3 years ago we bought a new electric vehicle. I am in the process of getting rid of it.
If you have spent any amount of time online you have definitely seen an anti-EV meme or two. Charging takes too long. The range isn’t sufficient. They don’t work when cold. California won’t let you charge your car! Diesel fuel is testosterone. They run off of coal. Etc…
That is pretty much all wrong though, which is why we are replacing our EV… with a new EV.
Why I am Ditching our EV
I wasn’t really in the market for a new car but the current deals on many EVs are truly impressive. (Thank you meme creators!) Running the numbers it was cheaper to sell our existing car and lease a new one.
I was able to lease a 2024 Hyundai Ioniq 5 SEL with 2 years of free charging / free maintenance for a one-time payment of $6,900. (~$288/month)
This is possible thanks to a dealer discount, inflated residual value, massive manufacturer credit, and large discount for pre-payment.
This is how that price breaks down:
| MSRP | $47,400 | |
| Delivery fee | $1,375 | |
| Sale price | $48,775 | Sticker price |
| Dealer discount | -$3,969 | |
| Acquisition fee | $650 | Lease cost |
| Registration | $126 | |
| Doc fee | $85 | |
| CA Tire Fee | $8.75 | |
| Total capitalized cost | $45,675.75 | The "loan" value |
| Capitalized cost | $45,675.75 | |
| Residual value | -$30,240.5 | Car value after 2 years (Purchase price at lease end) |
| Rent charge | $2,988.11 | "interest" |
| Tax (7.75%) | $1427.76 | |
| Lease cost | $19,851.12 | 24 months = $827/mo |
| Bonus cash | -$13,500 | |
| Title / license / fees | $549 | 1st year only |
| My total cost | $6,900.12 | ~$287.51/mo |
There were some additional costs as none of the local dealers I contacted would come close to this price. So… I flew to LA to pick up the car and then drove it ~400 miles back home.
The largest was a broker fee of $499. The broker pre-negotiated the lease so I didn’t have to call/email around or interact with any dealers.
A one-way flight cost me $292.28, but I purchased it on a credit card with a 10% cash back promotion… presumably I will be getting ~$30 back in the the next 14 business days.
Since I was in town I met up with a friend for lunch. He generously paid so my only cost was to remember to pay next time.
I also took an Uber to the airport and from the LA airport to the broker’s office. For this I purchased $100 in Uber gift cards on GCX (formerly Raise.com) for $88.99, saving $11.01. The total for both Uber rides with tip and after gift card discount was $100.65. (Get $5 off your 1st purchase.)
And on the drive back home I bought a coke zero while plugged into a charger for $3.15.
$0 / gallon (compare to gas prices on sign in the background)
And finally… there is a $400 disposition fee if I choose to return the vehicle at the end of lease. With a high residual value it would be silly to actually buy this thing in 24 months (for more than market value.)
Combined all of these extra expenses (including the soda) raise the effective monthly payment by $52.75 to ~$340.25
Not included in the above numbers – I paid the $6,900 in two chunks. A check for $3,900.12 and a credit card charge for $3,000 (the max allowed.) I put this on a Chase card that was offering a no-fee Pay Over Time℠ option for 2 years, so I will effectively be paying this off at $125/month with 0% interest. Meanwhile I have that $3k invested in short term US treasuries earning 5+%… or about $12.50 / month to start. (Similar to how I paid property taxes as discussed in the post Fun Money Hacks I Have Done Recently.)
16 minutes to charge for $0 ($3.15 for caffeine)
One Time Payment vs Amortization
As an alternative to one payment of $6,900, I could have paid $2,000 up front and $253/month for 23 months.
Another way to state this… $2,000 up front plus $4,900 one-time payment vs $2,000 up front plus 23 monthly payments of $253.
Using simple math the discount for the one time payment is ~$918.
$918 / $4,900 = 18.75%
That seemed like a good enough rate of return.
The downside? If I total the car early in the lease… none of that payment will be returned. Since I have never destroyed a car I also felt this was a reasonable risk.
