Should I hurry up and get a new pre-lizard LEAF?

[DaveinOlyWA]

It's getting pretty frustrating trying to navigate a path that doesn't have me in perpetual lease payments. The original thinking was that EVs were supposed to last a lot longer than other cars but we seem to be at the other extreme. Just picking up another cheap mazda 3 is starting to look attractive, and plan on handing it down when the dust settles on EV batteries in warmer climates.

i was in your camp until I did some math. it really makes no sense at all to buy right now. I know a lot of people here and elsewhere who (deleted) justifying their decisions but sorry... its emerging technology that is literally improving daily. paying big bucks for some sort of utopian long term future plan is really insane.

now I could understand people buying 2011's because there was not the great divide in payouts like there is now. but when you can re-lease a LEAF in the $250 per month range, there simply is no math that puts a purchase ahead for all the reasons stated above

I don't think it's quite so cut-and-dry for all cases. In this case, the OP was also considering buying out his lease (rather than just buying a brand-new car).

It's different for everybody, but here's a really rough rundown of my math for my 2012:

I could buy out the lease for about $17k (including interest for financing) or I can lease a new car for maybe $250/mo for another 3 years. With say $2k down, that's $2k + 36*$250 = $11k.

The difference after 3 years is $6k and whether I still have a car.

So in order for leasing to be cheaper, the Leaf has to be worth less than $6k at 6 years old and (given my driving patterns) about 50k miles. Is that possible? Yes. Is it likely? Probably not.

This also assumes that I want to trade in the car after 6 years. If I keep it yet another 3 years, the ABSOLUTE MOST it could depreciate is a total of $17k (over the six years). Another 3 year lease will probably cost in the $10k range.

Assuming that the car will work for me for 9-10 years (it really should), my best option financially absolutely is buying and not leasing.

well, its hard to take your numbers especially when you are projecting, so lets take mine. $245 a month, ZERO down. or buy which is higher down, higher (only slightly as it would have been in my case) and degradation. your analysis *might* work if you did not drive very much but it does not even come close to working for me. I had a 15,000 mile lease and used all of it. The current lease I will have to supplement my needs with a gasser. I am 12 days from my 6 month anniversary and have 7900 miles on the LEAF, 3200 on the gasser.

as far as what your LEAF could be worth? very hard to say but betting it will be dependent upon the 3rd party market for battery packs. your LEAF struggles to keep value but when there is a 150 mile LEAF out there, it will really be an uphill fight

 

[dgalvan]

You do know that this program has actually never come of fruition, right, and in fact may never do so in the U.S....

--If the battery degrades, then at least I know I have the option of Nissan's $100/month battery lease program.

I know that they announced this program publicly, and they have similar programs operating already in Europe.

The program that ends up being available to Leaf owners in the U.S. may differ slightly from what was announced. I get that.
But I'm willing to bet (obviously, since I purchased) it will be similar enough to what was announced to effectively mean that getting a new battery for an existing Leaf will cost less than buying (or leasing!) a new car.

If I'm wrong, and Nissan backs out (after having already publicly announced this program, which they know would be a really bad business move), well then I bet wrong on Nissan. But I'd still be willing to bet that third parties will do battery replacements for less than the cost of leasing/buying a new car. And in the unlikely case that even THAT service is not available, Even at 50% degradation my Leaf's range would meet my commuting needs without charging at work (though I CAN charge at work).

 

[Stoaty]

The program that ends up being available to Leaf owners in the U.S. may differ slightly from what was announced. I get that.

My understanding is that they went back to the drawing board after all the flack they received. I don't expect a program that is only "slightly different".

 

[GetOffYourGas]

well, its hard to take your numbers especially when you are projecting, so lets take mine. $245 a month, ZERO down. or buy which is higher down, higher (only slightly as it would have been in my case) and degradation. your analysis *might* work if you did not drive very much but it does not even come close to working for me. I had a 15,000 mile lease and used all of it. The current lease I will have to supplement my needs with a gasser. I am 12 days from my 6 month anniversary and have 7900 miles on the LEAF, 3200 on the gasser.

as far as what your LEAF could be worth? very hard to say but betting it will be dependent upon the 3rd party market for battery packs. your LEAF struggles to keep value but when there is a 150 mile LEAF out there, it will really be an uphill fight

You are missing my point. First and foremost, I was addressing your comment that the number *never* work for buying over leasing, not that they don't work for you.

