[georgeryon]

I was trying to get a volt lease three years ago when the gen 2 came out but they just weren't dealing. Jump to today, my current lease is up and I saw a nice trend with 2018 Volt prices. Also new this lease is the NYS rebate.

I am leasing a 2018 Volt LT with comfort package and floor mats. The car was a dealer car so it has 7,000 miles which doesn't bother me. Just first payment at delivery and 36 months 10K miles. Here are the details.

MSRP - $34815
Selling - $27500
w F/Tx - $29477
Rebate - $7400
Total. - $22077

$170 a month

 

[Norton]

$170 a month

Not bad for a car rental rate.

All you have to do is return it with legal tires and no dents and find yourself a way home with nothing to show for all those payments.
Oh, and don't drive it too much,,, (10k miles/year). Can you really live with that?

 

[Don M]

Is there such a thing as a 'great lease?' . . . . on a used car??

If it has 7,000 miles on it, the dealer must have put it into service at some tome in the past - Service loaner vehicle? How do you get a $7,400 'rebate' on a used car??

Don

 

[georgeryon]

A. Yup, great price for a rental, $5.67 a day. I never go over my milage, usually have 3-5K to spare.

B. I don't know how it can have 7,000 miles and be leased with rebates.

 

[DAC17]

A. Yup, great price for a rental, $5.67 a day. I never go over my milage, usually have 3-5K to spare.

B. I don't know how it can have 7,000 miles and be leased with rebates.

The good news is that you don't really care how they came up with the rebates, but you got them!

 

[obermd]

So at the end of the lease you still have nothing. Great Lease is an oxymoron unless you can write the lease payments off as a business expense.

 

[DAC17]

So at the end of the lease you still have nothing. Great Lease is an oxymoron unless you can write the lease payments off as a business expense.

Not necessarily. It depends on the residual price built into the lease. If that number is higher than the FMV of the car at lease-end (which in the case of rapidly-changing EV's is likely), than you got a good deal for the lease term use of the car. Why do people always assume that buying is better then leasing? And, if you live in a state with sales tax, you can save a bunch there too by leasing.

 

[obermd]

Not necessarily. It depends on the residual price built into the lease. If that number is higher than the FMV of the car at lease-end (which in the case of rapidly-changing EV's is likely), than you got a good deal for the lease term use of the car. Why do people always assume that buying is better then leasing? And, if you live in a state with sales tax, you can save a bunch there too by leasing.

I did the calculations on a lease one time. The effective interest rate was somewhere around 30%. In my book this type of interest is never to the payer's benefit.

 

[Edward Tyer]

You got a good deal! Everybody that rides pays! One way or the other. I look at what does it cost a year to ride. It's going to cost you about 2k per year to drive. You only need to charge it. I know people buy cars and drive them forever, but if you buy a 30k car pay cash and drive it for 15 years (the point where it basically has no value) what was your cost per year? 2k. PLUS tires, maintenance and the inevitable repairs.
What did that person accomplish verses the deal you got....nothing. If you can ride for 2k a year for 3 years with no other expenses... Do it!

 

[DAC17]

I did the calculations on a lease one time. The effective interest rate was somewhere around 30%. In my book this type of interest is never to the payer's benefit.

With all due respect, I have never seen a lease with an implicit rate of 30%. I believe that would violate the usury laws in most states. I think your arithmetic may have dropped a zero, and the rate was closer to 3%. Or you’re dealing with some kneecap banging creditor.

 

[JuneBug]

I trust Dave Ramsey--he has forgotten more about money and finances than I'll ever know:

https://www.daveramsey.com/askdave/automobiles/10367

Explain How A Car Lease Works

Hear Dave break down, in detail, what a car lease is and why you don't want it.

QUESTION: Listener asks Dave to break down the mathematical flaws in a car lease.

ANSWER: A car fleece is basically renting a car. You pay $400 a month and at the end of the new car lease, you turn it back in. If you want to buy it, you are buying it for what they estimate at the beginning of the fleece to be the market value. At the end of the lease, it’s called the residual value. If you pay $400 a month for 60 months, you pay $24,000 before turning it in. The car will not have gone down in value more than that, because the car companies would lose money if it did. When they get the car back, you will have paid them more than the car has depreciated during that time.

During that time, you’re maintaining the car as if you owned it. You’ll get charged for excessive wear and tear, or if you put too many miles on it. If you rent it for $24,000 and it went down $15,000 in value, then it cost me $9,000 to rent this car for this period of time. That is their profit during that time.

Another thing is that the interest rates on a vehicle lease are not disclosed because the Federal Trade Commission has determined that this is not a debt, so there is no federal disclosure involved. Therefore, you have no truth in lending disclosure sheet. The interest rates you get charged are unbelievably high. That’s where you’ll realize you got screwed over.

People get sold automobile leases because they are told that it’s what sophisticated people do. But as it turns out, the car companies make more money on leasing you the car than if you bought the car with cash, according to the National Auto Dealers Association. Broke people think ‘how much down and how much a month’. Rich people think ‘how much’. If you can’t pay cash for a car, then ride a bicycle. But don’t lease a car.

