Wednesday, March 11, 2009

The Costs

For many people the first thing they ask is how much does it cost?

And while I am thrilled to be able to drive the MINI E I have to admit that it is not cheap and Im not saving money by driving electric. It costs $850 a month for a one year lease, and I must return the MINI E at the end of the lease. I had to do some serious thinking to decide whether I could afford this and whether it was worth it to me, and make sure my fiance didnt dump me for being a reckless spender.

Since my current car a 1997 BMW Z3 is getting a bit old, I've already been in the market for a new car, but not exactly in a hurry, I still think the Z3 beats the Z4 in styling anyday. Before the MINI E was announced, I was thinking I'd wait another 2 years until the Chevy Volt came out and get that, it looks like a number of companies have Electric or Range Extended Electric Vehicles coming out in late 2010 or 2011 and I still plan to get one then, The MINI E bridges the gap nicely.

I do keep my car in very good condition and spend about $3000 on maintenance each year, I will keep it around for long trips, and just because I love it and dont ever want to sell it, but will be glade to not be using it as my primary car.

So is $850 a reasonable amount? A one year lease of a $40K+ JCW MINI would be about $550 a month, so for a MINI it is expensive, but if you consider that AC propulsion charges $70K for their ebox electric vehicle which uses the same batteries and electric motor as the MINI E, an $850 lease seems about right. Now in Berlin they are only charging 200 euros, which is about $325 a month, which seems unfair but then they have to use public charging stations around the city.

Am I saving money on Gas? I drive 15K miles a year and my current gas milage is 22 mpg, at $1.85 a gallon that's $1261 a year in gas. The MINI E uses 26 kw/h to travel 120 miles so that would be 3250 kw/h per year. In NJ we have a choice of energy suppliers and I pay a primium to recieve my electricity from all renewable resources wind/solar/hydro so Im paying .20 cents per kw/h.
If I got the math right that translates to $650 a year to power my car with electricity, or about half the price what I was spending on Gas. Now a year ago when gas was $4 a Gallon and Electricity from non-clean coal was .10 cents a kw/h the savings would have been $325 vers $2727 or 1/8th the cost of gas.

What about Tax savings? In NJ there is no Sales tax on Zero Emission vehicles, which would have been an extra $612 dollars Im not paying. There is also $7500 plug in electric car credit, while the details of this and how it relates to leased cars isnt known right now, and probably wont be until September if I did qualify for the full credit and if my tax rate was 28% that would be about a $2100 reduction in my taxes. [edited] (This appears to be incorrect, I calculated this as a deduction rather then a credit, if the IRS gives the full credit on a one year lease and your not hitting the AMT thats a full $7500 back on my taxes, that's 3/4 of the lease paid for by the government, would be nice but I'm not holding my breath for it.)

What about Insurance? The MINI E's lease includes collision insurance probably saving me $800 over a regular lease on a new car, so all I need is liability, I priced that out at only $300 extra.

So is the MINI E saving me money, of course not. Electric Cars are way too expensive right now to be practical, but I do believe they are the way of the future, as battery technology gets lighter and cheaper, as Gas prices return to higher and higher prices, and as renewable electric energy production becomes more common and cheaper, Electric Cars will become a viable and cheaper solution then Gas.

So why Drive the MINI E? To drive an electric vehicle, at least 2 years before I could otherwise. To help the environment by using clean electricity rather then Gas, which pollutes our air and contributes to global warming. To not send my money to foreign nations that are openly hostile to the US. To not support Big Businesses that are making record profits in a time of res session and lobbing to Drill in our National Parks and off the coast of our beaches. To support companies that are looking at alternative. To be part of a program where my opinion and experiences will have a big impact on the future direction BMW takes in developing the Electric Car. And to Drive a Really Cool Car.

Robert

7 comments:

  1. Very well said Robert! I agree with all your reasons for leasing the car, and I bet the other potential leasee's do to.
    You mentioned the tax credit giving you a potential savings of $2100 for 2009, but I think you were thinking of it as a deduction rather than a credit. Being a credit, you would actually take the full $7500 off the tax you owe, and not off your reportable income. This makes it much more valuable, but this of course assumes that we would qualify for it in the first place!
    Stan

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  2. Yes I was considering it a deduction not a credit, I cant imagine getting a full $7500 off my taxes but I'll definitively ask when it comes to next years tax filing. Till then I'll be driving with a smile on my face anyway.

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  3. Yes, a very nice post Robert. I am also in the field trial and have gone through much of the same thinking. I also noticed the deduction vs. credit issue. I do hope a good part of the credit works out.

    You say that zero emissions vehicles are free of sales tax in NJ. But the dealer I was assigned to, Morristown Mini, sent me an e-mail early on saying "Just so we are upfront about EVERYTHING... Taxes (7% NJ TAX): $738.43..." so either they don't know about it, or one has to file to get it refunded. Do you know which it is?

    Tim
    Maplewood
    MyEMini.wordpress.com

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  4. The dealer is wrong, not sure how its suppose to work but there should be no sales tax.
    check out:
    http://www.afdc.energy.gov/afdc/progs/ind_state_laws.php/NJ/ELEC

    it states:
    Zero Emissions Vehicle (ZEV) Tax Exemption

    ZEVs sold, rented, or leased in New Jersey are exempt from state sales and use tax. This exemption is not applicable to partial zero emission vehicles, including hybrid electric vehicles. For a list of qualifying ZEVs, see the New Jersey Department of the Treasury Web site. (Reference New Jersey Statutes 54:32B-8.55)
    http://www.state.nj.us/treasury/taxation/zevnotice.shtml

    I dont see the MINI E listed but it should be

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  5. Robert, would you please get in touch with us at MC2 MINI magazine?
    publisher@mc2magazine.com
    Barry Brazier(Seattle)
    360.698.7926

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  6. Barry,
    I just sent you an email, and Im making my email address more visible in the About Me section in case anyone else would like to contact me directly.
    Robert

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  7. The mini cars are very comfortable for me specially when i need to park in a small place, they can go fast when there are traffic jump that is why I love the mini cars, they are really beautiful Actually i think to approach costa rica investment opportunities and a mini car there would help me a lot.

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