Hello everyone, I’m going to get the Kona EV on Wednesday and I’m trying to decide between leasing or buying. In Canada the lease interest rate is much higher than financing 5.49% compared to 3.99%, therefore the monthly payment is much higher. My concern about buying is battery life and a large depreciation due to changing technology. What are people’s thoughts and what did you choose? Thanks in advance.
I think we may have leased if that had been available when we bought. Your rationale sounds good around the rapidly changing technology.
It's not just the different interest rate, it's the fact that you have no car to trade-in at the end of a lease. But if buying, how much is that car worth when you trade it in? Kelly Black Book claims the Bolt is only worth 41% of its initial value after 3 years. An average ICE is worth 51%, and shorter range BEVs are worth less %. Teslas are worth more %. But even at only 41% remaining value after 3 years, I calculate that taking out a 4% loan, buying and then trading in the car is a lot cheaper than leasing it. But sure, the trade-in is a crap shoot. Leasing, you know exactly what your costs are.
There will likely never be a better time to buy in B.C. with the new federal incentive matching the provincial one of $5000. It would not be surprising to see the province end its program as redundant in the next budget. I'd personally benefit from that since the federal measure has knocked 10% off my car's resale value.
I never lease cars, but for EVs I might consider leasing. The technology is changing rapidly and in three years from now, things can be very different, more cars, better technology. I normally keep my car for about a long time, but if I buy a EV this year, I might be way behind the curve in about 3-5 years. You may want to keep that in the back of your mind as a qualitative factor.
Thanks for your response. change in technology and battery degradation and loss of value is why I am thinking of leasing. I'm not great at keeping my vehicles for a long time. I'm concerned that if I buy, when the time comes to sell, I will owe more than the car is worth. I keep going back and forth between the options!
I would then say lease for now. You may have the option to buy at the end of the lease (Tesla does not offer that) but Hyundai might, to keep your options open.
If you have a business then the leased vehicle payment can be written off as an expense immediately. Buying the car in the USA results in needing to slowly write it off over a period of 11 years. Normally a lease is good if you will not drive the vehicle for 10,000 miles a year and this would be easy not to exceed with a short range EV as compared to a gas powered car. Special problem with an EV is that the first time buyer gets up to $10,000 in tax credits. So the $45,000 Kona has a net cost of $35,000 and this distorts the depreciation figures that are based on the price paid to the dealer.
