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Why Most Electric Cars Are Leased, Not Owned (bloomberg.com)
Bloomberg's research shows that drivers in the U.S. lease almost 80 percent of battery-powered vehicles and 55 percent of plug-in hybrids. "The lease rate for the country's entire fleet hovers around 30 percent," reports Bloomberg, noting that Tesla does not divulge how many of its vehicles are leased since it sells its cars directly rather than through dealerships. From the report: The lopsided consumer preference for leases is fueled by the meager demand for battery-powered vehicles on the used market. Partly this is a consequence of public policy meant to spur electric vehicle adoptions: buyers of pre-owned cars can't grab thousands of dollars in federal and state incentives. The high lease rate is also fueled by the bet [many] are making that upcoming models will far exceed today's in value and capabilities. Perhaps electric vehicles will truly arrive when they are no longer compared to smartphones, which become obsolete after three years.
No shit. I lease my eGolf. Why - I leased it 2 years ago, and could get an 80 mile range car. Today for the same price I could get a 240 mile range car from Chevrolet, or a slightly nicer 120 mile range car from VW. I'm sure in a further 3-4 years I'll be able to get a 400 mile range car for the same price again.
It'd be completely crazy to bind yourself into a technology that's advancing so quickly at the moment.
When I looked into electric and hybrid cars a few years ago, most of them could ONLY be leased.
I don't know if that still holds, but it would set both a trend and expectations, so attempts to analyse customer preference based on owned/leased would be unfairly bent towards lease. It would be far more accurate to actually ask people with those vehicles if they'd rather own or lease the it if they had the choice.
Isn't there something about lithium-ion batteries having a 3-year shelf/life, whether they're used or not? I'm not sure if this is true, but if it is, it would make sense to turn the car back in if you'd have to replace the battery, which is the most expensive part (?) of an electric car.
Appleburg
if one truly cared about the environment, and was still wanting to drive themselves (for whatever reason)
Does it make more sense to:
a. new car, and all the energy intensive production needed to make it.
b. used car
Financially, the calculus is even worse (and gets worse the more you spend, like a fucking Tesla for example)
Tesla -> ~60k (there's other EV's of course, around what, 30k or so?)
Used economy car -> 5-10k ?
That price differential would more than likely be more than you'd spend on gas for the life of the car (realistically several of your life times).
I'll admit Teslas are pretty fricking cool, but i don't think they should be subsidized by tax breaks.
I have a five year old Nexus 5 which works just fine. I did replace the battery (and the screen after I dropped it) but the new phones aren't any faster and don't have any more features. I'll get a new phone when there is some new whiz-bang tech that I have to own but I'm happy now.
I don't read your sig. Why are you reading mine?
Nobody wants to be stuck with the cost of replacing the batteries when they stop effectively holding a charge, or they hold much less of a charge than when you first bought the vehicle.
Seems to be a problem with Apple hardware. My five year old Nexus 5 runs great. OTOH, my 5 year old MacBook Air is a dog... software "updates" have killed it.
I don't read your sig. Why are you reading mine?
Three things drive this:
1. Battery tech continues to improve, both in charge time, discharge, and cost factors. Literally I've seen 20 basic patents for this in just the last two years here at UW Seattle. Thus, it's not worth buying, as the battery depreciates in value more rapidly than the car. Early EVs had 3-7 year lifespans and new battery tech usually means a retrofit to some of the internal systems or the chargers. So by leasing, you avoid buying into one form of tech, and can buy the winning tech (highest ROI and/or range) when the market stabilizes due to economies of scale.
2. Fear of accessibility. Vehicle charge routes keep changing, you may move or get a new job location and find it difficult to charge on either end. This affects renters and salespeople more than others.
3. Massive tax subsidies and exemptions for fossil fuel infrastructure and fleet purchases in the US make them less likely, except in urban car rental and rideshare scenarios.
-- Tigger warning: This post may contain tiggers! --
Dealerships are stealing the tax credits and bulking up their purchase cost.
