September 13, 2012

Would Gas Savings Alone Pay for a Chevy Volt Lease?

I just read that Chevy has been offering $199 monthly leases on the Volt for 24 month periods.  I checked the Chevy website and I see a 24 month lease at $289 per month for the 2012 Volt and a 36 month lease for $299 a month.

My first thought was that if you drive a lot then the fuel savings alone could warrant the monthly lease charge.   But of course leases have mileage limits so that effectively blows that idea.    The lease term only allows 1000 miles per month and if you go over you have to spend 18¢ or 20¢ per mile for the 2013 or 2012 models respectively.    So the first 1000 miles would cost you 28.9¢ or 29.9¢ per mile and the additional miles would be 18¢ or 20¢.    If your current car gets 20 MPG and gas costs $3.70 per gallon then you are spending about 19¢ per mile on gas.   Even if the Volt had $0 fuel costs you wouldn't come out ahead with just fuel savings.     But the Volt does cost money to operate of course.   The battery is 16k.5Wh and gives you 38 miles.  If you spend 11¢ per kWh on your electricity then it would cost $1.81 to charge the battery and it would cost you 4.8¢ per mile in electricity.    Therefore with a Volt lease you'd be spending at least 18¢ per mile for the lease plus almost 5¢ for electricity.

Lets say you drive a Hummer H3 entirely in the city and get 13 MPG.  Thats 28¢ per mile for gas.   If you gave that hummer away and leased a Volt you'd have to drive 1650 miles a month to break even.    Thats almost 20,000 miles a year.   BUT you can't actually drive a Volt 1650 miles a month on just electricity because the battery only gives you 38 miles a charge.  If you charge the car every night then the most you can get in an average month is 1155 miles.  That means you'd have to buy gas for the additional 500 miles a month.  The volt gets about 36 MPG when using gas so that cost is more like 10¢ per mile.    That means that the miles you drive over 1155 per month would cost 10¢ for electricity and 18¢ for the lease charge which would be equivalent to the 28¢ you spend on gas for the Hummer.
If you add the lease charge to the cost of fuel for the Volt it will always be more expensive than the fuel costs alone for a Hummer H3.    This is still assuming a cost of $3.70 per gallon of gasoline.  If fuel goes up then paying the lease on a Volt might beat the cost of gas for a Hummer.

Most people don't drive Hummers and if you do there are a lot of other options to save on gas costs.

A typical car gets 20 or 25 MPG.   That would make the cost of gasoline alone around 14.8-18.5¢ per gallon.    The cost of leasing a Volt is already higher than that per mile plus you have electricity and gas costs for the Volt as well.  

Bottom Line :   Leasing a Volt will not pay for itself in just gasoline cost savings.

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