How to lease a $50,000 bmw for less than a subway pass – bloomberg gas and supply acworth ga


Expensive battery technology has turned the electric future into a money-losing present. The profitable sport utility vehicles and pickup trucks sold by General Motors Co. help cover the loss of about $9,000 every time someone drives an electric Chevrolet Bolt off a dealer lot. The electric version of the Fiat 500 subcompact sells at a staggering $20,000 loss in the U.S. The top-selling electric car company in the U.S., Tesla Inc., is notoriously unprofitable and managed to go $2 billion into the red on $8.5 billion in sales last year.

That dynamic has played out with BMW’s i3, which has struggled to lure American buyers since its 2013 debut. Part of the problem was timing: BMW brought out the compact city car just as gas prices tumbled, luring Americans back to the gas-guzzling SUVs they know and love. The limited driving range—originally 80 miles per charge—and unusual design only narrowed its appeal. The latest version, with a $44,450 price tag, can go up to 114 miles on a single charge, still less than half the 275-mile range of Tesla’s Model S.

The German carmaker sold 6,276 i3s in the U.S. last year, a 17 percent drop from 2016, according to Autodata Corp. Global sales rose 23 percent, to 31,482 units, buoyed by a redesign over the summer. Next up: BMW’s Mini brand will introduce an electric version next year, followed by a battery-powered BMW X3 sport utility vehicle in 2020.

BMW’s i brand is meant to be an incubator for technologies that will ultimately be incorporated into full model lineups. But sluggish sales prompted a pause before adding more electric-only models to the lineup. “It’s slow—and, in terms of over-hyped, we need time,” said Joachim Kolling, the head of energy services at BMW, in response to a question as to when he expects to see an uptick in industry-wide sales of EVs. “It’s a long-term race,” Kolling said at a conference in New York last month.

Piccolo is the rare electric vehicle enthusiast who went out to buy the original BMW i3 back in 2014, and then he added a Tesla to his garage. He now feels he took a bath on the first i3, paying about $500 a month for inferior battery technology. This time around, he vowed to be more frugal.

The auto stars seemed to align in his favor. Americans are abandoning compact cars at a stunning pace, and that’s contributed to the i3’s lagging U.S. performance, said Michelle Krebs, a senior analyst with Autotrader. EVs also don’t fare as well as conventional cars in the used market, since heavy discounts have eroded their value. Plus, used-car buyers don’t benefit from state and federal tax credits.

As a result, most EV drivers in the U.S. don’t buy. Lease rates hover at 80 percent for battery-electric cars in the U.S., compared with a 30 percent industry average, according to Bloomberg New Energy Finance. And good deals abound: The 2018 Honda Clarity can be leased for just $199 a month after a $1,499 down payment.

When you lease a car, you’re essentially paying the car company for the amount the car’s value will depreciate over the life of the lease contract, broken up into monthly payments. Automakers will often low-ball the depreciation estimate to lower your payments and close the deal, but they do so at their own peril, since they’ll be stuck trying to sell the car at true market value after you’re done.

That’s a particularly risky game with electric cars, since they depreciate so steeply. Of six different 2018 EV and plug-in hybrid models sold in March, the i3 had the lowest forecast residual value, at 27 percent of its original price after three years, according to researcher ALG.

The $54 lease deal reported on the Leasehackr website, which was confirmed by documents viewed by Bloomberg News, is an extreme example of this game. For Piccolo, finding a dealership willing to match wasn’t easy. His bargain-hunter friend, Dan Kim, called about 15 before he found BMW of Oyster Bay, out on New York’s Long Island. Even then, when they showed up to lease the cars, Kim said the dealer balked at the final price.

To start, they asked for a 14 percent discount from the sticker price and ended up with 13 percent. A bunch of special perks helped pull down the price. Since Piccolo owned a BMW already, he received a $2,000 loyalty credit, and he applied a $500 discount with BMW that was available through his job. Added to that mix were a $7,500 federal EV tax credit, which BMW subtracted from the price; New Jersey’s EV tax breaks (eligible even when residents purchase a car elsewhere); $2,000 in cash incentives; and a $1,000 discount for attending a BMW promotional event.

Piccolo, who covered his lease in a single upfront payment of about $2,700 after he added bigger tires, now owns exclusively electric cars. He said he’s certain the technology will catch on in the U.S., once battery range improves, because they’re fun to drive. His wife still teases him about his “goofy” looking i3, but he feels he’s setting an example for the next generation.