How I bought that: A freelancer and program developer lease a $32,000 electric car
A couple earning $80,000 a year shares their spending habits.
How I Bought That is a weekly spending column from HelloGiggles that takes a peek inside the process of making a major purchase, whether your budget is big, small, all your own, or supplemented by family and/or financial institutions. In this series, we look at many different spending #situations: from how people afforded big purchases like first homes (with the help of real estate-savvy in-laws), new electric vehicles, splurge-worthy bags (that took more than a year to save for), and more. The common thread here is saving with a goal in mind, and then spending like you had it all along.
When the beater car I’d purchased after moving to the country—and letting my wife take my car for her daily commute—broke down, we became a one-car household. Paying for a second car seemed impossible, given that my wife and I each spent 25% of our income on student loans, so I was shocked to discover that the easiest way we could afford a second car was by getting an electric vehicle (EV).
By chance, we attended a local National Drive Electric Week event. We figured this was a long-range strategy to replace the commuter car, and we wanted to research models and speak with electric vehicle owners, so we could save up for the big purchase. An EV owner told us about a Kia Soul EV lease deal that seemed too good to pass up.
We spent a week researching EVs (including the federal and state rebates), test driving alternatives (the Nissan Leaf and Chevy Bolt), and crunching numbers. We liked the Chevy Bolt but it would have cost twice as much to lease. By the time we sat down to negotiate our lease deal, we were confident we could afford the Kia Soul EV, and we knew more about the car than the guy at the dealership.
What do you and your partner do for work?
I’m a freelance writer, and my partner works in program development at our local community foundation.
Annual household income?
When we got the EV, in 2018, it was around $80,000.
Why did you want a second car?
We live in a rural area with inadequate public transportation, rideshare service, and taxi service, so a car is something that’s a necessity rather than a luxury. I worried about the impact on our dogs—without a car, I wouldn’t be able to get them emergency vet care if they needed it.
While I work from home, sharing one car limited my ability to take part in personal and professional development activities (my wife would need to get home to give me the car, and while we made it work occasionally, it wasn’t ideal).
How much did the electric car cost?
The price tag to buy the Kia Soul EV was $32,230, and this EV qualified for a federal tax credit of $7,500. Over the three-year lease term, we’re paying $9,118.
Are federal rebates typical with EVs?
Most EVs are eligible for a credit (check how much here) but this begins to phase out after 200,000 sales, so you’ll save more if you buy before the cap.
Why get an electric car?
Getting an EV felt like the biggest difference I could make as someone who wants to conserve resources and protect our planet. Having lived in California where gas is crazy expensive, I also knew it’d save money to go electric. It’s awesome to drive around all day running errands and be carbon-free.
Did you have to put down a down payment? Why did you lease, and how much are you paying monthly?
We decided to lease for two reasons: cost and EV range (how far you can drive on one battery charge). The Kia dealership we leased through was offering a special of $1,450 down payment and $175 per month for a 36-month lease, with a mileage cap of 10,000 per year. We negotiated 15,000 miles per year for $213 a month.
I’ve never leased a car prior to this and was a little leery of it, but it’s been a great experience.
By leasing, we could get the second car we needed right away and save money over the lifetime of the lease. We’re halfway through the lease, and when it expires we hope to buy an EV with a bigger range using the money we’re saving in reduced gas costs.
Our Kia Soul EV gets about 111 miles of range (more in summer, less in winter). My wife’s daily commute is 40 miles so she can drive to/from work with a midweek charge-up, and we haven’t noticed much difference in our utility bill from charging at home.
Did you save beforehand?
No, we had enough in our savings account to cover the down payment.
Has this purchase changed your lifestyle in any way?
I got my car back, which means that I have freedom of movement and peace of mind. I can go to daytime yoga classes or evening writer meetups without needing my wife to get home from work first. Plus, my dogs are safe.
Would you have done anything differently?
We actually don’t use 15,000 miles a year, so we could have saved a bit of cash and taken the 10,000 mile lease offer but there was no way to know that ahead of time.
I would have taken the time to learn about EVs earlier rather than assuming out of hand that I wouldn’t be able to afford one because they were expensive. Yes, they are more expensive than gas cars, but there’s zero maintenance costs and rebates/tax credits that offset higher price points. Since I rarely drive our gas car, we’re saving money every week. We live in the most environmentally-friendly county in New York so there are EV chargers in most municipal lots. One big selling point was that we could charge the EV for free while running errands or dining out.