Volt vs Leaf lease

evnow said:

Residual % is about the same - GM is giving a highly subsidized lease while Nissan is not. I hope rest of your analysis is better.

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The leases are structured differently but the net outcome is that the residual percentages are not the same. If you want to buy the Volt at the end of the lease term the contract residual is over $26K, which is pretty much what the Leaf costs after rebate. Technically for the Volt, Residual = (44% X MSRP) + $7500. Adding the $7500 rebate to the contract residual means that leasing the Volt is a good deal but buying it at the end of the lease not so much.

The Leaf lease is more straightforward IMO.

SanDust said:

Adding the $7500 rebate to the contract residual means that leasing the Volt is a good deal but buying it at the end of the lease not so much.

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The US bank lease residual (adding back 7.5K) is almost a fraud. What is the fanancial basis of that adding back ?

The important thing to note in the Nissan & Volt leases is the money factor.

Leaf : 0.00204 (4.9%)
Volt : 0.00025 (0.6%)

That is what I meant by Volt lease being highly subsidized. BTW, GM also kicks in $2,000 to get to that magical $349. Apart from that, Volt is a 12K lease vs 15K for Leaf.

SolarExec said:

6. The interior is cheap.

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I actually agree with you on this but at one of the Leaf events I talked to an "industry consultant" -- can't remember his name but he was real -- who went on and on about how GM had to improve the Volt's interior if it expected to compete with the Leaf's. IOW he thought the Leaf's interior was great and the Volt's horrible. Obviously whether the Leaf's interior is "cheap" is highly subjective and open to debate. LOL

Safety concerns are always an issue but I haven't seen anything to suggest the Leaf won't be OK. I would, however, give the Volt points in the area for the knee airbags and more structural rigidity. On the other hand, if you're primarily driving locally the biggest issue is probably the danger of getting rear ended at relatively low speeds. It's not clear to me if one car would be better than the other in this type of crash. Finally, I've seen it argued that the fact the Volt has an engine means it can be pushed back into the passenger compartment.

WWBD said:

I will add one thing to the list that makes all the other gripes moot for me. It's not a $35k car. It's a $22,500k car (in California). It blows everything out of the water at that price point.

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I understand your point but we live in TX not CA. Our price on the car was $34,730 plus TTL (tax in TX is 6.25%) plus destination and handling. We had ordered the SL with QC and the floor mats. So after the tax rebate we would have spent just over $30k for the car.

evnow said:

The US bank lease residual (adding back 7.5K) is almost a fraud. What is the fanancial basis of that adding back ?

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Hard to say it's fraud since it's disclosed. They don't take the $7500 rebate off the MSRP before calculating the residual. This means that 44% of say $43,500 would be $19,140. Over 36 months that means you'd have to pay depreciation of $677/month, which is hard to do with lease payments of $400/month. So they're adding the $7500 to the residual to keep the depreciation payments down. But then you have to pay more at the end of the lease.

As mentioned, the leases are structured differently. The Volt lease is structured to give US Bank more upside which, given that this is a zero sum game, means it's structured to give you less upside.

SolarExec said:

I understand your point but we live in TX not CA. Our price on the car was $34,730 plus TTL (tax in TX is 6.25%) plus destination and handling. We had ordered the SL with QC and the floor mats. So after the tax rebate we would have spent just over $30k for the car.

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But are you comparing to a $30K car - after adding the tax ? If so, which car is that ?

ps : Apparently you think driving gas free has 0 value, but thats a different topic.

SanDust said:

They don't take the $7500 rebate off the MSRP before calculating the residual. This means that 44% of say $43,500 would be $19,140. Over 36 months that means you'd have to pay depreciation of $677/month, which is hard to do with lease payments of $400/month. So they're adding the $7500 to the residual to keep the depreciation payments down. But then you have to pay more at the end of the lease.

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Still doesn't make sense. Where is the 7.5K that US Bank gets from the government accounted for ? Is that pure profit for the bank ?

SolarExec said:

I understand your point but we live in TX not CA. Our price on the car was $34,730 plus TTL (tax in TX is 6.25%) plus destination and handling. We had ordered the SL with QC and the floor mats. So after the tax rebate we would have spent just over $30k for the car.

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How about this? It's a $35K car that comes with an infinite supply of gasoline at fifty cents a gallon. I realize you can quibble here and there with the gasoline approach but when you start looking at the reduced operating costs the total cost owner (TCO) should be a fraction of what you'd pay for a car with an internal combustion engine. Those things take a whole lot of care and feeding.

evnow said:

Still doesn't make sense. Where is the 7.5K that US Bank gets from the government accounted for ? Is that pure profit for the bank ?

