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evnow
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Posts: 11480
Joined: Thu Apr 22, 2010 11:41 am
Delivery Date: 25 Feb 2011
Leaf Number: 303
Location: Seattle, WA

Re: Is there something wrong with Leaf lease numbers ?

Sun May 23, 2010 10:13 pm

planet4ever wrote: OK, I give up. Surely the money factor would be the same for both models. If so, either my formulas are bad or else the residual percentage is different between the two. I suspect strongly that it must be my formulas.
See my new calc. They are completely depreciating SL premium in 3 years.
1st Leaf : 2/28/2011 to 5/6/2013
2nd Leaf : 5/4/2013 to 3/21/2017
Volt : 3/25/2017 to 5/25/2018
Model 3 : 5/10/2018 to ?

mxp
Posts: 762
Joined: Fri Apr 23, 2010 9:32 pm
Delivery Date: 26 Jun 2015
Location: Fremont, CA

Re: Is there something wrong with Leaf lease numbers ?

Sat Jun 12, 2010 10:51 am

I have never leased before, so I am interested in these calculations.

In any given car lease, there is the finance component. What is the effective "loan" interest rate given the money factor and perhaps other applicable variables?

I suppose the idea is if the effective "loan" interest rate in the Nissan lease offer comes up to say 8% per annum, why would someone go with the lease when you could easily get say 3.5% vehicle loans from any financial institution ?

I understand that in lease scenario, the "loan" dollar amount is only for the portion of the car (i.e. minus the residual) and in a full loan, it's for the full purchase price, but a full loan scenario wins out if the car is worth quite a lot more than the theorectical residual computed in the Nissan lease offer.

Please help me understand why the lease is still the best approach to owning the Leaf?
Thanks!

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evnow
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Joined: Thu Apr 22, 2010 11:41 am
Delivery Date: 25 Feb 2011
Leaf Number: 303
Location: Seattle, WA

Re: Is there something wrong with Leaf lease numbers ?

Sat Jun 12, 2010 11:08 am

mxp wrote:I have never leased before, so I am interested in these calculations.

In any given car lease, there is the finance component. What is the effective "loan" interest rate given the money factor and perhaps other applicable variables?
See this article. My calculation is based on that.

http://www.edmunds.com/advice/leasing/a ... ticle.html

I suppose the idea is if the effective "loan" interest rate in the Nissan lease offer comes up to say 8% per annum, why would someone go with the lease when you could easily get say 3.5% vehicle loans from any financial institution ?
Actually, current auto rates are around 6.5%.

http://www.bankrate.com/auto.aspx
I understand that in lease scenario, the "loan" dollar amount is only for the portion of the car (i.e. minus the residual) and in a full loan, it's for the full purchase price, but a full loan scenario wins out if the car is worth quite a lot more than the theorectical residual computed in the Nissan lease offer.
Not really. You are paying finance charges for the full price - afterall someone has to pay for the full car - and that won't be the auto manufacturer or leasing company. What you are not paying for is the full depreciation.
Please help me understand why the lease is still the best approach to owning the Leaf?
Lease is attractive since Leaf is a V1 product.
- In 3 years we can expect lot more options
- In 3 years we can expect better batteries with higher range
- You don't have to worry about the capacity degradation of batteries

But, when the full lease details come out - if I see that I'd have to pay a lot more for leasing vs buying, I'll buy instead of lease.
1st Leaf : 2/28/2011 to 5/6/2013
2nd Leaf : 5/4/2013 to 3/21/2017
Volt : 3/25/2017 to 5/25/2018
Model 3 : 5/10/2018 to ?

mxp
Posts: 762
Joined: Fri Apr 23, 2010 9:32 pm
Delivery Date: 26 Jun 2015
Location: Fremont, CA

Re: Is there something wrong with Leaf lease numbers ?

Sat Jun 12, 2010 11:43 am

Hi EVNow,
Thanks for your explanation and the example lease numbers breakdown you provided in this posting. It was very helpful indeed.

:-)

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LEAFer
Posts: 2647
Joined: Mon May 24, 2010 10:10 am
Delivery Date: 19 Jan 2011
Leaf Number: 000215
Location: Sacramento Area

Re: Is there something wrong with Leaf lease numbers ?

