4 ms·

It looks like this is a lease, but instead of using an expensive repo. man to haul away the car when you can't pay your bill, the car stops charging instead. W

by codex 13y ago

It looks like this is a lease, but instead of using an expensive repo. man to haul away the car when you can't pay your bill, the car stops charging instead. When your account becomes current, the battery unlocks. Progress marches on! The Boing Boing and EFF "articles" here are only so much outrage porn. Note that you really do not want to buy an electric car at this point; leasing is really the only option. Technology is changing so fast that if you should buy an EV you risk holding the bag should it become radically obsolete in the next three to five years. There's also a chance the battery will degrade faster than anticipated.

cantrevealname 13y ago
You're saying that leasing is better than buying because cost of obsolescence is borne by the lessor. This is an economic fallacy so common that it deserves a memorable name. If a product became obsolete so quickly that everyone chose to lease it, then the lease price would rise to the level where leasing and buying were equally good. For example, if the cost of a product went to $0 after 3 years, then--all factors being equal--the cost to lease it for 3 years then return it to the lessor versus the cost to buy it and throw it in the garbage after 3 years would be equal.
- codex 13y ago
  I'm saying something a little bit different, but I was not being very clear. Yes, the cost of leasing is born by you, the lessee. However, the risk of fluctuations in value of the car itself is born by the lessor, for which you pay a volatility premium. The lessor places a bet on the future value of the car ahead of time when they lease it, just as you would implicitly place your own bet should you buy it. Electric cars are so new that they may be one of the few cases where leasing makes sense; some people may not want the downside risk of buying, and are willing to pay a bit more for that. Battery technology is ever-improving.
  - edj 13y ago
    Electric cars are so new Hate to be pedantic, but electric cars have been around for over 100 years. https://en.wikipedia.org/wiki/Electric_car#1890s_to_1910s:_Early_history https://en.wikipedia.org/wiki/Electric_car#1890s_to_1910s:_E...
    - Dylan16807 13y ago
      This really doesn't contribute. Everyone knows that what's new is the particular technologies, not the idea of using electricity.
    - HelloMcFly 13y ago
      If you hate a behavior you're engaging in, then try not to engage in that behavior.
- mikeash 13y ago
  That assumes that everybody is equally smart and well-informed. I don't know that it's true, but it seems reasonable to assume that many electric car customers are treating it like a normal car purchase without thinking about obsolescence, and allowing the natural desire to own an object rather than rent it to push them in that direction. In an ideal world filled with sane, rational humans, buying and renting should cost about the same. But we don't live in such a world.
- ronaldx 13y ago
  Yes, and it's likely that the cost of the lease would be signifcantly higher to account for the risk of default.
  - codex 13y ago
    The risk of default in an auto loan is just as high, if not a bit more, as loan payments are typically higher than lease payments. But yes, you pay more for a lease than if you bought the car outright, assuming you couldn't get a higher return on your money elsewhere. The ability to remotely lock down the car, though, probably lowers the default rate and eases recovery of the car, so leasing this car should have lower "bad debt" costs than leasing a non-DRM'd car, making the lease comparatively cheaper than other cars.
    - waps 13y ago
      I find this risky on the part of Renault. We still have the ENAC principle ( http://en.wikipedia.org/wiki/Exceptio_non_adimpleti_contractus http://en.wikipedia.org/wiki/Exceptio_non_adimpleti_contract... ). When Renault locks the electric car, they are reneging on their contractual obligations. So given that they want to recover the money, how will that work ? In court you can say "I'm not paying for (a) the period that the car was disabled, ever (b) nor am I paying anything until the car is re-enabled", and that's a defensible position. Given that the car costs exactly the same (in loan repayments) to Renault, whether it's driving or locked down, this seems beyond stupid. I wonder who their legal advisor is. Reneging on contractual obligations is something you should only ever do if you're not expecting any payments anymore. (Of course this would be the situation in Northwest Europe, I'm not sure how this works in the US, so YMMV. And of course, you can bet it's unlikely in the extreme a collection agency will see it like this). This does not constitute legal advice, and I am especially not advising anyone to do anything. I am just voicing a concern. Contact a lawyer before you do anything (there is free legal representation for people having trouble with payments to financial institutions in most locations, use it).
  - anigbrowl 13y ago
    Then again the lessor may lower the lease price and absorb a little more of the risk in the hope of increasing sales and gaining market share, ie a loss leader strategy.
- dotBen 13y ago
  Except that lease $ payments are fixed and agreed at point of contract. The parent is suggesting that on day 0 of the lease the lessor doesn't know if the EV will be worth less than they project, due to accelerated obsolescence from a new technology emerging. You're right in the macro, that if this happened leases would go up, but those that were already in contract would be "protected" and I think that's his/her point.
- cdjk 13y ago
  The situation with electric cars is a little more complicated , as there's a $7500 tax credit for them. If I lease an electric car I can get the full value of that $7500 over the 2 or 3 year lease. If I buy it, that value is spread out over the entire life of the car. Personally I'd prefer to lease an electric car, and am going to soon. Even if it's more expensive than buying one, the extra cost is like buying an option to give at back after 2-3 years, which is worth something, especially with relatively new battery technology.
  - recuter 13y ago
    Why does it follow that you get to benefit from the tax credit and not the entity that leases the car to you?
    - cdjk 13y ago
      The entity that leases the car does get the benefit - but then passes it on to the consumer in lower monthly payments.
      - recuter 13y ago
        Ah, I see, you're an optimist. :)
rayiner 13y ago
The article is one of the stupidest things I've ever read that wasn't a Youtube comment. "Not allowed to own?" What kind of ridiculous statement is that? Can I complain that I'm "not allowed to own" my apartment because my landlord chooses to operate a rental building instead of a condo building?
__--__ 13y ago
if you should buy an EV you risk holding the bag should it become radically obsolete in the next three to five years. Not if, when. You can see this with electric motorcycles right now. The difference between the 2014 Zero and the 2012 Zero is night and day.