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It's not exactly pure profit. Leases are hard to assess on the front end since whether the lease is profitable for the lessor depends on the market price for the used car at the end of the lease. However, it doesn't strike me that the lease is a slam dunk for US Bank. Say it can acquire a $43,500 MSRP car for $435000 - $7500 (rebate) - $2000 (GM paydown) or $34000. It will receive finance charges on $43500. If will also get depreciation payments, let's say $350/month but it could be higher, which will total $12,600 over 36 months. Assuming all this, then at the end of the lease it will still owe $21,400 on the car. Since $21,400 is about 60% of what is (MSRP - the $7500 rebate), the break even point for US Bank assumes the Volt will retain 60% if its value after three years. That's somewhat aggressive.

The big deal is that the contract residual is about 75% of (MSRP - the $7500 rebate), which means that you're not going to want to exercise your option to buy unless of course gas has gone to $5/gallon and people are paying big premiums for EVs. If the car proves very popular you still won't have any upside like you will with the Leaf lease.

Just wanted to chime in to the OP. Thanks for that. I am cancelling my leaf order as well now.

I also went to the Chevy dealership to put dibs on a volt for lease.

Since I intend to lease for three years and then reassess the PHEV/Electric field, the volt makes a lot more sense for the money. Don't need to spend $1500 on a 240v charger either for sure now.

Considering that most new cars come with a minimum of two years of full maintenance coverage, and that maintenance requirements on modern new cars is pretty minimal anyway, that argument actually doesn't hold a lot of water... The difference in cost between gas and electricity is really the primary difference in cost of operation.

If I used just cost of operation or ROI as a benchmark, I would not being buying a Leaf. Likewise if there was not both a federal and state incentive.

SanDust said:

How about this? It's a $35K car that comes with an infinite supply of gasoline at fifty cents a gallon. I realize you can quibble here and there with the gasoline approach but when you start looking at the reduced operating costs the total cost owner (TCO) should be a fraction of what you'd pay for a car with an internal combustion engine. Those things take a whole lot of care and feeding.

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SanDust said:

It's not exactly pure profit. Leases are hard to assess on the front end since whether the lease is profitable for the lessor depends on the market price for the used car at the end of the lease.

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Rest of the things stay as they are with any other lease. The 7.5K from government has gone into US Bank's kitty with no accounting in the lease calculations.

What we don't know is - what will GM/US Bank do after 3 years with the cars that will come off the lease. Undoubtedly most will not buy the cars given the manipulated residual. Does GM have an agreement with US Bank to buy it from the bank at the residual rate ? Given the very low (almost free) interest, US Bank obviously needs some form of margin generation.

ps : This has gone OT. So I'll split the thread in sometime ...

I ran the (excellent) Volt lease calculator spreadsheet, and the numbers that matter to me are $457/mo total payment, with $5,543 Initial.
(Assuming MSRP, +rear view camera = $41,710)

The Leaf spreadsheet puts me at $437.50/mo. I don't know the exact initial payment, but It's probably less.. $3,500 or so.

Operating costs are likely to be identical for the duration of the lease.

Really, if I exclude the CA $5k, they're very close. Close enough that cost isn't a strong consideration. Styling, interior, and other factors (such as availability) take front stage.

So, if Nissan's "Pending" is long enough that the CA Rebate is likely to be drained, I'm leasing a Volt.

Another thing to consider: If GM really does ramp up Volt production, and saturates the early adopters soon, it doesn't seem unlikely that these cars will end up on the lots with normal markdowns from MSRP. The same is not likely for Leaf.

mogur said:

Considering that most new cars come with a minimum of two years of full maintenance coverage, and that maintenance requirements on modern new cars is pretty minimal anyway, that argument actually doesn't hold a lot of water...

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BMW offers comprehensive coverage for four years and the plan is estimated to save $4,000. Other brands offer less coverage and/or shorter coverage periods. Lots of brands offer nothing. But here's the deal. If it costs $1000/year to perform basic maintenance you will end up paying $1000/year. It may be wrapped in the purchase price. It may be in paying more for options. But the costs will be there somehow. If you don't have to incur those costs you'll not have to pay them.

Like you, I wouldn't be interested in an ICE version of the Leaf. However, the Leaf definitely has lower operating costs. I'm spending $225/month for gas. The Leaf lease is $350/month and includes everything. The CA rebate of $5000 is worth $139/month. Electricity to power the Leaf will cost $29. Pretty much a wash but this excludes the depreciation and the service on the ICE vehicle.

