December 2010 Lease VS Purchase

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1051

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If you receive your Leaf in December 2010 are you going to Lease or Purchase? In California with all rebates the purchase price is a little over 20K. Then you would get your rebates back by April 2011
 
A little more detail.

The Fed portion is a $7,500 tax credit. You have to wait to file in the year after you get the car, which may be 1Q 2011 depending on delivery. Alternatively, you could adjust exemptions to lower withholding and try to get some of it back earlier...Not sure how much you could really get back early that way.

The CA state portion is a $5K rebate, and you need proof of registration to file for that. So that's after delivery. I think the website says it may take 2-3 months to get that money. And that's if they don't run out, as the fund is only $4M.

Bottom line, if you buy the car, you have to come up about $38K to drive off. You won't get the incentives back for awhile.

If you lease, the fed portion is factored into the price, so you only have to file for the CA rebate after taking delivery.

Until we know more about the lease terms, it's hard to compare them too much. But leasing is definitely cheaper out of the gate....

I definitely want to learn more...

Randy
 
Interesting. In WA we have different parameters to consider.

Buy :

December '10 : $33,125 ($32,780 MSRP + $345 Delivery* ). Sales Tax Exemption.
April '11 : -$7,500 tax credit

Lease :

December '10 : $1,999. Sales Tax Exemption.
Jan '11 - Nov '13 : $349 / month + nearly 10% sales tax. (exemption expires in 2010)
December '13 : Buy at ? (residual amount) or pay disposession fee of ?

* : I used lease figures to calculate this (33,720 - 32,780 - 595).
 
I would be very surprised if they accepted payments in the Fall. It would be an accounting transaction that doesn't gain them much (they are not THAT cash poor) and it would make decisions about leasing that much more problematic. It would be hard to start paying a lease on an physical asset that is not on a US landed basis.

In short, I think payment and delivery will be at the same time.
 
sjfotos said:
I would be very surprised if they accepted payments in the Fall. It would be an accounting transaction that doesn't gain them much (they are not THAT cash poor) and it would make decisions about leasing that much more problematic. It would be hard to start paying a lease on an physical asset that is not on a US landed basis.

In short, I think payment and delivery will be at the same time.

Shouldn't be a big deal to sign the papers in August - essentially a contract to buy in December with particular conditions.
 
Hi evnow,
I agree that such a contract could be constructed, I just think it will not be worth the time to do so for Nissan. They end up with additional cash, presuming some payments, but a current liability that needs to be tracked and which does nothing for the quarterly or yearly results. It is just a pain in the neck for all concerned :) However, you may very well be right and they will start it all up in the fall.
 
sjfotos said:
Hi evnow,
I agree that such a contract could be constructed, I just think it will not be worth the time to do so for Nissan. They end up with additional cash, presuming some payments, but a current liability that needs to be tracked and which does nothing for the quarterly or yearly results. It is just a pain in the neck for all concerned :) However, you may very well be right and they will start it all up in the fall.

They don't need to take any more money. The contracts would not need to go anywhere on their balance sheet.

BTW, even if they took money - and put it in current liability - the money itself goes to current assets, so should be fine. Anyway, isn't the whole idea of giving salary to "bean counters" is to manage this kind of "pain in the neck" ? Nothing compared to all the LCs and derivative, forex & future contracts they need to manage anyway.
 
evnow said:
Interesting. In WA we have different parameters to consider.

Buy :

December '10 : $33,125 ($32,780 MSRP + $345 Delivery* ). Sales Tax Exemption.
April '11 : -$7,500 rebate

Lease :

December '10 : $1,999. Sales Tax Exemption.
Jan '11 - Nov '13 : $349 / month + nearly 10% sales tax. (exemption expires in 2010)
December '13 : Buy at ? (residual amount) or pay disposession fee of ?

* : I used lease figures to calculate this (33,720 - 32,780 - 595).

Again, the $7500 is a TAX CREDIT, not a rebate. Not everyone will get the full credit in April if they decide to buy. But if you lease, they're going to give you the full credit.
 
leaffan said:
Again, the $7500 is a TAX CREDIT, not a rebate. Not everyone will get the full credit in April if they decide to buy. But if you lease, they're going to give you the full credit.

True. BTW, I don't remember the details, but AMT is not applicable to this credit. Ofcource if you don't have enough income to be paying even this much tax - how are you going to buy the car ?
 
I made a general assumption that they have to do something in August/September to get buyers on the hook. Whether they'll collect more money or get a signed contract, I'm not sure. But somehow you have to commit because chargers are going to get installed in garages, etc. So you have to somehow show them you're going to buy the car? I'd love to learn more...
 
Randy said:
I made a general assumption that they have to do something in August/September to get buyers on the hook. Whether they'll collect more money or get a signed contract, I'm not sure. But somehow you have to commit because chargers are going to get installed in garages, etc. So you have to somehow show them you're going to buy the car? I'd love to learn more...

The "charger" (it's not really a charger, just protection equipment and interface), is being installed by a third party company, and will work for any newly designed EV or PHEV, so you will be paying this third party company (likely aerovironment)... if you don't buy the Leaf, you have the EVSE (Electric Vehicle Service Equipment, which is what it really is), and can use it on any future PHEV/EV you buy...

http://www.avinc.com/plugin
 
mitch672 said:
Randy said:
I made a general assumption that they have to do something in August/September to get buyers on the hook. Whether they'll collect more money or get a signed contract, I'm not sure. But somehow you have to commit because chargers are going to get installed in garages, etc. So you have to somehow show them you're going to buy the car? I'd love to learn more...

The "charger" (it's not really a charger, just protection equipment and interface), is being installed by a third party company, and will work for any newly designed EV or PHEV, so you will be paying this third party company (likely aerovironment)... if you don't buy the Leaf, you have the EVSE (Electric Vehicle Service Equipment, which is what it really is), and can use it on any future PHEV/EV you buy...

http://www.avinc.com/plugin

Not if you get free charger. There has to be some agreement to get leaf in that case.
 
maybe, but there is no doubt some people who apply for the EVSE equipment, get it installed, and either move by the time they take delivery, or perhaps have a change of heart, or finances and not be able to buy it, they probably have that factored in as well... It's probably assumed most will follow through, the lucky participants in the EV Project will be able to tell use what the contracts/agreements say in due time.
 
mitch672 said:
maybe, but there is no doubt some people who apply for the EVSE equipment, get it installed, and either move by the time they take delivery, or perhaps have a change of heart, or finances and not be able to buy it, they probably have that factored in as well... It's probably assumed most will follow through, the lucky participants in the EV Project will be able to tell use what the contracts/agreements say in due time.

The agreement will likely specify backing out conditions. Some monetary compensation ?

This could be similar to getting a cable connection. BTW, the charger will be installed in Q4.

http://www.theevproject.com/newsletter/04082010.html
 
Well I plan on leasing...but if the Nissan warranty is like the Amp Electric lease
Amp Electric Vehicles will warrant the batteries, drive motors, and conversion components for 8 years or 100,000 miles, whichever comes first
well I will change my mind and buy.

Gavin
 
I'm sure they will have warranties like the current cars - some parts warranted for 1 year, some others 3 years, others for 7/10 years.
 
Just looked at Amp conversions. When we see their costs - we can understand how cheap Leaf is. They want 25K just for the conversions - and you need a donar car too.
 
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