 

[Edward Tyer]

And Dave is usually right.....But go back to the cost per year to ride! It's not ever going to be free! Anyway you slice it the OP is paying 2k a year to ride. That will be his only expense period. If Dave Ramsey is driving a car I bet you $5 he is paying more than 2k per year to ride. Now on the other hand...I have never leased. Usually the cost per year to ride will be more in a lease and so I have never done it. Leasing is usually a bad idea. BUT the OP got a deal! No way around it! Congratulations ! Remember .... what is your cost per year to ride! Find the way that is the best for you and cheapest and go for it!

 

[DAC17]

OK; time for the unfortunate truth. The example cited is sort of amusing for someone trying to prove an already-formed opinion with limited facts. The real reason most people shouldn't lease a car is that they can't do high school mathematics with what is essentially a complex formula.

There are multiple factors in any lease, including MSRP, capitalized cost reduction, cap cost, money rate, residual value and more. In some, but not all, cases leasing may be cheaper than owning. I leased my 2017 Premier (MSRP 39,650) for $241 per month for 36 months and $1,000 out of pocket at lease inception (that's all front end costs).. Therefore, I paid $9,676 for 36,000 miles over three years. Assume I could have bought the car for $35,000 (pretty good deal; $4,650 off MSRP, right?) Take into account the $7,500 federal tax credit (assuming for the moment that I had enough taxes to use it all), and the upfront cost would have been $27,500. Now subtract the $9,676 from that amount, and the car has an implicit value of $17,824. Now compare that to the FMV of the three-year old Volt with 36,000 miles. I don't see much difference. Oh, but wait, I only paid sales tax on the $9,676, and I didn't pay sales tax on the $17,824; which in Connecticut would be $1,132. So now you're at just about $19,000. And I didn't include the lost investment income on the amount not paid up front to buy the car; let's conservatively call that another $1,000. Now we're up to at least $20,000 of selling price that you'd have to get after three years. And you bear the risk of selling for that price or more.

Particularly with electrics and hybrids (the focus of this forum...), where the technology is changing constantly, some buyers don't want to take a risk on the three-year out value of the car. That risk belongs to the leasing company.

Rip-off; I don't think so. But every lease is different and, in fairness, most people can very quickly glaze over at the math involved. And most people probably glazed over my analysis. [Let me know if I missed something important] So, yes, most people should probably stay away.

 

[Edward Tyer]

I keep the math simple. You paid 3200 a year to ride. Not great, not terrible. What does the GM-Volt Community think it should cost a year to ride? The OP is riding for 2k a year! Who wouldn't take that deal! But still , for me purchasing has been cheaper. Just do the math......

 

[josby]

The real reason most people shouldn't lease a car is that they can't do high school mathematics

Exactly. A lease CAN cost only a marginal amount more than buying a car with a loan then selling it after three years, and the benefits of leasing may be worth that small extra cost to some. But the extra "moving pieces" of a lease make it much easier for the dealer to screw over people who can't follow the math.

 

[wassct]

A car depreciates! An EV depreciates even more! Technology for an EV changes quickly sort of like smartphones! It's not a house and will not gain any value. If you keep it 7 years or more your car will be obsolete and worth nothing anyway. It's personal taste and has nothing to do with math! The math sometimes works better in a lease fyi! Sometimes you actually end up with equity in the car and sell it and make some of your cash back. Not everyone likes to drive old cars that are falling apart. That's so 1985! It all depends on personal circumstances. He got a good deal!

Sent from my SM-G965U using Tapatalk

 

[Steverino]

A car depreciates! An EV depreciates even more!

Only if you ignore the $7500 tax credit. If you deduct that from the price you paid and do your depreciation calculations, EV's are not generally different from other cars.

 

[LBV]

People are talking about the "cost per year to drive" but once you pay off a bought car, you no longer have any. It's zero .. ignoring same items like maintenance, charging, etc... just talking about the purchase portion.

 

[georgeryon]

The good news is that you don't really care how they came up with the rebates, but you got them!

Apparently the deal can use the car without changing it's status to used. As far as the break down, you are right, I'm glad I just got them.

 

[georgeryon]

You got a good deal! Everybody that rides pays! One way or the other. I look at what does it cost a year to ride. It's going to cost you about 2k per year to drive. You only need to charge it. I know people buy cars and drive them forever, but if you buy a 30k car pay cash and drive it for 15 years (the point where it basically has no value) what was your cost per year? 2k. PLUS tires, maintenance and the inevitable repairs.
What did that person accomplish verses the deal you got....nothing. If you can ride for 2k a year for 3 years with no other expenses... Do it!

I don't always lease. My main reason for leasing lately is that I feel leasing is a great fit for EVs. The technology is changing so quickly that I don't see sticking to one for too long. My other car is an 18 years old car that I modified and have an attachment to. Most cars are no investments but expenses. My house is a much better investment.

I don't know why people have to argue in such a disparaging way. I don't know if they are trying to help, or make them sound better, or make someone feel less, or because it's their nature. I just ignore them though.