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Car leases let more motorists ditch gas

Gasoline prices have never been higher. And getting off gasoline has never been easier.

Record breaking October gasoline prices in Southern California added to the value of of plug-in electric and alternative-fuel vehicles, allowing drivers to save more money.

Vehicles like the all-electric Nissan Leaf or a Honda Civic powered by natural gas operate for a fraction of the cost of traditional gasoline and diesel models. But day-to-day fuel savings are only part of the equation.

Aggressive financing plug-in electric vehicles — at under $250 a month on a $35,000 vehicle — have drastically lowered the cost barrier to driving on electricity.

Auto dealers incorporate a federal tax credit of up to $7,500 into those lease figures, saving customers the effort, delays and uncertainty of filing for the benefit at tax time.

Depending on driving habits, a lease can provide immediate fuel savings, whereas buyers may wait years to achieve savings as they pay off the premium on a high-tech car like the Chevy Volt, which leases for about $270 a month under some current offers.

“You would never see a lease for that price on a $40,000 car,” Alec Gutierrez, senior market analyst for Kelley Blue Book. alluding to the Volt’s sticker price. “It really makes those vehicles available to consumer who wouldn’t have been able to afford them otherwise.”

A California state rebate of up to $2,500 for zero-emission vehicles is delivered to the person buying or leasing the car for at least three years, and can be quickly rolled into a down payment.

San Diego hit an all-time record for gasoline prices on Oct. 8: $4.73 per gallon of regular.

Yumiko Kato, a 43-year-old mother of two who commutes daily from San Marcos to Rancho Bernardo said gasoline prices weighed in her decision to trade in an aging minivan last year and lease a Volt.

“That was the reason to get it, because you knew gas was going to go up again,” she said. “To insulate yourself from that was a great feeling.”

Kato’s car runs on battery power for about 35 miles before switching over to its gasoline engine. she has purchased only 30 gallons of gas in the course of driving 15,000 miles.

“I love driving by the gas station” without stopping, she said.

About 1,500 plug-in vehicles were sold or leased in California in September — the most ever, and outsized portion of the roughly 6,000 sold nationwide the same month, according to the California Center for Sustainable Energy.

The U.S. government has invested billions of dollars — much of it in industrial-scale loans to car manufacturers and battery-pack developers — toward the goal of having 1 million electric cars on the road by 2015. Republican presidential candidate Mitt Romney has been critical of the financial risks and government deficits associated with those investments and subsidies.

Only a tiny fraction of the million-car goal has been realized, though sales and acceptance are accelerating rapidly.

Government investment includes federal loans to California-based luxury electric car makers Fisker and Tesla. Another recipient was battery-pack maker A123 Systems, which filed for bankruptcy this month.

Nissan received a $1.4 billion loan to bring production of the Leaf and its battery pack to the U.S.

That plant will have three times the production capacity of the current assembly line in Japan, a sign of Nissan’s optimism, said Leon Kamins, general manager of the Mossy Nissan dealership in Kearny Mesa that offers free public car charging. It should also lower the entry-level price for a Leaf with fewer luxury features.

Rewind four years to the June 2008 price spike, when regular sold in San Diego for $4.63. There were no plug-in cars for sale to most motorists, points out Mike Ferry, transporation program director for the San Diego-based California Center for Sustainable Energy. The center administers statewide rebates on zero-emission vehicles.

“People forget about the price spike of 2008, even though it was a very traumatic event,” Ferry said. “These vehicles were not available. … Now people have the choice and the lease rates are fantastic.”

Gas prices and green cars have emerged as a major campaign issue in televised presidential debates, with President Barack Obama extolling the virtues of more efficient vehicles and one moderator prodding whether $4 gas is “the new normal.”

Before and beyond the election, electricity prices will have a distinct advantage over gasoline and diesel.
More nctimes.com

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