Wednesday, March 10, 2010

MINI-E Lease Extension Details Arrive

To renew or not to renew, that is the question....

When I first applied for the MINI-E trial lease program the terms were simple; $850 per month for 12 months, everything included, even collision and comprehensive insurance. All maintenance and even wear and tear items were covered and a loaner car would be provided if and when the vehicle was in for service. Total cost: $10,200 plus license and registration fees. It looks pretty steep on the surface since you can lease a new MINI Cooper S for about half that amount, get two back seats and still have money left over for the gasoline you burn.

I've been reminded of the high lease price dozens of times this year when I promote the MINI-E's virtues on various blogs, message boards and in face to face conversations. What I try to remind everyone is that for many of the Trial Lease participants or "pioneers" as MINI calls us it wasn't about the money. It was about helping to promote the proliferation of zero emission vehicles. We knew the MINI-E was not going to make it to the showrooms, so it wasn't about helping to "fine tune" the car for production. This program, whether or not anyone admits it or not, was purely about gauging public interest and acceptance of electric cars (that and getting some CARB credits but that was no secret or never disputed) and gathering data on average daily driving and responses to things like range anxiety and regenerative braking characteristics. The majority of the people in the program feel strongly as I do that the automotive industry should move in the direction of electric vehicles and offer their customers a choice of what kind of fuel that they want to power their cars with.

When we first got word that we would be offered the option of a second year with the car initially everyone was generally very happy because I believe most in the program love their cars and would like to keep them as long as possible. We were not given any details, just that we would have the option to renew for another year so shortly after the announcement was made we all started guessing what the terms of the lease would be. Whenever you lease a car, the longer the term, the lower the monthly payments so we knew the second year would be less, but how much was a mystery. Over on the MINI-E Facebook page, where many of us converse, the guesses were generally around $500/month. Anything under $500 and I think just about everyone would choose to stay in. Perhaps BMW knew that and wanted to "thin the field" some to send the returned cars to other markets as we have been told would be the case with the returning cars. In any event, I think some that wanted to keep the cars just can't at $600/month and that's unfortunate.

For me the decision was easy. I drive the car so much (about 30,000 miles a year) that the fuel savings alone will be enough to make the difference. Driving 30,000 miles in my Toyota Tacoma I'll need to purchase about 1,700 gallons of gasoline. If prices stay at the level they are today($2.65/gal), I'll spend $4,500 on gasoline. The MINI-E will cost me about $1,000 for electric so the $3,500 in fuel savings cuts the lease payment in half.(Actually it will cost me nothing in electric because I'll be generating all the electric with my new solar electric system at my home but it's still "costing me" $1,000 because I could have sold that electric to the power company) I also won't need to do about 7 oil changes, there's another $350.00. I won't need to put a set of brake pads on the truck either, or be halfway to a major tune up. Plus, I'm not losing the depreciation that 30,000 miles on the odometer will have on the Tacoma's value. All in all, while $600 per month sounds like a lot of money for a two seat commuter car, it really isn't at all.

All the financial reasons aside, I'm keeping the car because I love it. I enjoy the electric driving experience, I like that I don't have to stop and buy gasoline and that I'm not polluting as I drive. I like meeting new people all the time that stop me on the street and ask about the car and I like knowing that I'm doing a small part in helping to advance the movement to electrics.

To renew or not to renew? To me there is no question.

12 comments:

  1. I'm happy you are going to continue. I really enjoy your blog and hearing about your travels with the car. I agree with your assessment as far as costs related to driving your other car vs the MINI-E also. The total cost of ownership is only $7,200 for the year. That is probably much less than anything else you will drive considering that you'll drive over 33,000 miles in the year. The depreciation is something that nobody wants to factor in and you must to get the true total cost. Actually, $600 per month is very reasonable. Some of the people that turn their mini e's in because of the price will end up paying much more to drive another vehicle, but they don't realize it.

