I know that this is a lease forum, to me in this specific scenario, it may be more advantageous to finance.
Here are two options:
Lease the car with a great sell price (let’s say 20 percent below MSRP after all the rebates are baked into the lease, etc), but money factor is rather high coming to over 5 percent interest. Maybe I can negotiate that down to market MF, which according to edmunds is like 4.3 percent. RV you can’t really negotiate, it’s set at 52 percent.
OR
Finance the car, I can still get pretty much the same great sell price after I file my taxes next year. And additionally I can take advantage of their 0.99 percent APR. My thinking is that I can simply sell the car after warranty expires or even if I sell it after 3 years (to keep our comparison apples to apples), I think I can beat the lease deal, possibly.
Question is if I can actually 52 percent RV after 3 years in the free market selling it on my own, we are talking about a car that is 57k MSRP. That’s my big concern.
Never bought a Volvo, I know this first generation EV has software glitches etc, but in 3 years will this car be a paper weight because EV will have evolved so much? If the car’s residual value tanks after 3 years, then I’m better going the lease route, at least they guarantee 52 percent RV.
How do you think this first generation EV will hold it’s value? Is it unreasonable to think that car can be sold at least 50 percent residual value after 3 years?
I’m getting close! But the real question is if all things are the same (sell price being equal in both lease and buy scenario), is it better to finance with 0.99% APR compared to significantly higher MF. Knowing that this car will probably have issues with being a first generation EV, can I sell the car at 52% or higher RV after 3 years. If that’s case then finance seems like the best way to go.
Of course, being at an inflection point in EV technology, there’s also a possibility that the RV tanks in the free market and this car becoming a “paper weight” after 3 years. In that case, leasing seems like the safer option despite the much higher MF.
Just an opinion, but this is a super risky proposition. I would rather lease, and see where I come out in 3 years. I have a leased EV, and would not consider owning one for at least another decade.
I think you’re insane to even consider purchasing something like this when you can let Volvo hold the depreciation risk bag, especially on an EV with limited range at a time when the EV market is accelerating significantly.
I meant incentives only, before dealer discount, anyway. @Benedetto offered it with almost 10% discount before incentives, so with the $7,500 rebate only, you are already over 20% off.
Right, yeah that’s what I meant. If I can get that same discount with finance (after getting tax credit back), on paper it sounds like a better deal to take advantage of 0.99% APR, compared to 4-5% interest with lease. Way I look at it is, if I’m getting a 56k car for 42k, then selling after after 3 years. Big IF, but if I can get even like 26-27k back after 3 years, then it’s still a net positive over lease because the rebates are helping me with the depreciation cost. So at worst it’s a wash and you don’t have to worry too much about mileage.
But again I guess risky given current EV climate and all the better tech that will be out there very soon!
Don’t forget that with the purchase you get to pay wonderfully high CA sales tax on the whole value of the vehicle vs just on the lease payments. That wipes out a lot of the cost delta.
I guess the question on a purchase would
be, will you qualify to get the full $7500 back as it is a tax credit? How long do you have to own the car after you receive the credit?
It is, but nobody is going to tell you to Lease if Purchase/Finance makes more sense.
EVs have so far depreciated more than new cars because the technology is new/evolving, and the federal/state tax credits have pushed the actual purchase price down. Check out the resale on early production Leaves and the 500e
Given the choice, I would lease an EV that passes on the tax credit as trunk money before buying it myself. I don’t want the depreciation risk on an asset that expensive to start. Especially anything Gen1 (the manufacturers are still largely in unconscious incompetence- they don’t know what they don’t know)
The XC40 P8 I would definitely not want to buy it. But I’d gladly lease it.
I am not basing my lease decision on where my depreciated value may be in 3 years. It really doesn’t even concern me. I just care about my rent payment each month. I would not buy an EV because the technology is too rapidly changing. In a few years that 200 mile range may be obsolete. No way of telling where you will end up. Again, like I said, just an opinion, but I would not pile on that type of risk when I can just lease.
If you do buy an EV, I would look at your best chance to retain value, E.G. Tesla…
I think the XC40’s range alone (barely 200 miles) will be a big detractor in 3 years, when probably most new EVs will have 300+ miles of range. And if an EV offers less than 300 miles, it’ll be a helluva lot cheaper than $55k sticker. I would only lease a XC40 Recharge unless I got an insane deal, and insane deals are not to be had at the moment.
I’m not sure I agree, especially if charging improves (faster and more widely available). No knock on the P8s internals, but every EV that a manufacturer has built in an existing chassis (Focus, Golf, Rav4, etc) was a short-lived transition vehicle. That’s the risk I would gladly transfer to a captive.
