- 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.