[OldGrumpyGuy]

My ID.4 is sitting on the dock in Benicia right now awaiting customs to clear it (status 30-2) and for a truck to bring it to my dealer (I'm a little under 200 miles from the port).

I'm debating whether I should purchase it when it arrives or lease it.

I will break a 12K mileage cap (if that's what the default VW lease mileage per year) pretty easily each year as I have a 60 or so mile round trip commute to work 4 times a day week at present. This may change in the future but for now it is what it is.

I have never leased a car so I'm unfamiliar with how that works. I don't know what the end of lease buy out might be and I'm not certain that I will want to buy the car at the end of the lease. I have heard that the insurance premiums will be higher but I haven't started shopping for insurance for it yet so I'm not sure how much higher they will be. The lease is attractive to me with the idea that in 3 years VW or other Auto Manufacturers may have somewhat significantly upgraded battery technology and/or "creature comforts" that the ID.4 may never have upgraded due to hardware/software limitations.

I've set aside a reasonable down payment should I choose to buy. The last two cars I purchased I owned for 11 years each so if I buy I am unlikely to want to take on a car payment when the car is paid off for some time. That said I'm a bit concerned about the long term cost of ownership of an EV - battery degradation and the need to replace failed cells within the pack after the standard warranty period expire seem costly and are clearly not something I can do in my garage.

Would appreciate your thoughts on what you felt was the better option for you and why when you purchased yours or what you're planning to do in this regard when yours arrives.

If this has been discussed at length in a previous thread feel free to point me to it. I did look around a bit but if that thread exists I didn't find it.

Thanks in advance.

 

[Mrpmg]

Holy crap! If you’re commuting 240 miles a day, I assume you have charging available at work.

 

[OldGrumpyGuy]

Holy crap! If you’re commuting 240 miles a day, I assume you have charging available at work.

It's late... Week, not day. Made the edit

 

[Islander]

I'm debating whether I should purchase it when it arrives or lease it.

The lease v. buy decision is complicated, to be sure. You can get a lot of advice on it, but it's unlikely this decision is a slam-dunk either way.

I will break a 12K mileage cap (if that's what the default VW lease mileage per year) pretty easily each year as I have a 60 or so mile round trip commute to work 4 times a day week at present.

I think VW Credit uses a 10K mileage cap as its default, but offers 12K and 15K. My feeling is, you don't want more miles than you'll actually use. Better to go over a little bit than come in under. I picked 10K, knowing I'll go over, thinking that if I drive a lot more than 10K, it means I love the car and want to keep it. That's not necessarily the soundest reasoning.

I have never leased a car so I'm unfamiliar with how that works.

It's a hybrid of a long-term car rental and a loan. If you decide to keep the car, then in effect you borrowed to buy the car and you owe a balloon payment at the end of the lease term. And, you probably paid more for this kind of loan in terms of fees and interest than you would have paid if you'd taken out a conventional loan. But, your monthly payments will be lower. If you decide to return the car, then it was a rental.

I don't know what the end of lease buy out might be ...

You'll pay a residual value, which is an estimate set forth in the lease of what the car will be worth at the end of the lease. If you exceed the mileage cap, you'll pay an additional amount depending on the amount of the excess. If the car has damage or excess wear and tear, you can be charged for that, too.

... and I'm not certain that I will want to buy the car at the end of the lease.

That's a big reason why people lease, because they're not sure. A lease gives you that choice, and you don't have to choose until the lease ends.

I have heard that the insurance premiums will be higher ...

You may be required to purchase more coverage, but I don't think the coverage itself is any more expensive. There's also the question of whether you want to take out so-called gap insurance. Gap insurance has been discussed here in another thread.

The lease is attractive to me with the idea that in 3 years VW or other Auto Manufacturers may have somewhat significantly upgraded battery technology and/or "creature comforts" that the ID.4 may never have upgraded due to hardware/software limitations. ... I'm a bit concerned about the long term cost of ownership of an EV - battery degradation and the need to replace failed cells within the pack after the standard warranty period expire seem costly and are clearly not something I can do in my garage.

