Analyzing The Best Deal; Model 3, Bolt and LEAF

Ok, so now I know how it feels when at the Mall on Black Friday! The choices are no longer simple and few! A good thing, right?  Heck its a great thing but now, what do I do!!!  Actually, its been a couple decades since I have done a Black Friday but I do struggle with Cyber Monday!  Thank you Price Protection Guarantee for saving me a ton!  I actually started buying Christmas Presents in September. I have a real issue being pressured into deciding what to get someone so I have to have time to think about it.  But I also have to have time to pay for it and I don't buy what I can't pay for (tell me THAT is not an alien concept!) but when talking about cars you kinda don't have a choice but to buy something that you can't pay for right away, right?  ummm, hmmm, yeah we'll just have to see about that. 

As always the "value" of the deal is #1 and the 3 contenders are the 2018 LEAF, Chevy Bolt and the Tesla Model 3.  If just looking at MSRP's there is not a whole lot of difference in price but that is where the similarities end.  First off, you won't go wrong with any of these cars.  Despite the high stickers, these cars will save you money over a comparable gas car.  All of them do a very good job of addressing different segments of the EV populace so basically this blog is nothing more than a transparency of my current thought process as I work out the best course of action for me in the next 2-6 months. Now each person's financial situation, timelines and needs are vastly different so my only goal here is possibly open up lines of thought that may not have occurred to you. 

But value also means "getting the most" for your buck and that does not mean the cheapest car wins. Not by a long shot.

First off, there is the possibility of losing the federal tax credit. Right now the House has it gone but the Senate has it still in place.  This would be a huge blow to 2 of the 3 options above.  Since I did not sign up for the T3, I wouldn't get one before the credit expired anyway. I might sneak in for a ¼ but even that is shaky. 

**Edit** As we know, the tax reform is moving much faster than I had anticipated and the Senate has already passed a proposal that may or may not include keeping the EV tax credit. Lets hope the credit stays intact! 


TESLA MODEL 3
So lets start with the easiest one; the Model 3. Its easy because of the lack of negotiated prices and the assumption that no federal or Washington State tax credit would be applied.  The Base cost is $36,200 after delivery and the only option I would probably select initially is color for $1000 (still up in the air about that) so it would be $37,200 plus sales tax or roughly 40,473.60 on current 8.8% sales tax  rate for Olympia, WA. 

This is 220 miles of range, SC access (which is EXPLODING in my region) and a car that has a huge amount of passenger space easily matching or exceeding the full sized Chevy Impala work vehicles.  Not entirely sure that a base model would have the option to add the AP option later for $5,000 plus $3,000 for the upgrade but at those prices I am not sure I would do that anyway.  Emergency braking and collision avoidance are part of the standard features however which is my minimally acceptable safety features. 

CHEVY BOLT 
Here I would get the LT with comfort package ($555) Driver's Confidence ($495) and QC ($890). After delivery it would be $39,435 plus tax  which would be minimal since the state sales tax exemption would apply to nearly all the sale price.  Now, I did get a quote from Chevy of Everett for $36,108 (sales tax included) for a car without Driver's Confidence in Black. It did contain a "buy it now" perk though so that price may or may not be available but I think it would still be in the same ball park.  However, we cannot ignore the possibility of a run on them if the tax credit is actually removed. 

Here I would be getting 238 miles of range and TMS, both huge considerations but there is little else to get me excited here.  There is no collision avoidance options unless you go premium which is an expense I am not sure I want to pay sure I WILL NOT PAY for.  To get "Low Speed Emergency Forward Braking" requires two seemingly unrelated packages that balloons the price to $43,510 before discounts so roughly $4,000 more and includes a lot of stuff I could care less about. The reality is I have lived without it for 40+ years and its something I guess I could overlook... 

**edit** Someone I know just purchased from Dave Smith Motors in Idaho (I think) a Bolt EXACTLY like mine minus Confidence package for $33,504! Deals abound!

