2018 - 2019 40KWH LEAF: Should You Buy or Lease?

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LeftieBiker

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This first post is all that you need to read. Subsequent posts are about the writing of this document, some agreement and some dissent, etc. Copyright 2019 by Michael Cerkowski, aka LeftieBiker. Repost this freely but do not modify it without permission. It was written with significant input from the Leaf community on this site.



Given the substantial investment involved in buying or leasing a new EV like the Leaf, and the special circumstances involved in driving any EV, I felt that it would be a good idea to create a guide to help prospective Leaf drivers (and for that matter most other EV shoppers) decide whether buying or leasing makes more sense to them. First, definitions:

BUYING

This is an easy one. Buying any car involves negotiating a final price “out the door” (including all charges and fees) for the vehicle, and then either paying with cash or check from one's personal funds, or arranging a loan, usually with the automaker's financing arm, sometimes through a third party bank or credit union. When buying a car you need to look at several factors that affect how much you will pay, in total, for it. I've already mentioned the final, “out the door” (or “OTD”) price. There is also the interest rate on the loan, which can have a large additional affect on the final cost of the car. Some manufacturers offer 0% interest rate loans as an enticement to buy, and these are usually worth using. Remember that a low monthly payment with a high interest rate (usually for 6 or more years) is not a good deal.

LEASING

Leasing is a more complicated and tricky process. Until EVs became available to lease, leasing was used mainly by people who could either write the extra cost off as a business expense, or who wanted to drive a new car every two to three years, and didn't particularly care about the lack of ownership – it was essentially a rental for several years. Since the advent of electric vehicle leases, however, leases have acquired two advantages that were not there before, or didn't matter much. I'll get to that shortly. First, how does a lease work? When you lease a new car, you are agreeing to essentially pay the manufacturer for the depreciation of the market value of the car during the lease term, plus interest (called, confusingly enough, the “Money Factor” or “MF”). There are also fees for acquiring the lease, charges for dealer-installed options, and, if purchased, service contracts and extended warranties. Those last few are also involved if you purchase. At the time you lease, the leasing contract assigns a market value to the car at the end of the lease period. This value is called the “Residual” or “Residual value.” When the lease term ends, you have two or three options: you can buy the car for the residual value in the contract (sometimes but not always this figure can be discounted or negotiated), or you can turn the car back in to the leasing entity (usually a subsidiary of the auto manufacturer), at which time you are responsible for paying for any “excessive” damage, or odometer mileage in excess of the limit specified in the lease document. There is often a third option: asking for and receiving a lease extension, which is exactly what the name implies: an extension of the existing terms of the lease for an additional period of time. These extensions usually range from six months to one year, typically, although they can be shorter, and can usually be terminated by you, the lessee, at any time. Lease extensions can be very handy if, for example, your lease ends next month, but the car you want to lease won't be available for another 6 months.



SHOULD YOU BUY OR LEASE?


In the case of normal, internal combustion cars (aka “ICEs” or “ICEVs”), the answer is fairly simple. If you can write off a lease as a business expense, and like to drive a nearly-new car all the time, then a lease is the answer. (If you find that you really love your leased car, you can almost always buy it when the lease ends, for the residual price.) If you want to get the best value, and tend to keep cars for 5 years or longer, then buying is the better choice. In the case of EVs, though, things get more complicated. First, the US government has been offering a tax credit of up to $7500 when you purchase a qualifying electric vehicle. The catch is that you have to owe at least $7500 dollars in Federal income taxes, in a single year, to collect the full amount. If you owe less, then you receive whatever amount you owe in taxes. (There is a way or two around this, involving certain retirement accounts, but for most people what I just wrote applies.) Until recently, Nissan has been collecting the $7500 tax credit when a Leaf is leased (because NMAC, their leasing arm, is the actual “owner” of the car being leased) and applying all of it directly to the lease, as a “Capital Cost Reduction, which has the same affect as boosting the lessee's down payment by an additional $7500. This changed in 2018. Now, depending on the trim level, region, and how badly Nissan wants to sell that trim level in that region, Nissan gives you a “discount” of between $2000 and $9000, keeping the rest in the case of the lower amounts. Nonetheless, Nissan, GM, and other manufacturers are still usually passing on SOME of the Federal tax credit to reduce the cost of leases (GM also puts some of the tax credit into inflating the residual so you are paying less of the depreciation: this helps lessees who don't plan to buy the car later, and hurts those who do). So for someone who doesn't owe a huge amount in income tax (like many retirees and people of moderate income), this makes a lease more financially attractive. The other advantage of leasing is the ability to “trade up” a car with rapidly-aging technology for one with more advanced features and – usually most important - a larger battery pack with more range. And again, you still have the option of buying the car for the residual, with or without possible discounts, if you want to keep it. Financially, this option can be anything from “a great deal” to “very expensive” depending on the terms of the lease and any discount on the residual. Manufacturer incentives for buying, however, are often higher than those for leasing, especially in the case of Nissan.


