After (seemingly) endless analysis and navel staring, and (not coincidentally) (seemingly) endless patience displayed by my wife, we’ve taken the next step in our personal part of the electrification of personal transportation. Namely, we just bought the Nissan Leaf we’ve been leasing since March 2013.
Because of the perverse complexity of what should have been a straightforward decision and transaction, and the implications of many of the details we wrestled with for anyone in a similar situation, I thought it would be helpful to share the details of our thought processes and the experience of buying this particular car.
Please note that because of the length of this post, I’ve pushed a lot of the details and explanation into footnotes.
A bit of background
As I mentioned above, we leased a Nissan Leaf S in late March 2013. This was, in itself, a major step for us. Not only was it our first EV (electric vehicle) and the first time either of us had leased instead of bought a car, but it came at the end of a long and sometimes frustrating wait. That last part requires me to drag you back even further, to 2006, when I was absolutely convinced that electric cars would be on the market in just a few more years, so the right step for us was to buy a reliable, inexpensive ICE (internal combustion engine) vehicle, in other words, a plain old gasoline car, and then make the leap into EV ownership at our earliest convenience. So, in June 2006 we bought a new Scion xA, which came to be known affectionately in our household and on this blog as Space Wart. It was an excellent car for our needs, and it turned out to be an outstanding bridge vehicle. Unfortunately, the electric car market didn’t pan out according to my master plan. First, the cars didn’t arrive quite as soon as I expected, and second, they were surprisingly (to me) expensive, by quite a margin. (For more than you could possibly want to know about the Leaf, see the Leaf’s Wikipedia entry.) Even though the Leaf hit the market in late 2010 and we liked what Nissan delivered, it wasn’t a viable option for us for the simplest, most brute-force economic reason: It cost too much.
We took the obvious (and admittedly cautious) path and continued to drive Space Wart and watch the EV market intently. Zip forward in our little saga to early 2013, and we find Nissan offering an enticing lease deal on the Leaf S. A local dealer had two in stock, we test drove one, loved it, and signed up for a lease. We got it for 24 months because we were worried about committing to a 36 month lease on our very first EV. Yes, in light of our experience with the car that sounds laughably timid, but I’m being honest here, and that’s why we made that particular decision.
Similarly, we weren’t sure if we wanted to spend the money to put an EVSE (or “charging station”) in our garage. That would have cost us $1,500 to $2,000 to buy the unit itself, have an electrician run a new 240 volt line the length of our house to the garage, and install the EVSE. The Leaf comes with a 110 volt mini-EVSE, so we decided to try to live with just that plugged into a plain old wall socket in our garage. If that didn’t meet our requirements, we could always spring for the 240 volt/30 AMP version, which will charge the car twice as fast as the 110 volt version, later on. As it turned out, it’s now 27 months later and we’re still charging with the 110 volt EVSE, so we were able to spend that money elsewhere.
Life with our Leaf
What’s it been like living with our Leaf, you may be wondering.
Short answer: We love it.
Long answer: We love it for all the obvious reasons, like much lower fuel/maintenance costs and carbon emissions per mile, plus some less obvious reasons, like the extremely quiet ride and freedom from watching gasoline prices and dealing with the not-so-delightful smell of liquid fuel or stops at gas stations in all kinds of weather.
This is no doubt the point where a few people, no longer able to contain themselves, leap into the conversation and say, “But it doesn’t go as far on a charge as a gasoline car does, right???” Let me say this as gently as I can: No, it doesn’t, and if you absolutely have to have a vehicle with a longer range than an EV, then you shouldn’t buy one. Similarly, you shouldn’t buy a subcompact sedan if you need a pickup truck or minivan, and you shouldn’t buy a pickup truck or minivan if you need a high-miles-per-gallon commuter car, and you shouldn’t expect a motorcycle to be your only vehicle if you live in a part of the world that gets significant snow and icy road conditions. Whether you’re buying an EV or an ICE or a hybrid or a PHEV (plug-in hybrid) or a motorcycle you’re much more likely to be happy with your purchase if you match the vehicle to your needs.
Right now — more on this below — most EVs on sale in the US are good for 80 to 100 real world miles on a charge, depending on driving pattern and conditions and whether you’re running the heat or air conditioning.