V2L
The Hyundai Ioniq 5 supports V2L (vehicle to load) with an adapter. This provides a standard 120 V / 15 A – 1800 Watt electrical outlet for your various power needs. The adapter set me back $107.74
So far I have used it to power the upright freezer in our garage (which costs maybe $8/month to operate), a shop-vac for cleaning the garage, and the tv / fan / phone charger in my home gym. Using a similar adapter, a guy on youtube has a plan to power his entire house for 5 days during a power outage (link.)
In theory… our peak summer electrical rate is $0.3462 / kWH. At 1.8 kW for those 3 hours I could make $2/day by simply reducing our active load during that time or even pushing power back onto the grid (thanks to the net metering agreement with our solar install.)
Using this to reduce the cost of the lease by 20% +/- is not too far of a stretch (work in progress) although I estimate I have only “saved” about $0.35 -$107.39 on our electrical bill to date (I have only had the adapter for a day.)
Even if theory doesn’t match reality, it will still be really nice for camping.
Bonus memes
Based on 3 years of EV ownership to date, which includes at least 40 days of driving in the mountains for snowboarding trips, I haven’t experienced any of the issues highlighted by these memes (although I haven’t been able to grow a man bun since college.) On the other hand I’ve spent $0 on oil changes and paid <$1/gallon equivalent for fuel.
I am not emotionally invested enough in any particular form of fuel to create my own memes, but if you have any thoughts on the matter please share your favorite memes in the comments.
Summary
Deals on 2024 EVs are incredible and the math said it was cheaper to sell our current EV and replace it with a new one.
We leased a new 2024 Hyundai Ioniq 5 for an effective ~$340/month inclusive of all fees/taxes/etc.. for 2 years with 2 years of free charging and 2 years of free maintenance.
Is there a better deal out there?
Addendum
Change of plans. After much deliberation, we’ve decided to keep our other EV as a 2nd car… having 2 kids with school/multiple sports and a modest social life occasionally requires being in 2 places at the same time The numbers say it would be better to sell it and lease a 2nd Ioniq 5 though. Maybe this will end up on Turo from time to time. Apologies for the dramatic title.
Thanks for the article. How did you find your broker? Really need one right now.
On Leasehackr
Do you mind giving out the brokers number as I live in your area?
Drop me an email
Jer,
Intriguing article, as always. When you say the math made sense to sell your current vehicle, could you elaborate on that math?
If you were going to buy an EV that was less pricey than the one you just purchased (but still works for the math you outlined in this post), which one would it be?
Does leasing even beat buying with the big credits for purchasing an EV that expire this year?
What will you do after two years? Turn in and look for another deal?
Appreciate any more details you can provide. No worries if these are too many questions!
In 2 years I’ll decide what to do next. No rush.
Roughly what I calculated was that this car is so cheap to lease that nothing compares. Hyundai is giving these things away. The cash I would accumulate over the next 2 years instead of continuing to pay our current loan would be larger than the current car value in 2 years. There is lots of slop in that math but lots of things could change in 2 years in EV markets and cash is king.
Some people on leasehackr might disagree with my assessment of “nothing compares.” 18 month leases on the Nissan Ariya look pretty good too. But a lower MSRP car probably doesn’t win over a massive credit from Hyundai. And lower MSRP EVs won’t have V2L, 600v battery (fastest charging), etc…
I’m not sure what credits expire this year(?) but the tax credits of $7,500 applies to leases indirectly. Hyundai doesn’t even qualify for the tax credits as they are manufactured in Korea but they effectively match to even be in the game.
Got it. Tx, Jeremy. Glad you locked in a killer deal. I’ll take a look at this as we need to get a new car anyway in the next 1-3 years.
Let the record show that I swam in GCC’s wake and picked up a two-year lease on the IONIQ5 at a nutty deal. Thank you, GCC!
I clicked on this to find out what an EV is!
A car with massive torque and incredible acceleration. Modern muscle car :)
And w/ V2L, a portable power station!
I saved about 30 cents yesterday powering the garage freezer.
Did you include in the potential car repair cost when you return your lease?
I didn’t.
What amount would you include?
It depends on the dealer’s wear and tear policy. When we did our calculations for our Ionic 5 lease, I use $1500 just to be on the safe side. It’s certainly an unknown until you return your lease.