RANGE LOSS: THE ELEPHANT IN THE ROOM

The biggest pitfall for prospective EV drivers is one that you will rarely hear mentioned in a dealer showroom: range loss. Why is this such a pitfall? Mostly because of two factors: Winter range reduction, and battery pack degradation. Winter range reduction is due to cold weather and is temporary, while pack degradation is permanent and essentially irreversible. The biggest mistake that people make when buying or leasing an EV – ANY EV, but especially those with actual driving ranges of less than 100 miles in average conditions – is not realizing how much EPA-estimated range they need for their lifestyle, especially in the Winter. They also fall victim to a factor that they usually don't even know about: battery degradation. The EPA deserves a large portion of the blame here, for not giving cold weather range estimates as well as their best case rating, and for not mentioning that all EVs lose range to some degree over the years.

The first (and many subsequent) Leaf owners, having been told that the car would have a range of “100 miles” by salespeople, were treated to a rude awakening from the EV dream when they discovered that not only was the actual driving range (including highway driving and heater use) only about 75-85 miles at most, but that the Range in Winter, again driving on the highway and using the heater, was about half that. Later, as the cars lost that new car gleam (and sometimes even sooner) Leaf drivers in warmer climates began to discover that their cars' battery packs were degrading (losing capacity) at an alarming rate, as indicated both by the capacity “gauge” on the dashboard and by actual available driving range. The capacity bar display, which consists of 12 tiny capacity bars adjacent to the 12 much larger charge level bars, began to show missing capacity as soon as a few months after purchase in hotter states like Arizona, but then also began to show missing capacity bars in states like California, Florida, New Mexico... Those original battery packs, which I later dubbed the “Canary” packs, proved to be a disaster for many Leaf owners in all but the coolest states. Nissan subsequently improved the heat tolerance of the packs in Leafs manufactured beginning in April of 2013, and improved it again for the 2015 model year. They also implemented, while a class action lawsuit on the problem was being initiated, a battery capacity warranty that has provided some, but by no means all, owners of degraded Canary pack Leafs with new replacement batteries. From Spring of 2013 through 2015(when the more heat-resistant “Lizard” pack was introduced), battery degradation became a serious issue mainly for Leaf drivers in Hot local and regional climates, with range loss elsewhere being acceptable. In 2016, with the introduction of the 107 mile EPA-rated 30kwh pack, range worries eased – at least until some 30kwh Leaf drivers began to see indicated capacity loss not unlike that of the first 24kwh Canary packs. Nissan claims that this is not, in fact, actual capacity loss, but is an error in programming of the Battery Management System, or “BMS”, that leads it to gradually begin to underestimate capacity over time. Nissan has issued a software “fix” for this, and it does increase the capacity estimate to what would be typical for a pack with no abnormal degradation. Some owners/lessees of 30kwh Leafs agree that their driving range has been restored, while others do not. It thus appears that this BMS update fixes inaccurate capacity estimation and display in some Leafs that have it, while doing nothing permanent for the significant number of 30kwh Leafs with actual capacity loss. It should be noted that Leafs have, overall, experienced much greater capacity losses over the years than Teslas and Volts...


