Why Our New Electric Car Is Cheaper Than A Cell Phone (in GA)

We just joined the electric car revolution. Well, maybe a puttering attempt for revolution. But nevertheless, we have joined the electric car bandwagon by purchasing a new Nissan Leaf to drive for the next few years. Due to an unusual set of incentives in place, the cost of owning an electric car (in GA) is probably cheaper than your current cell phone bill.

20141029_124030011_iOSIf you had asked me six months ago if I would ever drive a new car, let alone lease a new car, I would have told you that you are crazy. I have been a staunch supporter of buying reliable, efficient, used vehicles for years. Buying new is a pretty tough sell, but leasing new is generally faux pa in almost all frugallite circles. However, for every rule of thumb, there are always a few exceptions. And this case is no different. By fully utilizing all the current tax and non-profit institutional pricing incentives, we have leased a brand new 2015 fully electric Nissan Leaf for total price of $1,186 ($49/Month) with an estimated gas savings of at least $2,125 ($88/Month) over the course of the two year lease. Special current incentives also include no down payment options.

Here are the qualifications to get the maximum benefit of the current offers:

  • Live in a state with strong tax incentives (GA,CA,CO are good: Check here)
  • Have taxable state liability of $1,000 or more each year
  • Be employed by a Nissan VPP partner (Many nonprofits are included)
  • Understand the benefits and limitations of an electric vehicle
  • Drive approximately 12,000 miles or less a year
  • Have a good credit score
  • Have a garage or easy access to a home power source
  • Finding a dealership with a Model S (Non-QCs) in stock

The perfect storm of incentives:
The base cost of commercially available electric vehicles has now dropped to around $30,000 with a VPP (Vehicle Purchase Program) invoice of around $26,000. The federal and Georgia state tax incentives add up to approximately $12,500 which approaches the residual value of an electric vehicle after a 2 year lease. In addition, the technology in electric cars is changing so fast (not too unlike computers/cell phones) leasing may be a preferred option even to individuals who conceptually oppose the concept of a lease. Due to the current structure of Georgia leases, you will be able to fully exercise the federal and state credit on a 24 month lease of an electric vehicle.

Here are the actual numbers for our lease for a 2015 Nissan Leaf Model S:

  • $238 * 24 Months = $5,712 (Oct 2014)
  • $0 Down Payment, $317 due at Signing (first months payment + $79 Registration)
  • $395 Disposition Fee (Turn-in)
  • Total Lease price for 24 months: $6,186 (Including TVAT)
  • Ga Tax Credit $5,000
  • Total 2yr Lease cost after credit: $1,186 ($49.41 per month)

Additional Efficiencies And Cost Savings

  • 7,200 kwh to charge for 24,000 miles
  • We will use GA Power’s EV Tiered Rate to lower the total cost of charging electricity to $116 for 2 Years (GA Power Rate 1.6c/khw)
  • $3,125 Cost of Gas @ 25 MPG for 24k Miles @ $3.25
  • $0 – Cost of Maintenance for first 2 Years
  • We will simply use the included trickle charge
  • Atlanta residents can drive in the HOV lanes without passengers

Other ways to drive the cost down
The lease offers changes each month but have been as low as $209 (June) and as high as $238 (Oct). Current year end lease rates are around $235 for a base Leaf Model S (Non-QC). Quick Charge models add about $40 a month to total price. Be sure to negotiate the best monthly (or total) price before purchase. It may also be prudent to buy at year end and file for a full refund in January. You could potentially come out with $5,000 cash rebate to pay the entire lease in (almost) full the month after purchase.

Most people underestimate the cost of driving a vehicle. Doing a general calculation would estimate an average cost of approximately 50¢ per mile. If you were to drive 24k over two years you would end up spending about $12,000 operating a vehicle. In fact, many people spend more if you own a newer vehicle or something that gets less than 25 MPG. We estimate the total cost of our new leaf will be around 8.8¢ per mile. That includes insurance, gas/electricity, taxes, maintenance, and registration. The total two year cost is expected to be approximately $2,100 which is $9,900 cheaper than the average American driver’s costs over two years.

The promise of electric cars has been around for many years but the challenges to the large scale viability of vehicles has only begun to make economic sense for typical vehicle owners. The federal government helped kick start the incentive by offering a generous $7,500 tax incentive for the first 200,000 electric vehicles sold within the United States. In an effort to further incentivize the adoption of environmentally friendly electric vehicles, the state of Georgia currently offers a $5,000 dollar tax credit on the purchase or lease of any new full electric vehicle. The incentive has been available for well over ten years, however, it has only been until this year that the pricing, availability, reliability, and functionality of publicly available electric cars make the incentive useful for typical consumers. Many other states offer incentives and they can all be found here.

