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Discussion Starter · #1 ·
Hi folks - I am about 1-2 weeks away from acquiring my first Chevy Volt. I have what seem like really good alternatives to buy or lease and was hoping to share my analysis and get some sound feedback, knowing the broad answer is: "it depends...". Thanks!

My profile: I live in LA, will drive about 15K miles/year I estimate 70% electric. I own a hybrid suv (!), and almost bought the Prius but now committed to get a Volt 2013 model. Have never leased a vehicle. For example the car I am getting rid of is an 11 year old Saab so I don't feel compelled to flip cars often.

Volt I want: minimally must have Leather Trim + Safety 1 (about +2K over base price MSRP)

My options on this car:

Lease - All in will cost me about $13K over 3 years @15K miles/year after all discounts including California State $1,500 credit.

Buy - All in will cost me about $32K over 4 years after all discounts including dealer, GM, CA state ($1,500) and Federal ($7,500) rebates/refunds, I have included tax and sundry charges. No financing cost - GM is giving a 0% interest.

My assessment - Pros of buying over leasing:
- Lower annual cost over the long term
- No mileage limit anxiety
- I might come out ahead vs. lease on 1st 3 years - this assumes I can sell the car at over $32K - $13K = $19K after I have owned it for 3 years. This seems quite plausible. The Kelly Blue Book indicates post three year value is 45% of MSRP so that is about right or a little bit below.
- Psychological feel good about not having car debt for more years than I do - since I'll pay it off in 4 years

My assessment - Pros of leasing over buying: (never owned a Chevy)
- Concerns over long term stability vs. say an Accord or my current Highlander Hybrid
- Concerns it will depreciate fast - signs are electrics depreciate faster than say hybrids
- I get to buy or lease the new model in 2017 if I like it without having to sell my current car

So should I lease or buy under these terms? I look forward to your feedback, thanks.
 

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We purchased our 2013 in January instead of leased since we are also do not flip our cars that often as well. The car it replaced was a 1995 Honda Passport that I purchased as new and our other car is a 1997 Jeep Grand Cherokee that we are keeping for when we need extra space (currently just sitting on a battery tender as it is now used very infrequently). We took the 0%/72 month deal with the $2,000 financing rebate. We plan on keeping the car for a number of years and will probably eventually replace the Jeep when they make the SUV version with the Volt technology and it has been out for a few years (we tend to stay away from the first few model years so the bugs can be worked out which is why we waited for a 2013).
 

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You've set this up really well so the answer to your question will just fall out naturally. It would be best to calculate the cost of a four year lease since that makes the comparison easier. Let's say it would cost $17000 (should be a good guess -- less depreciation but the discounts and credits are apportioned over 48 rather than 36 months). Also keep in mind that the structure of the Volt lease means you lose the tax credit if you buy at the end of the lease, making this an undesirable alternative.

At this point all you need do is ask yourself one question: Will a four year old Volt will be worth $15,000 to me? ($32K you would pay to buy minus the $17K you would pay to lease). If the answer is "yes" then buy. If the answer is "no" then lease.

There are a couple of things that make buying easier. One is that you can get an extended warranty. You'd want to get that either before you hit 12,000 or 36,000 miles. The prices are very reasonable, you're protected if something very expensive goes wrong, and the warranty is transferable, which will enhance resale should you want to sell the Volt later. Two is that you can get an HOV sticker. You should do that regardless of whether you'd use it because the sticker will increase the resale value by roughly $3000. (This also means BTW that the question might be whether a four year old Volt would be worth $12,000).
 

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Discussion Starter · #5 ·
.... At this point all you need do is ask yourself one question: Will a four year old Volt will be worth $15,000 to me? ($32K you would pay to buy minus the $17K you would pay to lease). If the answer is "yes" then buy. If the answer is "no" then lease.

There are a couple of things that make buying easier. One is that you can get an extended warranty. You'd want to get that either before you hit 12,000 or 36,000 miles. The prices are very reasonable, you're protected if something very expensive goes wrong, and the warranty is transferable, which will enhance resale should you want to sell the Volt later. Two is that you can get an HOV sticker. You should do that regardless of whether you'd use it because the sticker will increase the resale value by roughly $3000. (This also means BTW that the question might be whether a four year old Volt would be worth $12,000).
Hi Don - thanks for the feedback.

Sticker: I understand at least in CA the sticker expires Jan 1, 2015 and is available for both buy and lease so it's a wash and likely not worth much after. Would love to know if it's otherwise but that's what I saw on the state web site.

Extended warranty: great advice, I will negotiate if I buy and factor into the total buy cost.

Future credits: One other element of the decision could be if the Fed 7,500 incentive is renewable - i.e. if I lease can I get another 7,500 credit in 2016 on a new purchase. If I cannot the lease is less favorable since the bank benefits on the credit in part on the lease option.
 

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Lease there are so many of these going to come off of lease that the market will be saturated with them.
That's assuming there aren't people waiting to snap up just-off-lease deals. Also remember there weren't that many sold in it's first two years so I'm not sure about 'saturated'...