As I said above, we exclusively charge the car at home using the included 110 volt EVSE. I’ve never once used a public charger, simply because I’ve never had to. At the end of the day we plug in the car in our garage and the next morning we’re ready to go. Perhaps eight times in the last two years we’ve run longish errands in the morning on a Saturday and then plugged in the car during the day because we had a sporting event to go to that night.
The one range-related issue is winter driving. The Leaf comes in three trim levels (S, SV, and SL), and the SV and SL use a heat pump, basically an air conditioner run in reverse, to help heat the interior. The model we have, the S, doesn’t have a heat pump and uses plain old resistance heating, like the coils on an electric stove or toaster (but nowhere near that high a temperature, obviously). The problem is that such a system really sucks electrons, which means your range takes a big hit in the winter, about a third. (During mild weather, we can easily get 100 miles on a full charge; during winter with the heater on high, that’s reduced to about 70 miles.) This requires more careful planning, especially when it’s really cold, like February 2015 was in the NE US. The more efficient heat pump-assisted system in the SV and SL models doesn’t suffer as much of a range hit, but I don’t have any first-hand experience with them, so I can’t comment on what it’s like in real world use.
As far as the other major new thing in this adventure, leasing a car, to be blunt, I hate it. Not only do you pay a high price per unit of time you have the car or mile driven, but you have to worry about how you’ll be treated when you hand the car in — will they charge you for every little scratch, etc. I’ve heard from friends that the dealer we leased from was very reasonable at lease turn-in time, but I’ve also heard some horror stories about other car dealers. Also, I hated being on the clock and knowing I had a fixed time to keep the car, not to mention the joy of potentially having to buy new tires for a car at the end of a lease and then not getting to use them. In this case, we were pretty sure that leasing was a good idea because it bought us insulation from highly uncertain depreciation issues; if Nissan or some other company brought out an EV that went a bazillion miles on a charge and cost less than our car, then ours would plummet in market value. By leasing we didn’t have to worry about that and we could blissfully ignore trade-in/resale value issues. At least that was the theory. As it turned out, this looming issue of resale value seems to have worked very strongly in our favor, as I’ll explain a bit further down.
Deciding on our next step
We were acutely aware since we signed our lease that we were on the clock and had to be thinking about how to replace our Leaf. Fast forwarding our story to early 2015, we found very few other EV options that worked for us. The BMW i3 was too expensive; the Ford Focus EV has severely compromised storage space and a dashboard that looks like the result of an illicit liaison between an Edsel and a Transformer; the Mitsubishi i was too small and too weird; the VW e-Golf was too expensive; the Soul EV, Spark EV, and Fiat 500e were intriguing but weren’t available in NY State, etc. So it seemed pretty clear that we would wind up leasing another Leaf, even though, as I said above, I deeply dislike leasing. We didn’t want to buy a new Leaf and face a massive depreciation hit when the Leaf II (and Chevy Bolt and whatever Honda’s EV will be) all arrive in 2017 with much greater battery range. But we were hearing rumors that something was afoot from Nissan, so we decided to buy ourselves some time and extend our lease by six months. When in doubt: Decide not to decide, if that’s an option.
So we extended our lease, and then the news dropped that Nissan was introducing a 25% larger battery in the SV and SL trim levels of the 2016 Leaf, which would go on sale in the US in September. (That sales date came directly from a woman I spoke with at NMAC in April, so I’m reasonably sure it’s accurate; we’ll find out in about two months.) We still don’t know anything about pricing of the 2016 models, so we’re dealing with, at best, half of the information we’d need to make an informed decision. At this point, we grudgingly decided that our best option was to ride out our lease until September, and then lease another Leaf for 24 months, which would carry us well past the introduction of the Leaf II, which is expected in mid-2017.
Buying the car
Then news broke that Nissan was offering some Leaf lessees very sizable discounts, up to $6,500, to people willing to buy their leased Leaf. Looking at our residual (the remaining value of our vehicle) and subtracting the $6,500 meant we were definitely in the ball park, even assuming that our car would drop in value quite a bit when the “200-mile EVs” arrived en masse in two years.
