Lease versus purchase (buy)

[DaveinOlyWA]

ok my numbers. first of all, i was screwed royally on the money factor. read other thread for this, but basically paying almost 8% instead of the 4 % (credit rating 818...only a paltry 740 required for tier 0)

now, i leased over initial concerns over long term battery range and not qualifying for full tax credit (i would only get $3,000)

so, i put down 10,000 on a total out the door purchase of $34,565 or so. payments $162.02

right now, in process of moving. still looking so wanting cash on hand for that. after move and settling (each move somehow costs me around $2-3,000 in unexpected furniture costs!!)

but plan to convert lease to buy. even with a 30% range reduction, the Leaf would still work for me. it probably wont cover 56% of my driving like it does now, but would still be well used. so i am buying.

i plan to finance little because i hate it and dont like monthly payments. so not sure how i will go with this. thinking of cashing out car so have no payments at all, but then again need to see how move goes. have most of what i need. did sell Prius and Zenn so have that money sitting right now.

most likely will take loan against 401 to match. this is payroll deduction and it only charges $50 processing fee and interest is paid back to my account. most of the investment options i have right now are not really moving much so i would lose little in not having the balance in there.

but based on NMAC call in feb, my pay off in feb plus down payment plus one payment of $162.02 would have totaled out to $28,700.

now, my only question is sales tax. WA State waives sales tax on initial purchase or lease which is why my price is low. not sure on how it works on this since it could be looked as a used car purchase and not sure of how taxes work on that

 

[chipcustomizer]

Ok, My leaf is due to arrive tomorrow and I need to figure all this out before Saturday when I'm supposed to work out the deal for the leaf. I went to my dealer this past weekend to try to work numbers and my head is spinning a bit. Bottom line is that I live in California (Simi Valley) and my lease would work out to (after tax) $510.84. To me this sounds a bit high since they take the $7500 tax credit off the top.

To purchase the vehicle it's about $678 a month.

My question is - does this lease seem a bit high to anyone else? What are people paying for their leases?

 

[evnow]

My question is - does this lease seem a bit high to anyone else? What are people paying for their leases?

The dealer is marking up the money factor. Ask him for the details. Take the spreadsheet linked in the sticky and play around with the numbers. Dealers can't cheat an informed buyer.

 

[TomT]

Wow! Mine was 305 and change for a four year lease...

Ok, My leaf is due to arrive tomorrow and I need to figure all this out before Saturday when I'm supposed to work out the deal for the leaf. I went to my dealer this past weekend to try to work numbers and my head is spinning a bit. Bottom line is that I live in California (Simi Valley) and my lease would work out to (after tax) $510.84. To me this sounds a bit high since they take the $7500 tax credit off the top.

To purchase the vehicle it's about $678 a month.

My question is - does this lease seem a bit high to anyone else? What are people paying for their leases?

 

[littlegreen]

Leased my Leaf May 12th from Boardwalk in Redwood City. Went in expecting to buy. They convinced me if there was a question of not getting the $7500 credit the lease was better. I walked out with no $ out of pocket. They used the $7500 for all the down ect. 48 moth @ $524.59 per month. I can pay it off after 3rd month for an extra $300. Not sure if this was the right thing to do or not but that is history now. If I had to do it again I would have bought it out right.

 

[earther]

Leased my Leaf May 12th from Boardwalk in Redwood City. Went in expecting to buy. They convinced me if there was a question of not getting the $7500 credit the lease was better. I walked out with no $ out of pocket. They used the $7500 for all the down ect. 48 moth @ $524.59 per month. I can pay it off after 3rd month for an extra $300. Not sure if this was the right thing to do or not but that is history now. If I had to do it again I would have bought it out right.

I was in same boat -- unexpectedly talked into leasing over purchasing at Boardwalk delivery. In my case, the $7500 upfront was definitely a good deal (I don't have nearly enough annual income to qualify for the full tax credit, nor do I have a 401k that I could convert to a Roth to make up the difference).

