I recently leased a BMW i3 and though I would share my experience. This was my first leased car, usually I just buy. For electric cars it seems that leasing really the best way to go, and cheaper than the best deal you can get for a conventional car.
Most cars have a well documented rate of depreciation allowing the car companies to properly set lease rates. For most people, unless there is a tax reason, in the long run a car lease ends of being more expensive that buying.
Electric cars seem to be in uncharted territory. They are depreciating much faster than their traditional counterparts. In some sense, they are depreciating in a manner similar to consumer electronics. Every year batteries are getting cheaper, and the range is increasing, putting massive pricing pressure on unsold inventory and the used electric car market. Why buy a 2016 model now since you can wait a few months and get a 2017 with 50% increase in range at a similar price. Tesla is contributing to this by claiming that in a few years they will have an affordable model. Whether this is true or not, it is creating further pricing pressure on the electric models for the other car companies.
I just got a 2015 BMW i3 a few weeks ago for zero down and $270/month for 30 months (10K miles per year), all inclusive of tax and registration. A CA state rebate of $2500 effectively brings the price down to $190/month. My understanding is that BMW is introducing the 2017 i3 with a 50% larger battery in a few months, so the 2015 and 2016 models are hard to sell without the significant discounts. The gross cap cost was $38K, cap cost reduction of $5.3K, giving an adjusted cap cost of $32.7K. The residual value was listed as $28K.
So for a commuter car (that allows for use of HOV lanes in CA), this seems the best way to go.
I definitely agree with you and am in the market for an i3 as well. Could you share more specifics about your lease terms? Was this for a base i3 or Rex and did it have any packages (drivigin or parking assist)? Also which dealership you went to in California? Thanks in advance!
It was a base i3 BEV (Mega World). No parking assist or backup camera.
Did not pay anything at signing. The lease is for $251/month + tax (total of $271/month, and that included registration, etc) for 30 months with a total of 25K miles (10K/year). Still waiting for BMW to bill me for the first month payment. At the end of the lease there is a $350 disposition fee. If I go above the 25K miles, they charge 25cents/mile
This was BMW Beverly Hills. The sales person mentioned that they just got in a batch of 2016’s from the East Coast. Watch out if the dealership adds to the lease terms “stolen car insurance” for $150. I caught that before signing. The sales person was nice to work with and took care of that.
Agreed. Even though I pay $289/month on a Focus Electric (I got it June 2014, when deals weren’t as good), I saved a ton of money by having Ford take on the risk of depreciation.
The lease-end residual is $14K, but in reality, the car is worth $10K or so – and I’ve still got a year to go.
I did not as good luck as you with the dealership you mentioned. Give them credit for letting us test drive an i3. Their lease end return was not picky. After that they successfully made me feel that we had been tricked in and were being cheated on. Their promised 14%msrp “before any incentives” became a joke(only with mf marked up to 0.00189); They refused to show me their MF only did after I requested repeatly, hid 2 incentives, loyalty and buildout and told me these were not currently available or “dealers money”; a guy claimed himself as " fleet group program sale manager" was clueless about that discount refused to call bmwusa to verify?!. They offered me similar number with yours 220/ mon includes tax with 2000 drive off on a 51k rex. “Fair deal?” maybe to a degree, but no, liars. We walked off and were glad we did- got a better deal a week later.
Depreciation is a big risk with EVs - we just got out of our 2014 RAV4ev lease to lease a Mercedes B250e.
Our lease buyout was $22,000 - Blue Book on car was $15,000. Toyota stopped making EVs last year, RAV4 not continued - car value drops like a stone.
Second thing is technology changes - and who wants to be stuck with old tech when new, cheaper tech is released. Lease for EV is the only way to go.
Very good observation. Electric cars, both BEVs and PHEVs are not stable products in the used car world. There are many market failures at play. Many different verses of this song, here is another one:
Link below shares a story about Volts being returned from fleet duty with very little battery use. Gas is paid for by the fleet owner, but the drivers get no money for electricity. So they never plug in at home! The story is two years old, but the dealer in the story is still getting cars with virtually unused batteries.