WHAT ABOUT THE 2018 LEAF?

When battery capacity was increased from the original 24kwh to 30kwh in 2016, it was done by packing lithium cells more densely into the same space in the car. Many had hoped by this time that Nissan would begin to install a “Thermal Management System” in the car, to cool the pack when hot, instead of just warming it when it is very cold, which is the present setup. They chose not to do so. When the 2018 40kwh Leaf was announced, a TMS was again expected – and again not implemented. Instead, the passively air-cooled pack now has 25% more capacity installed in a housing only very slightly (about 5mm) larger than the 30kwh pack, with a little less space for air to flow above the pack. Many of us find this concerning, but have leased or purchased a 2018 Leaf anyway. My own capacity loss, as measured by the LeafSpy app, has been about 5.5% over six months (update: about 6% the first year). Others have measured significantly less capacity loss over roughly the same period. At this point we just don't know how fast capacity loss, which does tend to be higher in the first year, will occur in the 40kwh Leaf battery pack.


WILL YOU WANT TO BUY OR LEASE?

Quite a few people have bought a 2018 leaf, and don't regret it. If you live in a cool climate, don't need (and likely won't need in the future) a range of more than about 70 miles in Winter or 100 miles in Summer, and don't really care about emerging technologies that may be available in future EVs, then buying makes sense. Nissan offers an 8 year / 100,000 mile capacity warranty on the 2018 that essentially guarantees roughly 66% of original capacity or the battery gets replaced for free during that period. If you are still wary of possible substantial capacity loss, feel that the driving range of the current Leaf is adequate but not generous, or if you think that the Leaf is the best EV for you now, but may not or probably won't be in several years, then I strongly suggest that you lease. Finally, if you plan to take many long trips that will involve multiple DC Fast Charges, I suggest you either wait for the ePlus version of the Leaf, or buy or lease a Chevy Bolt. Why? because the 40kwh Leaf, even with the latest firmware to ameliorate the “Rapidgate” charging issue, gets the battery too hot in multiple fast-charging sessions for its long term health.

In short: if you are confident that a 2018 Leaf is right for you, don't live in a particularly hot climate, and understand that real world (and especially Winter) range is often much less than the EPA rating, then buying will save you money. If you want to play it safe and reserve the option of switching to another car in three years, and understand that this 'safety net' will cost you more than buying, then I strongly suggest you lease a Leaf. Likewise I suggest that you lease, not buy, if you live in one of the hotter regions of the US. If you live in one of the HOTTEST regions, then I strongly suggest you lease or buy a Bolt or Tesla, which both have an effective Thermal Management System.

SHOULD YOU DRIVE AN EV AT ALL?

While the driving range of most EVs has improved dramatically in the last couple of years, it still remains less than many people typically drive. If you regularly need 150 miles of range, year round, don't buy or lease a Leaf - look at the Bolt or Model 3 instead. If you regularly need 200 or more miles of year round range, then an EV is not presently a good choice for you. A Plug-In Hybrid Electric Vehicle (PHEV) is a much better choice, as the driving range (including use of the gasoline engine) is the same or even greater than that of typical ICE cars. Driving an EV as your sole or main vehicle also means that you must have access to a charging station at home, and if you are commuting more than 80 miles or so, at work as well. Public charging alone is NOT sufficient for most people, and relying on it for all of your charging puts additional strain on a still-inadequate charging infrastructure.


WHAT SHOULD YOU LOOK FOR AS OPTIONS?

