August 3, 2015

Is a $49 Monthly Lease for a Fiat 500e a Good Deal?

I heard a radio ad from a local car dealership leasing Fiat 500e electric cars for $49 a month for 24 months.   Sounded like an awesome deal but of course theres a minor catch revealed in the fast talking legally required disclosures at the end of the ad which is that it has $3400 due at signing.    Still that seems like a decent total cost.    You'd be paying $49 x 24 + $3400 for $4,576 total in two years.   Thats $2,288 a year.   Most new cars are going to depreciate that amount in a given year plus the 500e is electric so you'd save on fuel costs.

The 500e gets 87 miles out of a full charge.    The battery is 24 kWh.   At 11¢ per kWh that equates to $2.64 for a full charge and about 3¢ per mile.
A reasonably good MPG gas engine car might get 40 MPG.   With gas costing $3 per gallon that comes out to 7.5¢ per mile.
If I were to put 1000 miles a month on the car then I'd be paying $30 in electricity for the 500e versus $75 in gasoline for a gas car.

In total I might save up to $45 a month in fuel costs driving the electric 500e versus a gas car.  However thats the maximum savings assuming you hit the 1000 mile limit on the lease so your actual savings would be less or you risk paying extra on the lease for going over their 12,000 mile per year limit.

The net cost including fuel savings would end up at $2,288 for the lease minus $540 a year or $1,748.   I think thats a pretty good cost for driving a new car.  If I was in the market for a new car and a small car like the Fiat 500e would work for me I might consider such a lease.    However I might be better off buying a slightly used 2012 or 2011 Nissan Leaf for $10,000 to $12,000 range.


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