Just can't rationalize the lease cost

[powerdoc]

I got really excited when I saw a lease cost of $499 "well-equipped" but the actual cost on a moderately equipped giga was more than $700/mo even with a fairly large down payment. I just can't justify the cost/benefit of this price. My guess is that one factor driving the high price is the uncertainty of the true resale value of the 3-year-old leased cars. You've really got to be as green as Kermit the frog to pay that kind of cash just to get an electric car. I'm in Atlanta, GA and the dealers have a good supply of cars. Atlanta is one of the major EV cities in the USA but at this price I don't think the Bimmers will sell like Leafs. I'm not sure I'm enough of a gambler to go for a purchase. Granted, technologically the i3 got it right but unless you're playing with Monopoly money it just doesn't make monetary sense. BMW sold as many cars last month as the 3 previous months so their sales numbers do appear to be accelerating and therefore I don't expect better deals, but I can hope. I don't know if the extra sales in August represented better dealer stocks and I can't find the figures where they were sold, state-wise. One ray of hope: In following the online stock of cars offered in my area, I've only seen one sold in the last 2+ weeks.

I wait........

 

[Chrisn]

Please don't take this the wrong way, but you should maybe consider a Volt. I had one and really enjoyed it. From a utility perspective, the Volt is very close to the i3, but considerably cheaper. And the lease deals are pretty compelling. Check it out. A MUCH better "value" than the i3.

Half the EV range, and not quite as zippy, but still a very fun EV experience, and the "REX" in the Volt give you ~300 miles of full-power, non-stop range if you need it.

 

[i3Alan]

I got really excited when I saw a lease cost of $499 "well-equipped" but the actual cost on a moderately equipped giga was more than $700/mo even with a fairly large down payment. I just can't justify the cost/benefit of this price. My guess is that one factor driving the high price is the uncertainty of the true resale value of the 3-year-old leased cars. You've really got to be as green as Kermit the frog to pay that kind of cash just to get an electric car. I'm in Atlanta, GA and the dealers have a good supply of cars. Atlanta is one of the major EV cities in the USA but at this price I don't think the Bimmers will sell like Leafs. I'm not sure I'm enough of a gambler to go for a purchase. Granted, technologically the i3 got it right but unless you're playing with Monopoly money it just doesn't make monetary sense. BMW sold as many cars last month as the 3 previous months so their sales numbers do appear to be accelerating and therefore I don't expect better deals, but I can hope. I don't know if the extra sales in August represented better dealer stocks and I can't find the figures where they were sold, state-wise. One ray of hope: In following the online stock of cars offered in my area, I've only seen one sold in the last 2+ weeks.

I wait........

I went with the OC option to hedge against bad resale. The residual (same for lease and OC) is pretty good now, and many of the dealers are discounting i3s. I have seen $1K to $3K off MSRP frequently reported in the last month. I got $700 off last June when I ordered. Keep in mind that the dealers can add on fees, and I suspect the $700/mo. Giga you described has plenty of fees burried in it. If your credit is good, and you can put 15% down, you can get 2.74% from BMW Finance, with residuals over 50%, depending on term and milage. The down and monthly payment are nearly identical for lease and OC, but you may do better with your tax credit on an OC then BMW will give you on a lease.

 

[cove3]

The supply of i3s should go up and prices should come down when the VW e-Golf begins selling in November. It's 8,000 cheaper, leases for 299. and is getting very good reviews. The 2015 Golf gas version is rated #1 in the compact, hatchbacks, and affordable small cars catagories.

http://usnews.rankingsandreviews.com/cars-trucks/rankings/cars/
http://usnews.rankingsandreviews.co..._-1_-1_12610-365968_12516-369074_12786-366618

Ron

 

[powerdoc]

Leasing is something I've never done so I'm just now realizing that even Carl Sagan would have a hard time understanding just how the numbers run. What is the "OC" option? It wasn't offered to me. :?: :?:

 

[i3Alan]

Leasing is something I've never done so I'm just now realizing that even Carl Sagan would have a hard time understanding just how the numbers run. What is the "OC" option? It wasn't offered to me. :?: :?:

OC (Owner's Choice) is a loan structured to look just like a lease. The numbers are virtually identical, with a few differences.

The reason that BMW created the OC plan for US customers was to allow the owner to get 100% of the EV tax credit benefits that go only to the original purchaser of the car. For a lease, the leasing company gets the credit, but has to pay taxes on the credit, leaving about $5K of the original $7500 to pass on to the lessee. In theory, the OC plan saves buyer and BMW about $2500 due to tax credits.

Other differences between lease and OC are small, and some vary by state and buyer situation. But, for the most part, the down payment, the monthly payment, and the final residual amount (the balloon payment at the end which is only paid if the buyer wants to keep the car at the end of the lease/OC plan) should all be exactly the same. Dealers can squeeze in some fees to make those costs vary, however.

 

[powerdoc]

Thanks!