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  2. Thanks Jeremy, I hope you continue to enjoy the blog. You are right on with the cost analysis. It sounds like a lot because I'm paying it all in up front monthly payments, but when I break down all the costs of ownership I'm definitely better off accepting the extension. That being said, I was hoping the offer would be a little lower, around $500. I think it would have been a nice "thank you" for being good participants in this study. We are all doing our best to work with BMW to help make the program a success.

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  3. Thanks, I think so too. For me, because of how much I drive the total cost of ownership works in my favor, not so for some of the others that will drive the car 10,000 or so. I still think if BMW would have dropped it to about $500, they would have made a lot of the others in the program happy. I've had some time to talk to many of them the past two days now and the general feeling is that they do not think BMW didn't do the right thing and they are disappointed.

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  4. I have followed this on some of the other mini-E blogs and it seems that many others are not happy with the cost of the second year. It's $250 a month less than the first year, right? Why are they so pissed?

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  5. I have followed this on some of the other mini-E blogs and it seems that many others are not happy with the cost of the second year. It's $250 a month less than the first year, right? Why are they so pissed?

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  6. Ian,
    Yes it is less, but I do think they have a legitimate gripe. $600/ month is still a lot of money for a two seat car that you have to give back and will probably have some kind of service issues before the year is up. These are wonderful cars but they are "test mules" and we are testing them. So with that in mind many expected to have a better offer.
    I made my position clear, for me it's definitely worth it both for the enjoyment and financially. However if someone else thinks it's a bad deal and that they feel snubbed, I'm not about to condemn them, they have every right to feel that way.

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  7. I don't think it's a terrible deal, all things considered. BUT, mini could have shown some appreciation to you for being an early adopter and dealing with all the issues you have had to deal with. From the charger inspection fiasco to the service visits you've had to endure, the pioneers in the program seem to have done their part.

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  8. I am one of the drivers that is going to pass. I decided to spend the $10k this year to see if an electric would fit my commute and lifestyle. It has done that for me. I love driving the car. I believe in it and am ready to buy.

    But financially, this deal really never made sense. I own a prius and another Toyota outright and my commute is fairly short at 50 miles RT. And we have had to drive our other cars for room + going out with friends. What everyone doesn't mention is it wasn't $850. It was over $940 with tax and it is not now $600. More like $675 plus the licensing. I could never make up the $ in the year compared to gas.

    So I have decided like others I think to save that ~$9k a year to buy an EV in the next year or two. That way I get it for life and the room to really enjoy.

    I learned what I needed to from this. If Mini wanted me to stay, they could have made it make financial sense for us. An extra couple hundred for each of 400 cards could not have made any difference to them.

    It was fun and I really enjoyed it. But Mini/BMW had a shot for a customer in the next round and for me, they missed it. I'm looking elsewhere.
    -Jeff #148

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  9. I understand completely. In fact, it seems most of the people in the program that I've talked to are saying the same thing: "I love the car and would like to keep it for another year, but it's just too much".
    That's regrettable. You are right, the one or two hundred dollars per month for 200 or so cars in nothing given the scope of this project. In fact, it will probably end up costing BMW more to take the cars back, clean them up, remove the chargers, put on new tires etc, and then re-lease them. It doesn't add up. I think there is something else going on here that we don't know about. Perhaps they want a good number of the cars back to send to new markets? Overseas? France? Spain? I don't know but it would seem that they set the price at a level that would discourage a good number of the current participants to decline and thus have cars available for the other plans. Just a guess. Sorry to see you go, I've enjoyed reading your thoughts and comments over at the Facebook page.
    Tom

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  10. Jeff,

    I also forgot to mention that we do not pay sales tax here in NJ on these cars so for me it really will be only $600/month. I've heard a few of you out in California point out the tax cost. I'm surprised the CA is behind NJ on this, you are way ahead in all other aspects of EV's.

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