Second, you still seem to be comparing leasing against buying a new car. The OP was talking about leasing versus buying out his current lease.

Finally, you first poke fun at me because I admit that I am projecting/guessing at future numbers, and then close by doing the same thing. Nobody knows for certain what Nissan will offer in 3 years from now, or what affect that will have on use car values. I, for one, got in on the Leaf knowing that it will work for me for a good long time. Heck, there is a good chance that my now 5-year-old could one day drive my 2012 Leaf to high school. (That would be a 14 year old car). In fact, as a parent, I kind of like the idea of knowing my child only has a limited range on his car. I suspect between that and the little old lady looking for a car to get her to the grocery store and church that the car will hold *some* value far into the future.

All this is to say that buying could have a financial advantage over leasing if you keep the car long enough. It is not to say that it is the best value (if the 150-mile car appears in 2017, it could indeed wreck the resale value of an 80-mile car, but if the 80-mile car still works for you, just keep driving it!). It also means that you are driving around in an aging car rather than a new one every 3 years.

 

[Stoaty]

All this is to say that buying could have a financial advantage over leasing if you keep the car long enough. It is not to say that it is the best value (if the 150-mile car appears in 2017, it could indeed wreck the resale value of an 80-mile car, but if the 80-mile car still works for you, just keep driving it!). It also means that you are driving around in an aging car rather than a new one every 3 years.

Bought my car 3 years ago, if the Battery Aging Model is correct it will still work for me for another 4 years. If Nissan will sell me a Lizard battery at that time, say for $5,000, the car will probably be good for another 10 years. An aging car means less expensive registration and lower insurance costs. No regrets so far on buying over leasing. I think I will probably come out ahead financially in the long term... but of course, time will tell.

 

[dgalvan]

The program that ends up being available to Leaf owners in the U.S. may differ slightly from what was announced. I get that.

My understanding is that they went back to the drawing board after all the flack they received. I don't expect a program that is only "slightly different".

As long as it costs less to replace the Leaf's battery than to buy or Lease a new Leaf, I'm happy.

 

[uwskier20]

Bought my car 3 years ago, if the Battery Aging Model is correct it will still work for me for another 4 years. If Nissan will sell me a Lizard battery at that time, say for $5,000, the car will probably be good for another 10 years. An aging car means less expensive registration and lower insurance costs. No regrets so far on buying over leasing. I think I will probably come out ahead financially in the long term... but of course, time will tell.

Wholeheartedly agree. Also have had my LEAF three years, and with my 50-mile (r/t) commute and charging at work, I can go on like this for some time. Let's say a new battery costs $5000 and upgraded charging might cost $3K (I'd probably go through upgrademyleaf.com to get 6.6kW), that's only a quarter to a third the new vehicle cost, and without incurring the burdens of buying or leasing a new vehicle.

 

[davidcary]

Of course $5000 might be a pipe dream.

Most estimates put the battery at $10k now and some go to $15k.

I think most people think 7% decrease a year is optimistic. I prefer to use 3%. Of course that changes everything.

But even if manufacturing costs get down to $5000, what is to say that Nissan doesn't sell it for $10k? That would actually be what anyone would expect base on used car parts.

What would be frustrating of course is the battery last you 5 years and costs $10k to replace. Costs more than gas+maintenance for lots of other cars. With no defined market for used batteries, that garners you $1000 at best.

 

[GetOffYourGas]

If the battery aging model is correct, my car will last me at least 10 years on the original battery. Even if the car depreciates to $0 (it won't) and the battery completely kicks the bucket after 10 years, I'm way ahead over continuing to lease. My best financial interest is almost certainly to buy out my lease. I still may not do so, for other reasons (like if Nissan or a competitor introduces more range in the next 12 months, or NYS actually installs some DCQC infrastructure upstate :lol: )

 

[evnow]

If the battery aging model is correct, my car will last me at least 10 years on the original battery.

