Should Nissan Offer Warranty Options For The 2011 Leaf?

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Taken at the June 15 Leaf Driving event in Japan.

Taken at the June 15 Leaf Driving event in Japan.

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 What is an acceptable warranty for an electric car? Three years? Four years? Ten Years? And should customers be able to choose what that warranty level is?

That is the question Nissan was asking last week when it sent out a questionnaire to the 16,100 people who have paid out $99 to reserve a 2011 Nissan Leaf.

As part of the extensive questionnaire Nissan sent to its prospective Leaf owners the company asked just what warranty length customers would feel happy with.

Here's the problem though. In order to satisfy the 2011 Nissan Leaf for the California advanced technology partial zero emission vehicle rebate (AT-PZEV) - which is worth an additional $5,000 on the top of the standard $7,500 federal tax credit applied to any electric or plug in car - Nissan has to offer a 150,000 mile or ten year warranty.

When Chevrolet announced the warranty of its extended range electric car at eight years, or 100,000 miles, many Californian consumers faced the truth that it would not be eligible for the extra AT-PZEV credit, applicable at purchase.

2011 Nissan Leaf

2011 Nissan Leaf

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Rather than simply announce a warranty,  Nissan has asked it's customers if they would be willing to accept a warranty as low as five years, or 60,000 miles on the Leaf. Other options included 8 years, 100,000 miles, or 10 years, 150,000 miles.

While Nissan is yet to announce the final retail price of its 2011 Leaf, it makes sense to assume that a lower warranty price would equal a lower retail price.

But with replacement battery packs still costing in excess of $15,000, isn't a long warranty the key to ensuring a healthy uptake?

It depends.

The 2011 Nissan Leaf has a maximum range of 100 miles. Driving it to its maximum range every day, a 60,000 mile warranty would expire in a little over one and a half years.

Obviously, a car driven no more than 30 miles per day would not exceed the milage limit of a 60,000 mile warranty until five years had passed.

It is basic common sense to assume a car's resale value on the used market is directly proportional to the warranty given on it from new.

As the length of time a car is owned by a particular person is usually no more than five years, especially for a brand new car, a shorter warranty is unlikely to affect the first car's owner.

But it will affect the retail value. As we already know, cars with extended warranties taking out at the point of sale often command higher prices on the used market.

2011 Nissan Leaf

2011 Nissan Leaf

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For those who only intend to drive the 2011 Leaf on short daily trips, a lower warranty level might significantly lower the MSRP the car's first owner shells out for it without directly impacting on the level of protection the owner receives on their car.

Lower the warranty too far though, and regardless of the sticker price consumers will be reticent to buy the Leaf in case the car is worth nothing in a few years should a battery pack die.

While the Leaf battery pack will degrade over time, it's tough to say right now how quickly it will happen. Nissan is also unsure and must tread the fine line between a suitable warranty and an acceptable price in order become the victor in the electric vehicle wars.

Perhaps though, Nissan should consider offering a tiered warranty scheme to allow consumers to offset a lower cost with a lower warranty. It may just work.

 
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