What is “bonus cash -13,500”?
Also, do you have mileage limit?
After 2 years, do you need to buy the car for around $30k?
It’s just a fancy way of saying Hyundai reduces the price by that amount. In California sales tax applies to that sum (included in the numbers listed.)
There are 12k miles per year, after which there is a charge of $0.15/mile.
In 2 years I give the car back.
I don’t know US car market, but this seems ridiculously cheap and I can’t believe someone is leasing cars for such small amounts. They need to make money out of you, and those calculations show that they wouldn’t.
Hyundai reducing price of your loan by $13,5k? What sorcery is this?
Someone giving 65% off bonus (13k of 20k loan total price) is just impossible.
There is either something off in the calculations and in 2 years you would have to pay $30k, yet not be able to sell the car for $30 (so to get rid of the car you would still need to pay around $15k) or that cars in US are miraculously cheap and basically everyone would be driving <2 years old cars.
They aren’t making money
-$13,5k bonus is not included in residual value, so it seems that it only applies to the first owner, who owns the car for 2 years, covering most of their cost. It really doesn’t make sense.
I’m sure that after 2 years you must pay $30k, but if you want to sell the next owner would not pay more than $30k – $13,5k * (1-15/45), so not more than $21k, meaning the total cost of 2 years lease (if not buying the car for $30k) is $6,900 + $9000 = $15,900 ($662.5/mo).
It makes perfect sense. There are cars on dealer lots at the end of 2024 as the 2025 models are coming out.
They can sell/lease the car (at a loss) or not sell it at all (at a bigger loss.)
They choose the former.
There is no purchase obligation at the end of a lease. There is no “must.” I have the option of purchasing at the residual value in the contract, but of course I will politely decline.
Still, who is actually giving you the -$13,500 bonus?
Hyundai.
Wow, this is just wow…
Yes, on this we agree.
It basically is telling you there is no market for these vehicles, Stan. The true believers in EV and “saving the planet” have already bought into the hype. They are now struggling to get anyone else onboard.
Two years ago, at the very top of the market, I purchased a Tesla Model Y, something that I had been planning to do for a few years.
Within a couple of months, Elon dropped the price to approximately 20k less than what I paid for the car. Now, the car is worth about half of what I paid for it. I guess timing is everything.
I have no plans to get rid of the car because I love every aspect of driving it but I feel that myself and others that bought at that time were royally screwed by Elon.
From reading about your EV experiences, it appears that you’ve done quite well.
You bought the safest car for you and your family and it comes with the reliable supercharger network, over the air updates, and potential for full self driving (v12.5 insanely good, key for road trips). I too bought a model Y and love it. Still a great deal. Not dealing with gas, fume stank/pollution, and oil changes and pre heating/cooling car is awesome. Now swapping out Corolla for refreshed model 3 which has extra airbags. Don’t want kiddo driving anything other than Tesla due to safety. Too many bad drivers out there.
Lots of people feel the same way about that price drop :(
Any new car loses 25% in 1st year and 15%/year thereafter, plus or minus, caveats, etc… If I sold our ID.4 today it would be for about 50% of what we paid for it 3 years ago.
Can you share what the process is like finding a lease broker, coming to terms with them, and working with them to find the car in the trim and color that you want?
It was pretty easy. I looked at the pre-negotiated deals on leasehackr, texted the broker, spoke on the phone for a minute and told him what color I wanted, and less than a week later picked up the car. The terms are locked in advance.
So no having to deal with the dealership at all? I can just show up, sign paperwork and off I go? I’m asking because I loathe having to talk/negotiate with a dealership.
Yes, that’s right. I spent just a few minutes talking to the broker in advance and then 20 minutes in his office to sign the docs.
If you are in so-cal you don’t even need to go to the office, they will deliver to your door.
I’ve had my Model Y for almost a year now. The only bad part of the experience is misguided, meme spewing humans attempting to miseducate me.
Soon after buying the car, a couple of relatives told me I’d freeze to death because EVs ‘don’t work in the cold.’
At about the same time, I heard from a high-school student in the Sam’s Club parking lot. He told me he did a report on EVs and came to the conclusion that they suck.