40 KWH NISSAN LEAF

For the first time ever, I am "voluntarily" selecting up trims. If you don't remember, my SL was a forced choice as it was THE ONLY way to get QC and I have said it many times and its worth repeating; The person who thought an EV without QC was acceptable, SHOULD BE SHOT! But the allure of the features along with the reasonable prices (for car accessories that is) makes it a tough thing to pass up even for this tight assed penny pincher like me!   

My choice would be the SV trim with All Weather ($900)  and tech packages ($2200) price would be $36,440 with delivery charges added.  If done before the WA State Tax exemption expires (which is likely) that would be the total cost plus dealer fees that would add a few hundred.  Notice no additional charges for QC? At least "some" got it right. Guess Meatloaf knew what he was talking about with his song "Two out of Three Ain't Bad"  Well, we all know what happened with that 3rd option...

The LEAF would have the the shortest range at 150 miles and no TMS but adds features not available in the packages selected for the Tesla and Bolt; 

**Minimally acceptable Safety Features;
Emergency Forward Braking; LEAF, Tesla. 

**Highly Desired Safety Features;
Adaptive Cruise Control; LEAF
Lane Assist; LEAF

SHOW ME THE MONEY!

Tesla
Ok the Tesla due to its overwhelming demand and late delivery times will be the most expensive but also easily qualifies as the car I value closest to its MSRP by quite a margin. There is currently no lease options so a purchase is it.  I expect the T3 features to be ever evolving and Supercharger support cannot be overvalued.  But its basic premise for EVcentricity is top notch far exceeding both Nissan and Chevy for its forward thinking in both design, ergonomics and features.  I also expect that additional features may be available long after the purchase; the ability to pay for additional features at a later date is a great thing especially when the price is so high.  But with a $6500 down payment (If I don't blow it on something else during the loooong wait  ...) plus minor random dealer fees (does Tesla even have those?) I would be looking at $610.78 payments 2647.06 in interest if financing $34,000. 

Total payout of  $43,146.60


Bolt
The Bolt would likely be the 2nd most expensive and since Chevy passes on NONE of the federal tax credit to lessees, it is simply not an option for me. It would be several thousand more dollars with a money factor ranging from 1.9 to 4.5% Effective interest.  If done today I would be putting down $6500 so a loan at 2.99% interest (guessing here) would cost 532.54 a month for 60 months with $2308.40 in interest along with the $6500 down payment.  I would get a few thousand on the tax credit at the most so call it a payout of $36,452.40

total payout of  $38,452.40


LEAF

This will be the most speculative pricing of the 3. Nissan will have both buyer and factory incentives so unlike Tesla, none will sell at MSRP. But that is only part of the story as Nissan has provided THE BEST lease terms in the industry and I don't see that ending. There is no way we can know what terms Nissan will be offering since they tend to change every month but I have to think that passing on the entire federal tax credit will still be there along with "too good to be true" money factor rates resulting in rent charges for the entire lease coming in well under $100.  In checking with VERY recent leases on LEAF, the money factor (basically the interest rate on the lease term) is still nearly nothing probably less than ¼ of one percent.  So what does this mean?  Well, let me give an example I know well; my current lease term.


LEASE TO PURCHASE

There are two reasons to lease; lease to purchase or lease to avoid a large financial commitment.  Lets talk about lease to purchase. Now I am not going to presume that I will get the same discounts I got on my 2016 but that is not needed to illustrate the point.  So for sake of argument, lets say I will get a discount of $4,000 off MSRP which is considerably less than what I got on my current lease but close to the discount on the Bolt.

So add it up;

$4,000 off lease discount
$7,500 Federal tax instant cash
$1,000 Returning Nissan customer loyalty
Waivers up to $500 in damages on previous lease for returning customer along with waiver of lease termination fees, etc.  This now puts my cost on the LEAF at (adding say $560 for easy math for dealer fees, etc) $37,000 - 12,500 = 24,500.  This price is available to EVERYONE (possibly minus the loyalty cash but this is what I expect to be an average deal at best). It does not matter what your tax liability is. But, we already know that. Something else we already know but bears reminding...