Universities are stealing the student loan money by bulking up their tuition. Subsidized anything suffers from that problem. Artificial stimulation of demand increases prices.
Apart for missing those security updates, which your phone hasn't received since October 2016.
The real "Libtards" are the Libertarians!
If you're in California, you can get a $2,500 check from the State for purchasing a pure EV. It's simple.
If you're looking to capitalize on the $7,500 Federal tax credit, it's less simple. Since it's a non-refundable tax credit, you have to make sure you have a $7,500 tax bill at the end of the year. If you qualify for a $2,000 tax refund, then your $7,500 tax credit just poofed. You get nothing.
If you have a $2,000 tax bill, then $5,500 of your tax credit went up in smoke.
Thus, those who like to minimize the complexity of their tax bills don't like the Federal incentive because it means having to mess with tax withholdings in one year and then switch back to a previous setting for the next year. Thus, claiming the credits on a purchased EV is complex.
On the other hand, a dealership will claim the $7,500 tax credit on your behalf and reduce the cost of your lease by the same amount. Thus, getting the $7,500 value is easier and much more tangible for most consumers.
These cars are expensive. Leases are cheaper on a monthly base than a 3-5 year payment plan.
On the other hand the entire market is filled with wealthier individuals, people in those brackets lease for tax purposes as well as the need to have a reliable vehicle. If you can afford (time-wise) to fix your car every other month, then it makes sense to keep your car 10-15 years, myself I am having more and more time-sensitive meetings so I canâ(TM)t afford not to get somewhere because my car broke down again, I might consider leasing once my current car is starting to wear out.
Custom electronics and digital signage for your business: www.evcircuits.com
That seems to be the take away for this.
Worst case scenario, replace the battery. Leaf cars can even replace individual cells rather than the whole battery.
excitingthingstodo.blogspot.com
Rural and suburban utilities are stealing the rural electrification administration budget (just under 1 billion$/year).
It's called rent seeking, it's understood, but a bitch of a problem. Constitution banned 'transfer payments', but long gone.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
I seem to recall a lease was the only way you could get an EV-1 or the electric ford ranger unless you were doing fleet sales. Were the electric Rav4's sold or leased?
I should install CyanogenMod to keep updated.
Fortunately, Android is open source so it is maintained beyond the official support.
I don't read your sig. Why are you reading mine?
Rural and suburban utilities are stealing the rural electrification administration budget (just under 1 billion$/year).
Rural and suburban utilities are not increasing their rates because the government is giving their customers money to pay for the services like Universities can do because the students have access to loan money. If there is money being provided to the utilities directly by the government, that's keeping the prices down because it covers some of the costs, and the public utility commissions are managing price increases based on those costs.
That's not stealing. It's nothing like direct-to-consumer subsidies that drive prices up.
To understand why, you have to understand the economics of EVs. The real economics - not the "EV sales are rising because more people want them" rose-tinted version its proponents like to believe.
EV sales are taking off because of CARB (California Air Resources Board). They have a ZEV mandate (zero emissions vehicles - mostly EVs though Toyota has a hydrogen vehicle on the market). Beginning in 2013 or 2014, CARB required a certain percentage of each manufacturer's vehicle sales to be ZEVs or PZEVs (partial ZEVs - basically plug-in hybrids). The percentage goes up every year. The formula is a bit complex but it's about 2% ZEVs for 2018, and supposed to reach over 15% by 2025.
If a manufacturer fails to reach this percentage, the manufacturer must buy ZEV credits from another manufacturer which exceeded its required quota. This is what keeps Tesla afloat. Since they only sell ZEVs, they always have excess credits which they sell to other manufacturers who didn't sell enough ZEVs. That's right - if you buy an ICE vehicle, you are likely subsidizing someone buying a $70,000 Tesla. This is also why Tesla is in no hurry to ramp up Tesla 3 production. They don't want to flood the ZEV credit market - that would devalue their own credits. So they're going to ramp up production just barely fast enough to keep up with how many credits other manufacturers need to buy to comply with CARB's requirement.
