Possible Lease of Spark EV - opinions

[nozferatu]

Noz:
If I am reading your numbers correctly, you are considering trading in a car and the dealer is giving you $10,500 for it? Is that being applied against the lease cost or are you pocketing the cash? If using the old car as a trade in, then realize that if the Spark EV is totalled, (and I sincerely don't want that for you), you will get nothing back from Chevy or your insurance company. Normally they pay off the lease, that's it. You have just lost over $10,000. I guess there could be exceptions to the policy but I am unaware of any. I spent more than 35 years handling auto insurance claims and many of those as a Total Loss adjuster, so I am not just tossing guesses at you. Check on that first, with your insurance company and the leasing company. As far as the $7500 Federal rebate, why would they take some for themselves and not apply the full $7500? That's a lot of money...
Lou

Hey Gatedad,

No I get no cash from the trade. What's essentially happening is that the amount they are paying for my car is $10,500. But Ally Bank, the lessor, is telling the dealer that to payoff my car free and clear (i.e. I get a letter in the mail say "congrats you paid off your lease, etc") they owe Ally $12082. The difference I lose..which is why I pay more for the lease.

The way it works is that there is a end of lease payoff and also the remaining payments. Were I to trade in the car...the lease would be satisfied with $12082. Were I to keep the Fiat, I'd have another $3200 in payments to go plus $10989 IF I decided to keep the car, which I am not planning on doing anyway. The difference between $10989+$3200 and $12082 is essentially the tax I'd not be paying on the lease due to an early trade in.

It's a strange thing...my payoff is different from the dealer's payoff and it took me a few times to think about that before I understood that was the case.

Does that clear things up?

However, clearly the dealership will not take that hit.

With that said, what do you think of the deal now?

I've calculated that even after my hit, I'd still be saving around $80-100 a month with the Spark Ev over my current car. Strangely though, my insurance goes up by about $20 a month for the Spark which doesn't make sense to me.

 

[gatedad]

Well, I understanbd that trading in the car reduces your payments and makes the car more affordable at the end of the lease if you want to buy it. Why not just do a straight up purchase? Also, you didn't respond to the problem of if the new car gets totalled pulling out of the delaer lot. I actually traded in an old car when I leased my Mitsubishi. However, the car was transportation value only, with body damage. It allowed me to drop the car from my insurance(we'd have had 3 cars then), so I saved a lot on insurance and I had made no other down payment. As far as your insurance rates going up, a new car usually results in the policy being rerated. In regards to payments, I am completley worthless in those matters, as I am schlub when it comes to that...

Best wishes no matter how you chose.
Lou

 

[nozferatu]

Well, I understanbd that trading in the car reduces your payments and makes the car more affordable at the end of the lease if you want to buy it. Why not just do a straight up purchase? Also, you didn't respond to the problem of if the new car gets totalled pulling out of the delaer lot. I actually traded in an old car when I leased my Mitsubishi. However, the car was transportation value only, with body damage. It allowed me to drop the car from my insurance(we'd have had 3 cars then), so I saved a lot on insurance and I had made no other down payment. As far as your insurance rates going up, a new car usually results in the policy being rerated. In regards to payments, I am completley worthless in those matters, as I am schlub when it comes to that...

Best wishes no matter how you chose.
Lou

Oh sorry I must have missed that. Well I have gap insurance...so it's covered if it gets totaled.

I just don't to purchase a car like this. I think there will be better things in the near future but I don't want to wait for them to come either. Although I guess I could as my Fiat isn't a bad car.

 

[gatedad]

The Spark EV is covered if it's totalled and you carry collision coverage(whoch is mandatory to lease a new car); the gap insurance woudl cover the difference between what you owe on the remaimder of the lease vs what the car is worth at the time of the accident. I was referring to the fact that typically, the lease gets paid off and that's it. You would lose your $10,500 trade in money under most auto insurance policies.
Lou

 

[nozferatu]

The Spark EV is covered if it's totalled and you carry collision coverage(whoch is mandatory to lease a new car); the gap insurance woudl cover the difference between what you owe on the remaimder of the lease vs what the car is worth at the time of the accident. I was referring to the fact that typically, the lease gets paid off and that's it. You would lose your $10,500 trade in money under most auto insurance policies.
Lou

Oh I never even heard of that scenario...interesting. As far as I am aware, my auto insurance policy has no direct involvement with my lease or trade-in value. Well it may never happen so I'm not holding my breath on the Spark EV just yet...lol

 

[gatedad]

Noz:
"... my auto insurance policy has no direct involvement with my lease or trade-in value..."

If the car is physically damaged, it is your auto policy that will cover the damages(if they exceed your collision or comprehensive deductible). That's all I was trying to say. Good luck with any decision you make there. In CA you have a fair amount of EV options...

Lou

 

[nozferatu]

Noz:
"... my auto insurance policy has no direct involvement with my lease or trade-in value..."

If the car is physically damaged, it is your auto policy that will cover the damages(if they exceed your collision or comprehensive deductible). That's all I was trying to say. Good luck with any decision you make there. In CA you have a fair amount of EV options...

Lou

Ok got it. Yeah thank goodness my auto insurance is pretty good coverage!

 

[sparkyps]

The Spark EV is covered if it's totalled and you carry collision coverage(whoch is mandatory to lease a new car); the gap insurance woudl cover the difference between what you owe on the remaimder of the lease vs what the car is worth at the time of the accident. I was referring to the fact that typically, the lease gets paid off and that's it. You would lose your $10,500 trade in money under most auto insurance policies.
Lou

Not true at all.

What you owe on the lease is not at all related to the insurance payoff amount. Your insurance, w/o gap coverage, pays off the value of the vehicle. With gap coverage it pays off the greater of the value of the vehicle or what you owe on the remainder of the lease.