[grs10]

So, to build on my previous thread from over a year ago, I now am focused on buying a new Volt! However, I'm torn between buying or leasing the vehicle.

EV technology *is* improving these days so leasing may be good in that regard, but I'm afraid I may be throwing my money away with leasing since I prefer to drive my vehicles to the last mile. For the record, I'm currently driving a 2003 Lancer -- almost 14 years!

Additionally, I don't see as many good deals on leases as compared to the US, so it may not even be worth it?

 

[llninja]

Just think back about how driving a lancer for 14 years and not having a car payment for many of those years. Why start leasing now to get a perpetual lease payment? I would buy, drive the car far longer than a 3 year lease period, and wait another 10-14 years for your next purchase. In the mean time, put what you would have paid as if your were leasing into a bank account and watch it grow. Q0 years from now, you might have enough for a new tesla model S (or whatever their equivalent is at that time).

The next question is, can you pay cash for the car, or does buying imply a loan with payments?

Finally, since the g2 has been shipping since the summer of 2015. I would look for the end of this model year to be the time that dealers start to get desperate to eliminate stock as the Bolt and Tesla model 3 will cause the market to get soft. We saw this in 2013 with the g1, we saw this in 2015 with the ELR, I predict is will happen in the 4th quarter of 2017. So if your lancer can hold out a few more months, your pocketbook should be rewarded for being patient.

 

[grs10]

Thanks for your reply! I can definitely wait until Q4 for a new vehicle, as there's really no sense of urgency aside from my existing car getting clunkier and clunkier.

As far as my financial situation goes, I can definitely pay cash for the vehicle with a variety of ways -- either liquidating a few of my investments, line of credit, a combination of the two, etc -- but it's a matter of which method would yield the best purchase price.

Also, I should say that I live in Alberta, so finding Volts on the lot is actually kind of hard :/

 

[DonC]

People get all religious on the question, but the lease/buy decision really doesn't matter that much. Since you can buy at the end of the lease, at most it will only cost you a few hundred dollars more to lease and then buy versus buying in the first instance. For that few hundred dollars you get the opportunity to walk from the car at the end of the lease term. Is that worth it? Really depend on you. My guess is that, given your concern about technology, it would be. But that's just a guess.

Leasing works best for end of the MY closeouts. The purchase price gets cut but the residual stays the same. Buying at the end of a MY makes less sense since your discount is more than offset by the amount you lose when reselling a car which is a MY older (unless you keep it until it dies of course).

FYI I bought a Volt and an ELR but leased a Leaf. All the right decisions! LOL

 

[llninja]

Thanks for your reply! I can definitely wait until Q4 for a new vehicle, as there's really no sense of urgency aside from my existing car getting clunkier and clunkier.

As far as my financial situation goes, I can definitely pay cash for the vehicle with a variety of ways -- either liquidating a few of my investments, line of credit, a combination of the two, etc -- but it's a matter of which method would yield the best purchase price.

Also, I should say that I live in Alberta, so finding Volts on the lot is actually kind of hard :/

Why in the world would you use a line of credit to buy the car if you have the cash in investments? I did that not once, but twice, and as soon as I figured out that was really stupid (the percentage I was saving on the spread could barely pay for a Happy Meal) I paid off both cars within a week. The biggest gain comes from not having a payment in the world - you can save a whole lot of money when you have no payments.

You're doing the right thing with your buy and hold strategy to drive cars into the ground. Keep it up.

 

[SuperJ]

If you are really going to purchase the car as a 14yr car (I think this is unrealistic these days with the way tech is moving), I would be hesitant to buy a Volt. A full electric with big range and future looking options like DC fast charging is the way to go. The Tesla Model 3 is only car on the horizon that fits this criteria IMHO. The Bolt is great now but lacks serious DC fast charging (only 50kw), and GM hasn't had a good record on providing long term upgrades (or even short term). Tesla seems to be the only car company that has offered after sale upgrades (continous software updates, and the battery pack upgrade for the roadster or unlocking options after the fact like larger battery or supercharging). The Volt is a great car but I think you would be kicking yourself 5-8years in because it will never be better than the day you bought it. (unless some awesome aftermarket battery upgrades appear, 30kwhr would be amazing!).

