Ontario, Canada Buying VS leasing

[TheBoss]

Good day,

I am wondering if any of you did some math on the impact of that 14K incentive in Ontario with regards to the end of the Lease or Finance.

If the incentive is no longer available in 2019: (we dont know)
Then it seems you are paying less on a 3 year lease but you have no car at the end and no more incentive to get going again.
At least on a finance, you can trade it in or keep it with a decent 14K discount on MSRP.

If the incentive is still available in 2019 or 2020:
Then likely, it would make sense to lease and take the incentive again. Nobody will buy your 3 or 4 YO car at a decent price if an incentive is still around...
Once the market starts having more lease returns, the dealers will have to make those lease returns attractive to buy which tells me that those who finance the car will loose money...
Batteries will also get better and cars will have a better range... I read VW is looking to have a car on the market that will be in the 500Km Range and be able to charge in 15 min before 2025...


Like everything in the government, I think once people really start getting into electric cars... The incentive will be done quickly.

So I am not sure if leasing is better than buying or vice versa...

What do you guys think?
It may be better to lease the first generation of Egolf until the range is there...?

 

[Kosta]

Good day,

I am wondering if any of you did some math on the impact of that 14K incentive in Ontario with regards to the end of the Lease or Finance.

If the incentive is no longer available in 2019: (we dont know)
Then it seems you are paying less on a 3 year lease but you have no car at the end and no more incentive to get going again.
At least on a finance, you can trade it in or keep it with a decent 14K discount on MSRP.

If the incentive is still available in 2019 or 2020:
Then likely, it would make sense to lease and take the incentive again. Nobody will buy your 3 or 4 YO car at a decent price if an incentive is still around...
Once the market starts having more lease returns, the dealers will have to make those lease returns attractive to buy which tells me that those who finance the car will loose money...
Batteries will also get better and cars will have a better range... I read VW is looking to have a car on the market that will be in the 500Km Range and be able to charge in 15 min before 2025...


Like everything in the government, I think once people really start getting into electric cars... The incentive will be done quickly.

So I am not sure if leasing is better than buying or vice versa...

What do you guys think?
It may be better to lease the first generation of Egolf until the range is there...?

I purchased , retired and no business to expense the lease on ..

 

[RonDawg]

I purchased , retired and no business to expense the lease on ..

On this side of the border, for most EV's it's actually better to lease the car, even if you intend to buy it at lease end, regardless if you can write it off. The reason is how our Federal $7500 Tax Credit for EV's is structured: when you purchase, it's not taken off the purchase price directly, but rather you apply for it when you do that year's taxes. Depending on your particular tax situation, you may or may not be able to take the full $7500 credit.

But when you lease, AND the manufacturer has agreed to pass on the credits to the consumer (who otherwise cannot apply for it, since they technically do not own the car in a lease), that $7500 is taken off the Capitalized Cost (fancy lease term for agreed-to purchase price). Nissan, GM, FCA, and VW do pass this credit on; that's one reason they are able to offer good lease rates (insanely good in the case of the Fiat 500e) on their EV's. Not sure about Tesla or Ford (Focus Electric) or Mercedes (Smart Electric Drive, the just-discontinued Mercedes B-EV).

Lease rates on this side of the border, at least for Nissan and VW EV's, are so low that leasing then paying off the lease costs little more than buying outright. Retired folks with lots of savings but little in the way of taxable income have done just that to take full advantage of the tax credit. Plus there's the security blanket of knowing that if something more desirable comes by the time the lease term is up, you can toss them the keys and walk away and get something better.

May not be applicable to Canada, but it's something to consider as to why someone might lease.

 

[Zeuser]

Here's why i leased:

1 - I still get the 14% discount over 3 years
2 - if the discount still exists after the 3 years, I can start again with another lease with a car that likely has a better motor and battery. EV tech is exploding right now and VW has already said they're looking at a 48kwh battery in the next eGolf, possibly in 2019.
3 - If the discount goes away, I can buy back for $15K, which is probably well below market value for a 3 year old Golf in Canada.
4 - I'm not really sure of VW's eGolf quality, especially in terms of electrical gremlins. So I don't want to be stuck with a lemon in the post-warranty stage.

