Sunday, May 12, 2013

Why I Have To Lease

Getting my LEAF was a long involved process, the decision to get it was not.  In fact, that was the easiest part of all.  Back in early 2010, I had just about been fed up with my ZENN's lead acid battery system. They were a headache to maintain, too vulnerable to deep discharges and the total lack of a ZENN BMS just made it worse.  I had pretty much decided to do Lithium. Now, this was not a cheap project and at $9,000 +, would nearly double my investment into driving electric, but I saw very few choices in the near horizon. 

Then Nissan announced the LEAF. I spent all of about 2 hours reading up on everything I could find online and then decided this was the car for me.  I immediately shelved my Li plans (I was lucky in that if not for the shakiness of Chinese Cells and my apprehension in taking the plunge, I probably would have already done it!)  and dumped in a set of deep cycle marine batteries with hopes that I could baby them long enough for my LEAF to arrive.  April 20, 2010 I reserved my place in line for the LEAF!

Now, when considering the LEAF, I was working in town so my commute was insignificant. less than 12 miles roundtrip. I determined thru Google Maps that my most ambitious errand day would only be 70 miles but also at the time I was working 4-10 hour shifts and had 3 week days off so the errands could be spread out making it no more than 40 miles in a day; very manageable!

So decided on a purchase. I had to manipulate various stock options I had to insure my tax liability would be at least the $7500 the feds were offering and that was done quite easily.  All this was based on a Dec 2010 delivery date that I received after my RAQ (request a quote) on August 31, 2010.

But 2010 came and went and still no LEAF. I ended up getting my LEAF Jan 18, 2011 in the very first batch of 3 delivered to WA State (there was actually 5 but the other 2 were earmarked for out of state owners) . So I became first to take a "normal" delivery of a LEAF in the state by a day over Patrick and Sam who got theirs the next day. 

But the delay put in into a bit of a quandary.  I no longer had the option to manipulate my tax liability again to get the full $7500.  So I decided to lease and investigate a buyout later. (Besides, due to lack of "proper" income, I was unable to get a decent loan rate from them despite the offer to put 50% down!)  So, I leased and to reduce my buyout amount, I put down $10,000 reducing my monthly payments (and rental fees!)  to $162 a month.

It wasn't until a year after delivery that I realized that buying my LEAF would have been a mistake.  I live at the very southern tip of Puget Sound which makes my driving distance needs much greater than one more centrally located. I slowly began to realize that I really needed 110 miles of good freeway range for three reasons.

1) degradation; I live in one of the best areas for EV battery health, but batteries degrade no matter how well they are treated. Two things degrade them in perfect conditions and that is time and cycling.  My LEAF's new range was more than enough but after 33,000 miles, I realized that my LEAF would start losing its ability to cover my transportation needs in just a few more years.

2)Weather; It did not snow this year in Olympia. Ya, that's right, not a single significant snowfall this winter.  So, it does not get real cold but it does get cold enough. My 2011 did not have the CWP (cold weather package) of the 2012's or the heat exchanger of the 2013's. So it was freeze or get a heated coat, or etc.  But that only covered half the problem. Winter range degradation also involves cold batteries simply unable to take on as much charge as they can in Summer and cold air is denser so the car has to work harder to move and rain.

3) Need; Here, it rains a lot. water on the roads increases rolling resistance which also reduces range. So between the two, I figured I will be having issues making my basic commute next winter. Now, I also have changed jobs and that is a 55 mile commute.  In the worst of Winter I am barely making that trip and its usually at 55 mph (or less) and no heat.  But that is only part of the story.  With the addition of the Fife QC station, I am able to use my car more often for work where I am reimbursed mileage. This has turned out to be a bit of a godsend.  My average cost per mile is running right at 2.5 cents per mile and mileage reimbursement is tax free allowing me to bank nearly everything.  Even a conservative estimate puts my "cash in pocket" at over $300 a month. It would be higher but I do have a mileage limitation for a lease I have to consider.  Before I was on pace to only use about 38,000 of my 45,000 mile lease. But at the current rate I am going, I will run out of mileage allowance by Sept/Oct so will be incorporating the gas car for selective trips here and there.

Another note; Steve Marsh has put 76,000 miles on his LEAF in 2 years and I lent him my SOC meter so he could record his degradation and the first measurement came to 231 GID which works out to an 18% loss in what would be covered in 5-6 years normally.  That might be workable but for three things.

1) my tax liability wont allow me to recover the entire $7500

2) Lease terms right now are simply too wonderful to pass up

3) And finally, there is no 110 mile EV on the horizon.  Now, the RAV 4 EV does not count because it does not have chademo, so no QC, no sale!

**Note about my down payment on my lease. Putting down more than you are required to pay can be a risk especially with NMAC's somewhat shady business practices so make sure you verify with your insurance company what their payout process is if an accident happens and force them to research it before giving you an answer. the LEAF lease is apparently different (I don't have experience with any other leases so don't know for sure)  than a normal lease.

When I did my lease, I was unable to get a good rate on lease or purchase due to my income level (my credit rating was about 830 at the time I think and I even offered up to a 50% down payment but they still would not lower the terms...) so a rough calculation of $8900 down reduced my total cost of loan to the best rates offered at the time.  I had put the down payment before checking into the exact policy but was lucky enough that my insurance company did pay out replacement value whether it was a lease or purchase, so my down payment was not at risk. THIS IS NOT the case with all insurance policies. 

Also, if you do get into an accident and you do get some money from your insurance company, make sure you call NMAC to check on the details of the pay out.  You might get a financial surprise of the good kind!

No comments:

Post a Comment