I leased my 2017 (first lease of my life), I did it for a variety of reasons, but one was to limit the amount of technological lock in that long term finances ensures. The other was here in Ontario you still get the full $14,000 rebate on a 3yr lease (and lose less of it too tax on a lease), my employer was also willing to up my car allowance for a plug in car to offset company full costs savings.
I can still buy out my lease at the end for $14,000 after 3yrs so if tech moves slower than I anticipate I will likely buy it and drive it another 3-5years.

But, from a pure financial perspective financing/cash purchase is likely the best option. Cars are almost never an investment just a carefully planed divestment. So just decide if the leasing TCO matches your financial goals.

The state of car tech is moving faster now than it ever moved in the 80's, 90's or early 2000's. Back then 15 years in a car was not that painful (my parents just got rid of the daily driver 1997 Chevy suburban a year ago, it treated them well with over 500,000km).

 

[Breezy]

I wouldn't lease unless I were absolutely set on getting the latest, greatest thing available when the lease ends. If you want to drive the latest tech then leasing is for you. There are many new plug-in vehicles coming out in the next few years. For example, if you lease for 3 years, then the Model 3 should be widely available when the lease ends, and who knows what else might be on the market.

We don't get the same attractive lease rates as in the US, but on the other hand, resale values for EVs have generally held up better in Canada.

 

[llninja]

If you are really going to purchase the car as a 14yr car (I think this is unrealistic these days with the way tech is moving), I would be hesitant to buy a Volt. A full electric with big range and future looking options like DC fast charging is the way to go. The Tesla Model 3 is only car on the horizon that fits this criteria IMHO. The Bolt is great now but lacks serious DC fast charging (only 50kw), and GM hasn't had a good record on providing long term upgrades (or even short term). Tesla seems to be the only car company that has offered after sale upgrades (continous software updates, and the battery pack upgrade for the roadster or unlocking options after the fact like larger battery or supercharging). The Volt is a great car but I think you would be kicking yourself 5-8years in because it will never be better than the day you bought it. (unless some awesome aftermarket battery upgrades appear, 30kwhr would be amazing!).

I leased my 2017 (first lease of my life), I did it for a variety of reasons, but one was to limit the amount of technological lock in that long term finances ensures. The other was here in Ontario you still get the full $14,000 rebate on a 3yr lease (and lose less of it too tax on a lease), my employer was also willing to up my car allowance for a plug in car to offset company full costs savings.
I can still buy out my lease at the end for $14,000 after 3yrs so if tech moves slower than I anticipate I will likely buy it and drive it another 3-5years.

But, from a pure financial perspective financing/cash purchase is likely the best option. Cars are almost never an investment just a carefully planed divestment. So just decide if the leasing TCO matches your financial goals.

The state of car tech is moving faster now than it ever moved in the 80's, 90's or early 2000's. Back then 15 years in a car was not that painful (my parents just got rid of the daily driver 1997 Chevy suburban a year ago, it treated them well with over 500,000km).

Unless you were early with a Model 3 reservation, I think you'll be waiting a long, long time for a model 3 delivery. If you need a car this year, the volt is still an awesome car. I'm amazed that it is now 2017, 7 years after the first volt started shipping, and even the Gen 1 has more range than more modern competitors with range extenders (audi Etron, Ford C-Max, Volvo, Prius Prime, Prius Plug-in). Just like computers and smartphones, there will always be a better one around the corner, but if you never jump in, you'll never move forward. This reminds me of a coworker who talked for months about buying a new computer with the next AMD or Intel chip, but as soon as that chip was released, he looked at what's coming next and decided to wait for that next one. He ended up not getting a new computer for 5 years while all his friends PWNed him at LAN parties.

