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.
If 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.