I'd state this a bit differently. A lease provides you with some protection in case the value of the ID.4 drops sharply in the used car market. With a lease, you have some assurance that you can sell the car back to VW at a more-or-less acceptable value at the end of the lease term. For this protection, you'll probably pay more for your lease than you'd pay for a conventional loan.

So long as you're considering all this, you might want to fold two added factors into the equation. First, depending on the state where you live, leasing may save you $$ in sales tax, especially if you have a trade-in and can get your VW dealer to make you a good offer on that trade-in. Worth asking about. Second, if you lease from VW, they'll deduct the $7500 federal tax credit (for as long as it stays around) from the price of the car in determining what you pay for your lease. This may be an advantage if you can't fully take advantage of this tax credit, and there's the small additional advantage that you get the benefit of the tax credit immediately instead of when you file your income tax return.

 

[Spin]

The lease v. buy decision is complicated, to be sure. You can get a lot of advice on it, but it's unlikely this decision is a slam-dunk either way.


I think VW Credit uses a 10K mileage cap as its default, but offers 12K and 15K. My feeling is, you don't want more miles than you'll actually use. Better to go over a little bit than come in under. I picked 10K, knowing I'll go over, thinking that if I drive a lot more than 10K, it means I love the car and want to keep it. That's not necessarily the soundest reasoning.


It's a hybrid of a long-term car rental and a loan. If you decide to keep the car, then in effect you borrowed to buy the car and you owe a balloon payment at the end of the lease term. And, you probably paid more for this kind of loan in terms of fees and interest than you would have paid if you'd taken out a conventional loan. But, your monthly payments will be lower. If you decide to return the car, then it was a rental.


You'll pay a residual value, which is an estimate set forth in the lease of what the car will be worth at the end of the lease. If you exceed the mileage cap, you'll pay an additional amount depending on the amount of the excess. If the car has damage or excess wear and tear, you can be charged for that, too.


That's a big reason why people lease, because they're not sure. A lease gives you that choice, and you don't have to choose until the lease ends.


You may be required to purchase more coverage, but I don't think the coverage itself is any more expensive. There's also the question of whether you want to take out so-called gap insurance. Gap insurance has been discussed here in another thread.



I'd state this a bit differently. A lease provides you with some protection in case the value of the ID.4 drops sharply in the used car market. With a lease, you have some assurance that you can sell the car back to VW at a more-or-less acceptable value at the end of the lease term. For this protection, you'll probably pay more for your lease than you'd pay for a conventional loan.

So long as you're considering all this, you might want to fold two added factors into the equation. First, depending on the state where you live, leasing may save you $$ in sales tax, especially if you have a trade-in and can get your VW dealer to make you a good offer on that trade-in. Worth asking about. Second, if you lease from VW, they'll deduct the $7500 federal tax credit (for as long as it stays around) from the price of the car in determining what you pay for your lease. This may be an advantage if you can't fully take advantage of this tax credit, and there's the small additional advantage that you get the benefit of the tax credit immediately instead of when you file your income tax return.

Great advice. The bottom line is that everyone's situation is different and the decision should be based on your needs.

 

[TurbineFix]

My ID.4 is sitting on the dock in Benicia right now awaiting customs to clear it (status 30-2) and for a truck to bring it to my dealer (I'm a little under 200 miles from the port).

I'm debating whether I should purchase it when it arrives or lease it.

I will break a 12K mileage cap (if that's what the default VW lease mileage per year) pretty easily each year as I have a 60 or so mile round trip commute to work 4 times a day week at present. This may change in the future but for now it is what it is.

I have never leased a car so I'm unfamiliar with how that works. I don't know what the end of lease buy out might be and I'm not certain that I will want to buy the car at the end of the lease. I have heard that the insurance premiums will be higher but I haven't started shopping for insurance for it yet so I'm not sure how much higher they will be. The lease is attractive to me with the idea that in 3 years VW or other Auto Manufacturers may have somewhat significantly upgraded battery technology and/or "creature comforts" that the ID.4 may never have upgraded due to hardware/software limitations.

