[Caevlist] What Is the Most Economic Way to Acquire a Leaf - Used, New or Lease?

[WALTER J EAGER]

Edmunds.com addresses subject question for ICEVs at: http://www.edmunds.com/car-buying/compare-the-costs-buying-vs-leasing-vs-buying-a-used-car.html . Let's try to extrapolate its findings to the Nissan Leaf. 


For its ICEV comparison Edmunds used a new 2013 Honda Accord EX at the market price of $24, 500 and a used 2010 Honda Accord EX at the market price of $17,761. It used a new 2013 Honda Accord EX at a monthly cost of $344, which included the down payment and all fees in that monthly payment. The data below represents the economic situation at the end of a six-year period. This is the average time that a car is owned before resale. This six-year accounting requires two sequential, three-year leases. Edmunds discusses the effect of maintenance on out-of-pocket costs, but does not factor them in, although another of its websites, http://www.edmunds.com/tco.html, indicates that the 5-year maintenance and repair cost for this Accord is $4,092 and for the Leaf is $2973. 

Honda Accord EX 	Leasing 	Buying New 	Buying Used 
Total out-of-pocket costs 	$24,768 	$17,830 	$15,976 


Available time does not permit an equally-detailed economic analysis for the Leaf. However, the differences between Leasing New, Buying New and Buying Used are so great that a semi-quantitative analysis, using the Edmund ICEV report as a reference, will suffice for answering subject question reliably. 


For the Honda Accord EX the Edmunds analysis indicates that after six years Buying New saves the owner nearly $7,000 over Leasing New. It indicates that Buying Used saves about $1,800 over Buying New. What would the latter comparison be for the Leaf? We can obtain a reasonably dependable assessment by comparing the 3-year market depreciation of the Leaf SL with that of the Accord EX. The latter is reported by Edmunds to be $6,739 (28%). I purchased my new 2011 Leaf SL in August 2011 for $28,000 (tax credits deducted). So its 2.7-year, market depreciation is $10,361 (37%), compared with 28% for the 3-year market depreciation of the Accord EX. As these data indicate the Leaf depreciation is 32% greater than that of the Accord EX. So, if buying a used Accord EX is economically superior to buying it new, it is reasonable to conclude that buying a low mileage, used 2011 Leaf in outstanding condition is at least a 32% more favorable buy than a new Leaf. 


The very high, 3-year Leaf market value depreciation is probably attributable to a Leaf marketing strategy that seeks market dominance and economies of scale through production that exceeds demand. This strategy tends to saturate the market. It certainly has little to do with the intrinsic value of this remarkable vehicle. The much lower Leaf maintenance cost adds to the Leaf's value as a used car purchase. This data has convinced me, that as long as this market condition continues, buying a used Leaf with low mileage and in outstanding condition is the way to go. I did this in my most recent purchase. 



I now am offering my 2011 Leaf SL (the highest trim line) for sale at its Edmunds.com private sale appraisal of $17,639. For comparison the Edmund's appraisal for sale by dealers is $19,034. This Leaf is Cayenne Red with a light-colored, cloth interior. It is in outstanding condition and has been driven only 13,600 miles. A high quality window film was professionally installed on all but the windshield, shortly after purchase at an added cost of $200. It reduces solar heating of the cabin, and therefore minimizes the use of air conditioning, which increases driving range. A windshield sunscreen has been consistently used when this vehicle is away from its garage and exposed to sunlight. Used in conjunction with the window film this shield protects the Leaf's interior from ultra-violet rays. The Leaf has an exceptional useful backup monitor, navigation system, telematics and all of the other features which were standard equipment on this SL. It was purchased in August 2011, so all of this Leaf's warranties are still in effect. It has a clear CarFax report. 



If you have any of “two-car friends”, who do not already own a Leaf, please do them and me a great favor by forwarding this e-mail to them. My telephone number is (541) 753-5837. 


Thanks, 


Walt Eager
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