- Leasing a plug-in vehicle can save you money.
- Automakers are offering good lease deals.
- Leasing also spares resale, technology headaches.
Shoppers interested in a new plug-in hybrid might want to consider leasing instead of buying. That's because several factors combine to make leasing a great prospect for a new plug-in, even for shoppers who typically buy their vehicles.
One of the main reasons leasing a new plug-in vehicle makes more sense than buying is the subsidized lease rates being offered by several automakers. Chevrolet, for example, is advertising 36-month lease rates of just $299 per month on its 2013 Volt after $1,529 at lease signing. With a base price of nearly $40,000 after destination, buying a Volt with $4,000 down is likely to yield monthly payments of more than $600--even with GM's advertised interest rates as low as zero percent.
Nissan, too, has a great lease deal available on the Leaf, with payments starting at just $249 per month for 36 months after just $1,999 down at lease signing. Buyers who put the same $2,000 down to finance the plug-in hatchback will find payments well in excess of $600 per month due to the electric vehicle's base price of nearly $36,000, including destination. The same is true of the Toyota Prius Plug-In Hybrid, which is available to lease for just $269 per month--only $20 more than the standard Prius, whose starting price undercuts its plug-in stablemate by more than $10,000.
There are several reasons automakers are able to offer such low lease rates, which sometimes undercut even traditional gasoline-powered models. While one reason is high resale value, another is a $7,500 tax credit offered by the federal government for plug-in hybrids and electric vehicles. While buyers of cars like the Leaf and the Volt can take advantage of the tax credit, those who lease use it in a different way. The leasing company gets the tax benefit and passes those savings to the lessor in the form of a lower monthly payment.
There are several other benefits for leasing a plug-in hybrid beyond a low monthly payment. One major example is that high consumer demand for plug-ins is still not assured, making long-term resale value uncertain. And since plug-in hybrids use technology that's only just coming to market for the first time, there might be hiccups until the technology is perfected--a fact that some Leaf owners in Arizona discovered when the desert heat sapped their batteries, prompting the automaker to buy back several vehicles.
Indeed, our advice to green-minded car shoppers is simple: Lease, but don't buy. Either way, prepare to save a lot of money at the pump--if you even have to visit the gas station at all.
What it means to you: If you're considering an eco-friendly plug-in vehicle, we recommend leasing instead of buying thanks to generous incentives from automakers.