My plan, like yours I imagine, is to fully purchase the vehicle after the "required" 90 days. In order to minimize interest accumulation, I submitted about $28k as my first payment. I wasn't sure if NMAC would accept the entire amount, but apparently they did (although it shows up oddly on the NMAC website as multiple ~$3k payments on the same day; perhaps needed for some arcane accounting purpose). My next two payments should be the expected amount, and the lease buyoff at the end should be fairly minimal, I'm hoping. (I ran my plan ahead of time by the finance manager at Boardwalk, and he didn't seem to have a problem with it provided I keep the car as a lease for the 90 days). I can let you know the full bottom line when I make the final purchase at the end of July.

 

[EricBayArea]

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.

I realize this is an old thread but the above post is relevant to me as I'm going to be picking up my car at the beginning of October. Being in California I was looking for numbers exactly like this for leasing. I keep going back and forth in my mind to Lease vs Buy. I can afford to purchase the car outright and using your numbers above, that Lease quote equals $22,054.88. I KNOW that in 3-4 years EV technology will get better and what I am leaning towards is that buying the car now, with the $7,500 fed & $2,500 CA, I will be paying about $27,000 (estimation of tax/title/lic of $3,000 over the $34,000). So... is the car going to be worth $5,000 in 3-4 years? I'm 90% sure the answer is yes. I would be shocked if it wasn't worth $10,000... but then again, anything is possible.

Anyone else have these same internal discussions with themselves?

 

[Stanton]

Yep, and I decided to buy. If you can:

1) qualify for the $7500 tax credit
2) afford whatever payment you come up with

...then the lease terms just aren't worth it. Plus, there's a large enough sample size out there of folks who (if you ask) will tell you they LOVE this car (myself included). I can make this car work even if it had only 75% of it's battery capacity in 10 years, and I'm determined (with proper care) NOT to let it get that bad.

 

[twbaker]

My plan, like yours I imagine, is to fully purchase the vehicle after the "required" 90 days. In order to minimize interest accumulation, I submitted about $28k as my first payment. I wasn't sure if NMAC would accept the entire amount, but apparently they did (although it shows up oddly on the NMAC website as multiple ~$3k payments on the same day; perhaps needed for some arcane accounting purpose). My next two payments should be the expected amount, and the lease buyoff at the end should be fairly minimal, I'm hoping. (I ran my plan ahead of time by the finance manager at Boardwalk, and he didn't seem to have a problem with it provided I keep the car as a lease for the 90 days). I can let you know the full bottom line when I make the final purchase at the end of July.

Wondering how the lease, 90 day wait, then buy panned out?

I'm thinking about doing the same thing. When they calculate the buyout costs is it just:
(LEAF Residual + $300 purchase option + PV of Outstanding Lease Payments Balance)?

My plan is to Lease my LEAF, put $2K down, make payments for 3 months [~90 Days], then buyout with a Loan from my Credit Union. Do any of you see any flaws in my plan? Thanks!

 

[planet4ever]

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.

I realize this is an old thread but the above post is relevant to me as I'm going to be picking up my car at the beginning of October. Being in California I was looking for numbers exactly like this for leasing. I keep going back and forth in my mind to Lease vs Buy. I can afford to purchase the car outright and using your numbers above, that Lease quote equals $22,054.88.

I don't know how we managed to let that get by last spring without comment. $557 is indeed crazy. I can't believe anybody is paying anywhere close to that much.

Look at this one, for example, from Apr 22:

So, $2384.00 on delivery, which includes first month payment, then 35 monthly payments of $368.81 for a total of $15292.35

Now, that's Seattle, so he doesn't have California tax, but my number in California is closer to blorg than it is to the crazy one you quoted.

what I am leaning towards is that buying the car now, with the $7,500 fed & $2,500 CA, I will be paying about $27,000 (estimation of tax/title/lic of $3,000 over the $34,000).

Even with the stripped SV model you are apparently thinking of, you can't possibly come off that cheap unless you've got a deal way under MSRP. Your tax rate up there in Walnut Creek has to be at least 8.75%, right, maybe higher? That makes the tax alone on $34,200 about $3,000; more if your rate is higher. Title, license, etc. will be about $400, and don't forget the $850 destination charge.