My current lease payment is $245.99 for 35 months or  $8609.65 for the 3 year term and that total includes a rent charge of $29.10.  My residual is $9100 so total payoff amount is $17700 more or less (I also got a $148 refund for "overpayment" of my ZERO down drive off)

But the real benefit here is that on both the cars above, I put down $6 500 (I do actually have that!) but on my LEAF lease I put down zero allowing me to invest the money (The money I had for a possible down payment last year was put into my 401 K instead. That money has grown almost 15% in a year) but down payments is something that can greatly lower your total cost of the payments soooo, what is the difference between saving a little money each month and then using it as a big down payment in say... oh 3 years verses leasing?  In the above real example the only drawback to the lease terms is the fees which are small and the rent charge which is less than small.  Again, lease terms change probably monthly so who knows what next month will bring but a new Lessee (had her LEAF less than a week) will pay $22 rent charge on her 2 year lease. 

So, my deal is really a 3 year test drive where at the end I can use my entire "investment" (Over $16,000 discounts on front end + my $8600 in payments) to basically purchase a car for a bit more than $9,000! 

So back to the 2018.  If using payments of $300 a month on a 3 year lease, this would leave just about a residual of around $14,000.  Now add that same $6500 down payment (which has had time to grow btw...) plus tax on $14,000 ($15232) residual and we are financing $8732.  Since its not a new car, we won't get new car financing (Truth be told, I would cash it out anyway) so financing at 4.99% for 3 years for payments of $261.67 with interest totaling $688.00

So total payoff in this scenario

35 lease payments @ $300 = 10,500
down payment   $6500
36 payments of  $261.67 =   9420.12

Total payout   $26,420.12.  

Remember this is assuming "average" lease terms from Nissan. I strongly suspect better terms could be had.  Another thing to consider; since the lease would be tax free, it might serve you to artificially increase your monthly lease payments to reduce your residual which would suffer from both WA State sales tax AND loan interest. As long as the payments aren't too high, it can be done. 

So is this really a better way to go? After all, its still money out of your pocket. Well, that is true for EVERY purchase but with automobiles, we have to look at other things besides price. The purchases above were calculated using 2.99 interest AND  $6500 down. That is a lot of financial commitment verses a ZERO down, near ZERO INTEREST lease with a residual you can take or leave at the end. FYI; If you think your residual is too high, call your dealer at the end of the lease and let him know. Several LEAFers have purchased their cars well below the residual. It all depends on how the market will go so the "risk" is what a 150 mile range EV will be worth in 3 years? 

So not only do you have choices but you also electing a few hundred dollars in fees over  $2,000+ in interest assuming you take a FIVE year loan. 

So here is where we talk about purchasing a LEAF... LOL!!! Gotcha!! You thought I was serious, right!!! You know me! I am on my 3rd lease!! I am not a LEAF buyer!!! But, I may soon become a "lease buyer."  😉


Now all this above is MY THOUGHT processes which means many of you won't agree with this. That is ok. I didn't write this to tease Tesla, bang Bolts or sell LEAFs. As mentioned above, the tax credit maybe no more and much sooner than expected. No doubt a lot of T3ers will drop out of the queue because of it.  That is just reality. I know a handful who signed up for the Tesla but admitted long ago it was too much if the tax credit was gone. They all still hold on to hope and that is a good thing, right?

But the lease option works with or without the tax credit as long as the money factor stays very low. So now the question is back to "How much is that extra 70-90 miles worth?"   Degradation is always a question but for some, its a very manageable thing.  Will 40 kwh be better? It would be logical to think so. 

Finally; I talk to many people who feel like a used EV is the only option available to them due to cost.  That is not true. The LEAF lease terms allows a much greater segment of the population to enter EVDom and whether you think the LEAF is the best option or not, I don't care.  I only care that you reduce your gasoline exhaust any way you see fit. 


**EDIT**

Its been a year and HAVE to mention NCTC (No Charge To Charge) saved me over $1200 in charges at EVGO stations alone! They are one of 3 different networks I used extensively but by far the one I used the most.  So when calculating the above costs don't forget to toss in a few grand of free charging!  😎