If the manufacturer fails to sell enough EVs or buy enough ZEV credits, they are banned from selling cars in California. Since about a dozen states automatically adopt CARB's rules, that ban would extend to about 1/3 of the U.S. by population. No manufacturer wants to be banned from that huge chunk of the market, so they do whatever they can to sell enough EVs to comply with CARB's ZEV mandate. This means sales, discounts, incentives, whatever it takes to get however many EVs they need into buyers' hands to satisfy CARB's requirements. This is why the EV deals are better in California than in other states - CARB only counts EVs which are sold in California. So California is where automakers offer the biggest EV incentives. I almost pulled the trigger on a 3-year e-Golf lease in 2016 for $500 down, $79/mo in Los Angeles (the Bay Area had zero down, $79/mo available).
Since EVs are not actually popular with buyers (at least not at the percentage the ZEV mandate requires), this means the manufacturers have to sell the vehicles at below true market value to generate sufficient sales (sometimes even below manufacturing cost). If they're going to do this, leasing it is preferable to selling it. With a sale, they've lost the entire manufacturing cost of the vehicle. With a lease, they at least get the materials for the vehicle back at the end, which they can then reuse or recycle. And if the blue book value of the EV is less at the end of the lease than was projected, they can write off the difference and get a tax deduction for the loss. Leasing also allows anyone to take advantage of the full $7500 federal tax credit. Being a tax credit, you have to owe at least $7500 in income taxes to take full advantage of it. Based on IRS tax stats, this means the buyer needs to make more than about $70,000/yr to take advantage of the full tax credit. But if you lease it, the tax credit goes to the car manufacturer, who pays a lot more than $7500 in taxes each year. So they can take advantage of the full credit and pass it on to the buyer. That means the real price for a leased EV for anyone making less than $70,000/yr is often less than for a purchased EV.
All this is why the blue book value of a used EV is so low. The ZEV mandate only applies to new vehicle sales, not used EVs. The incentives lower the price, effectively causing more new EVs to be sold or leased than would've at the correct market p
At one point I looked at used Leaf prices, about 60% depreciation for 3 year old one. This makes direct ownership too expensive.
There two major incentives to lease: price, and obsolescence.
When I leased, I got a very steep discount on the vehicle total price, and federal tax credit ($7500) was already factored in without going thru any hassles. Also sales tax (which is very high here in CA) is only paid for the portion that you lease every month, and not the full vehicle price. And, when I finally return the vehicle, there won't be another tax for resale, like one would when you do on the used market. Given the lease financing was about 0%, there were many economical reasons to lease than to buy.
And of course I was expecting the technology to progress fast, like many others, and it would not be wise to be stuck with a short range vehicle (even though I enjoy it in my commute) for the long run.
The manufacturer and the market just pushes you to lease than to buy with all these incentives.
These cars are leased rather than purchased because they are a ticking time bomb of pile after pile of huge heaping expense to keep them on the road based on the cost of battery replacements and high-current charging circuits, etc ......... While they may be better for the environment they will be far, far more expensive to keep on the road and will have nearly no resale value when they get to their end of life.
My ten year old MBP runs fine, once I replaced the hard drive with an SSD. Canâ(TM)t be upgraded past El Capitan without hacking, but thatâ(TM)s still getting security patches anyway.
A significant number of vehicles, in particular vehicles for business, are leased. This is because Congress hacked up the tax code a long time ago (80's version). And they made an overpriced MBZ require 100+ years to depreciate. The solution, lease. The entire lease is fully deductible on month 1 to end of lease. I believe that maintenance is covered as well, although many leases include all the normal services. Excluding tires, IIRC.
This was probably written up by someone that is too young to know the reason leases are so crucial to business customers. Taxes. They didn't follow the money, basic reporting done wrong. Is that the new Bloomberg way? Have to wait and see if they get something else right.
Pay cash for things, donâ(TM)t finance them (and leasing is financing, do not assume it is advantageous to you). You will quickly find that your relationship with money and your overall financial status with both get better.