Then there is the real biggie. I doubt if the $38,500 you are going to need is sitting under your mattress. (Yes, you will need the whole amount, or a loan for part of it, because you won't get the $10,000 back until later.) If your money is in stocks or bonds, those are going to go up over the next three years, and you will be throwing away all gains they would otherwise make. If you are taking out a loan you will obviously pay interest on that loan. Surely you can't be planning to sell real estate - not in this market.

Ray

 

[DaveinOlyWA]

currently have a pretty active discussion on the FB Seattle page on the pitfalls of leasing with larger than expected downpayment

on the lease terms it states in event of a totaled vehicle payoff. the entire settlement goes to NMAC. now, i did a $10,000 down with plans to buy later to get the full benefit of the tax credit ASAP and talked with my insurance company before my Leaf arrived and they stated that i would get any difference in value paid to me in a separate check. so if you are paying more than the standard payment you might want to verify with your insurance company that you are protected in case the unthinkable happens.

obtw. the math; put $10.000 down, payments 162.02 and sept was payment # 8.

so that is $10,000 down+1296.16 in payments. and payoff 16992.43 by 10/16/2011 total 28,288.59

BUT... changes in our finances (SO's previously rock solid job is not as stable as it once seemed to be. proof that not even the medical field is bullet-proof) and job security has made me hesitant to pull the trigger on the purchase.

now, the assurances my insurance company gave me over the terms of a payout were given before i signed the lease. i will be double checking with them to verify the info i was given in Jan.

 

[bluester]

currently have a pretty active discussion on the FB Seattle page on the pitfalls of leasing with larger than expected downpayment

on the lease terms it states in event of a totaled vehicle payoff. the entire settlement goes to NMAC. now, i did a $10,000 down with plans to buy later to get the full benefit of the tax credit ASAP and talked with my insurance company before my Leaf arrived and they stated that i would get any difference in value paid to me in a separate check. so if you are paying more than the standard payment you might want to verify with your insurance company that you are protected in case the unthinkable happens.

obtw. the math; put $10.000 down, payments 162.02 and sept was payment # 8.

so that is $10,000 down+1296.16 in payments. and payoff 16992.43 by 10/16/2011 total 28,288.59

BUT... changes in our finances (SO's previously rock solid job is not as stable as it once seemed to be. proof that not even the medical field is bullet-proof) and job security has made me hesitant to pull the trigger on the purchase.

now, the assurances my insurance company gave me over the terms of a payout were given before i signed the lease. i will be double checking with them to verify the info i was given in Jan.

I am from Oly, WA as well and am working with my dealer on narrowing down on leasing vs. purchasing.

Did you purchase from the Dealer in Olympia?

If so, email me your experience..... I am interesting in leasing because we will 'NOT' receive the tax credit as we have children and receive a refund most years. We told him we are thinking about leasing for the first three months and then purchasing the lease shortly thereafter - for the $7,500.00 credit. However, if this practice includes huge penalties and fees, it may not be worth doing this. It appears the cost of our vehicle is:

$37,560 transaction price

this price includes:
2012 Nissan LEAF™ SL trim
cayenne red
no options selected
accessories added:
floor and cargo mats
splash guards

Processing fees, tax title license, destination & handling charges are not included.
The value of any trade-ins will be determined and applied at a later date.

--------------------------------

We are going to trade in a 2000 Nissan Altima - low miles, but still pretty old.

My bank states I qualify for a 3.14 % interest rate for 72 months.

Anyway, respond back if you can... I realize this is a pretty old thread, but relevant to us.

 

[Nubo]

I wasn't sure up until signing, which way I was going to go.

I figured it this way -- there are 3 possiblities

residual value plummets because 2015 EVs are much more capable and nobody wants a "100 mile" LEAF anymore.
..... So I hand it back so that I can get one of those rockin' new EVs.

residual value plummets because of some unforeseen deficit/defect in the car or battery.
......So I hand it back and move on

The car is fantastic, the battery is still going strong and 2015 EV price/performance is about the same
......So I purchase and keep driving the vehicle since it's a proven quantity.