If you want to keep the eGolf for more than 8 years, then yes... purchasing is probably the way to go. But for those of you with short or medium term plans, lease it.

 

[TheBoss]

Here's why i leased:

1 - I still get the 14% discount over 3 years
2 - if the discount still exists after the 3 years, I can start again with another lease with a car that likely has a better motor and battery. EV tech is exploding right now and VW has already said they're looking at a 48kwh battery in the next eGolf, possibly in 2019.
3 - If the discount goes away, I can buy back for $15K, which is probably well below market value for a 3 year old Golf in Canada.
4 - I'm not really sure of VW's eGolf quality, especially in terms of electrical gremlins. So I don't want to be stuck with a lemon in the post-warranty stage.

If you want to keep the eGolf for more than 8 years, then yes... purchasing is probably the way to go. But for those of you with short or medium term plans, lease it.

I agree with you.

The current specs are:
• 35.8 kWh high-voltage battery
• 50 kW DC Fast Charging, Combined Charging System (CCS)
• 7.2 kW AC onboard charger

The batteries will get better and hopefully cheaper enough so it translates in the car's MSRP...
I cant see myself in 3 years not wanting another golf with a bigger battery that will likely charge faster...

i will lease.

If my calculations are correct:
-MSRP 35995$
-With all the fees and taxes: 43750$
-if the residual is around 50% for a 36 month lease
- interest rate is 1.99% or less (loyalty program)
-With a 4000$ down or 3500$ trade
-14000$ cash incentive divided by 36 Months to offset Total car cost.
Payments would be around 251$/month including all the fees and taxes.

 

[miimura]

I would expect the residual to be something between 40% and 50%. Mine was 46.7% of the agreed selling price in 4/2015. If they really took all incentives into account, it would be even less.

 

[flyboy320]

I have just placed a deposit for a 2018 e-Golf here in Canada. The residual for a lease (although this will change in 6 months when it will finally be ready) is currently 44% for three years and 37% for four years. No reduction on price, so I paid MSRP, just the "dealer fee" on top of that.
I plan on leasing for three years for the same reasons as other people. I have read (although I can't find the source right now), the 2019 will have a larger battery and more powerful motor. The technology in these cars changes so fast it will be nice to have the option to hand the car back and see what other BEV are available in three years.

 

[forbin404]

I have just placed a deposit for a 2018 e-Golf here in Canada. The residual for a lease (although this will change in 6 months when it will finally be ready) is currently 44% for three years and 37% for four years. No reduction on price, so I paid MSRP, just the "dealer fee" on top of that.
I plan on leasing for three years for the same reasons as other people. I have read (although I can't find the source right now), the 2019 will have a larger battery and more powerful motor. The technology in these cars changes so fast it will be nice to have the option to hand the car back and see what other BEV are available in three years.

44%? Nice, mine was 39% but came with a bunch of rebates.

 

[TheBoss]

From what I understand; Here in Canada, they dont apply any provincial rebate at the dealer.
You must pay the full price and deal with the Gov for your rebate.

 

[TheBoss]

I have just placed a deposit for a 2018 e-Golf here in Canada. The residual for a lease (although this will change in 6 months when it will finally be ready) is currently 44% for three years and 37% for four years. No reduction on price, so I paid MSRP, just the "dealer fee" on top of that.
I plan on leasing for three years for the same reasons as other people. I have read (although I can't find the source right now), the 2019 will have a larger battery and more powerful motor. The technology in these cars changes so fast it will be nice to have the option to hand the car back and see what other BEV are available in three years.

Hey Forbin404,

If you dont mind me asking, What was your cash down/ trade?
What was your final cost / Month?

 

[Zeuser]

From what I understand; Here in Canada, they dont apply any provincial rebate at the dealer.
You must pay the full price and deal with the Gov for your rebate.

Nope. My dealer applied a $12,389 discount before tax. That's the $14,000 government rebate that the dealer will handle on their own.

 

[nerk]

Hi there,...

I too put my deposit down last friday, and planning on leasing for 3yr,... My hope is that in 3 years they will come out with a e-Golf sportwagon version,... I went for the golf over the i3 or bolt mainly for storage capacity... have the storage capacity of the sportwagon would be even better!

