Buy vs lease considerations

[danix]

I know about business deductions, etc. Not talking about that. Here's what I know so far. Tell me what I'm missing?
I'm in CA so rebates will vary in other states.

24 month lease:
[*]lowest payments I think (national lease program)
[*]doesn't qualify for CA $2500 rebate

36 month lease:
[*]does qualify for CA $2500 rebate
[*]lease payments are higher
[*]no $7500 federal but you get $5500 lease cash

Owners Choice:
[*]don't know much about this
[*]allows you to get the Federal $7500 but no lease cash
[*]may be worthwhile if you can take the full $7500 deduction

Buying
[*]You get both state and Federal rebates
[*]2.9% interest is equivalent to the lease factor offered
[*]highest payments

 

[websterize]

Tell me what I'm missing? …

A specific question?

 

[EK711]

Danix,

I went through this same process before leasing my i3 Rex in SoCal. I didn't go with any of the options you listed and here's why:

24 month lease - didn't qualify for CA rebate
36 month lease - higher lease payment than what I ended up with
Owner's Choice - requires you to pay sales tax on the full price of the vehicle. This negates any Federal or State rebates when compared to a traditional CA lease where you'll only paying sales tax on the usage
Buying - highest payment, not as favorable business write-off, stuck with out-dated EV-tech

So what did I end up with....a 30 month lease. Because of the favorable residual value (58%) and the fact that you receive the CA rebate made this the best option for my needs. My payments after rebate for my Rex, Giga, Tech, & DC Charger ends up at $323/month including taxes.

Hope this helps.

 

[danix]

Thanks EK, very helpful and an example of what I'm looking to hear.

I have a 2014 Volt right now, and when I went to lease the car, I realized that I was probably better off buying the car vs leasing, so I did.
With the lease factor being a wash with the interest rate for buying, I'm wondering if there is a clear advantage to buying vs leasing, in strict financial terms. All things being equal I would rather own, because if I end up wanting to change cars later it's much easier to do.

 

[ccjw33]

Danix,

I went through this same process before leasing my i3 Rex in SoCal. I didn't go with any of the options you listed and here's why:

24 month lease - didn't qualify for CA rebate
36 month lease - higher lease payment than what I ended up with
Owner's Choice - requires you to pay sales tax on the full price of the vehicle. This negates any Federal or State rebates when compared to a traditional CA lease where you'll only paying sales tax on the usage
Buying - highest payment, not as favorable business write-off, stuck with out-dated EV-tech

So what did I end up with....a 30 month lease. Because of the favorable residual value (58%) and the fact that you receive the CA rebate made this the best option for my needs. My payments after rebate for my Rex, Giga, Tech, & DC Charger ends up at $323/month including taxes.

Hope this helps.

wow $323 tax included is great deal for rex Giga, Tech, & DC Charger. What was your down payment? BTW, is 30 months lease qualifies the $2500 CA rebate? I thought only 3 years will qualify?

 

[EK711]

Thanks EK, very helpful and an example of what I'm looking to hear.

I have a 2014 Volt right now, and when I went to lease the car, I realized that I was probably better off buying the car vs leasing, so I did.
With the lease factor being a wash with the interest rate for buying, I'm wondering if there is a clear advantage to buying vs leasing, in strict financial terms. All things being equal I would rather own, because if I end up wanting to change cars later it's much easier to do.

Usually the decision to buy vs lease depends on several personal variables but I think this is one of those perfect storms where BMW has decided to artificially inflate the residuals on the current leases as well as offer aggressive incentives to move the remaining 2014 i3s off dealership lots. Especially in the SoCal market where there are several with 20+ i3's in-stock. Add the Federal and State rebates and it really is a no-brainer to lease.

If you're like me and change cars every 2-3 years then even more reason to lease. If you want to get out of the i3 earlier than that, as long as your lease payments are favorable, you could always do a lease transfer. But keep in mind, whether you lease or buy you'll have to repay the $2,500 if you get rid of it within 30 months.

Personally, I'd stay away from purchasing any EV. There's too much uncertainty with resale value and with battery technology rapidly changing I'd rather let the manufacturers deal with it then potentially take a huge bath on trade-in.

 

[websterize]

Keep in mind the federal incentive is a tax credit, not a deduction. For the tax year, you must have a liability that meets or exceeds $7,500. If not, you lose the remainder. So with a tax bill of $5,000, you'd be out $2,500.

 

[EK711]

Danix,

I went through this same process before leasing my i3 Rex in SoCal. I didn't go with any of the options you listed and here's why:

24 month lease - didn't qualify for CA rebate
36 month lease - higher lease payment than what I ended up with
Owner's Choice - requires you to pay sales tax on the full price of the vehicle. This negates any Federal or State rebates when compared to a traditional CA lease where you'll only paying sales tax on the usage
Buying - highest payment, not as favorable business write-off, stuck with out-dated EV-tech

So what did I end up with....a 30 month lease. Because of the favorable residual value (58%) and the fact that you receive the CA rebate made this the best option for my needs. My payments after rebate for my Rex, Giga, Tech, & DC Charger ends up at $323/month including taxes.

Hope this helps.

wow $323 tax included is great deal for rex Giga, Tech, & DC Charger. What was your down payment? BTW, is 30 months lease qualifies the $2500 CA rebate? I thought only 3 years will qualify?

No down payment. Paid a drive-off that covered first month, registration & some fees, ~ $1,000. Comes out to $406/month including taxes but the CA state rebate effectively takes off $83/month taking it down to $323.

Yes 30 months is the minimum term to receive the CA rebate.

 

[NoVAi3Rex]

My personal decision to lease was based on rapidly advancing EV technology. If Telsa and Chevy are two years away from releasing 200-mi EVs at $30K, I don't want to be stuck with an 80-mi EV at $50K. Consumer Reports recommends leasing because the battery longevity of these cars is untested, and will be considerable expense to replace.

 

[cove3]

>>>>If Telsa and Chevy are two years away from releasing 200-mi EVs at $30K, I don't want to be stuck with an 80-mi EV at $50K. Consumer Reports recommends leasing because the battery longevity of these cars is untested, and will be considerable expense to replace.>>>>

1. Smarter guys with lots more time than you have already built that into the lease price, with extra profit to spare
2. Tesla and GM are almost certainly not going to deliver a 200 mile car for 30K, nor by 2016 or even 2017

Ron