Financing isn't always bad. In particular, it's fine when either the thing that you're financing is an appreciating asset that will appreciate at a higher rate than the interest, when the cost of owning including interest is significantly lower than the cost of not owning, or when you can afford to pay cash and the interest is lower than you can get on savings / investments minus tax. Some concrete examples:
When I bought my first new laptop, the manufacturer was offering 10 months interest free financing. At the time, I was getting around 4.5% tax free on savings. This meant that, for the 10 months, I had an average of £1000 (around £2000 total cost) more in savings. At the end, I was about £35 better off than if I'd paid cash up front (which I could have afforded to do). Often, this kind of financing is available to let the company either increase sales or spread their costs and income around between cash years (or move them to different subsidiaries entirely). They're a bad deal for you if you can't afford to pay cash, but if you can then they're basically free money.
When I bought my first house, I was spending £350/month renting (and had high utility bills because the place had terrible insulation). After I bought, I was spending £100/month on interest, and another £50-70 or so on maintenance. My heating costs dropped by about 50%. I ended up about £200/month better off (which mostly went into paying back the mortgage early, and that £100/month dropped quite quickly as a result).
I am TheRaven on Soylent News
I live in New England. I've got a wife and 2 young kids. The only vehicle we own is a bicycle. When we need something that can carry us more comfortably, or longer distances, or with cargo, we use something else. Zipcar. Rental. Subway. Amtrak. Airplane. Taxi. Uber. Lyft. Carpool. Delivery service. For our lifestyle, the frequency with which we use those things costs less money than the rent we charge other people to park their cars in our garage.
Dumb? For some maybe. Certainly not for all.
Support a few technologists in Washington.
Leasing is great for those who have no money or too much money. The purchase cost for EVs is rather high compared to equivalent gas powered vehicles. That means anyone who is not loaded (and even those) can only afford and EV as a lease. Leasing an EV also circumvents the rather costly battery replacement.
when you lease the vehicle, the battery is covered in the lease. if you buy it and your battery is underperforming because of age, #charges, etc. you have to buy a new one yourself, which is expensive.
On a long enough timeline, the survival rate for everyone drops to zero.
Here in the UK the whole market is different, but we lease our hybrid Outlander - it turns out it's about the same cost either way, and arguably less hassle with the lease.
We went to a dealer and chose the car. We asked the dealer about leases, he gave us a quote for monthly and other costs. We then went home and found another lease company with lower monthly costs. After lots of form filling and whatnot, a couple of weeks later went back to the dealer to pick up the car. Even though we're leasing, it's considered a "new green car on the road", so we get the government subsidised charge point at home, and because it's CO2/mile is lower than thresholds, we don't pay the London Congestion Charge. Essentially, we didn't miss out on any of the 'perks' for leasing that we'd have got for buying it outright.
I'm assuming the lease companies work out what risk they're prepared to accept and price the monthlies accordingly. I seriously doubt they'll lose money on aggregate, although they may on the odd car where they got their estimations wrong and the owner drove the car to the mileage limits or whatever. I'd expect they'll be able to sell our car on to an auction or dealer for more than (purchase price - 36 x monthly). I'd imagine they can negotiate a better discount from the dealer than we could (although probably not by a huge amount) which helps them out a bit more, and they can probably get a better resell value than we can too.
If batteries are a problem and reduce the resale value of these cars, then all that will happen is the monthly lease costs go up in the future. As I say, I seriously doubt the lease companies are going to lose money in the long run.
We all have too much experience with electric gadgets that won't hold a charge after a few years. When EV batteries have proven themselves robust over time that trust may develop but it will take many years to prove and for that proof to be widely believed.
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Same boat but just installed Linux Mint 18.3 on it and it runs fast as when it was new. Apple updates ran that machine into the ground. I'm done with Apple.
The auto industry is the one that is treating cars like smartphones in terms of packing them full of gadgets that have little to do with driving. A 3-5 year old car is now a joke that nobody wants, and often times the connectors for gadgets are no longer compatible with current gadgets. In many ways your used car is obsolete and things are going to get worse, not better.