Eitherway,... Zeuser, did you have bargain with the dealership to get that incentive applied on the MSRP? I was told I'd have to wait, put the money in a savings account to use for my payments...

My plan was to put enough of a down payment down so that payments would be less than $300 a month. But as it sits right now, the payments are closer to $600 a month without the incentive... So it looks like I'll have to carefully manage my money until the incentive gets mailed to me :? Not a fan of this option... But I'll do it to get my hands on one of these...

I'm also afraid once the conservatives take over in next summers election (lets face it, its inevitable at this point), this incentive will be long gone :x or who knows.. maybe they'll come up with something better? :roll:

for what its worth, I'm going through the London Ont. dealership...

 

[flyboy320]

One dealer I spoke to was willing to apply the rebate on the price of the car, and another was not....I guess it's hit and miss.

 

[TheBoss]

I am in Ottawa and Myers VW in Kanata said no to apply the incentive at the dealer.

Anyone else had better luck in the area?

 

[arcticClover]

For all those on 3 year leases hoping to trade up to a more powerful longer range egolf in the future, it won't happen.
The golf 7.5 will be the last model offering the egolf. The new I.D electric vehicle line up will roll out in 2020 in Europe only, NA will get another model on the same platform years later.

http://www.autoexpress.co.uk/volkswagen/golf/89538/new-2020-volkswagen-golf-mk8-bold-interior-design-hybrid-tech-and-latest
*Egolf info is at the very bottom of the article*

http://www.greencarreports.com/news/1111692_volkswagens-5-electric-cars-start-in-2019-what-we-know-so-far

 

[forbin404]

$206/month OTD, no other money changed hands. And that's with a 39%.

No trade in, no deposit, nothing.

 

[kennethbokor]

Many good posts and advise here. Not much to add but if you can write off your car for business purposes on your Income Tax, then leasing my be best option as per advantages many have described.

If you can't write off lease, then it could be budget constraint and leasing can provide lowest payment amount for frequency. However, you don't own the car and if you turn it in at end and release, then it's like you are just renting a car for permanent time. I personally don't like that concept and like to own all my cars over time. Not because they make you money as we all know values drop like a tank on cars.

However, I don't want to be making payments all the time and want my cars to last 8-10 years. Currently I have two ICE cars which we own completely and one is 10 years old now and the other is 4 years old. It's nice not to have to make payments especially when no matter what, you still have to fuel and maintain them. Until my maintenance costs (things other than consumables like oil changes/tires/brake pads) start hitting about $2k per year, then it makes no sense to have payments on a car that are $200 per month or more. At least that is my reasoning and everyone is different.

Hope this helps but in todays world, if you can afford to purchase finance for 3 year term, that is the idea situation for financial best-practise. Of course paying cash for it right away is the ultimate but few of us can do that. Ideally you want to keep your auto costs down the the whole life-cycle of the vehicle ownership and need to look at TCO overall.

 

[RonDawg]

For all those on 3 year leases hoping to trade up to a more powerful longer range egolf in the future, it won't happen.
The golf 7.5 will be the last model offering the egolf. The new I.D electric vehicle line up will roll out in 2020 in Europe only, NA will get another model on the same platform years later.

http://www.autoexpress.co.uk/volkswagen/golf/89538/new-2020-volkswagen-golf-mk8-bold-interior-design-hybrid-tech-and-latest
*Egolf info is at the very bottom of the article*

http://www.greencarreports.com/news/1111692_volkswagens-5-electric-cars-start-in-2019-what-we-know-so-far

While I can understand they want to focus more on China than the US, they can't ignore the US either if they still want to sell cars here. For one thing, they fall under CARB's "major manufacturer" definition and are thus obligated to meet CA's ZEV rules, or buy credits from someone else, or pay a fine. They also need to do their penance for dieselgate.

If it's true we won't get the ID for "years" after Europe gets it, VW will likely continue on with the old-platform eGolf after we get the Mk VIII. VW has long offered old-platform cars alongside new models in certain markets, including North America (more so in Canada and especially Mexico than the US). Because of that, I can see a future Mk VII/7.5 eGolf with Mk VIII styling cues.

 

[flyboy320]

Who knows what the truth is. This article says there will be a more powerfull longer ranger e-Golf in 2019....