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I want to look into leasing. We bought an EV with cash, and the range have almost halved since we bought it. With lease, I guess I get a fresh car (and battery

by opyate 3y ago

I want to look into leasing. We bought an EV with cash, and the range have almost halved since we bought it. With lease, I guess I get a fresh car (and battery) every few years. And insurance is included. What kind of hustle can I expect with leasing? (I'll do some research when the time comes for the next car, as we're currently a 4-person 1-car family.)

djao 3y ago
1. Leasing is like a car purchase but with mandatory financing where the true underlying interest rate can legally be obfuscated behind cryptic language that you can't understand. Quick -- is a "money factor" of 0.0074 an attractive interest rate? 2. Leasing is like a car purchase but with a mandatory trade-in (you are going to be trading back the car that you are leasing, at some point in the future when you return your lease). Unlike a normal trade-in, where you have your car as-is and you can ask around for its value, in a leasing situation you have to predict what the value of your car will be in five years. The dealers do this professionally. You do not. Guess who wins? 3. Leasing means it's not really your car. This is an issue most frequently for people who drive a large number of miles. Going over your mileage limit on a lease is very expensive. 4. If your circumstances change such that you need to exit your loan obligations by selling your car before fully paying off your contract, it's easier to sell your way out of a purchase / finance situation than a leasing situation. Ending your lease early is not an option, as car leases (unlike apartment leases) typically carry a heavy early cancellation penalty. 5. In places like the US, where leasing and purchasing are both possible, this enables a unique type of scam: a "sale" where the buyer thinks he's getting a purchase but the paperwork actually says it's a lease. So you're paying full price for the car and you don't get to keep the car in the end.
- opyate 3y ago
  Thanks for the advice!
thebruce87m 3y ago
How old is the car? Most EVs I’ve seen have an 8 year warranty on the battery.
- opyate 3y ago
  It's a 2020 model, but I bought second-hand from an authorised dealer, and it was actually owned by the sales person. I'll ask about a warranty, thanks!

by opyate 3y ago

djao 3y ago

1. Leasing is like a car purchase but with mandatory financing where the true underlying interest rate can legally be obfuscated behind cryptic language that you can't understand. Quick -- is a "money factor" of 0.0074 an attractive interest rate? 2. Leasing is like a car purchase but with a mandatory trade-in (you are going to be trading back the car that you are leasing, at some point in the future when you return your lease). Unlike a normal trade-in, where you have your car as-is and you can ask around for its value, in a leasing situation you have to predict what the value of your car will be in five years. The dealers do this professionally. You do not. Guess who wins? 3. Leasing means it's not really your car. This is an issue most frequently for people who drive a large number of miles. Going over your mileage limit on a lease is very expensive. 4. If your circumstances change such that you need to exit your loan obligations by selling your car before fully paying off your contract, it's easier to sell your way out of a purchase / finance situation than a leasing situation. Ending your lease early is not an option, as car leases (unlike apartment leases) typically carry a heavy early cancellation penalty. 5. In places like the US, where leasing and purchasing are both possible, this enables a unique type of scam: a "sale" where the buyer thinks he's getting a purchase but the paperwork actually says it's a lease. So you're paying full price for the car and you don't get to keep the car in the end.

opyate 3y ago
Thanks for the advice!

thebruce87m 3y ago

How old is the car? Most EVs I’ve seen have an 8 year warranty on the battery.

opyate 3y ago
It's a 2020 model, but I bought second-hand from an authorised dealer, and it was actually owned by the sales person. I'll ask about a warranty, thanks!