Hello,
I have run these numbers every which way. IF I keep the car 10 years and drive my average amount I drive now and I have to buy a new battery pack at the 10th year, even with that, I will have saved 50% on energy costs compared to my ICE. I figure the battery is just that, paying for half the total energy cost up front.
ICE autos are only minimal on service when they are new, when you reach the 7~8 year mark the maintenance costs start going up. My GMC van had it's 3rd transmission by 120k miles at $1500 a crack (700R4).
The Prius has been pretty good (75K miles Gen 1) but we had to have a new ECU a couple years ago and the door locks have begun to fail. The LRR tires don't last very long (3 sets to date) and recently the hybrid sys has begun lurching when starting and changing modes. Got to look into that soon.

What I tell my ICE customers: It takes money to drive, whether you are making payments up front or paying for maintenance later on, the cash out lay will be pretty much the same. Very few cars give you that freebee time between the warrantee lapse, last payment and the onset of repairs. I'm betting the leaf will have a long "freebee window" before the battery comes due.

GroundLoop said:

Beside the Volt (which is a hybrid), what other choice in EV's do you honestly see being available in the next 4-7 months?

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Isn't the iMiEV available in the US yet ? It sells like hotcakes over here.
What about the Think City ?
And the Tesla Roadster is surely available...

Oh the agony of your wait. We don't even get to order our LEAFs in the "forgotten 36" anytime soon. From my perspective, it gets almost comical to hear those who've already ordered complaining about the wait. No state incentive here in PA, either, but at least Obama is trying to make the $7500 federal credit a point-of-sale rebate, in effect, which would allow me to take the full $7500.

This is somewhat off topic but one problem I have with free scheduled maintenance in general is the pressure this has placed on manufacturers to extend their service intervals. Using the BMW as an example, the service intervals are roughly 15,500 miles (it is dynamically calculated and varies a little depending on how the vehicle is driven). Now, I know that BMW uses a special and expensive LL1 synthetic oil (as do a number of other German manufacturers), but I still have a hard time wrapping my head around an oil change interval this long. Likewise their lifetime fill synthetic transmission and differential lubricants. I've changed the engine oil in mine at twice the recommended intervals (about 8,000 miles) and changed the transmission and differential fluids at 100K. It has rewarded me with 170,000 completely trouble free miles.
(By the way, I have long used synthetic lubricants in everything I own that has any kind of fluid in it... I'm a big proponent of them.)

SanDust said:

BMW offers comprehensive coverage for four years and the plan is estimated to save $4,000. Other brands offer less coverage and/or shorter coverage periods. Lots of brands offer nothing. But here's the deal. If it costs $1000/year to perform basic maintenance you will end up paying $1000/year. It may be wrapped in the purchase price. It may be in paying more for options. But the costs will be there somehow. If you don't have to incur those costs you'll not have to pay them.

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jkirkebo said:

GroundLoop said:

Beside the Volt (which is a hybrid), what other choice in EV's do you honestly see being available in the next 4-7 months?

Click to expand...

Isn't the iMiEV available in the US yet ? It sells like hotcakes over here.
What about the Think City ?
And the Tesla Roadster is surely available...

Click to expand...

In the US, iMiEV is re-designed to meet NHTSA spec, and is still a year or more away.

http://www.plugincars.com/exclusive-mitsubishis-north-american-ceo-details-new-electric-vehicle-strategy-106728.html

Think City just delivered it's first car in the US. Limited production, less range, no back seat, and higher lease cost.

http://www.plugincars.com/smart-usa-delivers-first-fortwo-electric-car-also-available-convertible-106727.html

Tesla is on a ~12 month waiting list and 2-3 times the cost. Again, the back seat thing.

KeiJidosha said:

jkirkebo said:

GroundLoop said:

Beside the Volt (which is a hybrid), what other choice in EV's do you honestly see being available in the next 4-7 months?

Click to expand...

Isn't the iMiEV available in the US yet ? It sells like hotcakes over here.
What about the Think City ?
And the Tesla Roadster is surely available...

Click to expand...

In the US, iMiEV is re-designed to meet NHTSA spec, and is still a year or more away.

http://www.plugincars.com/exclusive-mitsubishis-north-american-ceo-details-new-electric-vehicle-strategy-106728.html

Think City just delivered it's first car in the US. Limited production, less range, no back seat, and higher lease cost.

http://www.plugincars.com/smart-usa-delivers-first-fortwo-electric-car-also-available-convertible-106727.html

Tesla is on a ~12 month waiting list and 2-3 times the cost. Again, the back seat thing.

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Ok on the iMiEV.
Though Think sells 4-seaters over here and they have a 24kWh battery with MORE range, not less. And your link is for the Smart ED, not the Think City.
http://www.think.no/nor/THINK-City/THINK-City-4-seter

I do think you can get a Tesla Roadster much faster than 12 months, if you are not too picky on options and color. The price argument stands though