Leasing a car is like renting one–you’re paying for the use of a vehicle that’s owned by someone else.
In simple terms, renting is for short-term use, leasing is for longer periods.
When leasing, the car is owned by the leasing company. You are paying to drive the car for a certain period. Like buying a house, you are paying for equity in the car and interest. At the end of the lease you have paid a portion of the cost of the car.
Unlike renting, you are responsible for licensing the car, insurance, and maintenance. Any damage to the car during the lease must be repaired before you return the car. You must pay for any “excessive” dents and dings in the exterior, tears on the interiors or wear on the tires.
At the end of our most recent lease, the tires needed to be replaced. The lease requires us to pay for a new set of tires if they need to be replaced. So we replaced them before the end of the lease. In that way we could get some use out of them before we returned the vehicle.
Near the end of the lease you or the leasing company will schedule an “inspection” so that you know if the leasing company expects you to pay for “excessive” wear.
If you turn in the car to a dealer before inspection, the dealer will arrange for the inspection.
When you return a leased car, there is usually a “disposition” fee of $400-$500. Typically, if you buy or lease another car from the same company, this fee is waived.
If you don’t buy or lease from the same company you will have to pay the disposition fee. However, we returned a Nissan Leaf with some minor dents that was going to cost us $300. We turned the car in and walked away from Nissan and subsequently leased a Chevy Bolt. The company never sent us a bill.
Here in the San Joaquin Valley EV subsidies total $5,800. These subsidies are available to you whether you lease or buy an EV.
To qualify for electric vehicle subsidies in California you must lease a car for 36 months, no less. You must keep the car at least 2.5 years or the subsidies become refundable. So it’s wise to keep the leased vehicle for the minimum amount of time required.At the end of lease you have two options: buy the car or turn it in. To buy the car you must pay the “residual” on the lease. The residual is the cost minus whatever equity you have paid during the lease period.
Leasing is a very good way for people to experiment with driving an electric car. By leasing you don’t have to pay for the full cost of the car. With the substantial subsidies in the San Joaquin Valley, you can lease an electric car for the price of a monthly cell phone plan.