 

[llninja]

I wouldn't lease unless I were absolutely set on getting the latest, greatest thing available when the lease ends. If you want to drive the latest tech then leasing is for you. There are many new plug-in vehicles coming out in the next few years. For example, if you lease for 3 years, then the Model 3 should be widely available when the lease ends, and who knows what else might be on the market.

We don't get the same attractive lease rates as in the US, but on the other hand, resale values for EVs have generally held up better in Canada.

The counter argument to that is leasing the latest tech means you'll be paying full MSRP for that lease. Just like early volt g1 adopters, early volt g2 adopters, and current bolt owners/leassors. Supply and demand will be working against you. I really feel for folks who paid $44k for their premium G1s (or leased the equivalent of that price) when I only paid $21K for the same new $44k MSRP volt in 2013. My previous conquest was a 2004 CTS with a $33K MSRP for $23K. If you are filthy rich, and money is no object, go for it. I choose to not spend all of my money on cars - I love cars, have a bunch of nice ones, but I'm not going to give the finance companies my financial future for short term happiness.

 

[grs10]

Thanks for the replies everyone I'll try to reply as thoroughly as I can...

Why in the world would you use a line of credit to buy the car if you have the cash in investments? I did that not once, but twice, and as soon as I figured out that was really stupid (the percentage I was saving on the spread could barely pay for a Happy Meal) I paid off both cars within a week. The biggest gain comes from not having a payment in the world - you can save a whole lot of money when you have no payments.

You're doing the right thing with your buy and hold strategy to drive cars into the ground. Keep it up.

It all depends on whether the LoC interest rate is lower than the offered car loan -- that is, if the cash purchase price including the LoC rate is better than financing. That, and keeping the monthly payments low means that I can keep rolling my investment gains forward instead of divesting them all at once.

If you are really going to purchase the car as a 14yr car (I think this is unrealistic these days with the way tech is moving), I would be hesitant to buy a Volt. A full electric with big range and future looking options like DC fast charging is the way to go. The Tesla Model 3 is only car on the horizon that fits this criteria IMHO. The Bolt is great now but lacks serious DC fast charging (only 50kw), and GM hasn't had a good record on providing long term upgrades (or even short term). Tesla seems to be the only car company that has offered after sale upgrades (continous software updates, and the battery pack upgrade for the roadster or unlocking options after the fact like larger battery or supercharging). The Volt is a great car but I think you would be kicking yourself 5-8years in because it will never be better than the day you bought it. (unless some awesome aftermarket battery upgrades appear, 30kwhr would be amazing!).

I leased my 2017 (first lease of my life), I did it for a variety of reasons, but one was to limit the amount of technological lock in that long term finances ensures. The other was here in Ontario you still get the full $14,000 rebate on a 3yr lease (and lose less of it too tax on a lease), my employer was also willing to up my car allowance for a plug in car to offset company full costs savings.
I can still buy out my lease at the end for $14,000 after 3yrs so if tech moves slower than I anticipate I will likely buy it and drive it another 3-5years.

But, from a pure financial perspective financing/cash purchase is likely the best option. Cars are almost never an investment just a carefully planed divestment. So just decide if the leasing TCO matches your financial goals.

The state of car tech is moving faster now than it ever moved in the 80's, 90's or early 2000's. Back then 15 years in a car was not that painful (my parents just got rid of the daily driver 1997 Chevy suburban a year ago, it treated them well with over 500,000km).

This, combined with new battery chemistries on the horizon, quite aptly describes why I'm considering a lease...

 

[Coppersnowboarder]

Buy used. You can buy a 2016 Volt for about $24,000. Alberta has no public charging stations, so part of your planning should include how you will function with a battery pack that will only take you the first 50 miles of any trip. I drove through Alberta last summer and had to use gasoline for 4,000 miles without charging the battery pack for 40 MPG. During cold weather, operating my 2013 Volt on my short 18-mile commute gives me 80 to 120 MPG because the gas generator must be run whenever temperature runs in the single digits.