I purchased mine as I have been excited about owning an EV for decades and this fits my driving style perfectly. If it turns out 10 years from now that I made a big mistake... well that's my problem in 10 years. I'll just have to figure it out. I didn't buy this car for it's potential resale value.
 

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You can not predict the future. If EV technology is stagnant buy. If it rapidly is improving lease. It's sorta like electronics/phones.. The question is do you want the option to upgrade from an obsolete EV without fighting the trade game. It's not a conventional car
 

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The OP, if buying for the long term, would get a 10yr/150K mile HV/battery warranty. Noice.
 

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Buy and keep it for six years and then get a 2019 super-wonder Volt III. I bought my 2011 Volt in 2012 July and don't expect to change-out for 6+ years.

Cars do last longer than 3 years and holding onto a paid-for car is a wonderful thing to do. My Mazda was paid-for in 2009 and I didn't have a car payment until August of 2012. Those payment free years are freeing. The Mazda cost $20K at the time and gave us nearly 8.5 years of 150K miles care-free driving (other than new MTX clutch and tires). If my son didn't get hit broad-side by someone, it would have lasted a few more years.
 

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Lease. Next generation coming in a couple of years and then maybe buy. I am leasing and intend to purchase in 2 years.there will be quite a few new vehicles from other car companies available by then.
 

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Sticker: I understand at least in CA the sticker expires Jan 1, 2015 and is available for both buy and lease so it's a wash and likely not worth much after. Would love to know if it's otherwise but that's what I saw on the state web site.
...
Future credits: One other element of the decision could be if the Fed 7,500 incentive is renewable - i.e. if I lease can I get another 7,500 credit in 2016 on a new purchase. If I cannot the lease is less favorable since the bank benefits on the credit in part on the lease option.
On the HOV stickers, these will be extended. There simply aren't that many pure BEVs coming into the market. This is what happened with the stickers for the Prius and it's highly likely to be a replay. Advantage buy!

There is very little chance the tax credit will go away. The CARB rebate is more likely not be be funded. Advantage lease!

I've got you covered either way. LOL FYI I don't believe the next generation Volt will be as good as this one. GM is looking to take costs out of the car and, as we've heard from some of the GM guys, Gen I is heavy on the "belts and suspenders" because of uncertainly over what would fail. Those will disappear in Gen II.
 

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It's a coin flip.

I believe leasing is the more conservative approach because you have a predetermined residual in case things turn out unfavorably with reliability and resale value.
 

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I believe leasing is the more conservative approach because you have a predetermined residual in case things turn out unfavorably with reliability and resale value.
Except the pre-determined residual is designed to be $7500 above the actual residual value.
 

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Your circumstances mirror my own. Rapid product development convinced me that leasing (which was new to me) in this instance made sense. I took the plunge in October and am totally satisfied, even though my lease terms are probably not the greatest. Gas mileage was a distant factor, BTW, but I sure like the no-gas-since-Christmas thing. Yesterday I saw another Volt on the highway. Today, yet another--a first for me, even in the hotbed of Volt sales, S. Cal. My Volt Vote in October helped a lot. Yours now will help put Volt over sales "critical mass". Go for it.
 

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Discussion Starter · #16 ·
I hear you on the coin flip. It's close. I'm tending towards Buy right now and will await some responses. Residuals are close to 25K so they hardly matter b/c at that price I'd never buy out my lease after foregoing the option of purchasing outset at much much lower 3+ year price at the onset.
 

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Except the pre-determined residual is designed to be $7500 above the actual residual value.
Exactly. It works out favorably for the lease payment (inflated residual = lower payments) only if you turn it in at the end and walk away.
 

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I have to say I'm in this same boat with buying vs leasing and so far I've been leaning toward buying. The reason being is that if I purchase the vehicle and put 100,000 miles on it within 8 years (not a far stretch for me) and it has a resale value of around 12,000 at that point then it will have cost less then just putting gas in my xterra over those same amount of miles (not including maintenance costs).

However if I lease I can't seem to get the payment below $300 a month with little down. At my current fillup cost of $250 a month for the Xterra it would be nice to lease the Volt and have that close to that amount per month so it is very low cost car.

The other advantage of buying for me is that in 10 years my son will be driving and I could give him the Volt which seems to be built like a tank due to the batteries.
 

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I think a key factor to consider is that the non-utilitarian fun-factor of a car like the Volt is front-loaded and not linear over time. This is true of any brand new car, but I think more so for a car as innovative as the Volt. I know the OP doesn't flip cars quickly, but imagine how much more variety and nifty gadgetry will be in the 2017 model year BEV/EREV cars (Volt and others).

In other words: be careful when getting the "best deal" requires that you drive the car for longer, since you will likely not get as much out of the last six months as the first six months.

Also, don't forget sales taxes (especially in California). If you buy and then change you mind and sell after three years (for say $20K), you effectively pay a penalty of ~9% of the residual value (sals tax for depreciation you didn't enjoy). This adds ~$50/month to your ultimate cost of ownership.
 
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