Why We Bought an Electric Car

Here is the bullet point version real quick for the impatient:

• Saves us approx $200 a month on gas (effectively reducing our payment)
• $12,000 in combined federal and state tax credits
• Saves hundreds a year in routine maintenance
• The test drive made an impression
• The 85 mile range works for us

Notice that 3 out of 5 bullets are money related. This despite the fact most people tell you the #1 reason you shouldn’t buy an electric car is that it’s not economical… yet.

Before I explain the logic that went into our analysis of the economics let me first give you a little back story so you can understand our motivation a little more.

And, yes I keep saying “we” and “us” because both my wife and I analyzed the numbers and researched the Leaf until it made our eyes bleed! I like to think we are fairly smart people too since I’m an electrical engineer and my wife has a Ph.D. and does research for a living.

Our Motivation: Live Debt Free

It has been nice driving paid-off vehicles and putting the extra money not spent on car payments towards savings and other debt. Our goal is to pay off all of our debt (including our house) very soon. Financing anything is a step backwards for us and we didn’t have near enough money in cash savings to buy a new car outright yet.

Unfortunately, we really needed a new car because our vehicles simply had too many miles on them.

What could we do?

EV Economics to the Rescue

The most important thing when one is trying to pay off all debts is extra cash flow. So, it was time for some creative financing.

My wife had this not-so-crazy idea that buying and electric car would allow us to factor in monthly gas savings of about $200 per month effectively reducing our car payment by $200 and our monthly cash-flow by $170 per month. Then, if we commit to using the tax credits and resulting tax refund to pay down the loan we would only have to make 36 payments to pay the car off.

So after a modest down payment and 36 more payments of $170 we would own a fully loaded $37k car that will get 100-200 MPGe.

AND, once the car is paid off our monthly cash flow would increase $200 per month (gas savings) over what it was before we bought the car.

We didn’t even really factor in the savings from maintenance costs because we figured that money would simply be put towards a battery replacement in 7-10 years if we even decide to keep the car that long.

It seemed like a great idea, but we wanted to test drive one first.

Test Driving the Nissan Leaf

The Nissan Leaf seemed like the best fit for us. We had no problem finding one and promptly took it out for a test drive.

We were immediately impressed by the quiet power of the Leaf. It zipped out of the parking lot silently as if it was floating on top a cloud high in the sky blown by a brisk wind. Once we got it on the road, where there was a little more road noise, it felt almost too normal; yet there were some differences compared to gas (and diesel) cars most notably acceleration.

The Leaf was very responsive and had a lot of pep (torque) when stepping on the accelerator off the line and even at high speeds. When driving on the interstate at 60 miles per hour and stepping on the accelerator I really felt the power and I felt it instantly. Then, a couple seconds later I noticed I was going 75 miles per hour and had almost reached the exit where my wife would take a turn at the wheel.

While my wife was driving I got to focus a little more on the high tech dash and navigation / EV computer system that had all the bells and whistles like wireless Bluetooth phone integration, XM radio and energy consumption status. When we got back the salesman showed me how to plug the car into a quick charger and claimed it could charge the battery from almost 0 to 80% in 30 minutes.

Our 10 mile test drive had reduced the battery from 80% to about 70%. I stood there for a minute or two and watched the charge increase on the battery by a few percent. Neat!

The Leaf passed the test drive and made an impression.

Final Research and Other Thoughts

Wading through the fear, uncertainty and doubt on the internet surrounding various battery concerns was no easy task. We researched many owner and professional reviews trying to figure out things like leasing vs. buying, permanent battery capacity loss over time, range reduction in extreme temps, battery replacement costs, costs to install charging equipment and even so called “range anxiety.”

I will not go into the details of all that research here, but if anyone posts a comment and wants to know more I can point them to good sources of information and share some more thoughts.

In the end we did our best to separate fact from opinion and decided the Leaf would work for us. We made preparations to buy our first electric car and started looking for the best deal we could get on an SL model with a premium package.

Then right after we did our taxes Nissan ran a promotion offering an additional $2500 rebate and 0% interest. We were sold in a perfect financial storm. We wouldn’t even have to pay interest on the loan.

Should You Buy an Electric Car?

Everyone’s situation is different and I am certainly not trying to sell anyone on the economics yet. If you are thinking about buying an electric car I hope this article helps you with your decision.

I don’t personally believe in tax credits for things like this, especially with the deficit being so high, but they are there so I used them and to that end they seem to be functioning as intended: to create an incentive for people to buy electric cars. The huge tax credits in Colorado made our purchase much more attractive, but now that we actually own a Leaf I would strongly consider buying another one even if there weren’t any tax credits.

After driving the Leaf over 1000 miles I am convinced that electric cars are the wave the future for more than just financial reasons. I hope people try to be receptive and open to at least learning about the idea before they disengage their brain and start quoting their favorite politician or pundit to defend the status-quo.

If you are interested in learning more about the Leaf from an owners perspective check back for my Nissan Leaf owners review I will be publishing in the next week or so.