Let me introduce here a calculation that I found helpful in deciding what to do with leasing or buying a Leaf. I call it the “roll it off a cliff” calculation. Say that your cost to lease a given model of a car is $X per year, including the up-front money, taxes, fees, and your monthly payments. Essentially, your total cost over the lease term divided by the number of years, not including fuel and insurance. For a new Leaf S, that’s currently about $3,650. If you buy a Leaf for $Y and keep it for Y/X years, then you could give it away (“roll it off a cliff”) and do no worse financially than if you’d leased a series of Leafs for the same amount of time. For a new Leaf S, assuming you get the full $7,500 Federal tax break, then your bottom line price is about $24,000, including tax and fees, which makes your “roll it off a cliff” number about 6.5 years.
So, doing this calculation for our car, which, I stress, was only two years old, had very low mileage, and had been babied by its one owner (me), we had a very favorable “roll it off a cliff” value, almost exactly 3.5 years. That convinced us to take the buyout. That’s when things took a turn for the weird, as our dealer came back to us with a price lower than what NMAC had quoted. We never got nor sought an explanation for the difference; we were happy with the price quoted by NMAC (our residual price minus the $6,500 promotion), so we weren’t going to argue with a lower one that dropped our “roll it off a cliff” number to just over three years.)
But there is one question you’re no doubt wondering about at this point: Why would Nissan give lessees such a big discount? The reason is pretty simple: EV buyers tend to be very aware of things like rapid depreciation due to looming product introductions (yes, I’m not the only one), so a very high percentage of Leaf sales in the US were actually leases, often estimated as above 90%. That meant that by this point in the life cycle of the Leaf, a lot of them would be coming off lease, and the potential buyers would be acutely aware of big changes coming in just two years. So, if Nissan didn’t convince a lot of people leasing Leafs to buy them, there would be a lot of them on the used car lots, which would drop prices for used ones and create an ugly PR situation.
Right now, we’ve landed at a very good place, through a mix of patience, cautious consumerism, and plain old luck. We have a car we like and that we feel very good about driving, at a price that all but guarantees we’ll have an excellent total cost of ownership by the time we sell it or trade it in. Our plan is to hang on to this car and see what develops in the next two to three years. Between the Leaf II, the Chevy Bolt, that mysterious sorta kinda announced EV from Honda, and broader availability of the Soul EV, plus who knows what other surprises (hello, Toyota) arrive, there should be more and more interesting options for EV buyers.
Clearly the EV market is in a state of considerable flux, and the breakneck pace of change won’t settle down for at least two more years, likely longer. Even though the coming changes will be overwhelmingly positive — more cars from more companies, offering longer battery ranges likely at lower prices — consumers will have to exercise a bit more caution in making buying or leasing decisions than they might be used to based on their experience with ICE cars.
Specifically, if you’re interested in buying or leasing an electric car:
- Do the most objective analysis of your vehicle needs you can. This includes daily miles as well as all the usual issues of how large a vehicle you actually need. For many US households with multiple vehicles and a garage with an available outlet, a mix of ICE and PHEV or EV cars makes perfect sense. For example, in a two-car household you can use an ICE car for long distance travel and one person’s commuter, and an EV for local errands and another person’s commuter. That’s essentially the situation in our household; our other car is my wife’s Honda Civic.
- If you’ve never driven an EV, then go to a local dealer and test drive one, preferably without a non-stop-talking salesman in the car, so you can experience the lack of vibration, quietness, smooth ride (no automatic transmission shifts), etc. The first few times you drive an EV it’s an almost surreal experience, albeit a very pleasant one.
- If your situation dictates that you’ll have to use public charging on a regular basis, be careful. If you have a 70 mile round trip commute, then you won’t be able to complete it while using your heater/defroster unless you charge during the day, perhaps at an EVSE at your workplace. And if that charger goes away, you have a problem. This issue will disappear for all but the most extreme commuters when the longer range EVs arrive in a couple of years.
- Don’t rush to install a $1,500+ EVSE as part of buying your first EV. As I pointed out above, my wife and I get by quite well without one and charge exclusively via the 110 volt EVSE that came with our Leaf, as do numerous other EV owners I’ve talked to online. If you try to live with 110 volt charging and find that you really need the faster charging that 240 volts provides, you can add it later.