“Common sense is not so common.” — Voltaire
Somebody once told me, as soon as you drive off the lot with a new car, your vehicle depreciates by 30-50%. Just by buying it you lose that much if you were to trade it in.
It is also why I was always told to never buy a new car, no matter what. Always get a 1-3 year old car instead.
Not sure how true the above advice was. But that's what I was always told by a lot of people.
As long as you don't buy a new car and then immediately sell it, it doesn't really matter, it's not a cash loss. Yes, over the life of the car you will pay more than buying a two year old one, but you are starting with a zero mileage clean vehicle with probably a 100k/ lifetime warranty.
To have a right to do a thing is not at all the same as to be right in doing it
Thanks, I'll give it a try
I don't read your sig. Why are you reading mine?
Yup, had the same problem with my iPhone 3G. By the time the 4S came out (with its accompanying iOS update) it was basically useless. Took 10-15 seconds to launch an app, didn't even display incoming calls until the third or fourth ring.
In contrast, I had my galaxy S5 for four years, only replaced it with a new S8+ because I dropped a book on it while it was charging and messed up the power jack. It felt just as fast on the last day as it had on the first.
Just junk food for thought...
There is currently a $7,500 federal tax credit on EVs. But it's a non-refundable credit; you have to actually owe $7,500 or more in taxes to get the full benefit. There are people who can afford an EV who do not pay that much tax, including people with large itemized deductions. And it's even more likely to apply to seniors; they get a larger standard deduction (two of those for a married couple), their housing expenses are often low because they live in fully paid off houses, and their Social Security income may be non-taxable (it depends on total income). If those people lease an EV the leasing company gets the full tax credit even if the driver would not if they bought the car, and that credit is then reflected in lower lease payments.
That's just the federal picture. Some states also offer tax credits for EVs where the same consideration may apply. Others give EV rebates that you get regardless of tax liability. And in a few of the rebate states the rebate goes to the driver even if you lease; California and Massachusetts are two such states.
Sure, because why would anyone enjoy their lives now instead of waiting until a day they might be dead.
Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
The original CyanogenMod is dead. Try LineageOS instead: https://lineageos.org/
I booted Linux Mint 18.3 off a flash drive. No special versions needed. Hold down Option key and select EFI drive. You need MBR on the Mac drive or it won't boot. *Everything* works out of the box. Installed touchegg to get addition touchpad gestures. I also turned the drivers on the control panel.
Given that after the fracking boom , the US is a net oil exporter; reducing dependance on oil only hurts Texans and Alaskans not Saudis. And EVs are charged using electricity from coal which is a lot dirtier than ICE so the environmental argument fails too. The only argument that is valid is that Tesla is based in California while other car companies are in the Southeast or the midwest. Totally makes sense for California to encourage EV adoption. Why the federal govt is paying for it? 56 Reps in Congress. Thats why.
**Life is too short to be serious**
Thanks. I guess I haven't been keeping up but LineageOS looks like it will do the trick.
I don't read your sig. Why are you reading mine?
VZW cold called me after my contract ran out. When I declined their offer of a new phone, they switched me to a month to month "bring your own phone" plan. No contract, more data and about 20 bucks cheaper. No major OS upgrades to my Galaxy Note 3, but they did continue with security updates for the 3.5 years I owned that phone.
I assume they are not making any money on the hardware, but need to be competitive with their plans. Even more so, after I switched to a Nexus 6p, which has both CDMA and GSM. And I am still getting updates to the 6P - despite it not being a Verizon phone.
Capitalism is working fine for me. You probably just chose a provider that sucks.
They're stealing money from an obsolete do gooder program that has long outlived its utility.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
As another example, when I bought my last car it came with a forty-eight month zero-interest loan.
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
Electric cars are generally more expensive to buy due to the price of the battery, but cheaper to drive since they don't need fuel. So TCO can be better.
If people were good at math, they would be able figure out such a lower TCO despite a higher initial cost - but most people probably don't so they just lease it instead.