Should I Lease an Electric Car?

[Music] brought to you by the every dollar app start budgeting for free today I uh I actually live in Canada where everything is quite a long ways away I live in the northern region of Canada and I drive about 7,000 to 8,000 kilometers per month and I was wondering should I be looking at maybe leasing an electric vehicle or keeping my current gas SUV um okay the is there anything you want to add to that you seem like you're going to say something else I'm just going to say because the amount I spend in gas each month is roughly uh $200 less than uh a electric car release with the um extra kilometers for 80,000 per year so that's why I thought and I'm usually very against leasing but I thought I don't know is this the one time that there's an exception here I'm not not 100% sure well I think there's two it sounds like there's two issues here one is the affordability of your gas and if you want to lower your gas bill and the other issue is if you choose to change Vehicles can you afford it and you do have the cash to buy the vehicle so let's look at it kind of separately for that purpose first off uh for your gas SUV what are you spending now um how many dollars are you spending a month to fill it up and do all that about uh $1,280 so that's the average in the past three months I I looked at okay and you're saying that with an electric vehicle you could lower that by $200 no so the electric vehicle with um because leases usually only go to 24,000 kilometers here in Canada so buying the extra kilometers which is 8 cents a kilometer uh uh totals me about 1,400 is per month for um for leasing on a two-year lease and the reason is because I I I'm assuming there's no residual value left in the electric car if there is it' be small so the the warranty is for 160,000 kilm and I thought well I'll probably reach that within two years so you know releasing it over two years then here's the keys and I don't have to deal with the speculation on how consumers are going to perceive the value of the it's done here's the thing I'm never going to advise you to lease a vehicle and I'm never going to advise you to go into a car note for a vehicle for the lease I'm not going to suggest that because it truly is the most expensive way that you could possibly operate a vehicle even though you're like hey it's electric there's you know rebates that I'm going to get all that uh when you when you do the math on how the payment is how they come to the conclusion of the payment you're going to realize oh my gosh this is the most and I can go over that in a minute um what I would do if I were you it kind of feels like you're going from one extreme to another you've got a the electric vehicle on this end but then you've got a gas SUV on this end what if you had a gas gasoline car that wasn't guzzling as much gas what if you did that so I would kind of advise you to look at your options but at the end of the day what's really going to inform this is how much money you have do you have money to spend on a new vehicle and that's really where my mind is so I I own my current vehicle and uh yes I I I do uh I uh I actually teach Corporate Finance of all things um but uh yeah I have enough to you know if I was to go into a dealership comfortably buy a vehicle I was going to buy a lot instead but you know if I have to buy a car with it that's that's no no no issue but honestly my current vehicle is is fine it has a lot of life left to it okay um you know it's just more of you know the fact that you know there's a depreciation expense right and there's a there's a a gas expense and by the way when you lease a car the depreciation is built into the price of the lease like that's correct built in so you're not getting you're not avoiding that no what what I am saying is you know if if I I could buy the electric car in cash except the car salesman said once they're out of warranty they're really only worth you know maybe you know 15 or 20,000 you know in in residual value and he gave an example because he had one that he he recently had to buy and he said it's because consumers don't realize he can you know maybe replace the the battery but you know still it's kind of early and um so yeah I mean to your point to your point we are seeing I mean we're getting more and more people calling in saying I bought an electric vehicle it's now barely a year later and the value has gone down substantially so there is there are issues there I I'm not necessarily saying that I'm in favor of you having an electric vehicle you're just saying hey this is what I want what I'm simply saying is if you decide to do that I would buy it outright and I would buy it used I would not lease it so that would be my advice to you um I mean you're grown so you'll probably go away from here and you'll do what you choose to do but that would be my advice okay I'm going to stick with my my gas card then the only incentive I thought was the lease payment was cheaper than the gas but you know what the way that you but I don't understand I don't understand why not why not even maybe try to come to the states and get a used electric car that's what I'm think uh would they be under warranty though right and how long did do those electric car batteries last in lifetime you're G the wrong cat because I don't I don't want an electric car ever I I'm a classic car guy in fact the older the car the better for me uh so I'm just being honest I don't know I'm asking you so you came at us with a lease s about 200,000 kilometers and then they they they have like a you have to pay 20,000 for a new battery to be installed yeah and Andrew okay good so so in my asking that you've given yourself another an answer as to why it's not a good play for electric cars in general and there's another part of this with the amount that you're driving uh and I don't know I don't have an electric vehicle I only talk to the only person I know who has one which is George and the few calls that come and here about them uh is the charging like there's more to the charging than meets the eye there's the time and then if you want to do the Quick Charge that costs more you much battery cost for my gas car why would you buy something here's here's what and I'm not even Andrew I I don't even know why anyone would buy an electric car based on what you just told me because it's like once the battery goes that's that and you have to know where you can charge it you're driving long distances can it make that distance like how many trips can you make per charge that's the way my brain is thinking that feels like a headache to me so yeah as they say on Shark Tank for that reason I'm out yeah yeah I love that that means I'm out too so I was leaning towards keeping the car but I the math was going the one way I'm like a let's Camp be let's call A B Ramy show but I'm glad you guys agree you know as a society we really don't know enough about these cars to make a is your car are you using your car uh for your own business or do you work for someone else and it that requires you to do all this driving my own business so you do write that you write off all those expenses or at least every expense that you can I don't I mean on the car so that's that's at least a positive you know uh there's some breaks there about running that through your business but I mean that that's just that's what it is man and uh that's the nature of what you're doing so you got to build into that you know my retained earnings on a business like that would be like car replacement f% 100% i' have a line item on that are you doing that Andrew uh no I I usually include travel uh in with my develing practice that I have I usually include travel and the price that I give for the the engagement but maybe Charing idea well no it's great but what I'm saying is is I would Jade you're with me if you're going to do that I would put all that money into a car replacement fund it is a huge part of your business my friend I see what you're saying like you should be putting well let's just run this through we got about a minute and a half I'm going to give it to the budget Guru walkie so how much how much uh money do you pay yourself right me right now yeah 150,000 a year okay great and uh do you have some margin I'm guessing you have some margin in the business after you pay yourself uh yeah I usually keep very little profit in the business to to minimize corate taxes right but how much money could you put away real quick how much money could you put away a month in your business for a car replacement after paying yourself and all expenses 1,500 prob do that that's great I'm that today yeah I would too I mean you've got some margin there start putting a car replacement Fund in your corporate bank account and and and boy that's going to be great create your free every dooll budget today the simplest way to budget for your life