Lease Returns



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Sunday January 22, 2017 Lease Returns One of the biggest arguments against plug-in cars has always been the cost.  It even sometimes trickles into the thinking of EV Advocates.  I was once talking about the need for public charging so that people who live in apartment buildings or have to park on the street would be able to drive a plug-in vehicle, and was told that people who live in apartments couldn't afford plug-in vehicles.  It wasn't true then and it is even less true now.


The first thing to note is that the price of plug-in cars in general is falling fast.  While a lot has been made of the Bolt being a 238 mile range EV that can be bought for around the price of the average new car after tax incentives, other cars are also available or coming to a dealership soon that greatly drops the cost of ownership of plug-in cars. 
Something else is happening too.  Early on a lot of people chose to lease cars rather than buy.  This was a combination of people not knowing how well the batteries would hold up, and very favorable lease rates being offered by the car makers.  These leases were typically written for 3 years although some 2 year leases were also written.  While some people purchased their car at the end of the lease, others chose to get new cars, so there are now lots low mileage 2013 and 2014 cars starting to show up on the used market.


Lease terms usually contain a clause that limits the number of miles that can be driven in each year and there is a per mile charge for any mileage that exceeds this limit.  Typically plug-in car leases limit the car to 10,000 miles per year and drivers do try not to exceed this value. 


For the used car buyer this means that there are currently lots of used 2013 plug-in cars coming onto the market.  Typically I am seeing cars with around 20,000 miles on the clock with prices in the $8,000 - $10,000 range.

Another interesting thing I am seeing is a good number of compliance cars showing up at dealerships outside the original sales area.  The is particularly true of the Fiat 500e which was only sold in California and Oregon but is now showing up at dealerships like Carvana in Atlanta and Texas Direct in the Houston area, but there has also been a few Chevy Spark EVs showing up as well. 


There is also a good selection of used Nissan and Chevy Volts that are currently on sale.  These tend to have slightly more miles on the clock than the compliance cars and command a bit higher price, especially the Volt which seems to be holding its price better than most of the plug-in cars.  Even at that you can find 2013 Volts at around $12,500 with about 40,000 miles on the clock.  The Smart Electric Drive, which is also sold nationwide, is one of the cheapest of the lease return cars and low mileage versions can be found for around $8,000.


So what should you watch out for when buying one of these cars.  Well, you have to check the usual things that you would when buying any used car, like making sure that it hasn't been in an accident and that it is mechanically sound.  There are a couple of other things that need to be taken into considerations.


First lets go back to the apartment dweller.  The first thing you have to do is to figure out how you are going to keep it charged.  Do you have access to a plug at home or at work.  All the plug-in cars being produced today can be charged at a regular 110V outlet so if you have access to one, even if it means passing the charge cable though a window, then you are probably good.  If you don't have access then look around for public chargers near your home or workplace.  You can use websites like plugshare to locate chargers.  I would recommend taking a look at the chargers to see how busy they are, are they regularly blocked by cars that are not charging, and what the cost would be, including any parking fees.


If you are looking to buy a compliance car like the Fiat 500e and don't live in one of the states were the car was sold then you should make sure that you have a dealership nearby that is capable and willing to service and repair the car.  I've heard people complain that they had bought a used Fiat 500e and the local dealer refused to work on it telling the customer they would have to have it shipped to California to get it serviced.  Fortunately electric cars don't need too much in the way of service but if you are not able to take care of the car yourself it should be a major concern so check with dealers in your area to see if they are willing to work on the car, also check with the dealership selling the car to see if they are capable and willing to service and repair it after the purchase.

For cars that are sold nationwide there is much less to worry about.  The main thing is the state of the batteries.  Volt batteries appear to be holding up well but leaf batteries have been known to loose significant capacity over time.  Fortunately the Leaf has an option to display the current capacity of the car.  This tends to be more of an issue with earlier cars that were used in very hot climates like southern Arizona but it is worth a check. I would recommend walking away from a car with low miles that shows over 20% capacity loss.


If you want to go plug-in but were put off by the high price tag then a low mileage lease return might be a good way to get into one.  Give one a try, you are going to like it.


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