Until 2018, Nissan always equipped the (2013 and newer) Leaf SV and SL trim levels with their excellent “Hybrid Heat Pump” heating system, and all Leafs with heated seats (later front seats only) and heated steering wheel. No longer. If you live in a region where it gets even CHILLY in the Winter, make sure that the Leaf you buy or lease has the “Cold Weather Package”! Not only do the heated seats and wheel (all trims with Cold Weather Package) make the car much more comfortable to drive and for front passengers to ride in, but the heat pump (SV and SL with Cold Weather Package) significantly increases the driving range in cold weather above roughly 32F. Do NOT assume that what you are told about this option by salespeople is correct: it has not been installed in as many Leafs as should have been the case (and it can't be added by a dealership), and some salespeople are misleading potential Leaf buyers and lessees about the importance, or even the presence, of this important option package.
 
I had started this yesterday. Since WetEV is experiencing the usual problems with trying to write a collaborative document from scratch on the Web (and since the spam is light), I went ahead and finished it tonight. As usual, comments, suggestions and corrections are welcome. The first post will, also as usual, be the document for people to read, with subsequent posts being the aforementioned things. My arms are ready to drop off, so I'll leave it at that for now. I did try to incorporate WetEV's suggestions about not being so negative about buying and about degradation.
 
Content looks great. I tend to prefer bullet points to long paragraphs when possible but that may just be a personal preference. Definitely a useful document!
 
I like bullet points as well, but I've found that people looking for information seem generally to prefer a document that 'talks to them' rather than one that lists salient points. Maybe I'll throw in a few asterisks later. ;-)
 
25% increase in capacity. We "wanted" 25% increase in cells (which would have aided in cooler packs, less degradation, etc) but that didn't happen.

A mention of climate is key since it greatly affects range. My degraded LEAF will qualify for pack replacement long before my range hits 70 miles but I don't see the adverse winters that are common in the midwest.
 
LeftieBiker said:
Given the substantial investment involved in buying or leasing a new EV like the Leaf, and the special circumstances involved in driving any EV, I felt that it would be a good idea to create a guide to help prospective Leaf drivers (and for that matter most other EV shoppers) decide whether buying or leasing makes more sense to them.

You should discuss if the LEAF or any other EV is a realistic choice for them. If you are a salesman, driving worse case 180 miles per day in worse case weather near -20C on snowy and ice roads, no EV today will work well. Not even the Tesla Model S or X, unless there is always a supercharger handy. And maybe not even then.

https://www.teslarati.com/tesla-battery-range-sub-zero-snowy-conditions/

57% loss of range in horrid conditions probably isn't the worst case. This sort of thing hits ICEs as well, but they have faster fueling times and many more fueling stations. And yes, it is less critical than it was in the early days of EVs.

Of course, most people depend on driving far shorter distances in weather than isn't that bad.

Also, if you don't have home charging, or reliable work charging, don't even think about an EV. Public charging can be available, and not available. It can be free, and far more expensive than gasoline. Just a bad idea as the main way of charging your EV.
 
Very good post. I would recommend editing the "2018 Leaf" to "2018-2019 40 kWh Leafs". Also, when buying, you can also trade up. And add to do a cost analysis between leasing and buying. If your purchase price is less than the lease + residual, it's usually cheaper to buy.
 
DaveinOlyWA said:
25% increase in capacity. We "wanted" 25% increase in cells (which would have aided in cooler packs, less degradation, etc) but that didn't happen.

Fixed.

A mention of climate is key since it greatly affects range. My degraded LEAF will qualify for pack replacement long before my range hits 70 miles but I don't see the adverse winters that are common in the midwest.

The biggest pitfall for prospective EV drivers is one that you will rarely hear mentioned in a dealer showroom: range loss. Why is this such a pitfall? Mostly because of two factors: Winter range reduction, and battery pack degradation. Winter range reduction is due to cold weather and is temporary, while pack degradation is permanent and essentially irreversible. The biggest mistake that people make when buying or leasing an EV – ANY EV, but especially those with actual driving ranges of less than 100 miles in average conditions – is not realizing how much EPA-estimated range they need for their lifestyle, especially in the Winter. They also fall victim to a factor that they usually don't even know about: battery degradation. The EPA deserves a large portion of the blame here, for not giving cold weather range estimates as well as their best case rating, and for not mentioning that all EVs lose range to some degree over the years.

