Wanna lose your street cred really quickly as a financial blogger? Buy a new car. Your loyal readers will shake their heads in disgust and call you a bunch of names that might or might not be deserved (It happened to my buddy Len) But on Friday, I made the plunge and have been smelling that new car small all weekend. The aroma is quite pleasing.
Honestly, I NEVER thought I would be the kind of fella to purchase a brand new vehicle. I mean, you saw my post about my Nissan Altima with over 200k miles. It’s still going strong and has about 10k more than when I wrote that post. And besides that, I don’t even really care about cars. They mean very little to me. So why in the world did I purchase a new ride for our family? Ok. Here’s the scoop. First, lets start with why I don’t usually buy new cars.
Buying New Cars is Dumb
Almost always. You can’t get around this. They are a financial burden almost any way you slice it. Granted, reliability has come a long way. And gas mileage has gotten a lot better. But most people buy a brand new car for that sweet smell that I’ve been soaking in the last few days. And it’s bad for your wallet.
New cars involve more than just the monthly payment. Your taxes usually go up. Your insurance almost definitely goes up. Financing can be expensive if you aren’t thinking about it. And the hidden killer – depreciation. The combination of new car expenses can be as lethal as Justin Bieber deciding to join forces with Creed. Ugh. I’m guessing they would have to change their band name to Nails on a Chalkboard. But I digress.
Why I Bought a Nissan Leaf
The Nissan Leaf is the only car I can actually recommend for you to buy new. There are a few others that get into the ballpark of being a decent deal when purchased new, but the Leaf is the only one that actually makes total financial sense to cross the line and jump into new car ownership.
Prices have gone way down. Nissan dropped the price of the Leaf’s (Leaves?) $6k on the 2013 models. That’s a gigantic difference! My walk out the door price on my new set of wheels was $27k. That includes tax, tag, title, and all those other pesky things they tack on. That took some shrewd negotiating, and I’ll tackle that in a post really soon.
Tax credits pay for half the cost. The federal government is still offering a $7,500 tax credit to people that purchase all electric vehicles. Many states are offering incentives on top of that. Check out the full list here. I’m very fortunate to live in a state that is offering the most generous rebate. A full $5,000. So yes, the combined tax credits pay for almost half of my Nissan Leaf. I agree. That’s insane. If you live in GA and it fits into your lifestyle you almost have to hate your finances to not get a Leaf – unless you drive way too much or not at all.
You can save big money on gas. First, let me say, Americans are too obsessed with gas prices. Most of us fill up two or three times a month and it doesn’t severely impact the costs of car ownership. That’s why upgrading to a new car that gets 10 more MPG doesn’t really make financial sense. BUT, what if you upgraded to a vehicle that didn’t use gas at all!? Well that might make a bit more sense. I’ve estimated that we’ll be saving roughly $150-160 a month in gas consumption. And our electric bill should increase roughly $10. That’s a lot of savings.
Maintenance is nearly non-existent. I don’t want to tell you how much I spent on repairs for our family vehicle in the last year. It’s a bit maddening to think about actually. And all that time at the mechanic shop. Eesh. With the Nissan Leaf there’s no more oil changes, no more radiators to get leaky, no more belts to snap, and no more spark plugs that need changing…I could go on. Literally, the only maintenance required is rotating your tires and changing the brake fluid. I’m very excited about this part.
Is Nissan Leaf Ownership Right For You?
That’s a good question. First, what state do you live in? The tax credits pushed me over the edge. If I lived in a state with a much less generous or non existent rebate I really might have held off.
How much do you drive? If you drive between 20 and 70 miles a day you are probably a great candidate for the Leaf. If you drive more you might run out of battery power (unless you can conveniently plug in during your day) and if you drive less you might not derive enough savings to make it worthwhile. Pulling out a calculator and doing some dreaded math equations might be in order.
For me, the math works out swimmingly. And when you consider the mental health benefits of driving a new car with almost no maintenance needs to speak of, I might even become a jollier fellow because of entering into Leaf ownership. I didn’t think that was even possible!
By the way, I’m not installing one of those fancy charging stations at my house. I’m not sure how long we’ll be here and I’m pretty sure the trickle charging will work just fine for me. Especially since I can trickle charge at work too. Plus, charging stations are literally popping up in Atlanta every day. And, there’s this really awesome App/Website to find available charging stations in your area.
And yes, technology is moving fast in this area. That is one of the downsides to purchasing an EV while they’re still in their infancy. But because this car will work for our family’s lifestyle in the long term it was a good decision for us. If you wait for a car with a 400 mile range those sweet tax rebates just won’t be there any more.
I promise, I don’t go around buying new cars every day. In fact, I almost loathe the idea of buying new. It was almost surreal walking into a dealership. Especially since I never thought that would happen. However, in this case, a new vehicle purchase is actually the financially smart move. I still can’t believe I’m saying that.
I’ll have plenty of more posts on my Nissan Leaf and how it’s working out for me in the very near future. Do you have any questions about the Leaf in general? Anyone think I’m an idiot and that there’s a fatal flaw in my plan?
[photo courtesy of Karlis]