 

[llninja]

Thanks for the replies everyone I'll try to reply as thoroughly as I can...



It all depends on whether the LoC interest rate is lower than the offered car loan -- that is, if the cash purchase price including the LoC rate is better than financing. That, and keeping the monthly payments low means that I can keep rolling my investment gains forward instead of divesting them all at once.



This, combined with new battery chemistries on the horizon, quite aptly describes why I'm considering a lease...

The math nerd in me agrees, you can save some money with better interest rates, but that doesn't solve the problem of people overextending themselves buying more than they really can afford. I like my 100% down, 0% interest, unlimited miles, unlimited term lease better. If I have money sitting in the bank or in an investment, then I know I can afford to buy that next car or item.

Trying to save a little money on the spread between interest income and interest payments won't make you rich. Otherwise you'd change that $20-30K vehicle loan on the line of credit to $10M and have $10M sitting in the bank with investments. Whether it's $30K or $10M, you're adding risk to the equation which you aren't considering as part of your interest calculation. There is risk that another dot bomb or financial crisis could hit and hurt. There's risk that the bank could call you on the LoC and require you to pay it within 2 weeks. There's risk that you could have a medical event that stops the regular income in its tracks and throws this spread out the door.

As for battery chemistries, every month there is some new article touting some new chemistry that could revolutionize the EV industry. Super capacitors. Lithium air breathing batteries. Gold nanowire. Magnesium. Fuel cells. Graphene. Sodium ion. The list goes on and on I'm still waiting for any of these to become reality...

 

[GeV]

Buy used. You can buy a 2016 Volt for about $24,000. Alberta has no public charging stations, so part of your planning should include how you will function with a battery pack that will only take you the first 50 miles of any trip. I drove through Alberta last summer and had to use gasoline for 4,000 miles without charging the battery pack for 40 MPG. During cold weather, operating my 2013 Volt on my short 18-mile commute gives me 80 to 120 MPG because the gas generator must be run whenever temperature runs in the single digits.

Not sure what resources you were using to check the public charger situation in Alberta, but according to Plugshare there are plenty of stations in the Southwest and Central areas of the province:

 

[canehdian]

I look at auto leases as a form of undecided insurance.
If I want to walk away, I can. But I've lost the money I've put in to date. That's the cost of the "insurance".
I also have the option to keep my car at the end for a fee I know up front.

But to be in revolving leases is not a good way to go about the auto world, unless you have boatloads of cash.

I purchased (financed) but have since paid it off completely.

The advantage to using this "insurance" is if it is a lemon or gets in a severe collision you can walk away and not have to worry about it having costly repairs or problems, reduced resale, etc.

 

[mr_raider]

Not sure what resources you were using to check the public charger situation in Alberta, but according to Plugshare there are plenty of stations in the Southwest and Central areas of the province:

Gas is so cheap in Alberta, using a public charger is almost a waste of money unless it's free. I'd just use the extender.

As for lease or buy, the lease rates on the Volt were astonishingly bad in September when I bought my car, around 5.9%. The finance rates were 2.9 I belive which was very close to my LOC. I chose to finance over 3 years, but my balance was fairly after trade in and 8000$ EV rebate.

 

[canehdian]

Yes, I don't think I've ever seen lease rates go on "sale" since the volt launched.
Finance has gone down to 0%, but lease rates have always been crap from what I've seen (not that I'm checking every day, though)

 

[llninja]

Gas is so cheap in Alberta, using a public charger is almost a waste of money unless it's free. I'd just use the extender.

To some, it isn't a matter of whether plugging in costs less than fuel, it's a matter of paying to be green. Someday soon I'm planning to pay $2 per hour daily at the nearby chargepoint site to be green, but for now my greenbacks are piling into the mortgage payment until it's gone.