The first (and many subsequent) Leaf owners, having been told that the car would have a range of “100 miles” by salespeople, were treated to a rude awakening from the EV dream when they discovered that not only was the actual driving range (including highway driving and heater use) only about 75-85 miles at most, but that the Range in Winter, again driving on the highway and using the heater, was about half that.
 
Triggerhappy007 said:
Very good post. I would recommend editing the "2018 Leaf" to "2018-2019 40 kWh Leafs". Also, when buying, you can also trade up. And add to do a cost analysis between leasing and buying. If your purchase price is less than the lease + residual, it's usually cheaper to buy.

The first is fixed. As for the economics of leasing vs buying, that varies too much to make a single definitive statement, other than that leasing is usually more expensive. It isn't always more expensive, though, mainly because of residual discounts. I'll add mention of generally higher incentives for buying.
 
WetEV said:
LeftieBiker said:
Given the substantial investment involved in buying or leasing a new EV like the Leaf, and the special circumstances involved in driving any EV, I felt that it would be a good idea to create a guide to help prospective Leaf drivers (and for that matter most other EV shoppers) decide whether buying or leasing makes more sense to them.

You should discuss if the LEAF or any other EV is a realistic choice for them. If you are a salesman, driving worse case 180 miles per day in worse case weather near -20C on snowy and ice roads, no EV today will work well. Not even the Tesla Model S or X, unless there is always a supercharger handy. And maybe not even then.

https://www.teslarati.com/tesla-battery-range-sub-zero-snowy-conditions/

57% loss of range in horrid conditions probably isn't the worst case. This sort of thing hits ICEs as well, but they have faster fueling times and many more fueling stations. And yes, it is less critical than it was in the early days of EVs.

Of course, most people depend on driving far shorter distances in weather than isn't that bad.

Also, if you don't have home charging, or reliable work charging, don't even think about an EV. Public charging can be available, and not available. It can be free, and far more expensive than gasoline. Just a bad idea as the main way of charging your EV.

Done, although probably not as extensively as you'd like.
 
Higher incentives for buying are dependent of getting the full tax credit. In most of the past; leasing was cheaper "up front" due to full tax credit being applied to the lease cost in addition to Nissan and dealer incentives.

The reality is a guideline shouldn't delve too deeply into the details the programs change so much. Nissan's zero % financing was a tough deal for me to pass up despite my knowing in advance, I would not be happy with the car long term.

I am guessing this will eventually be moved from the threads after completion and a file created?
 
I am guessing this will eventually be moved from the threads after completion and a file created?

This is basic HTML, and can be easily reposted elsewhere as plain text. I had hoped that people would repost my other several "FAQs" elsewhere, but AFAIK they haven't. I plan to make several sticky posts here, each with links to multiple topics, and this will be one of the links under "EV Shopping."
 
LeftieBiker said:
Done, although probably not as extensively as you'd like.

SHOULD YOU DRIVE AN EV AT ALL?
Move this section to the top. Before worrying about details, should you even be thinking about this?
While the driving range of most EVs has improved dramatically in the last couple of years, it still remains less than many people typically drive. If you need 150 miles of range, year round, don't buy or lease a Leaf - look at the Bolt or Model 3 instead. If you need 200 or more miles of year round range, then an EV is not presently a good choice for you. A Plug-In Hybrid Electric Vehicle (PHEV) is a much better choice, as the driving range (including use of the gasoline engine) is the same or even greater than that of typical ICE cars. Driving an EV as your sole or main vehicle also means that you must have access to a charging station at home, and if you are commuting more than 80 miles or so, at work as well. Public charging alone is NOT sufficient for most people, and relying on it for all of your charging puts additional strain on a still-inadequate charging infrastructure.

A Bolt is a realistic alternative, but does not have 150 miles of NWR.

