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Here in Massachusetts I'm finding 2018 Volts for around 28,000 with leather, comfort and convenience packages.

I thought that leasing would be a great deal since MA provides a $2500 rebate just to lease the vehicle. I also was under the impression that the federal tax credit would drastically reduce the lease payment. I searched around and the feedback I was getting was that a lease for 36 months/ 15k miles would be about $350 per month. That would be $12,600 over the course of the lease.

Buying that car at $28,000 - $10,000 in incentives ($7500 federal and $2500 MA) would work out to a lower monthly payment and only a $5400 difference at the end of the lease, but you would own the car. Even if I buy it and then sell it for $10,000 after three years I would still make out.

Why would anyone ever lease these things? I guess if couldn't get the full $7500 back and didn't have a state rebate as generous as MA, but still? Leasing to me makes no sense.
 

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When you lease you can deduct whatever percentage (depending on usage) against income. With buying, you can deduct only the (true) yearly depreciation (whatever percentage depending on usage). It changes again if you keep your car for three years or thirty. Some people don't use their cars for work (to earn income). Some people don't have the money to buy and would have to borrow. Some people would rather keep their money in high dividend (which are taxed at a lower rate), steady increasing in value stocks. Not one size fits all. The astute would consider all factors.
 

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For most cars in most states, you can get a lower monthly payment with a lease, or you could afford a nicer car for the same monthly payment. That is the main reason they are popular. In the specific example you presented, it may not work out that way due to some distortions from the incentives. Also, as mentioned, there can be income sheltering differences, or someone may not qualify for the federal tax incentive, which also changes the math.

Another reason people like to lease these new technology vehicles is that they have doubts about how reliable they will be and don't want to get stuck with the car long-term. That turned out to be relevant for the early Volt leases where the residual was much higher than actual market value at the end of the lease. That probably happened with the early Leaf leases as well.

Also remember that you can't subtract the federal tax incentive from the price of the car for the purposes of determining your loan amount and payment. You do not get that at the time of sale.
 

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Here in Massachusetts I'm finding 2018 Volts for around 28,000 with leather, comfort and convenience packages.

I thought that leasing would be a great deal since MA provides a $2500 rebate just to lease the vehicle. I also was under the impression that the federal tax credit would drastically reduce the lease payment. I searched around and the feedback I was getting was that a lease for 36 months/ 15k miles would be about $350 per month. That would be $12,600 over the course of the lease.

Buying that car at $28,000 - $10,000 in incentives ($7500 federal and $2500 MA) would work out to a lower monthly payment and only a $5400 difference at the end of the lease, but you would own the car. Even if I buy it and then sell it for $10,000 after three years I would still make out.

Why would anyone ever lease these things? I guess if couldn't get the full $7500 back and didn't have a state rebate as generous as MA, but still? Leasing to me makes no sense.

Your $350 lease payment seems a little high given the MSRP of the car you are looking at. Dealers love to make money off of leasing, but if you bargain better you should be able to do better than $350. You are also assuming the car will be worth $10K at lease end. Depending on tech and market changes, it may very well not be. With the lease you take no risk. You also don't have to deal with selling a car.
 

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First, the arithmetic on your example is flawed, as you counted the $2500 rebate for the purchase, but not the lease. So it's really a $7900 difference even using the given lease rate.

Second, as others have pointed out, that lease rate seems pretty high. I'm leasing my 2017 in MA for 0 down, $220 per month. It is 12k miles per year, not 15k though.

Additionally, my $220 number already includes MA sales tax. I'm not sure if your 28k purchase quote does or not, but that could be an additional $1750 if not.

Once the MA rebate is factored in, even after lease acquisition/disposition fees, I'm basically driving a new Volt for 3 years for approximately $6000 total out-of-pocket. That didn't seem possible to beat with a purchase at the time.
 

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First, the arithmetic on your example is flawed.....
Not just the math. The instant deep depreciation (thanks gubmint incentives!) factors in.

I'm a big advocate of paying cash for cars whenever possible but there are situations where the lease makes more economic sense. None of those situations are ones I put myself in, so I really can't elaborate.
 

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Reality is that ~70% of electric cars are leased. I own both of mine - but I can see where one would only want to lease a "compliance" car.
 

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It all depends on your situation and what kind of deal you can get. I just leased a 2018 LT without options. I did one pay and it came out to $8600 total drive off, including all taxes, fees, etc. Factor in the $1500 CA rebate, my net out of pocket is $7100 for the 36 months period with 12k miles/year. That comes out to about $197/mth after tax. If I purchased the car at about $29k, even factoring in the rebates, it would be about $23,000 after taxes and fees. Will the car be worth $16k after 3 years. Who knows. But paying $7100 for 3 years seems like a pretty good deal to me, since I don't know if I would want to own the car for more than 3 yrs.
 

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My 36 months/15k mile lease for a 2018 is $220/month with $15k purchase price at the end. In 3 years I can reevaluate the lay of the EV land or just buy the car.
 
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