I've set aside a reasonable down payment should I choose to buy. The last two cars I purchased I owned for 11 years each so if I buy I am unlikely to want to take on a car payment when the car is paid off for some time. That said I'm a bit concerned about the long term cost of ownership of an EV - battery degradation and the need to replace failed cells within the pack after the standard warranty period expire seem costly and are clearly not something I can do in my garage.

Would appreciate your thoughts on what you felt was the better option for you and why when you purchased yours or what you're planning to do in this regard when yours arrives.

If this has been discussed at length in a previous thread feel free to point me to it. I did look around a bit but if that thread exists I didn't find it.

Thanks in advance.

I chose the "lease-purchase" option so I could take advantage of the $7500.00 credit instantly. I'll be going way over on my mileage allowance but it won't matter because I will be buying out the car at the end of the lease anyway. The costs are about the same.

 

[OldGrumpyGuy]

I chose the "lease-purchase" option so I could take advantage of the $7500.00 credit instantly. I'll be going way over on my mileage allowance but it won't matter because I will be buying out the car at the end of the lease anyway. The costs are about the same.

This is where you start with a lease and then purchase it the following month with bring your own financing, correct?

 

[d287]

This is where you start with a lease and then purchase it the following month with bring your own financing, correct?

Yes, VW gives you the $7,500 tax credit as a rebate against your lease’s cap cost (would total $8k along with your $500 deposit… don’t let them forget about that 😉). And they let you buy a lease out early so you can save the interest (but not the depreciation, as with any lease). These common sense things apparently make them rare, as other brands don’t do both of these things (looking at you Ford.) You will still owe the $699 lease origination and $399 lease termination fees. (Double check those amounts w your dealer - I’m relying on memory.)
We went back and forth for weeks on lease vs buy, and ended up buying because even if some amazing thing comes out in 2-3 years and we trade our second car for EV with more range, less weight, lower cost, etc… we’ll still have an AWD crossover with 200+ miles of range which would become our second car. Plus we live in a state (NJ) that waives all sales tax on EVs which helps a lot more if you’re buying than leasing. That 8 year battery warranty was some good piece of mind, too. And finally, like you, I never leased a car and just like owning stuff, even if it’s not always the best financial advice.
Of course, before buying, make sure you owe enough federal income tax to take advantage of the full $7,500 - it’s not a refundable credit (for now). And if you do lease and then buy out the lease, you can finance it anyway you want, many people seem to prefer credit unions.

 

[JTravers]

If you end up deciding on a lease and have the funds available, look to doing a single pay lease where you pay all of the lease upfront. You end up saving a lot on the “rent” (interest) charge.

 

[Don]

Since you're going to be over the mileage cap and you like to keep cars for a long time (I'm the same way - I only buy what I really like and then I keep them for 10 years or more) it makes more sense (to me anyway) that you buy the car outright. Manufacturers and dealerships love to lease cars because there's extra money it in for everyone and you know where that comes from. Now, if you own a business and you can write off much or your transportation expense, leasing a new vehicle every 3 or 4 years makes a ton of sense - You'll always have a relatively new, reliable vehicle and Uncle Sam helps you pay for it

There are many people who have great lease experiences, but I would bet they're in the minority as there are many ways to go 'wrong' with leasing a car - Little scratches or dents, mileage overages and things the company doesn't consider normal wear and tear can really up the overall cost when you go to turn in the vehicle. Buying the vehicle at the end of the lease almost always ends up costing more than if you had bought it on day one - I suppose the might be exceptions, but I believe that's true in most instances

Leases are perfect for those who like driving a new car every few years and want it to be a more expensive model than they could reasonably afford to buy - You don't sound like that guy

Don

 

[AWD Or Nothing]

If you have to lemon law the vehicle, and you buy it, you get to keep the 7500$ fed tax credit. If you lease, you don’t. Thats one of the reasons I’m buying.