The joke is on them though. Super quiet. Super cheap to operate. Road trips are effortless and comfortable.
If my Y was totaled today, I’d buy another EV without hesitation.
The oil and gas industry has very strong disinformation game.
Forgot to mention, they took you to the cleaners on the Coke Zero! JK
I agree. Cheaper than falling asleep on a long drive though :p
If you were to sell your EV, what would have been your strategy? Where to list? How to price it? I’m thinking of selling our EV and following your path. Makes total sense.
Believe it or not but Carvana had the best offer price by about $2,000. In theory private market would fare better but there is a $4k tax credit on used EVs if and only if purchased from a dealer for less than $25k… so that mostly takes away the private market opportunity.
There is a company (dealer) called keysavvy.com that will facilitate the transfer of a private sale and provide the 4K used car IRS tax credit at point of sale. I think it’s like $100 for each party.
Ooh… That is nice. Thank you!
Pretty good deal. Just for reference, it is worth noting that Tesla has the following lease deals (from just checking the website):
Model 3: $216/mo
Model Y: $389/mo
both 3yr, $10k miles, $3k down.
And they probably aren’t losing quite as much money as Hyundai :)
Those numbers need some conversion from the marketing bullet points.
Adding taxes and fees and subtracting the “fuel savings” raises the Y lease to $5,751 DAS and $536/mo, or an effective ~$696/mo for 36 months
That goes up to $5,895 DAS and $680/mo on a 24 month lease (10k miles) and $5,932 / $717 for 12k miles.
You got an excellent deal from the looks of it on your preferred vehicle, GCC. But like others the biggest concern I have is that someone would pay over $3 for a can of soda. I don’t want to live in a world that would charge so much for colored water :)
While we do not have an EV we do have a hybrid, a ’22 Ford Maverick. Phenomenal gas mileage particular when we drive into town (11 miles each way) and we average 58-60 mpg. We were one of the early adopters of that truck and now have a ’25 Ford Maverick on order to replace it. One might say “Why would you replace a truck that soon?” I’m glad you asked. For the simple reason that while the Mav has gone up in price, what I am being offered for our used truck by Carvana and others is greater than what we paid for it. And by buying the ’25 we not only get a few more features but it resets the warranty back to 0, the tires will be new, and the likelihood that any major repairs are years into the future. So while it is too early in the EV journey for us since we travel long distances still, hybrid technology will keep us going nicely until we are forced into the all electric world.
It was 20 oz so it wasn’t as big of a ripoff, but still overpriced for sure.
What is Carvana’s play here? Why would anybody buy from them vs buying new? Or is the ’25 model still a significant $ increase over the used ’22?
Mavericks are in high demand, pure and simple. They can still sell them for more than they pay me since the wait time for new models can be so long. Incredible what some people have paid for used ones over the last year or two, but if you want it I guess you want it, and Now!
As usual, your perspectives (and math!) really stretch my assumptions and past practices. Thank you!
Did I read your summary correctly that the car is going to cost you an estimated $8,160 over the 24 months ($340*24)?
Here’s my hangup (or mathematical deficiency, you decide): If I pay ~$8K to lease per the terms in your article, aren’t I worse off than paying, even, say $20-25K for a heavily depreciated 3-5 year old Tesla (less for a Bolt) or other EV of that vintage, but sell it in several years for a decent chunk of my cost? (Sorry, that’s some fuzzy math, isn’t it? But can you “straw-man” my main point?)
My case study: In 4/2021 I bought a 2017 LEAF for $9,000 on Craigslist from the 1st owner, who himself did a lease buyout. As of today I think I could recoup a nice amount of that $9K back via a private party sale (or maybe Carvana per the hack you noted earlier today). Yes, there are many issues with a 2017 LEAF I’m intimately aware of, least of all chademo (blegh) and no battery cooling, and I’ve never had free charging, hehe, but for whatever reason(s): Edmunds, JD Power, and Consumer Reports all think I could even sell for more than $9K, even up to $12K right now. I’m not counting those pennies yet, as the market has the final word, but still interesting. So, I’ve been seriously considering “ditching the EV” for an EV with faster charging and greater range. And maybe even a decent ability to take me along rutted logging roads to distant trailheads, or to the bases of some of the lovely PNW ski areas this winter without 2-3 quick charges and reserving my heat for range.