Sat Jun 12, 2010 1:21 pm

evnow wrote:
mxp wrote:I suppose the idea is if the effective "loan" interest rate in the Nissan lease offer comes up to say 8% per annum, why would someone go with the lease when you could easily get say 3.5% vehicle loans from any financial institution ?
Actually, current auto rates are around 6.5%.
Some Credit Unions have much better than 6.5% rates, sometimes "on sale" or seasonal. Assume for a minute my/your C.U. offers a 3.5% rate. What would be the process ? Could it still work ? Because at the moment the $7,500 tax credit goes to the "purchaser" of the car (i.e. the Leasing Company). Will this work for and apply to your C.U. so that the savings of the lower rate is not negated by a higher financed amount ? Would the willingness/ability of the C.U. doing the deal with you depend on the complexity of the (tax credit) paperwork ? Are there other obstacles keeping the C.U. from substituting for Nissan's Leasing arm ?
2011 Silver SL+QC [Mfg: 11/2010] 36mo/15k LEASE
06Jun2013 Status [28.5 months][34,173 miles][11 bars]
Lost CapacityBar 6/6/13 @34,173 miles while in LEAF Battery Monitor: 83.41%, 71.4F (avg); cool overnight;

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evnow
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Joined: Thu Apr 22, 2010 11:41 am
Delivery Date: 25 Feb 2011
Leaf Number: 303
Location: Seattle, WA

Re: Is there something wrong with Leaf lease numbers ?

Sat Jun 12, 2010 1:30 pm

LEAFer wrote:Because at the moment the $7,500 tax credit goes to the "purchaser" of the car (i.e. the Leasing Company). Will this work for and apply to your C.U. ...
No - when you buy the car with financing you own the car, though the lender has a lien on it. You will get the tax credit.

You can
- Finance full amount & pay back $7.5K when you get the tax credit
- Finance only $25K, assuming you can come up with the rest

BTW, I see that some places like BOA and Pen fed are offering rates from below 4%. My CU offers 3.8% minimum - though not sure whether they do that for $32K and longer terms. I'll find out (though I'll pay cash if I decide to buy).
1st Leaf : 2/28/2011 to 5/6/2013
2nd Leaf : 5/4/2013 to 3/21/2017
Volt : 3/25/2017 to 5/25/2018
Model 3 : 5/10/2018 to ?

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LEAFer
Posts: 2647
Joined: Mon May 24, 2010 10:10 am
Delivery Date: 19 Jan 2011
Leaf Number: 000215
Location: Sacramento Area

Re: Is there something wrong with Leaf lease numbers ?

Sat Jun 12, 2010 1:49 pm

Could the C.U. buy the car (they get the Fed Tax Credit) and lease it to you ? ( I've only leased once ... thru the mfg's finance company, similar to the Nissa LEAF lease setup. )
2011 Silver SL+QC [Mfg: 11/2010] 36mo/15k LEASE
06Jun2013 Status [28.5 months][34,173 miles][11 bars]
Lost CapacityBar 6/6/13 @34,173 miles while in LEAF Battery Monitor: 83.41%, 71.4F (avg); cool overnight;

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evnow
Moderator
Posts: 11480
Joined: Thu Apr 22, 2010 11:41 am
Delivery Date: 25 Feb 2011
Leaf Number: 303
Location: Seattle, WA

Re: Is there something wrong with Leaf lease numbers ?

Sat Jun 12, 2010 2:11 pm

LEAFer wrote:Could the C.U. buy the car (they get the Fed Tax Credit) and lease it to you ? ( I've only leased once ... thru the mfg's finance company, similar to the Nissa LEAF lease setup. )
I guess so - but I doubt any CU would do it. Esp on a new car like Leaf.
1st Leaf : 2/28/2011 to 5/6/2013
2nd Leaf : 5/4/2013 to 3/21/2017
Volt : 3/25/2017 to 5/25/2018
Model 3 : 5/10/2018 to ?

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planet4ever
Posts: 4674
Joined: Sat Apr 03, 2010 9:53 pm
Delivery Date: 02 May 2011
Leaf Number: 1537
Location: Morgan Hill, CA, south of San Jose

Re: Is there something wrong with Leaf lease numbers ?

Sat Jun 12, 2010 3:07 pm

evnow wrote:
LEAFer wrote:Because at the moment the $7,500 tax credit goes to the "purchaser" of the car (i.e. the Leasing Company). Will this work for and apply to your C.U. ...
No - when you buy the car with financing you own the car, though the lender has a lien on it. You will get the tax credit.

You can
- Finance full amount & pay back $7.5K when you get the tax credit
- Finance only $25K, assuming you can come up with the rest
One other variant to consider, if you normally pay at least $7500/year in taxes, and if you get the car early in 2011, as many will:

- Finance the full amount, but reduce your income tax withholding by as much as you can, up to $625/month.
- That will give you the extra money you need to make the higher payments, and also sock some away for 2012.
- Restore your normal withholding in Jan 2012. Start using that money you saved last year to continue making the car payments.
- You should come out even or slightly ahead on your taxes in April, 2012.

Of course you are still going to be stuck with high car payments for the next four years or more, but by that time you are going to be making more money (you hope) or, at worst, you can sell the Leaf a year or two later for a really great price (we all hope).
End of April 2013: Traded my 2011 SL for a 2013 S with charge pkg.

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