EPA range is 238 miles. Cold weather range for a new Bolt has been reported as low as 160 miles.

https://www.slashgear.com/5-things-we-learned-on-our-chevrolet-bolt-winter-road-trip-19485525/

Battery warranty is 60% of original capacity. Add a reserve of 10%. In Montreal, NWR is closer to 86 miles than 150 miles. Rather better in warmer places, but even in some warm place where you never lose range to cold, Hawaii perhaps, NWR isn't more than 130 miles.
 
I'll look at adjusting ranges. As for first asking if they should be driving an EV at all: remember that they will be reading this here (for now), which very likely means that they are doing research and are not complete newbies. I think it makes more sense to make the range issue more clear. The time taken reading this is modest, and they will learn more for the future if they don't stop after the first section. What I may do instead is add a note at the beginning to pay close attention to the range and charging information.
 
Great post!

However, can I convince you to change this line:
"If you need 200 or more miles of year round range, then an EV is not presently a good choice for you."

To this:
"If you need 200 or more miles of year round range, then you should review the available charging options and charging times along your travel routes first before considering an EV."
 
Oils4AsphaultOnly said:
Great post!

However, can I convince you to change this line:
"If you need 200 or more miles of year round range, then an EV is not presently a good choice for you."

To this:
"If you need 200 or more miles of year round range, then you should review the available charging options and charging times along your travel routes first before considering an EV."

I'm not going to suggest to anyone that in order to travel as far as they need to go, they will always have to charge en route. Not with a 40kwh Leaf. Sorry. I will add "regularly."
 
LeftieBiker said:
I'll look at adjusting ranges. As for first asking if they should be driving an EV at all: remember that they will be reading this here (for now), which very likely means that they are doing research and are not complete newbies. I think it makes more sense to make the range issue more clear. The time taken reading this is modest, and they will learn more for the future if they don't stop after the first section. What I may do instead is add a note at the beginning to pay close attention to the range and charging information.

Some of the early adopter that are still around complaining shouldn't have bought or even leased an EV to begin with.

It isn't like owning/leasing an EV is something Dad or Mom did, in most cases. It isn't something your brother can tell you about, in most cases. Assume complete newbies in this discussion, as we have some "old time" newbies in the group.

An EV with an EPA range of 80 miles just isn't realistic for a 50 mile commute, in any climate.

Yes, the first section should have the most important thing: and that is should you even be buying/leasing an EV at all at this time. And perhaps they might work out what they need in an EV before considering one at all.

Once again, this is just wrong:

If you regularly need 150 miles of range, year round, don't buy or lease a Leaf - look at the Bolt or Model 3 instead.

A Bolt doesn't have 150 miles of No Worries Range in Hawaii, much less in Denver or New York or Manitoba.

A Model 3 with a long range battery has a warranty of 70% capacity, you need a reserve of 10% or so, and cold weather reduces range a lot, as much as 50% in a very cold place. So again, start with the EPA range of 310 miles, multiply by 0.7*0.9*.5: gets you below 100 miles. If you had a commute with no reliable workplace charging, you might not make comfortably if near the end of warranty on a bad day. Yes, you do have well over 150 miles of NWR in Hawaii. Denver? Probably not. Yukon, no way.

https://www.tesla.com/support/Vehicle-warranty?redirect=no

Model 3 with Long-Range Battery - 8 years or 120,000 miles, whichever comes first, with minimum 70% retention of Battery capacity over the warranty period.
 
Let's agree to disagree. I think you should fight with Oils4AsphaultOnly for a while, instead. ;-) I will note that we're talking about a 150 mile EV here, not an 80 mile one. If the Leaf had had an actual 100 mile range, and it stuck around for a few years, most of the people you mention would still like driving an EV.
 
LeftieBiker said:
Let's agree to disagree. I think you should fight with Oils4AsphaultOnly for a while, instead. ;-) I will note that we're talking about a 150 mile EV here, not an 80 mile one. If the Leaf had had an actual 100 mile range, and it stuck around for a few years, most of the people you mention would still like driving an EV.

A Bolt doesn't have 150 miles of No Worries Range in Hawaii, much less in Denver or New York or Manitoba. Please correct.
 
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