Why Lease When You can Own an EV
11-09-2023, 12:36 PM
#51
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AMG GTC Roadster, E63s Ed.1, M8 Comp. Coupe
Cash is king in my book. There's a lot of variables and creativity with leasing vs. cash or financing. Negotiate a good deal for a brand new one, or buy a CPO or demo fully loaded car. For me, the fun is in the search. The tech and gadgets of a fully loaded vehicle typically keeps me happy for years beyond the point where cars selling for more than my old car still don't have the features or drive as nice. I like maintaining my vehicle. Get an extended warranty or get it fix myself. I learn a lot about the technical inner workings of the brand and the car itself. As the car age, I appreciate its design and engineering. Hence, leasing is not for me.
With lease, you get a new vehicle every 3 years, wash your hands, and move on to the next thing. No need to learn about the technical aspect of the engineering. No need to maintain it in the traditional sense. No long commitment. That might work for some people but not for me. Unless you negotiate a good deal on a lease, those bean counters at the dealers usually has the upper hand for most lease deals. You really can't get something for nothing unless you are like J_Boxer and some other "expert" leasees. Sure, sometimes you might make a few grands if the market is on your side toward the end of your lease. A few grand is a drop in the bucket for me. I'd rather use it toward a longer commitment strategy.
With lease, you get a new vehicle every 3 years, wash your hands, and move on to the next thing. No need to learn about the technical aspect of the engineering. No need to maintain it in the traditional sense. No long commitment. That might work for some people but not for me. Unless you negotiate a good deal on a lease, those bean counters at the dealers usually has the upper hand for most lease deals. You really can't get something for nothing unless you are like J_Boxer and some other "expert" leasees. Sure, sometimes you might make a few grands if the market is on your side toward the end of your lease. A few grand is a drop in the bucket for me. I'd rather use it toward a longer commitment strategy.
With a car purchase, cash is not king. Dealers make less money on a cash purchase vs a financed or leased car.
With some cars, purchases make more sense than leases due to high retained values (some 911's, G-Wagons, etc.) but leasing makes sense for many. For us leases work because we like to change cars often and luxury or performance cars takes big hits in value even with low miles. Plus they are for business use.
But it also makes financial sense for some brands. BMW very much so (residuals nearly always exceed ACV's and usually feature decent MF's), AMG's less so and Porsche even less so.
Apart from the negotiated price, the biggest impact on the lease rate is the residual (non-negotiable), but most dealers heavily mark-up the MF which is something that is easily fixed when knowing the Tier 1A base rate.
Couple things we never do. Don't provide a down payment and use a trade-in. All money is lost if the car is totaled. If a trade-in is used, you can do a cash-out and get a check.
As for keeping cars for a longer time, I feel this is a notion of times past. Cars are not really wrench-able anymore. When you have over 130 computers in a car, things will fail over time and modules are replaceable but not fixable. I see that manufacturers don't have parts available anymore even though they are legally required to do so.
Not a rarity to wait over 6 months for a part to be shipped.
Last edited by Wolfman; 11-09-2023 at 07:43 PM.
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11-09-2023, 04:58 PM
#52
Also, the average lease in the USA is ~36 months, so most leases from the launch period won't be coming due until early 2025.
Based on my personal experience leasing an EQS, MBFS was definitely propping up the residual, which made a lease amazingly attractive. At the time of my lease, I think MBFS was taking a bet that they'd somehow right the ship on the EQS sedan supply quickly, so they made a 13 month lease term (extendable to 15 months) amazingly attractive relative to 24 or 36 or 39 months. That federal $7,500 and fleet $4,500 were worth so much that they basically outweighed actual depreciation of the 13 month lease term lol. So, my particular lease structure had to include capitalized costs from the up-fronts doc fees just to avoid having negative depreciation.
Basically I'm paying MBFS a rent charge for the life of the lease. And renting a brand new EQS from MBFS is so much cheaper than bag-holding a Tesla as it rapidly loses value when Tesla cuts pricing. In only 2 months, our Model 3 saw the MMR go down the same as the lifetime value of the EQS lease.
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MBNUT1 (11-09-2023)
11-18-2023, 12:14 PM
#53
I hear a lot people advice to lease an EV rather than owning one because the technology changes so quickly that it will be outdated in 3 years. I think that it is a broad and flawed generalization. I also suspect it is a tactic to get people to lease rather than buy.
Batteries and battery degradation is probably going to be the least of your concerns in 10 years time. The 4matic and 4matic+ tech is not going to be matched by companies like KIA and the likes on cars selling for 30K. It will likely take 10 years before the other EVs will incorporate the EQS techs into their cars. By that time, the EQS will be worth not more than $18K in today's money. So if you do own an EQS tens years from now, it's now different from owning a 10 years old S class. More techs and rides nicer than most most new Toyota, KIA, Ford, yet cheaper resale due to its age and repair cost.
Batteries and battery degradation is probably going to be the least of your concerns in 10 years time. The 4matic and 4matic+ tech is not going to be matched by companies like KIA and the likes on cars selling for 30K. It will likely take 10 years before the other EVs will incorporate the EQS techs into their cars. By that time, the EQS will be worth not more than $18K in today's money. So if you do own an EQS tens years from now, it's now different from owning a 10 years old S class. More techs and rides nicer than most most new Toyota, KIA, Ford, yet cheaper resale due to its age and repair cost.
Last edited by DeanMassy; 11-18-2023 at 12:43 PM.
