Skip to main content

Why Nissan's 7K Buyout Is a Start of a Bad Trend

What Prices would you accept to buy your Nissan LEAF? Imagine you are sitting in an auction house and you are getting ready to bid on your favorite item in the auction. You hear the auctioneer shout "I've got $5000, do I hear $7000, good do I hear $10,000? Somebody give me $10,000.
Nissan LEAF

That is almost what Nissan is doing with recent reports on its offers to current Nissan Leaf lease holders. Last week I wrote an article on ways Nissan could do this differently, but I guess once you are on a track, you might as well keep going. Here is how Nissan can avert LEAF crisis by making this one single change.

The deprecation is obviously causing some people inside Nissan to worry about the next version of the Nissan Leaf in 2017. It will have more range, it will have new body styling, and it will be sought after. Nissan Finance started off with $5000 to reduce the residual value on current Nissan Leaf Leasees. InsideEVs.com just posted that they have increased this amount to $7000. The question is, now that Nissan started moving the target, will they come back next week with a $10,000 credit?

This is an interesting situation as each upward increase in giveback will obviously attract some lease holders to buy their LEAFs. Question is, do you think they will have round three?

The first time the government gave us Quantitative Easing (QE), then they gave us QE2 and then QE3 and I have heard one commentator suggest the Federal Reserve would be starting on QE4 soon. Will Nissan do the same? Will it start moving the target down until it is more closely matched to the resale market residual value?

In this article at TorqueNews I tried to suggest this was a routine program to balance dealer inventory. Is it routine to first start off at one price and then in one week change it to a more favorable deal? The answer to this is obviously not. This isn’t routine and it is obviously helping to position Nissan for the V2 Nissan Leaf in 2017.

Also See:

Nissan

Comments

Aaron Turpen    June 12, 2015 - 1:26PM

Permalink

You left out more than a few important details in your relentless bashing of Nissan here. The lease buyout amount is tiered according to the model year of the LEAF and the length of the lease in question. The shorter the lease and older the model year, the higher the buyout up to $7,000. The majority of people whose leases are expiring will be in the $5,000 tier. For many, this means the depreciation on their car will be largely erased and the buyout becomes a good financial choice.