Future of Electric Vehicles
The landscape is changing fast for electric vehicles and most expect the range of base level EVs to jump dramatically. For example, the redesigned 2017 Leaf is expected to double the range of current gen EVs (~150 to 180 Miles) at a similar cost. Tesla also has several long distance vehicles in its current pipeline and is building a multi-billion dollar gigafactory to aid in production of electric vehicles. Although the tax credits are expected to expire, the cost operating electric vehicles should be significantly cheaper and equally as practical as their gas powered counterparts by decade’s end (if not sooner). Electric vehicles are fun to drive, have very little maintenance, are super quiet, and produce no tailpipe emissions. Now is a great time to try an electric vehicle but it still might be wise to hold off on the purchase of a vehicle due to the rapid changes in the underlying technology.

Feel free to jump in with any questions or specifics and I’ll answer questions in the comments.

22 thoughts on “Why Our New Electric Car Is Cheaper Than A Cell Phone (in GA)

  1. You wrote: “Due to the current structure of Georgia leases, you will be able to fully exercise the federal and state credit on a 24 month lease of an electric vehicle.”

    Are you sure about that? My experience with the lease is that Nissan must get the $7500 credit from the fed but I did get the $5000 from the State of Georgia… spread over several years due to my modest GA tax liability.

    I’m in Athens, GA too. I believe it is almost a free car. I got the SL with all the bells and whistles on 2 Mar 2013 and am very happy. I believe that if you get the S model you will be making money. It would be interesting to see if you end up achieving this.

    • Great point! It is important to note that you need approx $1000 annual GA tax liability to get the full benefit of the credit. It is a 5 year roll forward credit so for very low tax payers you may not be able to get full value (if you have less than 5k total liability over 5 years). You are right, Nissan takes the $7500 off the top and the individual gets the $5000. With the summer rates at $209 it was almost a money maker for the right individual.

    • Ours will end up being about $802 over the 24 months or ~$200 every 6 months. This is pretty similar to what we were paying before. We are using Geico with full coverage and $1k deductibles.

  2. Wow, dude. This sounds incredible — exactly what I’ve been looking for. However, I live in an apartment complex, so I can’t charge at home. GA Power on Prince has a free charging station, and the university has one as well. About how often would I have to visit these places to charge up?

    • Hey, It may or may not be as practical if the apt complex doesn’t have easy access to an outlet. It will go between 80-120 miles we typically charge ours overnight. Depending on the type of the charger it can take between 4-20 hours (included trickle charger is closer to 20, but we rarely drive all the way to 0%, so average for us is 8 hrs or less at night) to charge so it is very helpful to be able to charge at home.

    • I doubt if this would be a viable option for you in an apartment. The GA Power on Prince Avenue charger is 1st for charging their electric truck, 2nd for charging employees cars during business hours, and 3rd offered as a courtesy to the public if not already engaged in 1st or 2nd priorities. As far as charging at UGA… you better check on the fees, you probably will have to pay to park in the deck first. Also, both of the above are 220 V and will recharge you in 3 or 4 hours depending on how much you need. What are you going to do in the meantime? So if you can get your apartment complex to give you access to an exterior plug it might be ok but I’d worry about vandals.

  3. Where were you able to track down a 24 mo. lease? All I have been able to find are 36 month offers.

    • I think almost all the dealers in Georgia offer it on the VPP pricing. I know that the 6 closest dealers to Athens all offered 24 month (1st month down). We ended up going with Sutherlan Nissan because they had what we needed in stock but I really liked the guys at Athens best. I would just call around, slickdeals.net also has a thread with more details.

  4. I have been sitting on this post in my inbox, but dying to read it because you said “cheaper than a cell phone. I fit all of the criteria including the VPP employer. (I even live in GA!). I am looking forward to researching this more. I drive a fully paid for beast of a car that guzzles gas at a rate of 12mpg. So thank-you for doing a write-up of how to drive this car for essentially free. I haven’t been able to fully justify in my mind buying another used car because of the outlay of cash I would need up front, but this idea is fantastic. Thanks so much for the info! Just off the top of my head, does the car charge off just a regular outlet, or do you have to install something?