 

[llninja]

Yes, I don't think I've ever seen lease rates go on "sale" since the volt launched.
Finance has gone down to 0%, but lease rates have always been crap from what I've seen (not that I'm checking every day, though)

When finance rates are 0%, that usually means you are paying near MSRP for the deal. if they toss in GM rebates, often times you won't qualify for 0% financing. I view 0% as a gimmick. The day they give me the maximum rebates AND 0%, then I'll retract that statement. But on my last two GM purchases, I had negotiated the price so low that taking the rebates far outweighed the 0%.

 

[grs10]

Buy used. You can buy a 2016 Volt for about $24,000. Alberta has no public charging stations, so part of your planning should include how you will function with a battery pack that will only take you the first 50 miles of any trip. I drove through Alberta last summer and had to use gasoline for 4,000 miles without charging the battery pack for 40 MPG. During cold weather, operating my 2013 Volt on my short 18-mile commute gives me 80 to 120 MPG because the gas generator must be run whenever temperature runs in the single digits.

A 2016 volt for $24k CAD?! Where?

 

[Bacardi]

The counter argument to that is leasing the latest tech means you'll be paying full MSRP for that lease. Just like early volt g1 adopters, early volt g2 adopters, and current bolt owners/leassors. Supply and demand will be working against you. I really feel for folks who paid $44k for their premium G1s (or leased the equivalent of that price) when I only paid $21K for the same new $44k MSRP volt in 2013. My previous conquest was a 2004 CTS with a $33K MSRP for $23K. If you are filthy rich, and money is no object, go for it. I choose to not spend all of my money on cars - I love cars, have a bunch of nice ones, but I'm not going to give the finance companies my financial future for short term happiness.

You are NOT paying FULL MSRP...If you can negotiate the sales from $44K to $23K, you can also lease at $23K...

The math nerd in me agrees, you can save some money with better interest rates, but that doesn't solve the problem of people overextending themselves buying more than they really can afford. I like my 100% down, 0% interest, unlimited miles, unlimited term lease better. If I have money sitting in the bank or in an investment, then I know I can afford to buy that next car or item.

Trying to save a little money on the spread between interest income and interest payments won't make you rich. Otherwise you'd change that $20-30K vehicle loan on the line of credit to $10M and have $10M sitting in the bank with investments. Whether it's $30K or $10M, you're adding risk to the equation which you aren't considering as part of your interest calculation. There is risk that another dot bomb or financial crisis could hit and hurt. There's risk that the bank could call you on the LoC and require you to pay it within 2 weeks. There's risk that you could have a medical event that stops the regular income in its tracks and throws this spread out the door.

As for battery chemistries, every month there is some new article touting some new chemistry that could revolutionize the EV industry. Super capacitors. Lithium air breathing batteries. Gold nanowire. Magnesium. Fuel cells. Graphene. Sodium ion. The list goes on and on I'm still waiting for any of these to become reality...

With a lease you can have unlimited miles, you pay more on the backend on terms of excess mileage; the excess is even interest free, your personal favorite! So drop tens of thousands now to "marry" a vehicle that's been known to have a "soft" resale value to save a little interest...Or pay very low interest and make monthly payments (like your cell phone and utilize bills)...

When finance rates are 0%, that usually means you are paying near MSRP for the deal. if they toss in GM rebates, often times you won't qualify for 0% financing. I view 0% as a gimmick. The day they give me the maximum rebates AND 0%, then I'll retract that statement. But on my last two GM purchases, I had negotiated the price so low that taking the rebates far outweighed the 0%.

What you've said before is you believe 0% is a gimmick because you believe you have to give up the incentive...First and foremost, there have been times you both can qualify for an incentive and 0%, second, you simply need hard numbers vs blanket statements...If incentives is the key, sometimes GM offers better ones for lease vs purchase...In a few circumstance, it's actually cheaper to lease now and purchase later than to purchase outright...

Disclaimer, I'm a huge fan of leasing if it's heavily subsidized like it is in the CARB states of the US, yet I cannot comment on Canada...