That is a big IF.

Ofcourse using an old EV will cost you less in the long run - IF the battery works for you.

To put this in perspective, you are assuming the battery risk if you buy. If you lease, you are letting Nissan take that risk. As with any "insurance" there is a cost to transferring that risk to Nissan.

BTW, obviously driving newer car/s for a decade is different than driving an old car - just like wearing old clothes for 5 years rather than changing every year.

 

[GetOffYourGas]

To put this in perspective, you are assuming the battery risk if you buy. If you lease, you are letting Nissan take that risk. As with any "insurance" there is a cost to transferring that risk to Nissan.

Insurance is a form of gambling, and the house always win. When you insure your car, you pay more than the company expects to pay out for any claims. Why would Nissan be any different with any risk to the battery?

 

[DaveinOlyWA]

Of course $5000 might be a pipe dream.

Most estimates put the battery at $10k now and some go to $15k.

I think most people think 7% decrease a year is optimistic. I prefer to use 3%. Of course that changes everything.

But even if manufacturing costs get down to $5000, what is to say that Nissan doesn't sell it for $10k? That would actually be what anyone would expect base on used car parts.

What would be frustrating of course is the battery last you 5 years and costs $10k to replace. Costs more than gas+maintenance for lots of other cars. With no defined market for used batteries, that garners you $1000 at best.

i think the price will be high but not because technology can't figure it out. it will be high because the alternative, gasoline will be higher. market forces will dictate the price and as always, they will charge as much as the market will bear

 

[dgpcolorado]

Insurance is a form of gambling, and the house always win. When you insure your car, you pay more than the company expects to pay out for any claims. Why would Nissan be any different with any risk to the battery?

My guess is that Nissan will lose big on the lease returns. They are trying to build an EV market and it will be some time before the huge costs of developing the LEAF, as well as subsidizing it through below-cost leases, can pay off. I believe that they (or Carlos Ghosn, at least) are thinking long term.

 

[GetOffYourGas]

Insurance is a form of gambling, and the house always win. When you insure your car, you pay more than the company expects to pay out for any claims. Why would Nissan be any different with any risk to the battery?

My guess is that Nissan will lose big on the lease returns. They are trying to build an EV market and it will be some time before the huge costs of developing the LEAF, as well as subsidizing it through below-cost leases, can pay off. I believe that they (or Carlos Ghosn, at least) are thinking long term.

Below-cost assumes that the off-lease cars won't sell for their residual. How is that working out in the older markets? Ours is too young to have any off-lease cars around.

Nissan used a 44% residual for my 39-month lease. Assuming they do the same with the 2014s, that means an S would be worth $12,750 after 39 months. If they sell for close to that, then they are hardly subsidizing the lease. Of course, if they sell for $5,000, Nissan takes a significant hit.

 

[evnow]

Insurance is a form of gambling, and the house always win. When you insure your car, you pay more than the company expects to pay out for any claims. Why would Nissan be any different with any risk to the battery?

Buying insurance is the opposite of gambling. You pay a small price to avoid a possible large cost.

Do you have insurance on your cars ?

 

[GetOffYourGas]

Insurance is a form of gambling, and the house always win. When you insure your car, you pay more than the company expects to pay out for any claims. Why would Nissan be any different with any risk to the battery?

Buying insurance is the opposite of gambling. You pay a small price to avoid a possible large cost.

Do you have insurance on your cars ?

I disagree. And yes I have insurance on my cars - you are required by law to insure any motor vehicle used on any public road.

If you buy collision insurance, you are basically betting that over the life of your insurance, you will get into an accident that will incur more damage than the cost of your premium. If you knew that you would not get into any accidents, you would not buy insurance.

Ultimately it's a game of shifting risks. There is always a small risk of something catastrophic happening. Buying insurance changes that to a larger risk of something far less catastrophic - that you pay a monthly premium for no ultimate benefit (i.e. you buy insurance, but never file a claim).

