Comparing Lease Prices on Luxury Plug-in Cars

By · January 20, 2014

The availability of low monthly leases for the most popular electric cars—commonly $199 a month or less—has lowered the price barrier to EV adoption. But based on emerging pricing information about leasing a BMW i3 or Cadillac ELR, leases for luxury plug-in vehicles are unlikely to take much sting out of high sticker prices.

The starting purchase price of the Cadillac ELR is $75,000—but leasing one will cost about $699 a month, based on a $6,000 deposit and leasing term of 39 months. (The deposit drops to $5,000 for current owners of GM vehicles.) The Caddy ELR is essentially the luxury version of the Chevy Volt series plug-in hybrid, which sells for about half the sticker price of the ELR.

Leasing Luxury EVs

Buyers should read the fine print regarding rates, residual values, mileage limits and buyback options. But here's roughly what we know:

  • BMW i3: As low as $550 a month (with $5,000 down)
  • Cadillac ELR: As low as $700 a month (with $6,000 down)
  • Tesla Model S: As low as $1,100 a month (with 10 percent or about $7,000 down)

The fine print on the ELR stipulates that miles are capped at 32,500 during the lease period—or about 830 miles per month. Run over the mileage limit and pay $0.25 for each additional mile.

The sleeker ELR is more powerful—delivering 217 horsepower performance compared to the Volt’s 149-horsepower motor. Yet, the ELR is expected to deliver approximately the same efficiency as the Volt, which is rated by the U.S. Environmental Protection Agency for 38 miles of pure-electric driving before a gas engine is brought online to extend the range to around 380 miles.

Caddy V. Bimmer

How does this compare with the i3, the new smaller luxury electric car from BMW? Based on documents published by InsideEVs.com, and a follow-up report on BMW blog, the terms for the purchase of a $45,800 i3—with a $1,000 down and 4.99% financing over 60 months—would be about $810.00 a month. The monthly purchase (rather than lease) payments for the i3, if you put down $5,500, would drop to $720 a month.

But a monthly lease for the same BMW, according to the web sources—with $5,000 down and a 39 percent residual value after three years—would run about $550 a month. These are estimated calculations based on press materials. Yet, Green Car Reports reported today that one actual buyer was given a quote of $930 a month for an i3, with a mileage limit of 12,000 miles a year.

A couple of caveats: Including the range-extending option on the i3, with any of the upscale trim choices, will likely send the base price above $45,800. And BMW will only apply $4,875, out of the total $7,500 federal tax credit, to the lease offer.

Then, There’s Leasing a Model S

Meanwhile, the lowest cost Tesla Model S—with the 60 kilowatt-hour battery pack providing more than 200 miles of range per charge—starts at $71,070 (before the $7,500 tax credit). When you get past Tesla’s marketing claims, it appears that the monthly lease price for the 60 kWh Model S—with 10-percent down and excluding taxes and registration fees—is about $1,100 per month. The monthly lease price for the 85 kWh version, with the same terms, is closer to $1,250 a month.

Comments

· · 32 weeks ago

I think drug testing is in order for BMW management they are on crack. I understand they need to make money but making it all on one customer? Good luck BMW your going to need it maybe electric cars are not your thing.

· · 32 weeks ago

Most new model introductions start high, mop up the pent-up demand, and then gradually work down to price point equilibrium. We saw it with the Leaf, Volt, Focus Electric, Honda Fit EV, Toyota RAV EV, etc, etc. Very rarely, as with the Fiat 500e, the price is set competitively from the outset, because it is cheaper than spending millions more on marketing, especially for a limited production run vehicle.

· · 32 weeks ago

Price premiums can also serve to moderate demand when initial production capacity is limited.

· · 31 weeks ago

Great Story. Pretty sobering if you consider that to drive a Prius or Accord Hybrid 800 miles in a month it costs $56. So it isn't as if subtracting the gas costs from a green ICE car is really much of a reduction on a lease of $600 to $1200 per month. Add back the electricity charges and the cost of fuel is pretty negligible.

· · 31 weeks ago

The article deals only a glancing blow to what is really at the heart of this story - residual value, i.e., "How much does the lessor expect the car to be worth at the end of the lease?"

If you dig into some of the low promotional lease prices we've seen on some of the early (B/PH)EVs (LEAF, Volt, i-MiEV), they were based on residuals that verged on the idiotic (yes, of course, someone will gladly pay $25k for a 4-yr-old i-MiEV). I can only surmise these were in some way guaranteed by the manufacturer in a buyback scheme, a sort of delayed rebate which provided the side benefit of cars being turned in for study after years of real-world use. Given all that, unless some extraordinary surge in demand for used EVs spikes their prices, I think it's an open question how many of these leased EVs will enter the used car market as opposed to being crushed or dissected (no points for guessing the fate of limited-run lease-only compliance specials like the Fit). The ridiculously high residual and my concern about the state of the EV market when I came off lease (so choose between having no EV or grossly overpaying for it) tipped me toward buying back in 2012. I apparently lost that bet when Mitsubishi slashed the price on the i-MiEV for its relaunch later this spring, but that really wouldn't have been much benefit to me as a lessee if the car disappears again before I'd have been out of the lease (so let's see how things look in 2016).

Luxury vendors are apparently not similarly motivated to subsidize leases for their pricey toys. To the contrary, since the article suggests that real-world lease deals for the i3 assume a 3-year residual value of less than 1/3 of the purchase price, the institutions financing these lease deals are assuming little to no depreciation risk.

I guess the moral of the story is if you want someone else to pick up the tab for you to drive your EV, don't expect that EV to be a status symbol.

New to EVs? Start here

  1. What Is An Electric Car?
    Before we get going, let's establish basic definitions.
  2. A Quick Guide to Plug-in Hybrids
    Some plug-in cars have back-up engines to extend driving range.
  3. Electric Cars Pros and Cons
    EVs are a great solution for most people. But not everybody.
  4. Eight Rules of Electric Vehicle Charging Etiquette
    Thou shalt charge only when necessary. And other rules to live by.
  5. Seven Things To Know About Buying a Plug-In Car
    A few simple tips before you visit the dealership.
  6. Eight Factors Determining Total Cost of Ownership of an Electric Car
    EVs get bad rap as expensive. Until you look at TCO.
  7. Federal and Local Incentives for Plug-in Hybrids and Electric Cars
    Take advantage of credits and rebates to reduce EV costs.
  8. Guide to Buying First Home EV Charger
    You'll want a home charger. Here's how to buy the right one.
  9. Electric Car Utility Rate Plans: Top Five Rules
    With the right utility plan, electric fuel can be dirt cheap.
  10. The Ultimate Guide to Electric Car Charging Networks
    If you plan to charge in public, you'll want to sign up for charging network membership (or two).