Nissan LEAF Residual Values Take a Big Hit in May

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Senior Pricing Analyst

As CarsDirect’s resident pricing analyst, Alex offers must-know analysis of pricing & incentives to those looking to buy or lease a car. His consumer-oriented coverage of the latest trends and breaking news has been featured in publications such as Car and Driver, Motor Trend, Automobile Magazine and Autoblog.

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, Senior Pricing Analyst - May 18, 2015

Last month, the Nissan LEAF hit a milestone by surpassing the Chevy Volt as the best-selling plug-in car in the U.S. Without a doubt, the $199 lease we've seen for months has played an important role in making the $29,000+ LEAF accessible to more shoppers. However, changes this month following a hit in residual values suggest Nissan is going to extreme lengths to keep payments attractive. Here's what you need to know.

Jump in lease cash

Lease incentives are generally used to lower the monthly payment or amount due at signing on a lease vehicle. We see this to some degree from most automakers each month.

For May, Nissan boosted lease cash incentives as much as 35% on the LEAF. The SL model got the largest incentives- up from $9,350 to $12,600, a huge amount based on what we're used to seeing.

Even the least-expensive S model got a 26% boost to $11,025. So why did the $199 lease deal stay the same in May?

The world of leases often involves subtle changes defined by residual values, money factor (akin to the interest rate), and lease incentives. This month, Nissan changed all three on the LEAF.

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Residual value hit

LEAF residual values tell an interesting story. Last December, Nissan's projected residual value on a LEAF S was 38% after 36 months. Although this was mostly unchanged through April, it got a massive cut in May from 37% to 31%, a 6% drop.

A look at other models in Nissan's lineup confirms the changes on the LEAF are unusual. For example, the residual on the Altima has been roughly flat at around 53% for months. On the Frontier truck, the residual actually increased 4% since last December.

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Money factor hiked

The story doesn't end there. Money factors, the lease equivalent of an interest rate, also got an abrupt change on the LEAF.

From April to May, the money factor changed from 0.00003 to 0.00055, equivalent to a change in interest rate from 0.07% to 1.32%. That might not seem like a lot but it's more than double the highest rate we've seen on the LEAF this year.

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Looking beyond numbers

We're inclined to suspect Nissan is compensating for lower projected residual values on the LEAF with bigger upfront lease incentives. They may be doing this for a good reason- competition.

Last month, Chevrolet announced a $139, zero-down lease on the 2015 Spark EV. The car, sold primarily in California and Oregon, saw a major spike in sales in April- it even outsold the Chevy Volt and beat its previous best sales month by over 5 times with 920 cars sold.

The $199 lease deal on the LEAF has stood firm for months- but how far is Nissan willing to go to keep the lease payment appealing to shoppers? Time will tell. We'll be watching closely and will report any major change in offers.

Side-by-side: Nissan LEAF vs. Chevy Spark EV>>

Incentives listed here are based on a resident in Southern California. Lease offers are based on top-tier credit and exclude tax, license, title, registration, document fees and insurance. State-level incentives can vary, so please check with your CarsDirect Trusted Dealer to confirm all available offers in your region.

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, Senior Pricing Analyst

As CarsDirect’s resident pricing analyst, Alex offers must-know analysis of pricing & incentives to those looking to buy or lease a car. His consumer-oriented coverage of the latest trends and breaking news has been featured in publications such as Car and Driver, Motor Trend, Automobile Magazine and Autoblog.

Follow On: Twitter | Website

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