 

[d287]

Since you're going to be over the mileage cap and you like to keep cars for a long time (I'm the same way - I only buy what I really like and then I keep them for 10 years or more) it makes more sense (to me anyway) that you buy the car outright. Manufacturers and dealerships love to lease cars because there's extra money it in for everyone and you know where that comes from. Now, if you own a business and you can write off much or your transportation expense, leasing a new vehicle every 3 or 4 years makes a ton of sense - You'll always have a relatively new, reliable vehicle and Uncle Sam helps you pay for it

There are many people who have great lease experiences, but I would bet they're in the minority as there are many ways to go 'wrong' with leasing a car - Little scratches or dents, mileage overages and things the company doesn't consider normal wear and tear can really up the overall cost when you go to turn in the vehicle. Buying the vehicle at the end of the lease almost always ends up costing more than if you had bought it on day one - I suppose the might be exceptions, but I believe that's true in most instances

Leases are perfect for those who like driving a new car every few years and want it to be a more expensive model than they could reasonably afford to buy - You don't sound like that guy

Don

Good point… I forgot to mention the worry about being charged for every little chip/scratch.

 

[Volt-Wagon]

Yes, VW gives you the $7,500 tax credit as a rebate against your lease’s cap cost (would total $8k along with your $500 deposit… don’t let them forget about that 😉). And they let you buy a lease out early so you can save the interest (but not the depreciation, as with any lease). These common sense things apparently make them rare, as other brands don’t do both of these things (looking at you Ford.) You will still owe the $699 lease origination and $399 lease termination fees. (Double check those amounts w your dealer - I’m relying on memory.)
We went back and forth for weeks on lease vs buy, and ended up buying because even if some amazing thing comes out in 2-3 years and we trade our second car for EV with more range, less weight, lower cost, etc… we’ll still have an AWD crossover with 200+ miles of range which would become our second car. Plus we live in a state (NJ) that waives all sales tax on EVs which helps a lot more if you’re buying than leasing. That 8 year battery warranty was some good piece of mind, too. And finally, like you, I never leased a car and just like owning stuff, even if it’s not always the best financial advice.
Of course, before buying, make sure you owe enough federal income tax to take advantage of the full $7,500 - it’s not a refundable credit (for now). And if you do lease and then buy out the lease, you can finance it anyway you want, many people seem to prefer credit unions.

One correction here, you won't pay the disposition fee or termination fee if you buy out the lease. I suggest leasing to get the full tax credit. As EVs evolve in technology we will undoubtedly have more that come out with better range looks etc. Better to lease to keep your options open. One other thing, I never take my lease to the end, I usually trade out of the car and make money. This can be done each and every time if you get a good structure on the lease (right now thats harder as dealers are getting MSRP for all cars) For example, I requested a price offer from Carvana on a used ID4 RWD with 1,000 to see what they would come back with, it is more than I would owe on the cap cost of the lease so if I bought the ID4 and sold it to Carvana I would make money on the ID4. I also don't wanna wait for the credit from the IRS. Leasing is the best option. Even if you think you will go over the miles. You can trade out of it into a different car later probably getting another 7500 in an EV incentive from the IRS directly or as a lease incentive.

 

[JPWhite]

Given you have a decent commute I would favor an outright purchase. You won't have to worry about exceeding the annual mileage if you take road trips in addition to your daily driving.

 

[JTravers]

deleted

 

[MikeQBF]

FWIW, I will never lease again. I was stuck with a 3-year lease on a car I grew to hate before a year was up, with the buy-out unaffordable if I wanted to sell it. It basically took up space in our garage until the end of the term minus driving it to the grocery store once a month to make sure it still ran. At least I wasn't dinged for paint chips.

 

[Mike Bouck]

IMHO a lease has way too many opportunities to ensure you're on the losing end of the deal. Everything from the byzantine money factor and various fees to the residual value factored into the lease terms. That said, if you don't have enough of a tax burden to claim the entire $7,500 credit from the fed then it might make sense over buying but even then I'd probably think about it three or four times. Ultimately leasing is renting - I feel more comfortable owning my assets.

 

[Huey52]

I've rarely leased, but when doing so have always paid up front. And bought the car at lease end most of the time, which ironically steered me to even fewer leases.

