BUMWA
Posts: 158
Joined: Sat Jul 26, 2014 5:42 pm
Location: Albany, NY USA

Electric Cars Value Tumble (WSJ)

Sun Mar 01, 2015 5:21 pm

http://www.wsj.com/articles/resale-pric ... issan+Leaf

No mention of BMW, and brief mention of Tesla holding value; Leaf Plummets
Cheers,
Ray
14 i3 REx Giga; Clipper Creek HCS-40 w/holster, exterior mount
04 545iS 6-spd (sold)
07 K-1200 GT (sold)
40+ years of BMWs
hi-perf 5s since '87
Waiting for i5.....

jadnashuanh
Posts: 4981
Joined: Thu May 22, 2014 2:07 pm
Location: Nashua, NH USA

Re: Electric Cars Value Tumble (WSJ)

Sun Mar 01, 2015 6:41 pm

This is really only an issue if you trade or lease your cars frequently. Especially with something like the i3, there really isn't much to wear out. I plan to keep mine a long time, and the depreciation curve flattens out by then.
Jim DeBruycker
2011 535i x-drive GT, 2014 i3 BEV
Soon (hopefully!) A 2021 X5 45e will replace the above

NormanF
Posts: 26
Joined: Mon Feb 09, 2015 7:29 pm
Location: Near Orlando FL

Re: Electric Cars Value Tumble (WSJ)

Sun Mar 01, 2015 7:14 pm

jadnashuanh wrote:This is really only an issue if you trade or lease your cars frequently. Especially with something like the i3, there really isn't much to wear out. I plan to keep mine a long time, and the depreciation curve flattens out by then.
On one hand I do not want i3's to be affected by this. On the other hand I would love to be able to buy my i3 at the end of it's lease for less than the residual value I was given.

jadnashuanh
Posts: 4981
Joined: Thu May 22, 2014 2:07 pm
Location: Nashua, NH USA

Re: Electric Cars Value Tumble (WSJ)

Sun Mar 01, 2015 7:18 pm

It could really make the second owner a good deal! But, then almost any used car is a better buy than getting it new. If you keep them long enough, it really doesn't matter.
Jim DeBruycker
2011 535i x-drive GT, 2014 i3 BEV
Soon (hopefully!) A 2021 X5 45e will replace the above

i3an
Posts: 120
Joined: Tue Oct 14, 2014 1:09 pm
Location: San Francisco

Re: Electric Cars Value Tumble (WSJ)

Sun Mar 01, 2015 7:39 pm

Unfortunately, the news sections of the WSJ have been infected by the opinion pages that are wholly in the bag for the CO2 industry. Case in point: "...some worry the expensive batteries could have to be replaced" on two-year old Leafs — beware the anonymous "some", which is usually a doppelgänger for the journalist's (or her editor's) marching orders. Look, even Leafers know how long their batteries really last, so the WSJ (aka Rupert Murdoch of Fox News infamy) is merely propagandizing; I challenge Christina Rogers to open her journalist's notebook and produce a real quote from a real Leaf owner to substantiate that allegation.
I bought my beloved Honda Insight in the year 2000 and said at the time that I hoped it would become obselete in 5 years, and was very disappointed when it became more like 14 years for the i3 to come out. Now I decided to lease an i3 (rather than own) precisely because I expect that the technology/price/value of BEVs to improve so rapidly that when my lease expires the resale value of my i3 will have plummeted such that it will be BMW's problem, not mine. This is a feature, not a bug, of BEVs and all rapidly evolving technology — after all, who is bemoaning that their 3-year old iPhone has plummeted in value?

pancakes213
Posts: 13
Joined: Mon Jan 26, 2015 5:41 pm

Re: Electric Cars Value Tumble (WSJ)

Sun Mar 01, 2015 10:58 pm

NormanF wrote:
jadnashuanh wrote:This is really only an issue if you trade or lease your cars frequently. Especially with something like the i3, there really isn't much to wear out. I plan to keep mine a long time, and the depreciation curve flattens out by then.
On one hand I do not want i3's to be affected by this. On the other hand I would love to be able to buy my i3 at the end of it's lease for less than the residual value I was given.
I'm a newbie to leasing. How would the residual value change at the end of your lease? I was assuming that if I'm given a residual value of $29k right now when I sign my lease, then that would be what I agree to pay after the lease if I want to purchase it.

jadnashuanh
Posts: 4981
Joined: Thu May 22, 2014 2:07 pm
Location: Nashua, NH USA

Re: Electric Cars Value Tumble (WSJ)

Sun Mar 01, 2015 11:37 pm

pancakes213 wrote:I'm a newbie to leasing. How would the residual value change at the end of your lease? I was assuming that if I'm given a residual value of $29k right now when I sign my lease, then that would be what I agree to pay after the lease if I want to purchase it.
If the car is actually worth a lot less than what you your residual, if you wanted to buy it, you'd still have to pay the residual value unless you could negotiate with the dealer. But, in the time you had it, because they thought it would be worth more, you only are paying for essentially the depreciation, and would have had a bargain verses buying it, then trading it in. On the other hand, if it were worth more than your residual, you'd be getting a bargain if you bought it, even if you then sold it...you would have paid more for it during the lease, but may be able to make it up if you bought it and then resold.

So, when it is worth more than the residual...you've paid too much. ANd, the opposite, if it is not worth the residual. The 'winner' can flip-flop. It only comes out even if the guess is correct for all involved (well, the dealer is making money regardless).

Basically, a lease is a guess at what the depreciation will be, and you pay that plus a bit for profit. Who ends up the biggest winner, depends on how good the guess was. In the interim, you get to drive the car.
Jim DeBruycker
2011 535i x-drive GT, 2014 i3 BEV
Soon (hopefully!) A 2021 X5 45e will replace the above

Jeffj
Posts: 252
Joined: Mon Sep 15, 2014 12:32 pm
Location: Boulder, CO

Re: Electric Cars Value Tumble (WSJ)

Mon Mar 02, 2015 7:04 am

Slight correction. Its not the dealer making money on the lease, its the financing company (BMW FS, most likely). The captive financing companies (GMAC, Ford Credit, BMW FS, etc.) are typically the most profitable portions of an automaker, as their "product" is cash, and they make a lot of money with that cash. That's the real driver for why leasing has exploded in the last decade. Hard to say no to big profits, especially when the captive financing companies can cherry pick the best customers and therefore have the lowest risk on non-payment.

NormanF
Posts: 26
Joined: Mon Feb 09, 2015 7:29 pm
Location: Near Orlando FL

Re: Electric Cars Value Tumble (WSJ)

Mon Mar 02, 2015 7:44 am

Darn. I'm a lease newbie too. I was hoping that I would be able to buy the car at the end of the lease for a lower price without having to negotiate. Assuming that the i3 depreciates faster than BMW Financial thinks it will. This is also my first BMW so I do not know how well they hold their value. So basically I still have to buy it at the stated residual value on my contract unless I am somehow able to negotiate if the actual residual value is lower. To be honest I'm not that concerned. At least right now.

rtanov
Posts: 189
Joined: Mon Oct 20, 2014 10:55 am
Location: Cincinnati, OH, USA

Re: Electric Cars Value Tumble (WSJ)

Mon Mar 02, 2015 9:25 am

Gotta love articles like this. And the cheap gas which made these great cars not very popular. Was just able to get a nice lease deal on our second i3 :-)
2014 BMW i3 REx
2014 BMW i3 BEV - retired

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