Leasing New Electric Is Definitely Way To Go
|   Tuesday, August 19, 2014
If you have been thinking of leasing or buying an electric vehicle, a recent study shows that leasing a new electric is definitely the way to go.

Wired Magazine, in a detailed study of the advantages of leasing versus buying used found that if you lease:

You are not buying another person's problems
You can obtain the federal tax break for your electric vehicle

Wired based its study on a new Nissan Leaf versus a three-year-old all-electric Nissan Leaf.
The Leaf is a small all-electric wagon with an 80 kW AC motor under the hood mated to a single gear transmission (there's only one gear because the power output is determined by the position of your foot and the motor).

EV s also take advantage of the so-called flywheel effect or using the electric motor in the vehicle to capture the power generated by each wheel as the Leaf slows. This power is pumped back into the lithium-ion (Li-ion) battery pack to keep it charged. It has several names but flywheel effect describes it best.

Wired Magazine's study points out, though, that even with all of these advantages there appears to be a problem brewing in the used-car market for E Vs. After three years they become incredibly expensive to buy.

At this point, the buyer will find that it will cost about $300 monthly to finance the EV, as you do not have access to the federal $7,500 electric car tax break and any other new-car money available from the factory.

You can mitigate the large monthly payment but it will take a huge downstroke or downpayment to keep the cost of the loan down.

Wired also believes this is the reason that new E Vs are running away with the tiny-but-building EV market. The magazine also points out that the people are turning to three-year leases to maximize all advantages. After the third year, when the EV comes back to the dealership, it may be a task to sell an EV to a buyer as there's no factory money or any other breaks available. This puts the EV at a huge cost disadvantage, while the lessee of a new Leaf has all the advantages and can end up paying $199 per month for 36 months.

Wired noted this could be the reason that more new Leafs are moving off dealer lots than used. Last month, in fact, there were 3,015 Leafs sold, a record 62 percent increase over last year. Leaf has had a yearly sales increase of 35 percent over 2013. It is the number one car in the tiny-but-building EV market. Number Two is the Chevy Volt.

Wired proposes that this is why far more new E Vs are selling than used. Analysts also posit that this could be an interesting test point for Wired's theory as the first of the 2011 leased models will be coming off lease and heading back to dealer lots, where they will be offered at prices that are more nearly their real costs and far higher than new costs.
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