Given the pace of EV development there's a good logical reasoning to be made for 3-year leasing and also regularly utilizing the free EA DCFC for that duration. The instant Fed Tax application is also very attractive, especially if you don't think you'll have the required tax exposure. But yes, much more complexity and thereby more opportunities to find yourself on the losing end of the deal.

I bought as I have an intention to [uncharacteristically] hold onto this vehicle. The 8-year assured 70% capacity battery warranty was my decision positive tipping point. I also got what I asked for on my trade-in given the low inventory climate these days. And I have sufficient tax exposure.

Many personal and thereby very subjective decision points, so the best we can do is offer our own opinions based on our own current market insight and experiences.

If you end up deciding on a lease and have the funds available, look to doing a single pay lease where you pay all of the lease upfront. You end up saving a lot on the “rent” (interest) charge.

IMHO a lease has way too many opportunities to ensure you're on the losing end of the deal. Everything from the byzantine money factor and various fees to the residual value factored into the lease terms. That said, if you don't have enough of a tax burden to claim the entire $7,500 credit from the fed then it might make sense over buying but even then I'd probably think about it three or four times. Ultimately leasing is renting - I feel more comfortable owning my assets.

 

[fireboy92k]

Some great advice here. Here are some other highlights and a bit of consolidation:

• To lease you will pay $699 to set up the lease that is non-negotiable and usually something like $500 at the end at turn in unless you lease another car from VW Credit (any VW brand really) where they will waive the $500 turn in fee.
• In most states you will save taxes on a lease upfront (or at least they won't be capitalized into the car) as you pay use tax as you go in your monthly payment vs on the sale price of the car upfront (though you usually will also pay tax on the federal rebate at the state level)
• A lease is guaranteed to get you the $7500 rebate if the car still qualifies. That WILL lower your cap cost and probably your payment. If you buy, you'll get the credit, if you qualify, on your taxes. But you'll still be paying for a higher finance cost and therefore a higher payment. You can take the $7,500 tax rebate if you get it, and pay the car down, but it won't change the payment amount for each month. Tesla likes to play a game on their website where they show pricing 'with savings', but you are still on the hook for the higher car payment!
• You have options of 10k, 12k, and 15k usually with a lease. The difference is usually, in my experience, about $20 a month or so at each level, but that's based on history with Audi, etc. not VW or this car. Usually, VW Credit will, however, give you a one-time option mid-lease to buy extra miles at a discounted price if you want them (about half the cost of overrun at the end of the lease). If you buy the car at the end, mileage doesn't matter.
• VW Credit isn't too bad with the lease turn-in guidance from what I can tell. I posted copies of it for Audi anyhow here. If you are really worried about it, you can negotiate a price for end of lease turn in that removes all the worry, but I think it's expensive (like $2k) and basically like extended warranties, a profit center for the dealer. Take the $2k and put it away for yourself if you are concerned IMHO.

We had some good debate in this thread: (19) Lease Numbers from VW.com | Volkswagen ID Forum (vwidtalk.com) with examples, and I shared my reasons why I think there is a lot of bad 'rule of thumb' advice about downpayments, etc. in lease vs buy decisions. But those are my opinions.

Personally, we are going to lease. If the tech turns out to be good, etc. then we may buy the car at the end. But I'm willing (and able thankfully) to pay a little more upfront for the security of knowing if something is bad there is at least a forced light at the end of the tunnel where I can turn the car back in. If you buy it, you own it and you'll eat all the depreciation and the cost to get rid of it. Assuming you are able to live with it the same length as the lease would be. But as my wife coined the other day, 'given the option we lease our tech, we don't buy it.' LOL

 

[ID4BeerGuy]

I chose the "lease-purchase" option so I could take advantage of the $7500.00 credit instantly. I'll be going way over on my mileage allowance but it won't matter because I will be buying out the car at the end of the lease anyway. The costs are about the same.

They'll deduct the $7,500 from the total price but the "savings" would be spread out over the life of the lease, 36 or 39 months. Whereas if you purchased, you'd only need to wait til you file your taxes in the next calendar year. And theoretically you could purchase in December and file your taxes in February, essentially getting the full $7,500 in about 2 months.