully this isn't violating any agreement I have with my dealer or anything, just wanted to put in the details of my lease. The dates aren't correct, of course, because this was an estimate he ran for me before I actually picked up the car. The new numbers lined up almost exactly, with the exception being that I adjusted the term and down payment a little bit:
Quote Number: 68225
1) Contract Date: 01/21/11
2) First Payment Date: 02/20/11
3) Stock Number:
4) M.S.R.P.: $ 35,775.00
5) Initial Cap Cost: $ 34,800.00 Adjusted Cap Cost: $ 26,264.81
6) Mileage Penalty:
7) Term: 36 Base Monthly Rental: $ 368.81
8) L.E.V.%: 45.00%
9) Money Fact Sell Rate: 0.00204
10) Lease-end Value: $ 16,098.75
11) Add To MSRP W/Markup:
12) Customer Cash Down: $ 2,384.00
13) Rebate: $ 7,500.00
14) Total Sales Tax:
15) Total Front We Owes:
16) Total Insurance:
17) Total Add Cap Costs: $ 595.00
18) Cash Cap Reduction: $ 1,630.19
19) Total Trade Allow:
20) Security Deposit:
21) License Fee: $ 200.00
22) Title Fee: $ 35.00
23) Total Initial Fees: $ 185.00
24) CapTax1 Rt/Amt: .0000%
25) Amount Due At Start: $ 2,384.00
26) Total Working Cash: $ 2,384.00
27) Total Monthly Payment: $ 368.81
First Monthly Payment....... 368.81
License Fee................. 200.00
Title Fee................... 35.00
DOC.SRV.FEE (U)......... 150.00
____________________________ __________
Total Inception Fees........ 753.81
+ Cust Cash as Cap Reduction 1,630.19
____________________________ __________
Total Drive Off............. 2,384.00 ( or 1999 + 200 lic+35 title+150 documentation)
So, $2384.00 on delivery, which includes first month payment, then 35 monthly payments of $368.81 for a total of $15292.35
Buyout at the end of the lease is listed at $16,098.75, so finance that over the next 2 years to match an overall 5-year loan @ 4% and that gets you 24 months of $699.05 for a total loan price of $16,777.2
Total purchase, if I were to buy it out at the end: $32069.55
Alternatively, take the same base price of $34,800, plus same fees, comes to $35965 (not factoring in 7500 yet)
Assume 4% financing over 5 years and the same down payment of $2384 (which includes first month payment) gives monthly payments of 627.91, for a total bill of $2384 + (59 * $627.91) = $39,430.69
Subtract out the fact that I'll get 7500 back in the tax credit, resulting price: $31930.69
$32,069.55 (Lease then buy option)
$31,930.69 (Buy Option)
$138.86 savings to buy over course of 5 years
Somebody check my numbers, that's significantly lower than what I calculated before when I was spending more time doing so. I may have been calculating a significantly lower down payment or something.
Quote Number: 68225
1) Contract Date: 01/21/11
2) First Payment Date: 02/20/11
3) Stock Number:
4) M.S.R.P.: $ 35,775.00
5) Initial Cap Cost: $ 34,800.00 Adjusted Cap Cost: $ 26,264.81
6) Mileage Penalty:
7) Term: 36 Base Monthly Rental: $ 368.81
8) L.E.V.%: 45.00%
9) Money Fact Sell Rate: 0.00204
10) Lease-end Value: $ 16,098.75
11) Add To MSRP W/Markup:
12) Customer Cash Down: $ 2,384.00
13) Rebate: $ 7,500.00
14) Total Sales Tax:
15) Total Front We Owes:
16) Total Insurance:
17) Total Add Cap Costs: $ 595.00
18) Cash Cap Reduction: $ 1,630.19
19) Total Trade Allow:
20) Security Deposit:
21) License Fee: $ 200.00
22) Title Fee: $ 35.00
23) Total Initial Fees: $ 185.00
24) CapTax1 Rt/Amt: .0000%
25) Amount Due At Start: $ 2,384.00
26) Total Working Cash: $ 2,384.00
27) Total Monthly Payment: $ 368.81
First Monthly Payment....... 368.81
License Fee................. 200.00
Title Fee................... 35.00
DOC.SRV.FEE (U)......... 150.00
____________________________ __________
Total Inception Fees........ 753.81
+ Cust Cash as Cap Reduction 1,630.19
____________________________ __________
Total Drive Off............. 2,384.00 ( or 1999 + 200 lic+35 title+150 documentation)
So, $2384.00 on delivery, which includes first month payment, then 35 monthly payments of $368.81 for a total of $15292.35
Buyout at the end of the lease is listed at $16,098.75, so finance that over the next 2 years to match an overall 5-year loan @ 4% and that gets you 24 months of $699.05 for a total loan price of $16,777.2
Total purchase, if I were to buy it out at the end: $32069.55
Alternatively, take the same base price of $34,800, plus same fees, comes to $35965 (not factoring in 7500 yet)
Assume 4% financing over 5 years and the same down payment of $2384 (which includes first month payment) gives monthly payments of 627.91, for a total bill of $2384 + (59 * $627.91) = $39,430.69
Subtract out the fact that I'll get 7500 back in the tax credit, resulting price: $31930.69
$32,069.55 (Lease then buy option)
$31,930.69 (Buy Option)
$138.86 savings to buy over course of 5 years
Somebody check my numbers, that's significantly lower than what I calculated before when I was spending more time doing so. I may have been calculating a significantly lower down payment or something.
A
Anonymous
Guest
Also remember I'm not in California, so I don't know how your extra tax breaks and whatnot work down there. In Washington we get the federal tax credit (rolled into the lease, NOT rolled into a purchase) and we do not pay sales tax on either a lease or a purchase. (We have sales tax here, but for EVs it is ignored)
Obviously the numbers change if you have different tax situations, depending on how they work into a lease versus purchase.
Obviously the numbers change if you have different tax situations, depending on how they work into a lease versus purchase.
planet4ever
Well-known member
Frankly, it's even worse at purchase time in California. Yes, everybody gets the federal credit rolled into the lease and not the purchase. But in California you pay something around or over 9% in tax on the total (pre credits or refunds) price at purchase time. The exact rate varies depending on where you live; it's 9.25% for me. But if you lease with $2K down you pay that tax, at lease time, on less than $10K.blorg said:
If you walk into the dealer with $3K and lease, you end up with what amounts to a loan for about $27K.
If you walk into the dealer with $3K and purchase, you end up with a loan for about $35K.
That extra $8K in loan amount is going to cost you every month in payments and cost you every month in interest. Sure, you may (or may not) get $7500 back a year later and pay down your loan, but that doesn't help when you are trying to get the credit for the jumbo loan on day one.
Ray
wwhitney
Well-known member
I couldn't quite make it through all your numbers, but here's a quick run down of your lease premium:blorg said:
$595 lease fee + $300 purchase fee + extra interest
Since you are comparing leasing at 5% versus buying with financing at 4%, then the extra interest is just 1% on the life of the lease. So 1% * (26,000 + 16,000)/2 * 3 years = about $630.
So your lease premium is about $1,500. This assumes you are indifferent to borrowing money at 4%. Otherwise the different payment schedules in your two scenarios have an effect.
Cheers, Wayne