Thus, my big hangup on this whole leasing idea is that I do not have something to sell at the end of its term. Granted, I don’t think a car is an “investment,” (except that it can get me places where I can earn income…), but still I do like to recoup some money from depreciating assets whenever possible LOL.)
I appreciate that your good math works out due to some healthy & creative uses of credit and investing in Treasuries, etc, but please consider further expanding my assumption that I’m always better off with something I can sell later vs. return to the lot. Won’t I still do better to buy a heavily depreciated EV vs. hack a really good lease, if at the end of 18, 24, or 36 months I can sell said EV for even 60% to 70% of my out of pocket cost?
Full disclosure, I have never leased anything except an apartment (not even a cell phone), and I have always bought used cars for cheap up front costs (some of which took some elbow grease or mechanic bills). My most expensive used car was the $9K LEAF. :) My father, successful and independent–non-commission–financial advisor who has been FI for awhile, called leasing “fleecing,” so I have a predisposition toward leasing suspicion. I wonder if others reading are like me, too, and can’t fathom it working out to pay $8K for something I have to turn in afterward with no depreciated asset to sell off afterward? Thanks!
I think which choice is better is purely subjective.
Let’s say the total cost after 2 years is identical. $8k vs $8k. (e.g. buy a used car for $25k and sell for $17k.)
Same cost, different experience. Which is better is subjective.
Let’s say one costs less than the other (the used car can be sold for $18k. Or $20k. Or $25k)… is the cheaper option better? Maybe. Is spending less the most important goal? Also subjective.
Or a 3rd option. Car A vs e-bike B. Both provide transportation. Is the lowest cost option superior?
All that said… after doing all the math (even without creative side quests) a lease this cheap will often come out ahead in financial terms vs buying an used EV, or close enough to it that it objectively is the better choice :)
Not sure if you qualify for the used EV (4k) credit, but have thought of that route?
I am hesitant on the new lease route even though there seems to be a lot of great deals because of the insane insurance prices in California…. curious how much you will be paying for insurance, I’m assuming insurances will be valuing the car at the ridiculous full msrp?
We could buy an used EV and get the $4k tax credit, but I would have to generate an additional $4k of tax burden to take advantage of it in full. That might push our income to a level that would be disadvantageous in other ways but I haven’t thought about it enough to say for sure.
Insurance prices are insane in California? I’m paying about $100/month on this car, which, yes, would provide up to the full replacement value.
Yes…. at least in Socal, most of my friends and family in the area have auto insurance increased anywhere from 40-60% in the past 2 years.
Mine personally went from $95 (2022) to $150 a month for full coverage, $1000 deductible, ~7500 miles. No changes except depreciation of my PHEV that’s worth only about 15k right now.
Which provider are you currently using?
Huh. Our non-cost numbers are similar. We are with geico and get a discount (not sure how much) due to owning a single B share of Berkshire Hathaway.
I’m in SoCal. We use AAA for our cars and our insurance is roughly the same as it has been for years. 2 cars cost us $103/month
Has your wife tried the new car as my wife is asian and many cars won’t work for her due to her height?
She hates it for aesthetic reasons (says it got design inspiration from a chunk of concrete) but it fits her fine (she is 5’7”)
How generous are they with the free charging for 2 years? Could you charge the car for free and then power the house via that nifty adapter to save on the home electric bill?
I am working on doing that. I don’t see how they could restrict it.
There are practical limitations on the house side though. It’s 1.8kW max and 120V only. I’ll need to wire in a transfer switch or maybe a subpanel with just single pole breakers to get near the max, and that may cost more than I can save in the 2 years.
I went to the Hyundai dealership in Stockholm, Sweden to see if the large dealer discount of ~$14,000 was available and applicable for an Ioniq 5 in this country. The dealer was shocked at the pricing leasehackr showed and assured me there was no campaign like that existing for the car in Sweden. It seems to be a specific oversupply issue in the States and Hyundai is giving a large discount to move the vehicles. I was hoping it was a worldwide program as I would’ve acquired a new car.
