Getting an EV - buy new, buy used or lease?

[Anonymous]

Talk to me about the pros and cons. Our last car we bought new for cash and have driven for 15 years. I feel that there is so much unknown still about longevity with EVs that it may make more sense to lease for a couple of years than invest $40k in a car.

What did you do? Or what would you recommend? We’re planning on an EV, not a PHEV or other hybrid.

[jsteele]

I chose to buy an EV (two EVs in fact), but that was because I always buy cars and I can't really argue that it makes the best financial sense. We always keep our cars a long time and I expect that same will be true in this case. But, with EV technology changing so much, we may want a new one sooner than expected.

Leasing has several advantages. One, as I mentioned, the technology is changing quickly. It is very likely that in 5 years batteries will be smaller, cheaper, and hold a larger charge. Ranges will be extended and charging speeded up so that today's EVs will be undesirable in comparison.

Another advantage is that a loophole in the rebate law allows dealers to offer the rebates that are meant for American-built cars to be provided on any EV. Therefore, if you have your eye on an EV that does not qualify for the tax incentives if purchased, you can probably save $7,500 by leasing it.

There are a lot of great lease deals available these days.

The downsides that I know of with leasing is that, if you plan to keep the car longer than the lease period (i.e. buy the car at the end of the lease), the residual value may be higher than what used models of the same car are selling for. Therefore, you probably want to look at this as a true lease in which you turn the car in at the end of the lease. In that case, you are stuck with car payments forever as long as you continue leasing. One of my main reasons for buying is that I hate monthly payments. So I pay cash for cars and keep them for as long as possible.

One other thing to consider is that I believe every EV sold in the US has a 8 year warranty on its battery. The battery is the big worry that folks seem to have with EVs. Therefore, you could look at 8 years as a reasonable length of ownership. That is almost half of your current car, but twice or more of most leases. So you might compare the cost of leasing for 2-4 years versus owing for 8.

[Anonymous]

We have leased twice. I don’t know if it was the right financial decision but it sure was easy. I love our id4 and the tech is better for the new one than the one from 3 years ago which is really nice.

[jsteele]

I forgot to give my opinion about buying used. Used EVs are some of the best deals around. This is especially true of high end cars. For example the Mercedes EQS and the BMW iX cost over $100k new, but can be found in the high or even mid 50s a year or two old with low miles. If you find an EV for less than $25k and your annual AGI is less than $150k, you can get a 4k rebate. You can probably find a two or three year old car that was $50k new, $24k now, and you can get it for $20k with the rebate.

[Anonymous]

I would never purchase an EV. The battery range decreases over time and is only guaranteed for 8 years.

[Anonymous]

There is a reason used EVs appear cheap. Battery life is a huge concern.

I would never buy a used EV. If your heart is set on electric, it's better to buy new, a brand that has good reviews and whose manufacturer is previously made reliable batteries.

No used.

[jsteele]

Anonymous wrote:
There is a reason used EVs appear cheap. Battery life is a huge concern.

I would never buy a used EV. If your heart is set on electric, it's better to buy new, a brand that has good reviews and whose manufacturer is previously made reliable batteries.

No used.

I agree that there is huge concern about batteries and that fear is part of what is causing depreciation. However, in some cases (maybe all, I just don't know about all brands), it is possible to test the battery before purchase. I bought a used EV that was three years old but with only 19,000 miles. I checked its battery and its current capacity is better than the specification for the battery when the car was new. Obviously, the manufacturer was very conservative in the new capacity specification and actual capacity was originally higher than the official spec. I used another program to check for degradation and found that the battery is at 98%. Normally there is a drop-off right at the beginning and then the battery stays at the same level. As long as we don't abuse the battery, it should stay at 98% for a long time.

[Anonymous]

Anonymous wrote:Talk to me about the pros and cons. Our last car we bought new for cash and have driven for 15 years. I feel that there is so much unknown still about longevity with EVs that it may make more sense to lease for a couple of years than invest $40k in a car.

What did you do? Or what would you recommend? We’re planning on an EV, not a PHEV or other hybrid.

The issue is not longevity but technology change. The manufacturers are starting to warranty EVs for 12 years to help resale value. The issue is the battery technology and mass manufacturing have driven the battery price down while increasing range. There are working prototypes that are getting 600-700 miles per charge with 10 minute charge.

So for an EV it makes sense to lease because the current models will not be competitive with the new EV models coming out in a year or two. The battery prices are really falling - 40% this year and projecting another 50% by next year with 15% reduction after that till 2030.

[Anonymous]

We leased one. It's our first EV and we wanted to figure things out on a low-commitment basis before choosing a permanent car. We may buy it when the lease ends, or we may buy a different model - we just weren't really sure what to consider in choosing one, so we wanted to try it out before buying.

[Anonymous]

I bought my Bolt 4 years ago (best time to buy an EV is when gas is cheap) and so far I haven't noticed any reduction in battery life, though I have taken some steps to protect the battery (hilltop setting, not letting the battery get too low) . I did go through a recall but they determined my battery was fine. The range does keep getting better on the new cars, however.

But 4 years is pretty short (I tend to drive my cars until they don't go anymore) so I don't have longer term data. But so far, love the car.

[Anonymous]

We just lease out. It just did not make sense to buy given a) the pace at which the battery technology has been changing and current tech and b) lease incentives.

New incentives should come out after the 4th of Sept (check Edmunds) but they were having very good deals on EVs before, especially the EV6 and Ioniq 5,but to a lesser extent, also the ID4. Outside those three and the Mach E, didn't consider any other EVs so don't know about the other ones.

[Anonymous]

I can’t speak to leasing, but I’ve researched buying one extensively. You can get a used model y directly from tesla for $27k. that’s what I’m gonna do.

[Anonymous]

We bought a used EV for a song and have driven it for 8 years with no problems. It’s the lowest cost of ownership of any car I have ever had. I think people are scared of used EVs which deflates their market value but the fear isn’t necessarily justified.

[Anonymous]

Anonymous wrote:We bought a used EV for a song and have driven it for 8 years with no problems. It’s the lowest cost of ownership of any car I have ever had. I think people are scared of used EVs which deflates their market value but the fear isn’t necessarily justified.

The car is now more than 10 years old and haven’t noticed any loss of battery life. It’s possible there is some, but I can’t tell. The newer ones have much better range but ours is ok for our needs.

[Anonymous]

I wouldn't lease if you need to do a lot of driving. Don't they severely limit the number of miles you can put on a car?

For something for about town, I agree that leasing an EV could be a good decision, especially if it doesn't require a lot down.

Check insurance. I think they're more expensive to insure.