 

[ultraturtle]

Also remember that the OC option comes at a cost. In the case of a 5 yr, $50,000 loan, that cost is at least $1,650 - the difference in interest between 2.99% and credit union rates of 1.75% or better.

 

[i3Alan]

Also remember that the OC option comes at a cost. In the case of a 5 yr, $50,000 loan, that cost is at least $1,650 - the difference in interest between 2.99% and credit union rates of 1.75% or better.

You say the OC costs at least $1650 more in interest, but it depends on how much is put down, and weather the Flex option is chosen. With at least 15% down, the BMW interest is 2.74%. Also, with the OC or a bank/credit union loan, but not with a lease, paying more than the monthly minimum payment does reduce interest costs.

OC or lease plans are typically less than 5 years, and the interest paid is correspondingly less.

With an OC or lease, where you turn the car in at the end of the term, you will not have paid the residual, but you will have paid the interest on the residual during the OC/lease.

 

[WoodlandHills]

One big picture matter to keep in mind is that for the foreseeable future EV's are going to be like computers were back in the 386/486 days: everytime you go to buy one it will be cheaper and more capable than the old one was just a year or so ago. I fully expect a Tesla Model X to cost less and do more than an i3 just as I expect the 2nd gen i3 to do the same. At this point in the history of EV's something akin to Moores Law is affecting the entire industry and that trend can only accelerate. My point is that a series of 3 to 4 year leases could keep you in state of the art EVs with ever increasing capabilities and ever decreasing monthly payments for the next several decades. Should there be changes and/or consolidation in the various competing charging networks and standards, a 2014 EV may or may not be fully compatible in 2017 or 2019. Who knows? At least with a lease you are only locked into a certain level of tech for 3 years, even if it does cost a bit more per year than buying.

Just my two cents........

 

[Tummy]

The Nissan Leaf 24 month lease is basically free after the state incentive in Georgia.

Keep in mind that with the BMW lease you are not getting the full $7,500 federal incentive. Owners Choice will allow you to collect the full incentive. Over 36 months the difference is $73/month towards the monthly payment. You also need to keep in mind that you can claim the $5,000 Georgia state tax incentive, further reducing the overall cost ($138/month effectively over 36 months).

I was able to easily negotiate 6% off mine, about $3k off MSRP of $52,200.

Without the actual figures, it's hard to tell if your payment is high or not.

If you were to buy the car, after all incentives in Georgia it was be base $29k, which is a fantastic price for a new BMW. Mine was $36k + sales tax with every option, fed and state tax incentives.

 

[Surge]

One big picture matter to keep in mind is that for the foreseeable future EV's are going to be like computers were back in the 386/486 days: everytime you go to buy one it will be cheaper and more capable than the old one was just a year or so ago. I fully expect a Tesla Model X to cost less and do more than an i3 just as I expect the 2nd gen i3 to do the same. At this point in the history of EV's something akin to Moores Law is affecting the entire industry and that trend can only accelerate. My point is that a series of 3 to 4 year leases could keep you in state of the art EVs with ever increasing capabilities and ever decreasing monthly payments for the next several decades. Should there be changes and/or consolidation in the various competing charging networks and standards, a 2014 EV may or may not be fully compatible in 2017 or 2019. Who knows? At least with a lease you are only locked into a certain level of tech for 3 years, even if it does cost a bit more per year than buying.

Just my two cents........

Ever decreasing monthly payments?! No.

That's where it's not the same as computers.
And besides, I'm not sure if that holds with PCs either.

A car is still more than silicon and software.

But you are correct that for the same price the next gen i3 will be dramatically better.
Just don't expect it to cost less. Other than market incentives, but that's driven by supply and demand, not car makers passing on lower cost components to consumers.

 

[WoodlandHills]

One big picture matter to keep in mind is that for the foreseeable future EV's are going to be like computers were back in the 386/486 days: everytime you go to buy one it will be cheaper and more capable than the old one was just a year or so ago. I fully expect a Tesla Model X to cost less and do more than an i3 just as I expect the 2nd gen i3 to do the same. At this point in the history of EV's something akin to Moores Law is affecting the entire industry and that trend can only accelerate. My point is that a series of 3 to 4 year leases could keep you in state of the art EVs with ever increasing capabilities and ever decreasing monthly payments for the next several decades. Should there be changes and/or consolidation in the various competing charging networks and standards, a 2014 EV may or may not be fully compatible in 2017 or 2019. Who knows? At least with a lease you are only locked into a certain level of tech for 3 years, even if it does cost a bit more per year than buying.

Just my two cents........

Ever decreasing monthly payments?! No.

That's where it's not the same as computers.
And besides, I'm not sure if that holds with PCs either.

A car is still more than silicon and software.

But you are correct that for the same price the next gen i3 will be dramatically better.
Just don't expect it to cost less. Other than market incentives, but that's driven by supply and demand, not car makers passing on lower cost components to consumers.