I had no clue lease hacking was a thing and now I’m in search of a broker in Sweden. Thanks for the great article!
I’ve been looking at Hyundai EV’s on the far side of the country and so far I’m not even remotely close to getting a nearly as good of a deal as Jeremy (to be expected as he’s the king of this stuff) so (as noted in the blog) not all dealers are offering the same discounts. I’m going to keep trying though.
Take a look through the signed deals section of the leasehackr forum… it is a great way to see what others have been able to get in your area.
Jeremy,
I roll in a 2014 Jetta (paid $19K for a demo model). Now it’s 10 years old with 70K miles and looks essentially new. It’s cost me ~$1.2 to 1.4K per year in depreciation if I was to trade it.
I’m bored with it and debating upgrading as I have almost ZERO tech in it (car play, bluetooth, zip).
The most I’ve paid for a car was $24K in 2002 when I had no money.
The macabre thought I had was, I’m 52, if I keep my cars 10 years how many more will I have?
I’ve been retired 10 years and my portfolio is over 2X when I quit. I’m spending what is now 1.7% withdrawal rate.
Clearly I’m overthinking it.
As my frugal sensei, what are you thoughts?
Time for a mid-life crisis car!
What a great deal!
I can’t do a lease because I drive too much, but this sounds like a steal for those who can make it work.
Actually just commenting because you had previously mentioned the “Pay Over Time” feature on your card. I’ve always ignored those in the past, but once you mentioned they can come with no fees, I started checking them out. It seems to be hit or miss as to how much they charge, but I have had a couple large purchases I was able to spread out over time with no fees/interest.
So thank you for mentioning that!
I am super happy you were able to take advantage of those no fee pay over time options.
It is hit or miss as you say. I will just check every so often. Since I knew I had this car payment coming up I just went through each card and fortunately one of them had the 0 fee option.
That is a good deal, especially with free charging and maintenance. I don’t drive enough to do more than 1 synthetic oil change a year, but the free charging is great. Never been in the Ioniq, but it’s good to see the tables turning on cars becoming cheaper. I usually buy used, drive it for a year or two, and sell it for around the same price I bought it..My Prius I sold in 2021 for $7,000 more than I bought it, can’t believe people pay markups on cars.
I would never by an EV just because I’m concerned we will loose gas powered vehicles as an option in the future. We need to support the combustible engine so we don’t loose it.
For similar reasons I only watch movies on VHS
#VHS4EVAH
‘“nothing compares.”’:
My 2007 Ford Territory AWD
https://commons.wikimedia.org/wiki/File:2007_Ford_Territory_(SY)_TX_RWD_wagon_(2009-02-27).jpg
leaves the garage on the weekly food forage, a round trip of 6 km, then plugin to supercharge to minimise battery decay.
Plus irregular bank foraging.
Total: ~1,000 km / y.
All in cost: ~$A1,500 / y
Otherwise I traipse a lot:
Cost: boots ~$A150 / y.
For round trips over 10 km, I take an electric bus:
https://www.act.gov.au/our-canberra/latest-news/2023/may/more-electric-buses-for-canberra
Cost: $0.00
Make more $ & cents to stop registering the car and have groceries delivered and hire a car for long road trips.
Just a little nicer to be able to move quickly on a whim.
Why EV Leases Are So Cheap Right Now In The U.S.
https://www.youtube.com/watch?v=npg0AP4r5_E
I did not see a cost for insurance? Should this be factored in?
~$100/month, about the same as car1
I think new car inventory is final improving.
I bought. 2024 Hyundai about three months ago. The dealer was willing to negotiate on price quite a bit below MSRP.
I bought a hybrid Elantra and have been very happy with it so far.
I also charged $3K and have a loan that is less than the yield SGOV and no real hurry to pay it off at this point.
I think they are both pretty good deals. Mine will costs me $20K more but I get to keep it as long as I want.
Those low/zero interest rate loans are the best. I’m sitting on about $60k of 0% credit card debt right now.
I approve. :-)