The Monkey House

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Is this the best cheap car?

In February of 2016, I bought a Nissan LEAF. So far, it has been great! I'll discuss some of my thought processes behind my choice, and give some initial cost-effectiveness data, to be updated as summer weather arrives and I have more experience with running the air conditioning and longer trips.

Investigation

Though it has been convenient owning a vehicle with large cargo capacity, I'm paying a lot in fuel economy to have that flexibility, and it's really not justifiable on purely economic grounds. So I was looking for a smaller, more efficient commuter car better suited to my actual driving habits. After quite a few test drives, I eventually settled on the Subaru Legacy as the car to beat. It fit my 6'3" frame reasonably comfortably, had decent but by no means exceptional fuel economy, and was reasonably priced. Having set the bar, I then started investigating electric vehicles to see how they measured up. The LEAF was a clear winner with a large comfortable cabin and good visibility, unlike the Chevy Volt which is completely unsuitable for someone of my height.

Would the LEAF actually work, though? Sure, my commute is only 4 miles each way, but I do make longer trips than that. Fortunately, I have been recording data about each of my gasoline purchases in my old car going back to 2008. Of 170 fill-ups, only 3 had an average miles-per-day of more than the LEAF could manage on a single charge at its EPA-rated range. Those longer trips could be accommodated by my wife's gas-powered car, so I decided to try to buy the LEAF.

Purchase

At first glance, the LEAF is a reasonably expensive car if one's goal is cheap transportation. The low-end S trim line starts at an even $32000, with the SV and SL lines each costing a few thousand more than the next-lower tier. Fortunately, I was purchasing a car near the end of the model year, and demand was depressed by Nissan's announcement of a 25% larger battery in the 2016 model and recently-plummeted gasoline prices. I watched stock levels and price trends at the half-dozen closest Nissan dealerships, negotiating for a mid-range SV trim line, ultimately without success. I got tantalizingly close though, negotiating an acceptable price by phone with one sales person just as another sold the car I wanted to someone in person. Eventually all the SV models sold, leaving me my choice of a bunch of S models or one SL with the premium package, being sold by a dealer who was unwilling to take my offer.

As January turned into February and 2016 model year cars were showing up on dealer lots, prices continued to slide. Eventually I settled on a LEAF S with the quick charge package from a dealer trying to clear out their old inventory. I continued monitoring prices after my purchase, and they appear to have sold their last car for about $500 less than I paid; I didn't see any lower prices advertised for the last few cars on any of the nearby dealers' lots. Here's a breakdown of the price I paid:

$32000MSRP for LEAF S with charge package
($5480.27)Nissan and dealer rebates
$1632.59Sales tax (5.5%) and fees
($5000)Financing discount
($7500)Federal tax incentive
($1500)Estimated net present value of loan
$14,152.32Actual cost

The financing discount works like a down payment on the vehicle financing. So while I bought the car for $28,152.32, Nissan paid off $5000 of that for me, leaving me to make payments on the remaining $23,152.32.

The net present value of the loan attempts to capture the value of my ability to pay for part of the car in 2016 dollars, part of it in 2017 dollars, part in 2018, etc. rather than pay the entire thing in 2016 dollars. Rather than pay Nissan today the whole $23,152.32, I could instead 'pay' myself some amount of money, setting that aside in a separate account earning some amount of interest, and make future car payments out of that account. How much money would I need to put into that account, and how much less is that than the car's purchase price? That difference is the net present value of the loan. The $1500 estimate I used in the table above assumes a 2.25% return on the money set aside for the car, which is a deliberately low estimate. Five-year CDs are earning more than that now; corporate bonds have been yielding closer to 3.5% of late; a US stock market index fund might yield 10% or more, and at 10% the NPV of the loan would be $5800.

Even if I had immediately paid off the loan, the car would have actually cost less than half of its MSRP, and comfortably below half the average US new-car purchase price. In fact, you could argue that I bought the battery and almost got the car for free. Tesla's Powerwall costs about $3,000 for a 6.4KWh battery, not all of which is usable capacity, and some charging hardware and software; the LEAF costs about $14,000 for a 24KWh battery, not all of which is usable capacity, and some charging hardware and software. I don't know what the ratios of usable to nameplate capacity are on the Powerwall or LEAF, so for the sake of argument let's assume they are the same. Then roughly $11,000 of the car's purchase price is for the battery, leaving only $3000 for the entire rest of the car. A bargain!

Ownership

The LEAF does not feel like a $30,000 car. The interior is a bit plasticky, but it is well built: no creaking or uneven mating between parts. The dash suffers from a variety of user experience flaws, including a very button-driven interface to the climate control system which requires taking your eyes off the road as it lacks knobs and levers that can easily be operated by touch. The left and right turn signal indicators are buried deep within the instrument cluster so they're never fully visible: they're either blocked from above by the dash, or blocked from below by the steering wheel, depending on driver height. The radio suffers from the all-too-common design flaw of displaying only part of the song information at once on a scrolling marquee, despite the LCD display being wide enough to accommodate the entire string. I could go on, but the point is that the interior is just adequate.

All that said, compared to other cars in the $15,000 price range, it holds up quite well. The cabin is roomy, with several inches between my head and the ceiling, and of course the driving experience is great. The car is quiet, nimble (take this with a grain of salt, as I drove a minivan for the past 10 years), and responsive. Even here at the low end of the electric vehicle market, there's that instant torque that makes EVs fun to drive around town. Mashing the accelerator causes the car to surge forward with just a bit of electric motor whine quickly drowned out by wind noise, which you'll be noticing a lot in the absence of engine noise. It's no "Tesla grin" but I'll take it. Time will tell whether the trend holds, but in the first month of ownership, I'm driving almost 15% more miles per day than my 8-year average. Whereas in the past my wife and I tended to split trips we took together fairly evenly between her car and mine, we now take the LEAF almost exclusively.

So the LEAF was cheap to buy, and it's fun to drive, but what about fuel economy? I have eight years of fuel data for my old car, a 1999 Toyota Sienna minivan, and as I gather similar data about the LEAF I will be able to compare its actual delivered economy in my real-world usage scenario. Initial data suggest that the LEAF costs about 1/3 as much for 100% renewable electricity as the van did. In the 2823 days between my first and last recorded gasoline purchases, I drove 49,162 miles. That's an average of just shy of 17.5 miles per day, almost 6400 miles per year. During that time, I purchased 2670 gallons of gasoline for a total cost of $7850, or 15.9 cents per mile for fuel. I have so far just a month worth of data for the LEAF, not quite 600 miles and about 180KWh of electricity. My 'fuel' cost per mile is just 5.3 cents with 100% renewable energy purchased from my local power company.

If I were on time-of-use billing, the cost for vehicle electricity would be about half that since the car charges at night. However, daytime usage would be significantly more expensive; I do not yet have sufficient data to determine if that is a net win. More soon!

UPDATE: More now!

Version 0.5    |    Content date: July 10, 2016    |    Page last generated: 2017-05-20 20:28 CDT