I don't expect the next gen i3 to be cheaper, but the Tesla Model 3 will be. How much less is open to debate, but it will be less than $45k and will have a whole lot more range than an i3. And those monthly payments will be less than the ones I will have now.

 

[DaveNC]

The Owners Choice Plan appears to help quite a bit with the cost, but the two dealers I called today in the South SF Bay area, had no idea how it worked. One sales person, when I explained the advantages of how Chevy is doing their lease deals, started arguing with me that I seemed to like the Volt better and to call him when I decide I want i3.

The owners choice math on a $51k i3, with 36 months, 12,000, and assuming a $11.5k down (my rationale is this equates to the $7,500 tax credit + the typical $4k down payment), yields a monthly payment of $537. I can only consider this price to be fictional- it was produced from the BMW website financing calculator but neither dealer I talked was able to reconstruct it.

I like the i3 slightly more than a Volt, but the 2014 Volt lease deals are incredible. For a Volt with leather, nav and bose, the monthly payment is $302 with $4k down. I'm not sure the i3 is that much better to justify the additional cost.

 

[cove3]

>>>>but the Tesla Model 3 will be. How much less is open to debate, but it will be less than $45k>>>>

More like 50-80K plus it appears it's going to be all steel frame and body
http://www.teslamotorsclub.com/show...between-50k-80k-far-above-Tesla-estimated-35k

Plus by late 2017 orv2018 it will be competing with extended range bevs from a dozen manufacturers and some of them will be all carbon frame and body which technology Tesla doesn't have. Not to mention vastly improved hybrid/hybrid plug ins, some of which will also be all carbon

Ron

 

[powerdoc]

Well, seeing that the basic lease cost went down from $499 to $369 for the BEV, I expected that the lease for what I actually wanted( giga not mega) would have come down but no it's still well North of $600. If I add the 7% GA tax and the 15% higher price than the stripped Mega, I'm still in the $400's. Where is my computation going wrong????? :?:

 

[i3atl]

Well, seeing that the basic lease cost went down from $499 to $369 for the BEV, I expected that the lease for what I actually wanted( giga not mega) would have come down but no it's still well North of $600. If I add the 7% GA tax and the 15% higher price than the stripped Mega, I'm still in the $400's. Where is my computation going wrong????? :?:

How are you coming up with these numbers? What's the sales price of the car you're looking at?

 

[powerdoc]

For a list price of $47-48,000.

 

[i3atl]

For a list price of $47-48,000.

It's possible now, at least in GA, to expect $3500-4K off MSRP at the dealer level, plus the $2K Innovation Credit from BMW, for around $6K off sticker. Then be sure you're accounting for the 7% residual bump that's still available this month.

Also, with a lease you're giving up nearly $3K of the $7500 Federal credit as BMW only passes $4875 on to you, so Owner's Choice with Flex makes more sense in most cases for GA buyers. If GA TAVT was based on lease payments as it is in CA, maybe a lease would be more viable.

 

[Surge]

One big picture matter to keep in mind is that for the foreseeable future EV's are going to be like computers were back in the 386/486 days: everytime you go to buy one it will be cheaper and more capable than the old one was just a year or so ago. I fully expect a Tesla Model X to cost less and do more than an i3 just as I expect the 2nd gen i3 to do the same. At this point in the history of EV's something akin to Moores Law is affecting the entire industry and that trend can only accelerate. My point is that a series of 3 to 4 year leases could keep you in state of the art EVs with ever increasing capabilities and ever decreasing monthly payments for the next several decades. Should there be changes and/or consolidation in the various competing charging networks and standards, a 2014 EV may or may not be fully compatible in 2017 or 2019. Who knows? At least with a lease you are only locked into a certain level of tech for 3 years, even if it does cost a bit more per year than buying.

Just my two cents........

Ever decreasing monthly payments?! No.

That's where it's not the same as computers.
And besides, I'm not sure if that holds with PCs either.

A car is still more than silicon and software.

But you are correct that for the same price the next gen i3 will be dramatically better.
Just don't expect it to cost less. Other than market incentives, but that's driven by supply and demand, not car makers passing on lower cost components to consumers.

I don't expect the next gen i3 to be cheaper, but the Tesla Model 3 will be. How much less is open to debate, but it will be less than $45k and will have a whole lot more range than an i3. And those monthly payments will be less than the ones I will have now.

Why? Why will it have "a whole lot more range than the i3"?!
That implies tesla has new tech / IP that BMW doesn't have. And that's not the case.

Don't believe Elon's marketing hype. The battery tech in the Tesla is nothing more than a series of off the shelf sized batteries, like everyone else is using.

The BMW's "secret sauce" is the very light CFRP body and decades of experience.
There's no way tesla can match this.

And there's no way they can price it less unless they take content out.

It's quite simple. The auto business is highly efficient, and there are no "free lunches".
If you are paying less for something, it's because it costs less to purchase the parts and to build. You're not getting "more" for less.