Leasing a Plug In Vehicle: Total Cost of Ownership

As with any car purchase, there’s more to consider than cost when thinking about a plug-in vehicle. There’s also the convenience of fueling at home and the superior driving experience of an electric drive train. But at some point, we have to think about the cost and thrifty consumers will start there.

Doing the cost analysis for a gas car is pretty simple: look at the monthly payments, estimate your fuel cost based on how much you drive and the vehicle’s MPG, and add in the basic maintenance costs like oil changes. It’s not any more complex for an all-electric vehicle, but thinking in kilowatt-hours may be unfamiliar for most first-time EV buyers. It’s even a little simpler for an all-electric car since there are no oil changes and a lot of other regular gas-car maintenance goes away. For a plug-in hybrid, the situation is a little more complex, having to do both gas and electric calculations.

Since many plug-in buyers are choosing to lease rather than purchase, I’ve developed a spreadsheet tool to help with the calculations. I picked some representative fuel-efficient vehicles, looked up the EPA ratings, and researched some current 3-year lease deals. As a set of affordable vehicles that buyers may be considering, I chose the Toyota Camry, Toyota Prius, Toyota Prius PHEV, Ford C-Max Energi, Chevy Volt, and Nissan LEAF.

You can replace the vehicles I picked with the vehicles you’re considering and/or update any values that have changed or differ in your area.The gray boxes in the spreadsheet are the values that describe each car and can be freely edited.

Once the vehicles are set up, you just enter information about how you drive and where you’ll be able to charge and the tool does the math from there.

Here’s an example result for someone who has a 30-mile daily commute, also drives an average of 35 miles per day on the weekends, lives where there are no state incentives, and pays about the national average for electricity. These values have been filled into the yellow boxes in the spreadsheet.

As you can see, the LEAF is the cost winner in this situation, the Volt and C-Max Energi cost a bit over $100 more, the Prius about $200 more, the Camry $243.33 more, and the Prius PHEV $359.29 more per month than the LEAF.

Now let’s try an example with a longer commute: 60 miles per day.

The rankings don’t really change much, but there’s a bigger difference between the highest and lowest cost. Only the Leaf and Volt benefit from being able to drive more electric miles. The costs for the others go up according to their gas efficiency

Next, we’ll increase the commute distance to a really extreme value, 100 miles (fewer than 1% of Americans commute this far each day), and add in the ability to charge at work as well as at home which increases the range of the Leaf and doubles the electric range of the plug-in hybrids.

The LEAF is still the cost winner, but the Volt increases its cost advantage over the C-Max Energi because the Volt has more electric range.

Now let’s go back to a more typical commute, but push the weekend travel up to 100 miles per day and see what happens.

In this scenario, the Volt is the cost winner, with the C-Max Energi very close.

Since the LEAF has an EPA range of 84 miles, it’s not suitable for a single car household that drives beyond that in situations where there’s no opportunity to charge along. While it may be completely reasonable to make trips like that in the LEAF in areas where there is convenient charging infrastructure, to be conservative, the tool removes the LEAF from consideration.

Since the Prius has better gas mileage than the Volt, for drivers that do a lot of driving but have limited opportunity for driving electric miles, the Prius has to win out. To find a situation where than happens, I reduced the daily commute to just 10 miles and cranked up the weekend driving until the Prius beat the Volt. To get there, I had to assume driving 680 miles per weekend!

With a very short commute to minimize electric driving during the week and an incredible 340 miles per weekend day, the Prius comes out less expensive than the Volt by $0.50 per month. However, the cost winner in this case is the C-Max Energi with gas mileage that’s close to the Prius. For the Prius to beat the C-Max Energi, I had to assume 1,300 miles of driving every weekend all year long!

Here’s a summary chart of the scenarios considered here.

The Camry came out as more expensive than everything but the Prius PHEV. It even loses to the expensive Prius PHEV in the highest mile scenario. I also considered the Honda Accord, but its gas mileage isn’t quite as good as the Camry and Honda’s lease calculator showed a higher monthly lease payment ($433 for the least expensive model), so it would do worse than the Camry in these cost comparisons.

Although the Prius PHEV came in as most expensive in all but the last of these comparisons, that’s just because the lease terms I could find online were expensive enough that its savings in fuel costs from a small electric range were not enough to cancel out the highest lease price from this particular set of vehicles. If you can find a better lease deal, the numbers may turn out differently.

Charging Equipment I didn’t factor in the cost of installing home charging equipment. If you have an outlet near where you park overnight, the charging cord that comes with most plug-in vehicles can give you 30 to 40 miles of range overnight. If that’s all you need, you don’t have to spend any money on charging equipment. If you do need to installing charging equipment, perhaps a Level 2 (240V) charging station, you could spend as little as $500 or much more depending on your situation. Any investment you make in charging equipment may pay off for many years, so you may want to amortize that cost over a period that’s longer than the lease period. It’s something to think about as you’re comparing vehicles and before you sign a lease.

Disclaimer There are a bunch of reasons why these numbers aren’t right for everyone. I probably didn’t enter your average driving pattern. Perhaps I haven’t chosen the right vehicles for you. The lease deals may have changed since I set up this tool, or you may choose a different term lease or mileage allowance. I didn’t recalculate lease prices for the extreme driving examples. I don’t consider the end-of-lease residuals. You may have a different expectation for what gas prices will average over the next three years. Your electric cost may be higher or lower. Maybe you get free charging at work, or maybe you can’t charge at home and have to pay a premium to charge at work. Maybe you can’t charge at home or at work, so a plug-in vehicle doesn’t make sense for you.

There’s also an issue with the EPA-rated electric range of the Prius PHEV. The EPA sticker for the Prius says that it gets 11 miles in gas+electric mode but only 6 miles in electric mode. I understand this is because during the EPA test cycle, the Prius gas engine comes on after six miles, the battery isn’t depleted until the 11-mile mark, so maybe the electric range should be higher than six miles. On the other hand, the Prius PHEV can’t go freeway speeds without turning on the gas engine, so the nature of your commute will strongly influence how many electric miles you can get.

Just to be complete, note that the electric range for the Volt and Leaf are both true electric range. Both vehicles can operate at freeway speeds (and above) on just electricity.

We all know that your mileage may vary. Depending on how (and where) you drive, you may get a different MPG than the EPA estimate, you may do better or worse. The same is true for electric range. I chose to use the EPA combined city/highway numbers for MPG, electric range and electric efficiency so as to compare vehicles as consistently as possible. If you have a better idea of how a vehicle will perform for your driving, you can change those fields in the spreadsheet.

Please download the spreadsheet and plug in your own assumptions and driving pattern. Let us know what you find out in the comments.

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