    • Nice! It is worth looking into at the vary least. We are certainly enjoying the vehicle thus far. It can charge at both a regular outlet or at 240 (like stove or dryer). We typically charge ours up over night with a regular outlet (with the included cord) and it charges about 40 miles per evening (8hrs). You can charge it much faster with a higher powered charger.

      • That’s good to know. Also, do the numbers in the post include taxes/ad valorem fees we have here in GA? Thanks!

        • Hey, yes, they include the advolerm taxes (tvat). They are built into the cost structure.

  5. I leased my Leaf in September. Just like SE, three months ago I would have NEVER considered leasing a car. But it really is a free car or almost free car for the 24 month lease term. For me, I have transferred 12,000 miles/year from vehicles that get 17-19 mpg to the Leaf. If you currently have a 12 mpg vehicle, even at current gas prices it is a great deal. The Leaf is the perfect commuter car to drive to work, grocery store and other errands. It is also very roomy with decent cargo space. The back seat is not cramped at all. We love our Leaf.

    One thing to remember on the tax credit. Your federal tax liability will increase slightly as a result of the state tax credit. You get a deduction for state taxes paid on your return. Since you will be paying less or no state taxes, your federal deductions will be lower; therefore paying more in federal taxes. Using the $1000 state credit amount/year and assuming you are in 15% federal bracket, your federal taxes will be $150 higher.

    Keep in mind if you are charging outside the colder weather (30s/40s) does affect battery range. I’m in garage so not a big deal but I have noticed a slight reduction in range with the recent cold mornings.

    • Thanks for the input and tips. We will be experimenting with the cooler charging this winter as we do not have a garage. I’ll keep tabs to see how it affects the range. I think the tax point is well taken. Fortunately for us, we will not itemize this year so we will not be deducting state taxes but for many individuals who are interested in the leaf it is a consideration. Thanks again for tips!

    • I agree, I was of the mindset to never lease. However, I bought my current car was before I started reading MMM. Now I would never purchase a car with such horrible gas mileage.

      By my calculations, if I could get a lease pymt similar to SE’s,( after the tax credit, gas savings, and assuming $25/mo electricity cost) I would actually net nearly $5k over a two-year period after paying the lease! My local power company, Walton EMC, has their own LEAF and estimated that power cost for the car would be about $24/mo. They do offer an alternate electricity rate where they have an ‘on-peak/off-peak’ rate. For the most part, I’m sold. My major remaining concern is being charged for “excessive wear and tear” at the end of the two years when I return the vehicle. Also finding a lease for a similar amount.

      That’s a good reminder about the increase in federal taxes as a result of the decrease in state taxes. Would you mind sharing which dealership you went with if you’re in GA?

      • That sounds like your calculations are pretty in line with ours. We have the benefit of GA Power’s insanely low EV rates (I’ll be curious to see how long they last) but I’m hoping they will be around for at least 2 years. We have also gotten better mileage than the leaf stated (we have been driving lightly like we did on our previous hybrid) so our consumption my be even less than expected 4.0kwhs/mile with distance of 100+ miles per tank.

        We wanted to work with the guys in Athens. They were certainly the most straightforward over the phone but they did not have any model s leafs in stock so we drove to the Mall of GA (Sutherland) for pickup.

        • I got mine at Athens Nissan. Talk to Mike Gasaway, he is a great help, and has a uncannily appropriate name.

          I would exhort you all to track how many miles you drive on a daily basis for a month before buying one. Also highly recommend getting the best onboard charger available. Not just the quick charge port but the 6.6 kW Onboard Charger which helps even when trickle charging or using the 220 V at Walgreens when you are venturing off to Atlanta…

  6. Sound great. Wish this would work for us, but doesn’t in VA 🙂 I wonder what the long term business plan is for Nissan with this? What is the buy out cost after the lease period, and what will happen to all the “leased vehicles” that are turned back in after the lease period? Are they banking on the incentives not being there in 2 years so that there would actually be a demand for used vehicles? Because right now there wouldn’t be. I guess you can always move your vehicles to another state to sell if needed.

    • Certified pre-owned Nissan Leafs are going for $11,000-$15,000 right now. I bought one in February 2015, in Massachusetts. We didn’t have the slam dunk deal that SE got on the new car, but I love the car and as a second car it is working great for us. Not much maintenance (rotate tires, annual physical) and a wonderful driving experience.

      I expect CPO off-lease cars to continue at about that price, with a national market evening out the state by state incentives. I am curious what will happen when the federal credit goes away, but that’s still a few years out.