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Plug-in electrics offer big savings with lease incentives

Right now, a lease on a new plug-in car can save you thousands over purchasing the car outright.

By Clifford Atiyeh Jan 25, 2013 3:07PM
Automakers are piling big incentives on plug-in electric cars in an effort to move these pricey compact cars off the lot, and in some cases, the savings total more than $10,000.

Lease deals from Ford, Toyota and Nissan all pitch 36-month contracts for less than $300 per month with less than $2,800 down. Most of these manufacturers also offer zero percent financing for up to 60 months.

But even if you want to purchase a plug-in outright, we found it's significantly cheaper to lease one and then buy it after the term expires.

Nissan, for example, is offering a $10,150 lease discount on the 2012 Leaf SV that allows customers to pay $199 per month after $1,999 down. When adding acquisition fees and the resulting purchase price after three years, the total cost is $25,847, nearly $3,000 less than buying one. Even if you receive the full $7,500 tax credit,  the Leaf costs $28,550. The offer ends Jan. 31.

Sales of plug-in cars, both hybrid and full-electric, totaled more than 53,000 in 2012, according to data compiled by HybridCars.com. The Chevrolet Volt accounted for nearly half. An oversupply of lithium-ion batteries, slow or limited nationwide rollouts of new electric models and a general lack of demand has pushed automakers to roll out the kind of incentives buyers normally see on pickups and SUVs.

To that end, Ford is offering a $10,750 lease discount on the Focus Electric at Southern California dealers that sets a $249-per-month lease after $2,138 down. Ford said individual dealers determine the car's purchase price after three years, but even if the final price is greater than $15,198 (according to Kelley Blue Book), buyers will still save thousands off the $39,995 MSRP through this lease. For cash buyers, Ford is offering $2,000 rebates when financed through the company's credit arm and zero percent APR for 60 months. Their offers end April 1.

The Chevrolet Volt is available for $329 per month for 36 months after $2,599 down. Like Ford, Chevrolet dealers set the final purchase price. With an estimated $18,000 residual, this purchase is a wash, at about $32,114 total after a three-year-lease or $32,495 outright -- again, assuming you receive the full tax credit.

For the Toyota Prius Plug-in, which can only allow a maximum $2,500 tax credit due to its smaller battery, it's better to buy. Toyota offers $4,000 to $5,000 cash back and zero percent APR for 60 months, which on base models will equal a $28,985 price -- even better than the $269-per-month lease and $2,799 down.

Don't think automakers are suddenly generous or desperate. In a lease, the automakers own the vehicles, which allows them to claim the full federal tax credit and create such attractive monthly prices. So, in reality, Nissan and Ford are offering $3,000 rebates. That's still an impressive deal, especially considering that other similar models aren't discounted at all.

Unless you owe $7,500 worth of federal taxes on April 15, you won't receive the full $7,500 tax credit. Many automakers advertise the $7,500 credit to look like a cash rebate, except it's not. The IRS credits a variable amount up to $7,500 based on your taxable earnings, and only after all your deductions have been taken. According to the IRS, most American families earning less than $100,000 per year will not receive the full credit. Leases allow the buyer to save right away.

With $3,445 down, the Mitsubishi i-MiEV can be leased for $221 per month for 24 months. At the end, Kelley Blue Book estimates the i-MiEV will be worth $11,391, about 38 percent of its $30,675 price when new. Mitsubishi did not specify a purchase price when the lease expires, but at that low resale price, we bet it's safer to lease and score a fire-sale deal should you want to keep it.

Remember, not all these deals are available in all areas -- and not all dealers choose to participate -- so check online before heading out.

[Source: The automakers via Automobile]
6Comments
Jan 28, 2013 8:25AM
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An electric car is a good fit for certain people.  If it is your only car, and you travel long distances on a regular basis, then of course it will not work.  

OTOH for my family an electric car is a great idea as a secondary car.  My wife drives around 50 miles round trip to work and back.  Where she parks, they have charging stations, and of course I would have one in my house also.  This means that the item that costs us the most gasoline would go away.

Plus for the "around town" trips where you drive under 20 miles on average, there is no range issue. since they pretty much can all go 60-70 miles on a charge.

Would I get into an electric car if I was planning on driving a long distance?  Of course not.  If OTOH I were going to the stores, etc.  then it is a great idea.

As to lack of excitement that Zerlak talks about, I have driven electric cars, and the fact that it has constant acceleration is kind of cool.  No shifting.  But some cars are for excitement, and some cars are for getting from place A to B.  Each has its purpose.


Jan 28, 2013 9:42AM
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How can I as the taxpayer paying part of the cost for someone else's d*mn car save money?
Jan 27, 2013 4:20PM
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The range limitation prevents me from having any of these. I would suspect there would be many others that these would be nothing better than an expensive yard ornament.   Bring the range up and the price down and maybe the table will be turned.
Jan 26, 2013 4:28AM
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For me, it is the lack of excitement that prevents me from wanting these electric/hybrid vehicles. One speed transmission or CVT just doesn't excite my blood like a good old fashioned manual does. I admit, the idea of not having to use conventional Petrol or Diesel is a nice thought, and since most of my area uses hydro electric it would actually be decently gree, but it just isn't worth it to me.
Jan 28, 2013 8:48AM
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Leasing makes no sense here??  Why would you pay for something you are not going to own at the end of the contract? Leasing any car makes no economic sense to me.  Other than you have a car you really can't afford and just want to show off... Leasing is bad news.
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