Whatever advantage I would have gained from an outright purchase was outweighed by covering those bases.

 

[DaveinOlyWA]

I got mine in auburn. As fast as leasing definitely do it.get the full tax credit applied as a down payment. There is no sales tax so your quoted price will have a few hundred added for lease fees and a destination charge of $700 or so. I got a discount which is why I went with auburn but in retrospect I might have been better off going locally

 

[kubel]

Can someone confirm that if I bought out my lease immediately (or after 90 days, or whenever the minimal waiting period is), that the buyout price would *not* include interest for the remaining payments?

 

[DaveinOlyWA]

Can someone confirm that if I bought out my lease immediately (or after 90 days, or whenever the minimal waiting period is), that the buyout price would *not* include interest for the remaining payments?

Confirmed

 

[edatoakrun]

Can someone confirm that if I bought out my lease immediately (or after 90 days, or whenever the minimal waiting period is), that the buyout price would *not* include interest for the remaining payments?

Confirmed

A few other factors in my recent decision to buy, after leasing, which may or may not apply in others cases:

Positives:

No lease ($300?) termination Fee.

My dealer let be to put $3,000 on a credit card (rewards points +0% interest.)

For some reason, CA reg renewal fees, which the dealer collected, since due within (90?) days, seemed lower, but the calculation process was so byzantine, My head would explode if I tried to figure out why.

Negative:

$12O inspection fee. Not much more than tires and brakes. I did get the reassuring report, that my spare has 100% of tread...

It was complex. Basically 2 complete sales transaction, from Infiniti credit to the dealer, and then from the dealer to me.

And since the my local dealer was remodeling, and had some computer problems, it took a couple of hours.

And someone apparently forgot to plug it in, after the inspection test drive, so my after-the-purchase plans, had to be changed.

 

[downeykp]

As it turns out after getting my taxes finished today. I only realized a $2500 credit on taxes. But looking over all of the email transactions from my sale leasing would have gotten the full $7500 credit but all of the lease payments added up to $15000 and the residual was right at $1500 plus the $999 down payment added up to just under $31000. That is $1000 more dollars that what I paid cash for.
Mike Abbott at Oly Nissan was a great salesman. He was honest and a nice guy. The buying experience with the exception of the finance manager was great.

Can someone confirm that if I bought out my lease immediately (or after 90 days, or whenever the minimal waiting period is), that the buyout price would *not* include interest for the remaining payments?

 

[DaveinOlyWA]

Leasing will cost you just about $1000 more than a straight purchase but if not paying cash some of the diffrence can be made back by lower interest payments.

The best part is that the sales tax waiver applies to EVs both new and used so no real penalty for buying out the lease

 

[bluester]

As it turns out after getting my taxes finished today. I only realized a $2500 credit on taxes. But looking over all of the email transactions from my sale leasing would have gotten the full $7500 credit but all of the lease payments added up to $15000 and the residual was right at $1500 plus the $999 down payment added up to just under $31000. That is $1000 more dollars that what I paid cash for.
Mike Abbott at Oly Nissan was a great salesman. He was honest and a nice guy. The buying experience with the exception of the finance manager was great.

Thanks for the response..... Mike Abbott is our sales person as well. Our vehicle is on order and our sales experience is yet to be determined. However, we found that we are able to claim the $7,500 on our taxes next year. So we will purchase. We are attempting to sell our Nissan Altima (2000 with 129000 miles). I contacted EVProject and applied for a L2 charger. My paperwork is in the process. Mike stated he had a contact, but has yet to get back with me. The process appears to be moving along fine with out the contact. Anyways, We had a question regarding the price and if there was a possibility the price can be reduced. Mike made it appear, there is no room to reduce the price. I find this hard to believe, but we have read how some paid MSRP, while other have not. I guess it depends on how much the salesperson or dealership is willing to work with you - we purchased enough cars to know how how the process works and - being an ex-salesperson realize how much a good sale can make you or break you.
Back to the subject at hand..... The EVProject / Blink Networks explained how they will use our internet access to collect data about charging / usage. I hope that is all they collect?!?!

Again, thanks for the tips!!