If you could drive a brand new car for free, would you? If you work near a free electric vehicle charging station, you just might be able to drive that free car! If you are really lucky like me, your employer has free charging stations in the parking lot already. Government incentives and free charging stations are making electric vehicle leases very attractive!
The idea came to me when a friend was explaining his “wicked reasonable” lease on a new Chevy Volt. He is trying to hack to gas bill by always charging his car at work, since it is a free charging station. Sounds pretty sweet.
Normally I am not a big fan of leasing new vehicles over and over again every two to three years. It is a great way to commit financial suicide at a young age. Car markers love to make getting a new car as easy as possible with low interest rates to finance your dream car because you deserve it! We have already seen how much it really costs to keep leasing that new Mercedes–a lot of freedom.
What makes electric vehicles totally rethink my position on leasing new cars really comes down to technology and the current political environment.
There are enormous rebates and government incentives available for new electric vehicles! The government reeeeally wants you to hop onboard the ‘low-emission, save the planet’ vehicles. They are make it as cheap as possible to purchase these cars. When you lease a new Leaf or Volt, they apply the tax credit as a sort of down payment (last I checked it was around $7,500, but look up deals in your own area to be sure). This large credit/downpayment makes the lease very cheap for a $30k MSRP car: around $199 per month for a Leaf in my area. Relying on the government program really makes or breaks this. As soon as the incentives dry up, electric vehicles will be much more expensive!
The battery replacement is another reason I’m starting to like electric vehicle leases. Battery replacement can cost an arm and a leg! They usually need to be replaced after 60k miles or 5 years for around $5,500! Ouch! So why not just use up half the battery life and hand the keys back to the dealer way before it starts to wear down. I’m sure a few people bought a cheap used electric car thinking they found a great deal and were later furious when they found that it needed a battery replacement for $5k! That’s why it is important to always do your research and always question any business transaction–someone could be trying to take advantage of you!
Currently my gas bill is around $150-180 per
month, but when gas prices were $4/gal it was closer to $200-250 per month. Here is where you could break even financially leasing an electric car if you live/work near a free charging station. It takes a little more planning effort, but if you are reading this article I’m sure you’re up for it. If your workplace has free charging, then it will take much less effort. You could theoretically take your gas bill now and convert it to a new electric car lease! Almost…
The problem with my situation was that I only have liability insurance since I drive a cheap car. If you lease a car, the lease agreement will require you to carry full coverage auto insurance–comprehensive and collision. That would jump my insurance costs up substantially! There goes my free car… But if you are already have leased or financed a car, you should already be paying for full coverage, so your insurances costs should not change too much. There might be hope of a free, new electric vehicle for some of you.
Some important notes:
- This has been a fun thought experiment where we use creative thinking to get as much as we can for as little money as possible, not a suggestion to go buy or lease a new car tomorrow.
- Please always do extensive research before purchasing a new car, as everyone’s situation is different and some dealerships/people could try to take advantage of you.
- This relies heavily on government incentives such as tax breaks and credits. As soon as the incentives run dry, this gravy train is over!
I love fun thought experiments like this one where we creatively grow our wealth. While it does not work out so well for people driving cheap cars with liability only insurance, it could very well mean close to a free car for some. Moral of the story: use any creative means available to growth your wealth and get as much as possible for as little as possible!