Nissan Leaf: Should You Lease or Buy?
So, you’ve decided that you are ready for smooth, clean electric mobility. You’ve chosen the 2011 Nissan Leaf as your next vehicle. The next question is – should you lease or buy your Nissan Leaf?
Nissan has made it quite easy for drivers to get in on the Leaf action. First step is that you will want to reserve your spot to purchase or lease your vehicle. The next steps include getting a home assessment for charging your Leaf and having the home charger installed. Nissan has a two-minute video that explains how the process works.
The final step involves purchasing or leasing your Nissan Leaf. The MSRP for the Nissan Leaf is $32,780. However, the federal government has a $7500 consumer tax rebate towards the purchase of electric vehicles. This drives down the purchase price to as low as $25,280. If you typically pay at least $7500 in federal taxes, then purchasing a Leaf is your best option.
You may also want to consider tax credits available from your state governments towards the purchase of your Nissan Leaf. Both California and Alabama have implemented an additional $5000 tax credit towards the purchase of an electric vehicle. It is likely that many more states will adopt similar legislation in the near future.
If you typically pay less than $7500 in federal taxes (and/or less the $5000 in state taxes), leasing a Nissan Leaf may be a better option. Nissan will absorb the federal tax credit to be able to offer the Nissan Leaf at a very affordable $349/month for a 3-year lease. This is a very smart move for Nissan, as many young and first-time car leasees will also want to take part in the electric car action.
Leasing a Nissan Leaf may also be an option to consider is you are interested in trading Leaf 1.0 in for a possible Leaf 2.0. No word yet on what a Leaf 2.0 may offer, but one can imagine perhaps a larger battery pack that will allow you to drive farther. (That said, many drivers of the first and only generation of Toyota RAV-4 electric vehicle – which has the same 100-mile range as the Nissan Leaf – report high levels of satisfaction with the range of their cars even after ten years of ownership.)
And, if you still needed more reason to get a Nissan Leaf, many state and local governments are also providing funds to cover the cost of having a home charger installed (which can run around $2000). For some, this means that whole process of owning of a Nissan Leaf and home charging unit could be as low as $20,000.
Keep in mind that these local, state, and federal funds are geared towards helping the first wave of electric vehicle owners. Just like early hybrid owners reaped the benefits of discounted prices and carpool lane stickers, the first wave of electric car owners get to take advantage of the early adopter “freebies.”
Dr. Shannon Arvizu loves driving clean, green machines. You can find out more at MissElectric.com.
12 Comments
Since I’m on the list of Leaf buyers, I’m thinking the same question you posed…. buy or lease. My first inclination is to lease, because a few things are unknown:
Battery Life – will it last beyond any warranty period? If I lease, I can lease the second gen and know it’s got a superior battery (among other things)
Residual. It would be great to know what the residual assumptions are on the car. I guess I can back into that calculation or look it up online. If the residual seems awkwardly high, then leasing seems reasonable. unlike the super high demand of the Prius (HOV lane use, tax credit, gas crisis), I doubt that this will actually increase in value over time or even hold close.
Thoughts on both topics?
Hi Tom,
Great questions. And congrats on making the choice to electric drive. I know you’re going to have fun ;o
Battery Life- Batteries in electric vehicles last far longer than people expect, and far longer than the warranties. Batteries in hybrid vehicles, for example, are going strong even after over ten years of use. Based on current tests of lithium-ion batteries, these batteries are lasting over 4,000 charge cycles (that’s equivalent to 400,000 miles).
Residual- I expect the residual value of all-electric vehicles to be quite high because, quite simply, they are low-maintenance, have low overall energy costs (even with today’s gas prices), and have proven to be quite reliable. As an example, owners of Toyota’s Rav-4 EV have been able to resell their all-electric cars at very attractive price points.
I have to admit that I was leaning in favor of leasing until I read this post. As Tom pointed out, the battery technology is sure to improve, just as it does every year in consumer electronics.
However, I have to thank Shannon for reminding me that those tax incentives are only going to be around for so long. I remember the outrage in LA when Prius owners stopped being eligible for those coveted carpool lane access stickers.
Maybe the freebies are worth more than the extra twenty or so miles I’d probably get in two years.
How fast do you think the battery (and other green) technology on electric vehicles will change? If it is anything like computers or cell phones, seems like leasing is the best bet. I wonder if buyers will get 2 sets of tax breaks- the original tax credit and then the write off for donating an out-of-date vehicle to the EV museum? ha!
Hi Shannon,
Good article. One thing to point out, though, is that I believe you have the Federal and State incentives backwards. The Federal incentive is a tax credit for $7,500, and the State incentive for California is a rebate for $5,000. However, the California incentive has only been funded for $4.1M, so it may run out unless it gets extended.
Actually, I’m looking forward to the day when we can make museum pieces out internal combustion engine parts. This is the only industry that is still reliant on 120-year old technology (which is only 16% efficient – 84% of the $ you spend on gas is wasted as heat). Talk about a true dinosaur technology ;o
Randy is right about the taxes. oops, just checked blog. It must have been changed.
Good note. I am definitely going to wait to purchase an electric car. One, the battery technology is simply not there and the car companies are just learning how to improve the driving feel of these cars. I don’t believe Tesla has a great product just yet. People have been making battery powered go carts for years. It’s just a Lotus with a sophisticated pack of lithium ion cell phones batteries. Clever idea, but not proven until I see more than 50,000 on the road. It will get there and when it does I’ll be in line for mine.
Anxious to see Al Gore’s Fisker car company churns out its magnificent piece of metal. I made you cringe when I wrote Al Gore, huh? ha. I know who Henrik Fisker is. The Aston Martin is my favorite car ever.
Rock on to electric avenue.
The Leaf is fugly. I can’t believe there are folks who eve like this car! The Fisker is the only electric car I’ve seen that looks like any person with taste would consider.
“Electric” should be a powertrain in every vehicle. Stop trying so hard Nissan. Make an electric car that also happens to look like a car you won’t look like an idiot driving in!
Since I always get a tax refund, the decision for me is fairly simply. I have to lease otherwise I lose all the benefit of the federal credit. Fortunately, the California incentive is in the form of a rebate so I can get that regardless.
I’d rather NOT lease, but I see no practical alternative considering…
Dave,
You are way too insecure. Who gives a tinkers damn what others think. Drove my converted 92 Geo Metro for 4 years and am in the queue for the Leaf and I can tell you with out a doubt once you have driven electric you will wounder why we didn’t do in sooner. Just think where we could have been if the OEM’s had continued making EV’s back in the 1990’s.
Stay Well,