With competitive lease deals as low as a few hundred dollars per month for well-equipped models, the majority of new electric car owners today are choosing to lease rather than purchase their cars.
Along with some of the financial benefits that come from leasing — like being able to apply the $7,500 Federal tax credit when signing the lease rather than waiting until the end of the tax year to claim it — leasing an electric car means you’re generally free from worry over battery longevity and replacement battery costs, since most lease deals end long before your car shows any signs of battery degradation. Then there’s the upgrade potential: if at the end of your lease there’s a better-equipped, longer-range electric car you want to buy, simply hand your car back to the dealer and sign a new lease deal.
In fact, if you’ve got a fairly predictable annual milage and don’t mind not owning the car, we’d recommend leasing an electric car over buying one outright, since it offers all of the benefits of driving electric without any of the risk. And if you get to the end of your lease deal and decide you want to buy the car, simply hand over the outstanding balance and it’s yours.
Like many electric automakers, Nissan has been encouraging customers to lease its LEAF electric car for several years. But as hordes of 2012 and 2013 Nissan LEAF hatchbacks come to the end of their lease deals and their former owners find themselves singing new lease agreements on 2015 model year cars, the Japanese automaker faces a new problem: how to sell on the off-lease vehicles. As a consequence, Nissan is working hard to ensure leased cars don’t come back to the dealership and cause a massive drop in used LEAF prices by encouraging lessees to buy their cars outright rather than return them to the dealer.
That encouragement comes in the form of a $5,000 lease buyout credit in which Nissan will offer to wipe $5,000 off the value of the outstanding amount payable — often colloquially known as the CBP or “Crippling Balloon Payment” — and making it cheaper and more practical to buy your leased car.
As CarsDirect (via GreenCarReports) explains, the so-called LEAF Gross Payoff discount is available on all 2012 and 2013 model year cars, while those with an older 2011 model still on lease will find a smaller $1,500 available to help them end their lease and buy their car outright. In some cases, dealerships are offering their own discount worth up to $1,500, although many are choosing to pocket this discount and keep it for themselves.
According to the car valuation site, the average payoff amount for a 2013 Nissan LEAF is somewhere around $20,000 at the end of their lease. For that price, most lessees would struggle to justify keeping a two or three year old electric car in preference for a new lease.
But at $13,500 – the potential settlement price if both the $5,000 Nissan discount and $1,500 dealer discount is offered — keeping your current LEAF may seem worthwhile.
Naturally, individual circumstances may vary, but the discount is believed to help Nissan account for the changing value of the Nissan LEAF on the used car market. In recent months, the value of that has dropped, caused in part by the drop in new LEAF prices as economies of scale come into play combined with greater competition in the plug-in marketplace. In May alone, the average residual price of a used Nissan LEAF in the U.S> fell by six percent.
Next year’s rumored unveiling of the next-generation 2017 LEAF doesn’t help either: expected to be more mainstream in appearance and offering up to double the range of existing LEAF models, Nissan wants to ensure that it has as few used LEAFs in inventory as possible.
We should note that the lease buyout credit available will depend on individual circumstances and where each customer happens to be in the U.S. With an average $5,000 available however, we think those who are looking to trade their LEAFs back in at the end of their lease may find a good reason to keep hold of them a little longer.
The crippling balloon payment of upwards of $13,000 may be too much for many buyers — and it’s true in some states that new 2015 model year LEAF lease deals and lease deals from competing cars like the 2015 Volkswagen e-Golf are too good to miss.
But if you’re happy with your current-generation LEAF and think you could happily live with it a little longer, we’d like to remind you of one fact that might change your mind.
The $5,000 LEAF buyout offer currently being offered on 2012 and 2013 model year LEAFs is almost equivalent to the $5,499 price being charged by Nissan dealers across the U.S. to replace your LEAF’s original aging battery with a brand-new one offering better-than-new range and longevity.
If that’s the only thing stopping you from keeping your current car, using that rebate to fund a brand new battery replacement could be a good deal — but only if your lease happened to be weighted on monthly payments rather than large lease-end payments.
Are you about to come to the end of your Nissan LEAF lease? Are you tempted by this offer? Or are you looking for a newer, next-generation plug-in?
Leave your thoughts in the Comments below.
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