- If you get an EV soon, expect to see other drivers checking out your car at stop lights, especially if you live in an area (as we do) where you don’t see five EVs on every local errand.
 Technically, an EVSE (electric vehicle supply equipment) is not a “charging station” or “charger”, as the charger is built into the car. An EVSE is nothing more than a fancy adapter.
 You can see pictures of Leaf EVSEs and some third-party units here. As you might expect, there’s a pretty vibrant cottage industry that’s popped up to do things like convert your 110 volt EVSE to a 110/240 dual voltage unit, plus multiple companies offering wall mounted EVSEs.
 I am dumbfounded that Nissan and other car companies selling electric vehicles don’t tell people in their advertising about benefits like the quiet ride. It’s a significant and very pleasant aspect of EV ownership, yet people who have never driven or ridden in an EV are almost universally unaware of it. When my wife or I ride in an ICE vehicle all we can hear are mechanical parts in motion.
 I am not going to get into the religious war between people who prefer a PHEV, like the Chevy Volt, vs. those who want a 100% electric vehicle, like my Leaf. As best I can tell, many Volt owners are very diligent, some bordering on fanatical, about plugging in their car every night to maximize the amount of their driving they can accomplish on electricity instead of the car’s gasoline engine. You can find stories online of people who use literally just a few gallons of gasoline per year, and if you go with a PHEV I urge you to do the same for the sake of your operating expenses and the environment. I think people driving Volts is great, but since I can live without the gasoline engine in a PHEV, a Leaf is an even better fit for my circumstances.
 For those who simply must know such things, on a 110 outlet the car charges at a rate of about five percentage points of its capacity per hour. Therefore, charging from 60% to 100% of battery capacity takes eight hours via a 110 volt outlet, and about half that time on a 240 volt outlet.
 That’s $2,500 up front plus 24 monthly payments of $200, for a total cost of $7,300 over two years, or $3,650 per year. Our initial lease, way back in 2013, was $2,000 down and $180/month, but, as I mentioned, Nissan was running a promotion, so this was an unusually low price for leasing this car.
 Note that when I saw “news broke”, I mean that I learned about the lease buyout promotion via the Internet. I was never contacted by NMAC or my dealer about it. In fact, when I called my dealer to tell them I wanted to buy my leased Leaf with a $6,500 discount, they had never heard of the promotion. And to make matters worse, when they called their contact at NMAC, she hadn’t heard of it, either. I had to call NMAC again, get the Nissan bulletin number announcing the promotion, and then relay that information to my dealer so they could verify I wasn’t trying to scam them out of a sizable pile of money. By the time we got this worked out, I was hearing the classic comedy routine “Who’s on First” in the background every time I talked to my dealer or NMAC.
 This is such a big change that I’ve been referring to it as the “EV Singularity”. GM is promising they’ll deliver the Bolt, a $30,000 (after Federal tax break) car with a real-world 200 mile battery range, for example. At that point EVs go from the “early adopter” stage to a much more mainstream friendly product, and we early adopters will have to listen to our neighbors, relatives, and co-workers tell us how wonderful EVs are. It’s the price we pay for being ahead of the curve, I suppose.
 I’ve read multiple times online that Nissan reconditions a lot of off-lease Leafs and ships them to Europe for resale, in countries where buyers get a tax break for buying a used EV. Assuming that’s true, it’s certainly not a cheap process, so Nissan still has an incentive to get people like me to keep our Leafs.
 Notice that until very recently we had no reason to think Honda had any plans to introduce an EV, yet they do, and it seems to be coming in the next two to three years. Given that the development time for a new car is normally longer than that, it seems clear that they’ve been working on whatever their new EV will be for some time. (I’m guessing that it won’t simply be a re-introduction of the Fit EV, even though I’d guess that would likely be a very popular product, based on all the reviews I’ve read of it.) Is Toyota also developing an EV and simply not telling us about it yet? Given the state and trend of the economics of vehicle-scale batteries, they better be, or they’re risking falling very far behind competitors.