by codex 13y ago

cantrevealname 13y ago

You're saying that leasing is better than buying because cost of obsolescence is borne by the lessor. This is an economic fallacy so common that it deserves a memorable name. If a product became obsolete so quickly that everyone chose to lease it, then the lease price would rise to the level where leasing and buying were equally good. For example, if the cost of a product went to $0 after 3 years, then--all factors being equal--the cost to lease it for 3 years then return it to the lessor versus the cost to buy it and throw it in the garbage after 3 years would be equal.

codex 13y ago
I'm saying something a little bit different, but I was not being very clear. Yes, the cost of leasing is born by you, the lessee. However, the risk of fluctuations in value of the car itself is born by the lessor, for which you pay a volatility premium. The lessor places a bet on the future value of the car ahead of time when they lease it, just as you would implicitly place your own bet should you buy it. Electric cars are so new that they may be one of the few cases where leasing makes sense; some people may not want the downside risk of buying, and are willing to pay a bit more for that. Battery technology is ever-improving.
- edj 13y ago
  Electric cars are so new Hate to be pedantic, but electric cars have been around for over 100 years. https://en.wikipedia.org/wiki/Electric_car#1890s_to_1910s:_Early_history https://en.wikipedia.org/wiki/Electric_car#1890s_to_1910s:_E...
  - Dylan16807 13y ago
    This really doesn't contribute. Everyone knows that what's new is the particular technologies, not the idea of using electricity.
  - HelloMcFly 13y ago
    If you hate a behavior you're engaging in, then try not to engage in that behavior.
mikeash 13y ago
That assumes that everybody is equally smart and well-informed. I don't know that it's true, but it seems reasonable to assume that many electric car customers are treating it like a normal car purchase without thinking about obsolescence, and allowing the natural desire to own an object rather than rent it to push them in that direction. In an ideal world filled with sane, rational humans, buying and renting should cost about the same. But we don't live in such a world.
ronaldx 13y ago
Yes, and it's likely that the cost of the lease would be signifcantly higher to account for the risk of default.
- codex 13y ago
  The risk of default in an auto loan is just as high, if not a bit more, as loan payments are typically higher than lease payments. But yes, you pay more for a lease than if you bought the car outright, assuming you couldn't get a higher return on your money elsewhere. The ability to remotely lock down the car, though, probably lowers the default rate and eases recovery of the car, so leasing this car should have lower "bad debt" costs than leasing a non-DRM'd car, making the lease comparatively cheaper than other cars.
  - waps 13y ago
    I find this risky on the part of Renault. We still have the ENAC principle ( http://en.wikipedia.org/wiki/Exceptio_non_adimpleti_contractus http://en.wikipedia.org/wiki/Exceptio_non_adimpleti_contract... ). When Renault locks the electric car, they are reneging on their contractual obligations. So given that they want to recover the money, how will that work ? In court you can say "I'm not paying for (a) the period that the car was disabled, ever (b) nor am I paying anything until the car is re-enabled", and that's a defensible position. Given that the car costs exactly the same (in loan repayments) to Renault, whether it's driving or locked down, this seems beyond stupid. I wonder who their legal advisor is. Reneging on contractual obligations is something you should only ever do if you're not expecting any payments anymore. (Of course this would be the situation in Northwest Europe, I'm not sure how this works in the US, so YMMV. And of course, you can bet it's unlikely in the extreme a collection agency will see it like this). This does not constitute legal advice, and I am especially not advising anyone to do anything. I am just voicing a concern. Contact a lawyer before you do anything (there is free legal representation for people having trouble with payments to financial institutions in most locations, use it).
- anigbrowl 13y ago
  Then again the lessor may lower the lease price and absorb a little more of the risk in the hope of increasing sales and gaining market share, ie a loss leader strategy.
dotBen 13y ago
Except that lease $ payments are fixed and agreed at point of contract. The parent is suggesting that on day 0 of the lease the lessor doesn't know if the EV will be worth less than they project, due to accelerated obsolescence from a new technology emerging. You're right in the macro, that if this happened leases would go up, but those that were already in contract would be "protected" and I think that's his/her point.
cdjk 13y ago
The situation with electric cars is a little more complicated , as there's a $7500 tax credit for them. If I lease an electric car I can get the full value of that $7500 over the 2 or 3 year lease. If I buy it, that value is spread out over the entire life of the car. Personally I'd prefer to lease an electric car, and am going to soon. Even if it's more expensive than buying one, the extra cost is like buying an option to give at back after 2-3 years, which is worth something, especially with relatively new battery technology.
- recuter 13y ago
  Why does it follow that you get to benefit from the tax credit and not the entity that leases the car to you?
  - cdjk 13y ago
    The entity that leases the car does get the benefit - but then passes it on to the consumer in lower monthly payments.
    - recuter 13y ago
      Ah, I see, you're an optimist. :)

rayiner 13y ago

The article is one of the stupidest things I've ever read that wasn't a Youtube comment. "Not allowed to own?" What kind of ridiculous statement is that? Can I complain that I'm "not allowed to own" my apartment because my landlord chooses to operate a rental building instead of a condo building?

__--__ 13y ago

if you should buy an EV you risk holding the bag should it become radically obsolete in the next three to five years. Not if, when. You can see this with electric motorcycles right now. The difference between the 2014 Zero and the 2012 Zero is night and day.