Like I said, the insurance company wins. Overall, they pay out less in claims than they make in premiums.

 

[kmp647]

my 2012 SL lease is up in January 2015
15,000 mile per year so it will have 45,000 miles and be 3 yeas old
residual in at lease turn in
$16,456 current wholesale value 12,000
projected value at lease tuen in 11,000

Nissan will take a big hit when they auction my car. about $5,000

I really like my Leaf but I cant wait to get a new car. Might have to get a used volt until the new Leaf is available (as in 2016 or 2017 model)

 

[apvbguy]

To put this in perspective, you are assuming the battery risk if you buy. If you lease, you are letting Nissan take that risk. As with any "insurance" there is a cost to transferring that risk to Nissan.

Insurance is a form of gambling, and the house always win. When you insure your car, you pay more than the company expects to pay out for any claims. Why would Nissan be any different with any risk to the battery?

when you lease you are paying for usage of the vehicle for a set amount of time, the risks of battery degradation becomes nissan's problem rather than the car users problem because after the term of the agreement is up nissan and not you are saddled with any burdens from owning a car with capacity degradation. this has nothing to do with financial aspects of the leasing versus owning

 

[evnow]

my 2012 SL lease is up in January 2015
15,000 mile per year so it will have 45,000 miles and be 3 yeas old
residual in at lease turn in
$16,456 current wholesale value 12,000
projected value at lease tuen in 11,000

Nissan will take a big hit when they auction my car. about $5,000

2012s will have the biggest difference - since Nissan jacked up the price in '12 compared to '11 - and they lowered it in '13. They are probably happy they didn't sell too many of those '12s.

 

[dgpcolorado]

I disagree. And yes I have insurance on my cars - you are required by law to insure any motor vehicle used on any public road.

If you buy collision insurance, you are basically betting that over the life of your insurance, you will get into an accident that will incur more damage than the cost of your premium. If you knew that you would not get into any accidents, you would not buy insurance.

Ultimately it's a game of shifting risks. There is always a small risk of something catastrophic happening. Buying insurance changes that to a larger risk of something far less catastrophic - that you pay a monthly premium for no ultimate benefit (i.e. you buy insurance, but never file a claim).

Like I said, the insurance company wins. Overall, they pay out less in claims than they make in premiums.

While I agree in general that insurance is about risk shifting, insurance is best used for protecting against losses that would be difficult or impossible to otherwise pay for. This is why it is best to use high deductibles, assuming that one can come up with the money. I insure my house so that if it burns down I will have help in rebuilding it. I don't care about small losses of a few hundred or a thousand dollars because I can pay for those if necessary, but a total loss would be difficult to cover. If one is wealthy, one can skip the insurance and self-insure for those losses.

I don't have collision on my ICE car because it is only worth a few thousand dollars. I do have it on the LEAF because I'd rather not have to come up with the fifteen thousand or so to replace it if it is destroyed. And the cost of collision/comprehensive insurance is low, $242 a year, and the risk fairly high (most collisions here are with deer and many are unavoidable despite best efforts; I've already lost one car to a deer).

Insurance is a form of gambling, and the house always win. When you insure your car, you pay more than the company expects to pay out for any claims. Why would Nissan be any different with any risk to the battery?

The difference with Nissan and batteries is that there isn't enough history to make adequate actuarial calculations. Is Nissan losing money by replacing batteries in Phoenix cars? Of course they are, and it wasn't expected when they launched the car since there was no battery capacity warranty. Will Nissan make enough on the majority of cars that don't need warranty replacement to cover the cost of the hot climate cars? My guess is no because I assume that Nissan still loses money on each LEAF they sell. They are a long way from paying for the huge research costs to bring the LEAF to market and I have my doubts that the invoice price covers the cost to manufacture the car and battery even in 2014. I'm just guessing though; only the Nissan accountants know for sure.

So, in my view Nissan and batteries is something of a special case because the product and market are still young. That should change over time.