How to buy or lease an electric car: advice from owner who's done it four times Page 3

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Doug Kerr, daughter Andie Kerr, fiancee Barbara Gleason; Fiat 500e, Ford Focus Electric, Fiat 500e

Doug Kerr, daughter Andie Kerr, fiancee Barbara Gleason; Fiat 500e, Ford Focus Electric, Fiat 500e

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That lets you simply refer to an "SEL" or an "ES" or a "Platinum" trim level, rather than getting stuck in the weeds over the recommended sticker price may be on any particular model.

If you want a particular option package—always get DC fast charging if it's not standard, for instance—ask for the lease price including that added cost, rather than a specific MSRP.

To buy or not to buy (meaning lease), that is the question

As noted above, residual value makes a big difference if you think you may want the option to purchase the electric car at the end of the lease you're negotiating.

As my earlier sample lease page shows, the purchase option on the lease is $8,568 plus a $500 fee at lease end. Note that residual is often not negotiable—especially with Ford.

Depending on the maximum annual mileage you agree to, the residual will change: The more miles, the lower the residual. Of course, if you want more miles each year in your lease, it will cost you more.

Doug Kerr with new 2017 Ford Focus Electric

Doug Kerr with new 2017 Ford Focus Electric

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But the residual will be the key to deciding if you want to lease or purchase. After all, if the two numbers end up relatively equal, leasing is the better choice—because batteries will likely be better three years hence.

Here’s my example on a Ford Focus Electric, which carries a manufacturers suggested retail price of $31,735.00:

                                                                              Purchase                                     Lease

Negotiated Price                                          $28,509.23                               $28,509.23

Tax on purchase                                                2,209.44

Federal Tax Credit (if EV)                             (7,500.00)                                                           

Total Purchase                                               $23,218.67                                             

Lease Only Payment                                                                                               193.04

Lease tax                                                                                                                        14.96

Total Monthly Lease                                                                                                208.00

Lease payments - 3-Year Total                                                                        7,488.00

Down Payment                                                                                                      2,500.00

Lease - 3-Year Total                                                                                           $9,988.00

Lease Buyout (Residual incl. fee)                                                                  9,068.45

Lease Residual Tax                                                                                                   664.05

Grand Total                                                     $23,218.67                               $19,720.50                                         

If in CA - Rebate                                            ($2,500.00)                              ($2,500.00)

The table above does not calculate any loan interest paid for three years if the buyer gets a new-car loan; it assumes an all-cash payment.

If you live in California (and some other states), both purchases and leases are eligible for state rebates.

Money and car keys

Money and car keys

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In California, if you make less than $36,180 in single income, or below $61,260 with three in your household, you are eligible for an additional $2,000 rebate.

In that case, the California rebates could result in an electric car that costs only $15,220.50 at the end of your lease. The state provides information on California lease-income qualification for the clean-vehicle rebate program online

If you cannot take advantage of the federal credit because your income is too low to qualify, leasing may be the better option for you because the leasing company can take advantage of the full $7,500 credit to lower lease payments.

(Qualifying for the fed tax credit could be an entirely separate article.)

As my experience has demonstrated, leasing an electric car may cost less over three years than buying the car outright. This is possible even if you expect to exceed the number of miles in the lease agreement.

National Plug-In Day 2012: San Francisco, with 60 Nissan Leafs in front of the Golden Gate Bridge

National Plug-In Day 2012: San Francisco, with 60 Nissan Leafs in front of the Golden Gate Bridge

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If you plan to buy the car at the end of the lease, you don’t have to worry about the mileage maximum—and it’s your car from the beginning.

 If you keep it simple, and don’t get bogged down in the lease minutia, a lease negotiation need not be intimidating.

Make the dealer do the work in calculating your "out-the-door" lease payments. All you need to do is to pit dealers against each other starting with that first quote.

Good luck and happy hunting!


 
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